Putting Alastair Campbell and Rory Stewart in Their Place

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— The Rest Is Politics (@RestIsPolitics) November 28, 2025

I was genuinely pleased that Alastair Campbell and Rory Stewart offered a response to my comments about the monetary system. Rory was right when he said that the issue ultimately comes down to the question of what sort of economy we want. He neatly described the perceived choice when he asked: “Do you want to have a much bigger state with much bigger government spending and much bigger government control of the economy, or do you think it’s important to leave a big space for the private sector for competition and innovation?”

However, if Alastair and Rory were honest with themselves, they would have to acknowledge that giving ever more space to the private sector has simply not worked for the vast majority of British citizens.

A Model That Has Not Delivered

The UK’s trade deficit, which both Alastair and Rory cited in their discussion, was considerably lower before governments adopted policies that handed a “big space for the private sector” to drive competition and innovation. In fact, the UK regularly enjoyed a trade surplus before this shift took place.

The very approach that Alastair and Rory are keen to retain has contributed to a collapse in UK exports compared with levels before successive governments embraced a laissez-faire economic stance. Rory’s “big space for the private sector” has brought with it the offshoring of much of our manufacturing base to low-wage economies, while public services and utilities have been transformed into cash cows for corporations, many of which are profiteering at the public’s expense.

The Decline Is Visible Everywhere

I cannot believe that Alastair and Rory travel around the country with their eyes closed. The evidence of decline is visible in almost every corner of the UK: dilapidated infrastructure, overstretched services, and communities that have been left behind. A bigger role for the state, backed by sustained government investment, is the only credible route to reversing this downward trajectory.

Ironically, such investment would arguably generate significant opportunities for the private sector—an outcome that Alastair and Rory seem to value highly—yet it requires the very state-led approach they tend to dismiss.

For these reasons, I hope they will reconsider their support for an economic system that is, by any reasonable measure, axiomatically failing the British people.

A Misunderstanding of the Monetary System

When Campbell and Stewart spoke to Zack Polanski, they also betrayed a fundamental misunderstanding of the monetary system. To help clarify the issue, here are ten facts for Alastair and Rory to ponder:

1. “Government debt” is a misnomer. It is not really debt in the conventional sense; it is simply the value of government bond sales.
2. The government does not use the proceeds of bond sales to pay for its spending programme.
3. Because the government issues the currency, it has access to as much money as it requires. The true challenge is not financial but real: locating the workers, raw materials, machinery, and infrastructure necessary to deliver programmes and services.
4. Bond sales and taxation serve to withdraw money from circulation, helping to prevent inflation from getting out of hand.
5. Bond sales are essentially a bookkeeping exercise for the Treasury.
6. Bonds provide a guaranteed return on investment, which makes them very attractive to pension funds.
7. Bonds are also a safe haven for banks, large corporations, and super-rich oligarchs, effectively providing them with a form of corporate welfare.
8. Bond sales are used to cover the gap between what the government collects in taxation and what it spends—known as the deficit—but the government is not obliged to do this.
9. The Bank of England, which is owned by the government, holds around 30 per cent of all government bonds. This means the government periodically goes through the charade of selling bonds to itself—an illusion deployed notably during the COVID crisis.
10. For these reasons, the bond markets are not all-powerful, contrary to the suggestion made by Campbell and Stewart. In reality, the power ultimately resides with the government, the sovereign issuer of the currency.

Explaining Modern Monetary Theory