Rock Bottom, or Resurfacing?
Britain’s exit from the E.U. is not another stage in its decline, but a necessary condition for Britain recovering its confidence on the world stage.
As it did again this year, Britain hosted the Eurovision Song Contest in 1977. Our competition entry, a song called "Rock Bottom," seemed to capture the moment. The contest itself had been delayed by five weeks because of strike action by BBC technicians. Although the lyrics were supposedly about a low point in a love affair, the fact that the performers and conductor were dressed as bowler-hatted City gents carrying copies of the Financial Times left few viewers in doubt that it was really about basket-case Britain, the sick man of Europe, laughing at itself.
The situation seemed irrecoverable. Yet just two years later, the country elected Margaret Thatcher as prime minister, and the country began an ascent on a trajectory that arguably made it Europe’s leader by the early 2000s, overtaking France and Germany, and inspiring change and reform around the world.
Britain has a longstanding habit of wallowing in its problems and then solving them. In 1775, Edmund Burke, writing to the Marquis of Rockingham just as the American War of Independence was breaking out, commented
If things are left to themselves, it is my clear opinion, that a nation may slide down fair and softly from the highest point of grandeur and prosperity to the lowest state of imbecility and meanness, without anyone’s marking a particular period in this declension, without asking a question about it, or in the least speculating on any of the innumerable acts which have stolen in this silent and insensible revolution. Every event so prepares the subsequent, that when it arrives, it produces no surprise nor any extraordinary alarm. I am certain that if pains, and great and immediate pains, are not taken to prevent it, such must be the fate of this country.
Burke was right in the short run. Britain did of course go on to lose that war. But soon thereafter Britain saved Europe by its example and went on to become undoubtedly the world’s leading and most powerful nation for a hundred years.
How are we to assess the current state of Britain? There is no shortage of commentators predicting decline. There seem to be rather fewer arguing that Britain can get on top of its problems. Is Britain just getting overwhelmed by the depth of its difficulties, or beginning to do what is necessary to tackle them?
For much of the last two centuries one of the major British contributions to civilization, for many perhaps the major contribution, was believed to be the art of governance. Over time, Britain had created a supremely flexible constitution based on the sovereignty of the monarch in Parliament and on the English common law, capable of accommodating change and the gradual democratization of society without the abrupt breaks and violence seen elsewhere. In the minds of the Labour Party in the 20th century, and perhaps beyond, this enabled a particularly successful development of welfare and communal social institutions such as the National Health Service. Britain’s institutions were then widely imitated as its colonies became independent—even if they did not always last in countries whose conditions were very different.
If sometimes slightly overdone—after all, other countries such as Germany expanded suffrage and the welfare state at least equally fast, and if the First World War had not intervened, there was every chance of violent civil war over Ireland, always the poor relation of British governance—the perception was in its fundamentals correct.
It is perhaps no coincidence that the years of British post-war decline coincide with the rapid change, even collapse, of this British governance model following the social and political change brought in by the Second World War. As Professor Robert Tombs puts it in his magisterial The English and Their History, “Abandonment of age-old characteristics of English governance—decentralisation of power under a strong but limited central government, wide participation in local administration, and a high level of political involvement—dates only from the mid-twentieth century.”
Overlaid on top of this system from the 1970s came the institutional structure of the European Union, removing whole areas of this newly centralized system entirely from domestic scrutiny, and leaving more and more laws to be determined outside the country completely, in a way which was wholly alien to British experience. The unfamiliar principles of the European legislative tradition supplanted English and British laws: the senior British judge Lord Denning famously foresaw this, noting that “The [European Communities] Treaty is like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back.... It is equal in force to any statute.”
The revolt against this system, and much more besides, in the Brexit referendum of June 2016 left much of the British governing class reeling. Its leading members then hesitated between a form of Brexit that still left Britain within core E.U. arrangements such as the customs union, and an attempt to reverse the referendum entirely. Meanwhile, the main proponents of Brexit refused to accept anything other than a clean separation, the restoration of full autonomy for British institutions. All sides played to sweep the board for their preferred solution, and as a result British constitutional arrangements came under severe strain in 2018 and 2019.
Boris Johnson, and I as his chief Brexit negotiator, broke through the impasse in 2019 and 2020, only to find the country’s institutions again seeming to come close to collapse during the coronavirus pandemic. After his departure, Liz Truss as prime minister once again shook the system, as rushed but nevertheless necessary reforms panicked the markets and briefly sent the financial establishment into a nervous breakdown. Prime Minister Rishi Sunak steadied the ship, but in the view of many has left it becalmed, its crew now reluctant to embark on any major voyage and preferring to stick cautiously close to familiar shores.
