How to revive the UK economy in three simple steps @RichardJMurphy

Uploaded May 2026 | Updated September 2026, 3 weeks ago

Britain’s economy is failing, but fixing it is not as complicated as many economists claim.

In this video, I set out three straightforward policies that could transform economic performance, reduce poverty, increase investment and create a stronger society.

The solutions do not come from neoliberal economics. They come from recognising how money, spending, taxation and investment actually work.

I explain why poverty is not just a moral failure but an economic failure, why greater equality can create a stronger economy, and why Britain’s savings system is currently failing to support productive investment.

I also argue that redirecting some ISA and pension savings into the UK economy could unlock more than £100 billion a year for investment, job creation and the climate transition.

The Financial Times recently asked how Britain can revive its economy. My argument is that the answers exist, but they lie outside the economic assumptions that have dominated British politics - and FT thinking - for the last forty-five years.

In particular, I argue that a successful economy must first ensure that everyone has enough income to live with dignity and security. People who are struggling to survive cannot fully participate in society or contribute to economic growth. An economy built on insecurity is an economy that will underperform.

I also explain why higher taxation on high incomes, and most especially that from wealth, has a role to play in rebalancing spending and fiscal power across society.

Finally, I suggest that Britain already possesses the savings required to transform its economy. The challenge is not finding the money; it is ensuring that money is used productively rather than being diverted into speculation and existing assets.

The result would be a stronger economy, better jobs, more investment, lower poverty and a more secure future.

Could these policies succeed where decades of orthodox economics have failed?

Take a look at the poll below: youtube.com/post/Ugkxx9kSqJObihk5KyWAZtmYHrOT4amkhX0h

TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk

IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp

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ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.

This video was edited by Thomas Murphy.

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INTRODUCTION: youtube.com/watch?v=HdHsRPy3060

PLAYLISTS:

The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD

Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4

Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10

Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY

MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX

Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m

Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ

USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H

Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw

The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx

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How to revive the UK economy in three simple steps

$Stock markets dont fund investment. Why, then, do we worship them? Just about everything you have been told about stock markets and the UK economy is wrong. Politicians talk nonsense about stock markets. Financial advisors repeat it. The BBC reports FTSE 100 movements as economic news, and economics textbooks embed a set of false thinking in students heads. But the truth is that while the City of London likes to claim that stock markets are essential to saving, investment and economic growth, that is not true. In this video, I challenge the claim that buying shares funds real investment in the economy. To do that, I explain the crucial difference between the primary stock market, where companies issue new shares and raise money, and the secondary stock market, where existing shares are traded. The reality is simple: the primary market is small, and the secondary market dominates. Most stock market activity is just the exchange of existing wealth between savers, not the creation of new investment. I also look at the numbers. Trillions of pounds of shares are traded each year on the London Stock Exchange, but only a small fraction raises new capital for companies. Maybe 98% of all share trading is in secondhand shares, and the companies whose shares are traded get no money at all as a result of that. That breaks the assumed link between stock markets and real economic activity, such as jobs, productivity and growth. The video also explores what stock markets actually do: they provide liquidity for unnecessary share trading, generate potentially quite misleading price signals about the value of companies, and it enables wealth to change hands and accumulate. What they do not reliably ever do is fund productive investment. I then consider the policy implications. The UK provides large tax subsidies to pension saving in shares, yet the return in terms of real investment appears to be negative: the subsidy exceeds the sum that reaches businesses for productive purposes. That raises serious questions about whether public policy is directing money to the right place for the benefit of the economy at large. Finally, I explain what really funds business activity, which is bank lending, retained profits and public investment. If you think stock markets drive growth, this video will challenge that idea, I hope, because that claim is very largely a work of fiction. Check out the poll below: https://www.youtube.com/post/UgkxgeuzuBiSRQ2AZT31JYiJYnLfGNCtliK6 00:00 — The myth of the stock market 00:50 — Claims about savings, investment, and growth 01:40 — Why saving can reduce economic activity 02:20 — The false link between shares and investment 03:10 — Two markets explained: primary vs secondary 04:00 — Primary market: IPOs and new capital 04:50 — Secondary market: trading existing shares 05:30 — Why companies get nothing from most trades 06:20 — The scale: trillions traded vs billions raised 07:10 — Over 95% of activity is secondhand trading 08:00 — Why stock markets don’t drive real investment 08:40 — Financial engineering vs productive growth 09:20 — What stock markets actually do 10:00 — Liquidity: buying and selling shares 10:40 — Price signals vs real company value 11:20 — Markets driven by sentiment and speculation 12:00 — Shares as claims on future income 12:40 — Wealth accumulation vs wealth creation 13:20 — Why the myth persists 14:00 — Policy, media, and economic misunderstanding 14:40 — Rachel Reeves and government policy 15:10 — Alternatives: bank lending and retained profits 15:50 — Rethinking pensions, investment, and growth 16:20 — Conclusion: moving beyond the stock market myth TRANSCRIPT A transcript for this video is available at: https://www.taxresearch.org.uk HOW TO SUPPORT US Please consider donating: https://ko-fi.com/taxresearch ABOUT RICHARD MURPHY Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’. This video was edited by Thomas Murphy. RICHARD MURPHY ON BLUESKY: https://bsky.app/profile/richardjmurphy.bsky.social OR ON MY BLOG: http://www.taxresearch.org.uk/Blog/ HIT SUBSCRIBE & GET NOTIFICATIONS Subscribe and get notified of new videos released. INTRODUCTION: https://www.youtube.com/watch?v=HdHsRPy3060 PLAYLISTS: The Wealth Series https://www.youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD Ecenomics https://www.youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4 UKEconomy #StockMarketMyth #PensionFunds #WealthCreation #WealthAccumulation #RachelReeves #Neoliberalism #FTSE100 #UKInvestment #EconomicMyth #MMT #RichardMurphy #FundingTheFuture #ukeconomy #investing #finance #money #stockmarket #stocks #wareconomy #war #iran #usa$

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