In the wake of World War Two, in the midst of the Cold War, in the age of anti-colonial struggles and independence movements, at a time when new nations were emerging, The United States’ Secretary of State Dean Acheson remarked in 1962 that the United Kingdom had “lost an empire and not yet found a role.”
Most of these comments were unfounded. Though Britain will never return to the Pax Britannica dominance that it enjoyed in the 19th century, living standards continued to rise through the 20th century, and the economy remained competitive. Although it wasn’t a power house in world affairs, it was still a power broker.
However, British decline has become less imagined and increasingly real over the past ten years. It is in crisis. The U.K. can no longer afford to keep up its treasured national healthcare system, or its expansive public transit network. Last year, British courts were told to delay sentencing criminals because prisons were full. Companies are fleeing London’s stock exchange for New York and Paris. Economic growth has all but stopped. If the current malaise persists, Britain will be poorer than Poland — a country whose cheap labor exports partly triggered Brexit — in just 7 years’ time, according to the Economist.
What to do? No political party has offered a convincing response: the political landscape is dangerously fragmented. In Scotland and Wales, insurgent parties (the Scottish National Party and Plaid Cymru) threaten to eviscerate the U.K., imagining that they would fare better on their own. Meanwhile, Reform U.K., a new hard-right party, hopes to double down on isolationist, anti-immigrant politics — while the Green Party promises to spend nonexistent billions on carbon neutrality and radical-left social initiatives. The two mainstream parties promise only to maintain the status quo, though they disguise their similarities.
Britain has an unhealthy relationship to government spending. Brits are poorer than Mississippians (and only 60% as wealthy as Americans overall) — yet receive government services that would be unimaginable in the U.S.. This isn’t a problem, as small-government types insist, with social spending alone: it is a problem of economic policy. In Ireland, a demographically similar nation with comparable social policies, GDP per capita is about 50% higher – a divergence which has emerged only in the last 15 to 20 years. British leaders have failed to enable their welfare state through economic policy. For instance, most British cities are surrounded by “green belts” — areas where development is heavily restricted. These preserves were intended to maintain the “green and pleasant land” of which Shakespeare wrote and prevent American-style suburban sprawl. They have also throttled growth.
Britain’s top economic hubs — like the vibrant research centers of Cambridge and Oxford, as well as the polyglot city that is London — should be growing fast. In the U.S., cities like Phoenix and Austin have boomed in recent years. However, British planning law discourages substantive new development. Most old buildings are subject to draconian restrictions on renovation. New builds can’t be “out of keeping” with a neighborhood, nor can they be taller than a few stories — lest views be blocked. They can also be arbitrarily denied by local councils. The result is that people cannot live where they work– which, very often, means that they can’t work there either. Many Britons have both the skills and desire to work productively in big cities. But so acute is the nation’s shortage of housing that they cannot — a problem that strangles growth. The solution is simple: the British government must defang local busybodies and allow building to proceed without restriction.
A similar problem applies to business. Britain has imposed onerous restrictions on business owners — a thicket of regulation that the kinds of scrappy young startups that thrive in America would struggle to cut through. Innovative British companies, like Arm, a designer of computer chips, have increasingly chosen to set up shop in the U.S. or E.U.
Previous British governments have attempted to fix these issues by pouring money into the country’s least prosperous and slowest-growing areas. However, rather than focusing on fixing the structural problems associated with these regions, they have simply attempted to redistribute cash from the wealthy London area.
These questions of policy also dovetail with demographic issues.
Britain is an aging nation. Its healthcare system will struggle to keep up with the rising number of elderly patients flooding into hospitals. Already, 8 million Britons are waiting for hospital treatment — a number which will only rise in the years to come. Britain’s aging population also poses challenges for the labor market. With a shrinking workforce, Britain will become less innovative. Youngsters, facing the high housing costs and poor job prospects created by British policy, are increasingly disillusioned with their prospects. Many will seek opportunities abroad. Immigration presents a potential solution to the coming shortages of taxpayers and laborers — millions around the world are willing to live and work in Britain — yet that is a prospect that is politically untenable after Brexit. This summer, right-wing riots flared across the U.K. in response to the new Labour government, which has reversed some of the anti-immigrant policies of its predecessors. The violence was stoked by spurious claims that a Muslim immigrant had stabbed three children in Stockport, a suburb in Northern England. Britain has been among the best nations in the world to be an immigrant: the robust and cost-effective school system means that the gulf between long-established and first-generation families is smaller than in other countries. It is a testament to the increasing multiculturalism of Britain that Rishi Sunak, a child of immigrants, rose to the top of the Conservative party. Yet, right-wing violence has imperiled Britain’s attractiveness to immigrants, and with it, the potential for Britain to continue its path towards openness for the best and brightest from around the world.
Britain’s challenges are not insurmountable, though. By rectifying its wrongheaded policies and welcoming the world, it can create at least the chance for a resurgent economy. Brits should hope that the new government is brave enough to take an ax to the inefficient apparatus of the state as it stands.
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