All this has left Britain and its people suffering a severe case of self-doubt and angst. Trust in politicians and institutions is at the lowest level ever. A YouGov poll for the IPPR think tank in November 2022 showed that nearly two-thirds of British people thought that politicians were “merely out for themselves” and that only 4 percent thought politicians were doing their best for the country. Many seem to believe that the pandemic was handled worse in Britain than elsewhere, though there is little real evidence for this, and excess deaths in Britain over 2020–21 were around the average for European countries. Whatever the truth of it, the years of Brexit and then of Covid seem to have induced in many a belief that Britain is, as in 1977, becoming ungovernable. Gloom is not hard to find. A Times Radio/Johnson Partners focus group in February asked swing voters how they felt about the country. They said it was “the worst it's ever been in my lifetime,” that “it’s like we're running on empty,” that “it’s a scary place to be and I can’t really see a way out.”
This air of gloom is not borne out by the short-run economic figures. British growth actually outstripped that of France, Germany, and Italy in both 2021 and 2022. The British economy remains extremely flexible and responsive thanks to the reforms of the 1980s and 1990s. Britain continues to have major strengths: internationalism and openness, entrepreneurialism, the tech scene (if it can keep it), world-class science and research, and the City of London. Britain is still a large economy, the sixth biggest in the world, with global significance in ideas and policy-making, and with disproportionate visibility and influence.
But it is hard to deny the broader critique and many across all political parties would privately agree with it. Overall there is a sense of stasis, a feeling that the country’s problems are simply too deep to be tackled and that the government does not know how to do so. Most would also agree on the nature of those problems.
Economically, productivity performance has been poor for the best part of two decades. The underlying causes are much debated, and are certainly a function of broader macro conditions and prevailing super-low interest rates, but are also connected to high levels of low-skill migration, an underperforming education sector, and a planning system that restricts house-building and labor mobility where it is most needed. Slow growth has meant a drift into a high-tax high-spend model, in which the tax base cannot support expectations for public services, and with increasing zero-sum industrial and social conflict competing for a share of a static cake.
Super-high levels of migration over many years have produced a deep corrosion of social capital in some places, notably parts of London and northern England. Legal immigration has increased since Brexit, and the jury is still out on whether the government can find a way to prevent increasing illegal migration in the English Channel because of the complex web of international obligations and domestic judicial practice in which the country is enmeshed. More broadly, for many, there has been a sense that the country’s norms, history, and culture have changed rapidly over a very short period, and this sense of dislocation has been reinforced by the rapid spread of “woke” values among the country’s elite and the young.
The moral sanctity of the Attlee government’s legacy has meant that key post-war reforms have persisted long after the logic behind them has disappeared: a Soviet-style centrally planned health service, the 1947 Town and Country Planning Act that now restricts development of any kind, and a non-contributory welfare system which makes the country a magnet for migrants from around the world.
The government machine is dysfunctional and poorly managed. The country suffers from the dreadful coincidence of a highly centralized system with a very weak center. Asymmetric devolution, especially in Scotland where the administration wants to break up the country entirely, has added to the complications. Meanwhile, the Civil Service has come to see itself as a supposedly impartial guardian of the constitution and of establishment values rather than as what it is in constitutional doctrine, the servant of the government of the day. At the same time its actual skills and capacity erode away: The civil service is generally low quality in terms of actual expertise but works in an environment of constant mutual self-approbation, one where honors are given for doing only average work in the right place at the right time.
To all this must be added an increasingly collectivist tone in the national political debate. Going back ultimately to the large-scale financial sector bail-outs after the 2008 crash, which fostered a sense that the government was always available to be called upon when things went wrong. This sense has been strengthened by increased legislation and government hectoring about lifestyle and personal behavior, much of which goes back to the net-zero policy, and then by the generous funding for individuals during the pandemic that proved difficult to switch off as conditions improved. This has restricted the range of possible solutions to political and economic challenges, resulting for example in the vast subsidies to individuals to protect against energy price rises over the last twelve months, and the concomitant slow increase in the tax burden.
Many of these problems are of course common to other European countries. Indeed I suspect that some of those countries trapped in the Eurozone and its rickety and dysfunctional structures are going to find the next few years even more difficult than the U.K. But somehow British failure seems worse, perhaps because Britain was one of the leaders of the great upward trajectory of the ’80s, the ’90s, and the 2000s, the great global reform that brought back free markets, open and free societies, and the expansion of world trade, beginning with Thatcher through Blair until it ended with the crash and then the pandemic. As confidence in the value of these past developments seems to falter, so does British self-belief.
