Don’t Blame Brexit for Britain’s Economic Mess

Even before Britain left the European Union, and even more so after 2020, half the country was warning of impending doom. And now the country is in an economic crisis. The pound falls. The Prime Minister is a joke. Europe must be the answer!

No, on the contrary: the extraordinary political and economic crisis that is unfolding in Great Britain is not the fault of Brexit. But Brexit is not entirely innocent either. This is the uncomfortable truth that Britain’s pro- and anti-Brexit tribes must face if the country is to have any chance of emerging from the exceptionally deep hole it has dug for itself. I don’t hold my breath in the face of Britain’s post-war history.

Put simply, things were bad in Britain long before Prime Minister Liz Truss blew up the economy. They were bad before Boris Johnson came to power and bad before Theresa May took charge. And they were bad long before the country voted to leave the EU in June 2016. One of the reasons people voted to leave the EU was fact because Things weren’t very good. The truth is that the UK economy is struggling to recover from the global financial crisis that began in 2008 – and with it the political settlement that underpinned what appeared to be the golden years of Tony Blair’s Prime Minister. From that point on, wages stagnated, public services deteriorated, and voters grew—understandably—angrier.

In politics, however, many things can be true at once. Frustrated Brexiteers can remind people that all was not rosy in Britain before Brexit. You can argue that leaving the EU did not require a future prime minister to make tax cuts, without specifying how she intends to pay for those cuts. And you can Clues that Britain’s first post-Brexit Prime Minister Boris Johnson did the opposite from 2019 to 2022 when he hiked taxes to pay for additional spending on elderly care and the National Health Service after promising to – in the campaign, which resulted in the biggest Tory election victory in 30 years – an end to austerity.

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But to pretend that Brexit has nothing to do with the country’s current problems is just as selfish. Around half The huge fiscal hole now being created by Truss’ tax-cut craze is due to the permanently lower economic growth forecast caused by Brexit. In other words it would have been “Trussonomics”. fewer more daring inside the EU than outside. It is also true that Brexit helped create today’s modern Conservative Party, which in turn created a Prime Minister who promised to do stupid things.

The point is, doing stupid shit, as Barack Obama might say, stays stupid whether you’re inside or outside the EU. They can aim for a balanced budget within the EU, as Germany does, or not, as Greece did not. And Britain was quite capable of catastrophic acts of self-harm before Brexit came along. Finally, the closest parallel to Truss’s absurd self-immolation is “Black Wednesday” in 1992, when John Major’s government attempted to keep the pound in the system that preceded the European single currency. This was the last time Britain tried and failed to defy economic reality, and wasted billions of pounds in the process – in pursuit professional-European politics that made no sense. Today the opposite is the case, but the result is the same.

Even though the UK has been mired in an economic doldrums since the global financial crisis, it seems too belittling to blame it. The harder truth is that Britain has been failing for a long time. In fact, Britain has been woefully mismanaged since the turn of the century. The serial failure includes its military missions in Iraq and Afghanistan, its regulatory system in the Great Financial Crisis, its political elite during Brexit, and its institutional machinery during the pandemic. Westminster handed power to Scotland hoping to neutralize secessionism, only to see the opposite happen. She gave voters a referendum on leaving the EU, not knowing how she would do it if they voted yes. And when it found itself outmanoeuvred during Brexit negotiations, it joined with its own country’s economic partition, knowing that doing so would jeopardize Northern Ireland’s fragile political settlement. In short, Britain has done a lot of stupid shit.

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Of course, other countries have also struggled during the pandemic, but the UK’s vaccine research program will have saved millions of lives around the world. Unlike some breakaway democracies, Britain has no leaders trying to overturn election results. Despite recent turmoil and humiliation, the country remains as prosperous as France. But the overall picture is unflattering: unlike in France, secessionist nationalisms are one referendum away from succeeding, and the ruling elite no longer seems to have a coherent strategy about what to do next.

In the face of such challenges, the impulse to look for simple, Populist statements – Brexit is to blame! – are understandable. Finally, believing that the country’s problems can be explained by a single act of stupidity and not by structural problems that are much more difficult to fix is ​​reassuring.

A quick look at Britain’s economic growth since 1945 shows that claims of decline and resurrection before and after Europe, before and after Thatcher, are not all they seem. In figures provided to me by the Center for European Reform, a London-based think tank, the average GDP growth rate (real) for Britain from 1945 to 1973 – outside what was then called the European Common Market – was 2 .8 percent. From 1974 to 2008, when Britain became a full member of the European Economic Community, as it became before its final form as the EU, that figure dropped to 2.3 percent. From 2009 to 2019, between the financial crisis and Brexit, this fell further to 1.3 percent. In other words, Britain’s growth rate has shown a long-term slowdown, similar to that of the rest of the West, regardless of membership in Europe. However, when compared to other countries’ growth rates, the UK’s performance looks better in Europe as out. Outside, its economy grew about half as fast as those of France and Germany. Indoors, it grew at about the same rate until 2016; after Brexit it slowed down slightly. Which numbers are more meaningful? That depends on what story you want to tell inside or outside.

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Researching a book I am writing about Britain’s troubled relationship with Europe has made me realize that deception since 1945 has been the constant thread that unites almost all British governments, whether enthusiastically pro-European or skeptically anti-European. All this time, Europe has floated in public opinion as either the great savior or the great satan, but always as the all-encompassing explanation. If only Britain would join Europe, some said. If only Britain would go Europe, others said later. Now some think again If only Britain would rejoin.

Any explanation is easier than settling on decades of boring good government backed by effective institutions, sound money, and wise investments. Still Europe could still be part of the answer – or maybe not. But it will not be Europe alone the Answers. That lies within Britain itself. If the country is to succeed, it must stop obsessing about its reputation beyond its borders and the magic powers of Europe, and start obsessing about the systemic flaws affecting Britain alone and nobody else are attributable to. History doesn’t make me optimistic that this will be the case.

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