Andy Burnham is fighting the wrong enemy

Margaret Thatcher's greatest achievement was refusing to accept decline

If Britain needs anything, it is more Thatcherism, not less

Thatcher-era growth rates would add £740 billion to the economy today

Mani Basharzad

20 July 2026

Diana Walker/Getty Images

‘I’m personally convinced that our civilisation is approaching its end,’ wrote the British journalist Malcolm Muggeridge in 1980. ‘I think of St Augustine when, in AD 410, the news was brought to him in Carthage that Rome had been sacked by the Barbarians.’ Jim Callaghan was equally gloomy. In 1974, he remarked: ‘When I am shaving in the morning I say to myself, if I were a young man I would emigrate.’

Looking back, it is easy to see why. Inflation reached 25% in 1975. Britain was suffering a brain drain, with highly skilled engineers and academics leaving the country. Why would they stay when the top rate of income tax stood at 83%? Then there was the 1976 IMF bailout, followed by the Winter of Discontent. In 1979 alone, 29.5 million working days were lost to strikes. Unemployment reached 2 million. The dead went unburied, and hospitals were reduced to emergency treatment only.

When the new Prime Minister, Andy Burnham, says he wants to ‘undo Thatcher’s economic legacy’, is that the Britain he wants to return to?

Had the UK achieved Thatcher-era rates of economic growth over the past decade, the economy would today be around £740 billion larger than it is

It is easy to criticise Margaret Thatcher when we forget the country she inherited and the one she left behind. Thatcher’s greatest achievement was not economic growth, although GDP rose by 29.4% during her premiership. Nor was it cutting public spending, although it fell from 45% of GDP to 39%. Nor was it tax reform, although she reduced the top rate of income tax from 83% to 40% and the basic rate from 33% to 25%. Her greatest achievement was refusing to accept decline.

‘I can’t bear Britain in decline,’ Thatcher once said. Decline was not destiny. It was not something to be managed or accommodated. She criticised the Treasury for seeing its role as the ‘orderly management of decline’. Thatcher rejected that mindset altogether. She also brought conviction and intellectual debate back into British politics. As Roger Scruton observed, there was finally someone to ‘hate’. Niall Ferguson has recalled that, as an Oxford student, while the Left had Marx and Sartre, conservatives once again had Hayek and Friedman – with Thatcher in power.

The Thatcher years were a counter-revolution against the post-war idea of the ‘end of ideology’, as Raymond Aron described it. Politics once again became a battle of ideas rather than a debate over marginal policy adjustments. That shift in direction helped transform Britain from the ‘sick man of Europe’ into one of the fastest-growing major European economies.

Nor was Thatcher’s impact confined to economics. She restored Britain’s confidence and influence abroad. At the beginning of the 1980s, when Ronald Reagan declared that he intended to win the Cold War, many dismissed him as an extremist detached from reality. Jimmy Carter feared such rhetoric risked a catastrophic conflict. Paul Samuelson’s bestselling economics textbook predicted that the Soviet economy would eventually overtake that of the United States.

But Britain, no longer paralysed by the domestic crises of the 1970s, was able to stand alongside Reagan under Thatcher. Rather than merely managing coexistence or accepting the Berlin Wall as a permanent feature of European life, the two leaders together helped create the conditions that eventually brought it down.

Thatcher made Britain believe in itself again. She made Britain matter again on the world stage. Even Tony Blair acknowledged as much: ‘Even if you are on the Labour side of politics, you have got to say this was a big figure, a towering figure, who made an impact not just on our country but worldwide, and was rightly admired.’

That is not the rhetoric coming from Burnham. From refusing to wear ties to wanting to remove lecterns from speeches, he is eager to signal that he is different. His attacks on Thatcher are intended to show that he rejects the direction Britain has taken over the past 40 years. Yet if Britain needs anything today, it is more Thatcherism, not less. Had the UK achieved Thatcher-era rates of economic growth over the past decade, the economy would today be around £740 billion larger than it is.

Burnham is fighting the wrong enemy. The defining trend of the past two decades is not Thatcherism but the rise of state capitalism. Since 2000, the number of state-owned enterprises among the world’s 2,000 largest firms has doubled. These state-linked giants now control around $45 trillion in assets – more than thirteen times the size of the UK’s GDP and close to half of global GDP. There are now more than 900 development banks worldwide, managing over $49 trillion in assets. Sovereign wealth funds have increased sixfold over the past two decades, and 176 countries now operate some form of sovereign wealth fund.

Across the world, the state is becoming increasingly involved in the economy. Concerns about national security are replacing concerns about economic efficiency. That is the hidden trend suppressing growth, expanding the size of the state and crowding out entrepreneurs and wealth creators. If Andy Burnham is serious about reviving Britain’s economy, Thatcherism is not the obstacle. The growing reach of the state is.