I underline the depths of these problems as the necessary background to explaining why huge and far-reaching steps need to be taken to deal with them. Where I differ from many others is that I don't see leaving the E.U. as part of the problem but as part of the solution. I see the Brexit referendum and everything that followed as a sign of health in the British system not of dysfunction—as a first step to getting a grip and reviving the body politic of the British nation.
This is because many of the pathologies described above got established during the period of E.U. membership and are still part of the legacy E.U. mindset. For that reason, they would never be challenged while Britain was an E.U. member. The high-migration low-productivity model was reinforced, not undermined as many seem to believe, by E.U. single-market membership—indeed, U.K. productivity performance was at its worst when Britain was most closely integrated into that market. E.U. integration was gradually creating regional specialisms within the wider European economy, based on comparative advantage, and ultimately feeding supply chains centered on Germany.
Britain’s niche was as a broadly low value-added, fairly low-skill, largely service economy, an outlet for labor surpluses in the structurally weak Eurozone economies of Southern Europe sustained by some advanced manufacturing, the City, and by scientific and research excellence based around a small number of world-class universities, all highly concentrated in Southeast England. Britain’s governing class largely benefited from this model personally, did not seek to change it, and did not wish to. That is why the 2016 referendum was so traumatic for them.
E.U. membership had broader cultural effects too. The governing class preferred endless consultations to taking decisions in a decisive way and the Brussels process became an end in itself in many areas. These habits of thought spread much more broadly. As so often in the E.U., British politicians comfortably accepted the general Brussels view that some aspects of politics were best conducted when shielded from voters, a situation all too easily achieved in Britain because of the incomprehensibility and cultural distance of the E.U. institutions, established as they were on principles very different to Westminster. E.U. membership gave the civil service a stake in this by enhancing its role in defining and approving laws, often without much real political control.
Some of this was and is also visible in foreign affairs, where Britain has become steadily less assertive and arguably less effective over the last two decades. This is in part a reaction against the Bush-Blair alliance and the Iraq War, a reaction that was strong, slow-burn, but quite deep-rooted, and itself partly driven by establishment edginess at finding themselves positioned too far from core European views.
But there is more. The British foreign policy establishment largely has a declinist view of Britain, a belief that the country counts for nothing except as part of a larger bloc. It gradually absorbed the E.U.'s own belief that rules-based policy-making and the rule of international law, as interpreted by international institutions, were morally superior to a foreign policy based on a definition of the national interest. There was a naivete about those institutions—a failure to see them for what they currently are: fora for great power competition, not worthwhile producers of international norms—and advocacy of the “rules-based international system” became defined as a central British national interest, one complementary to E.U. membership.
All this created a process-oriented outlook about sustaining the mechanisms of the international system rather than looking at its outcomes, and one that was naive about the fact that, to the extent that such a system worked, it ultimately depended on American power.
Leaving the E.U. is the first step towards dealing with these dysfunctionalities and returning to the strengths of the traditional British system of governance. These have not disappeared entirely. British politics is still not completely disconnected from public opinion. Issues that people are actually talking about—E.U. membership, immigration—have a way of forcing themselves into the political arena, often outside the normal party structure. Britain still has a genuinely parliamentary political system, with M.P.s directly and regularly exposed to opinions in their constituencies, and as a result cannot get too far from the popular will. That is a huge strength. It showed itself in the Brexit era. Parliament made a terrible mess in 2018–19, in part by trying to override the tried and tested balance between executive, legislature, and party. But normal ways of doing things reasserted themselves in the end, an election decisively cleansed the system, and the referendum result was finally delivered.
Similarly, in the Covid pandemic—the issue over which I resigned from government—all the attempts to manage opinion and behavior did not in the end enable the government to control Parliament or forbid the expression of dissenting views. A critical mass of Parliamentarians would not be silenced, grew in numbers as the disconnect increased between government action and the realities of the pandemic in autumn 2021, and eventually succeeded in changing policy so that another lockdown was averted. In the end the forces of freedom and of dissent prevailed, and were vindicated.
It is now time for British governments to become accustomed to this new situation. The British establishment is once again running a national democracy. A new range of possibilities is opening up. It is up to Britain to grasp them. In a system that is fundamentally democratic and shaped by public opinion, that means that the governing classes must do more than just accommodate themselves to that opinion. They must take a lead, try to persuade, and explain their competing visions for where they wish to take the country. In my view there is only one possible route that can lead to success, but it is not a route that, currently, seems to be offered by political parties.
Let me explain further. Politics nowadays, in Britain and elsewhere, is as much about values as about economics.
The range of views on economics is familiar: It runs from low-tax low-government free markets at one end through to social democracy and socialism with high levels of government intervention at the other. The range of views on the values spectrum is a little more complicated. At one end is what I call “nationhood,” a belief that the best way human beings have found of organizing themselves is within a nation-state with some established traditions and conventions. Patriotism, established institutions, a degree of social conservatism, control of borders and migration, family, history, religion, duty, are all part of nationhood.
At the other end is “globalism,” a word that is already to some extent tainted but which I try to use non-pejoratively. By it I mean a belief that the main forces in modern politics are not nation-state–based and do not depend on tradition, but are about social liberalism, personal autonomy and fulfillment, about non–geographically based communities, regional or global ideas, norms, regulations, and institutions. It comes with a belief that barriers to these things are in principle undesirable, if sometimes necessary in practice, that the ideas themselves can be constantly reinvented, and that established ways of doing things can and should be overturned if there is a justification for doing so.
The diagram below sets this out. Inevitably it over-simplifies and the four quadrants do not capture everything; for example “Blairism” would be much closer to the central axis than “Corbynism”.
The Labour Party currently offers social-democratic economics and globalist values—the bottom left quadrant.
The pre-referendum Conservative Party has tended to offer a version of free market economics and globalist values, i.e., the bottom right quadrant. Indeed many Conservatives seem to see these two things as inextricably linked, and believe that free markets can only deliver if they are based on a set of international economic institutions and are constantly tearing down barriers and overturning long-held assumptions and conventions. Most who take this view—the international commentariat, the business liberals, the Financial Times—see the E.U. as one of the most desirable of those international institutions. They see Brexit fundamentally as a drag anchor and believe the only rational course is for Britain to retrace its steps all, or part, of the way. (For the record, I fundamentally disagree with this: Brexit comes with a small cost, largely already paid, and certainly compensated for by the ability to set the country’s own rules and to improve its own domestic productivity record.)
Some, in both parties, argue for a third position. People like the academic Matt Goodwin claim, rightly, that the current political offers are heavily over-influenced by the 15 percent of Brits with radical progressive views who dominate the commentariat and many British institutions. They argue, again rightly, that the British are not globalist in values, but are much more attracted to “nationhood,” and that therefore that the current centre of gravity in public opinion is the top left quadrant in the diagram: social-democratic, active-statist economics, but coupled with an emphasis on rebuilding the nation, controlling migration, and on community, on cohesion, and—as the Boris Johnson government had it—“leveling up” across the nation.
Proponents of this view agree that there was a loss of national purpose and national cohesion during the years of E.U. membership, but that the correct way to deal with it is to use the newly recovered powers to push through serious social-democratic economics, sustained high tax-and-spend policies, redistribution, industrial policy, regional policy and so on—in short, the view that national cohesion can't be achieved unless the government pays for it. There are forces in both major parties that seek to shift their parties in this direction—“Blue Labour” or “Red Tory”, as some call it—and it is where “national conservatism” might well land in the British political debate unless carefully handled.
The problem with this approach is that, while it may make political sense in the short run, it doesn’t make economic sense beyond that. It falls into the trap, described earlier, of accommodating to public opinion rather than trying to shape it. After all, if there is anything we can be certain about in economics, it’s that high-tax high-spend policies and a strong government hand in directing business do not generate prosperity. As a direction of policy, it is even more misguided when the starting point is—as it currently is in Britain—the highest levels of taxing and spending since the Second World War. It’s a false trail for those of us who actually want to see Britain’s economy growing again.
The way forward is a different policy mix: the top right quadrant in the diagram. I call it, for want of a better term for now, “Brexit Conservatism.” That is, on the one hand, to deliver open and free markets and freedom more broadly. Being in the E.U. or paying excessive regard to international institutions is not necessary to deliver free markets and economic reform at home. What is important is to open up the economy to global trade, to reduce spending and tax levels, to protect economic and political freedom, and to get the government out of day-to-day economic management. And it is also, at one and the same time, to be serious about nationhood: restoring the constitution, reducing the scope of devolution, putting in place a government machine that actually works, protecting the borders, spending properly on defense, ensuring proper energy security, and standing up for our history, traditions, and heritage. That’s why, in my view, this is the natural place for “national conservatism” to land in the U.K. political debate, too.
Too often these policy directions are seen as contradictory. They aren’t. They go together. You don’t get growth and prosperity without free markets. But people won’t put up with the churn and chaos of properly functioning markets unless there is a feeling of common purpose and project, a sense that we are all, genuinely, in this together.
That is why the restoration of British national independence matters. It enables Brexit Conservatism as a meaningful policy route.
The truth is that getting consent for such an approach will take some time. Sadly, Conservative governments have not explained for many years what free markets actually mean and how they work, and public understanding of what a functioning economy needs is low. Similarly, “nationhood” policies are highly counter-cultural and indeed highly unpopular amongst the progressive governing establishment. That is why—as the brief Truss government showed all too clearly—explanation and persuasion is crucial. Her attempt to rush things shook the system and eventually resulted in her expulsion by the permanent establishment.
But her ideas have not gone away. The need to get the economy going again is bubbling up through political debate. The problem is that many things need fixing, but the current government seems to be losing its nerve in trying to fix them. What Britain now needs is a new national project for Brexit Conservatism, a project to restore the viability of the British state and nation: a five- to ten-year program that gets taxes and spending down to more normal levels, reduces regulation and gets the government out of people’s lives more broadly, begins to reform public services, shifts us away from the disastrous net-zero approach, takes back control from the international web of obligations on migration, and—crucially—reforms the government machine and ends the dated Northcote-Trevelyan system in favor of a proper meritocracy, managed properly, and dedicated to delivering actual results.
This project should also get Britain properly back on the world stage. Indeed, in foreign affairs, leaving the E.U. is already making a difference. The 2023 “refresh” of the original 2021 Integrated Review of Foreign and Defence Policy, largely written by the brilliant Professor John Bew in Downing Street, has begun to do just that. AUKUS, the Indo-Pacific tilt, Britain’s new trade policy and the imminent prospect of accession to the CPTPP, the fusion of foreign policy and development in one department, and the more assertive and more expensive defense policy, are taking the country in a different direction. It is no coincidence either that policy on China has gradually toughened up after leaving the E.U., if perhaps not as far as many of us would wish.
But old habits die hard. Britain still remains excessively attracted to, and arguably naive about, international institutions and international law. There is still a preachy tone to British foreign policy and Britain still remains uncertain about defining its own national interest and acting accordingly. In areas as different as Iran policy, the ongoing developments on the sovereignty of the British Indian Ocean Territory, and indeed the acquiescence in EU needs in Northern Ireland, the British establishment still seems naive about other actors’ motivations and excessively concerned about legal risk. There remains a risk that Britain is perceived as an international hand-wringer, not an influencer.
These habits will change, gradually. The robust position taken by Boris Johnson on the Ukraine war shows that as a country Britain is still able to see the essentials of foreign policy issues, grasp what’s at stake, and speak out. Those of us who advocated Brexit always argued that being outside the E.U.'s foreign affairs arrangements would be a strength, that it was more important to be able to act quickly, to advocate a case, to take a lead, and to persuade others to follow, than it was to have a 13 percent share in the local bloc’s decision-making processes and to have to devote huge efforts to keeping that bloc on the straight and narrow. Had Britain not left the E.U., there is an alternative version of February 2022 in which Britain’s attention is entirely focused on the E.U. Council and in which attempts to establish a distinct British position are swamped by the ability of France and Germany to push E.U. policy in a direction more congenial to them.
Of course, foreign policy isn’t made in a vacuum. It depends ultimately on national power and strength. In the end domestic success and economic growth are needed to influence global developments. Size matters, but so do growth, so do attractiveness and soft power, and so do governmental effectiveness and a willingness to act decisively. Making things happen globally means getting your own house in order first. That’s why the restoration of British national independence, and the process of change that follows upon it, are so crucial to making Britain once again an effective, and reliable, ally on the world stage.
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“Brexit Conservatism” is the mix of policies most likely to get Britain on track. It would likely already appeal to a majority of the Conservative Party in the country, and probably its voters, if not necessarily to a majority of its current parliamentarians. Fully and energetically sold, it could enable a renewal of Conservatism and re-energizing of the country. But at the moment it is not the declared policy of the Conservative Party or any other. The focus is on steady-as-she-goes managerialism from the Conservatives or a bit more of the same from Labour.
But British politics will not stay quiet. The challenges, economic and political, are too great. The current high-tax high-spend path will not deliver results. Before too long, within or outside the major parties, figures will emerge who will make the case to get Britain moving again. It will happen and I am confident in the capacity of the British political system to make it happen.
Too many international commentators think that Britain is some kind of international delinquent for leaving the E.U. and for standing up for its own interests. This is a fundamental misjudgment. Rather, with the Brexit vote, the country has taken the first step to recovery. The challenges are formidable, but at least that first step has now been taken. As so often before, the country now holds its destiny in its own hands. As so often before, we will, in the end, get on the right path.