Don’t Blame Brexit
How tempting it is to trace Liz Truss’s economic fiasco to the decision to leave Europe. If only Britain’s malaise were that simple.
Even before Britain left the European Union, and certainly after it finally did in 2020, half the country warned of impending doom. And now the country is in the grip of an economic crisis. The pound is falling. The prime minister is a joke. Europe must be the answer!
No, in fact: The extraordinary political and economic crisis unfolding in Britain is not Brexit’s fault. But neither is Brexit entirely innocent. This is the unpalatable truth that Britain’s pro- and anti-Brexit tribes both need to face up to, if the country is to stand any chance of climbing out of the extraordinarily deep hole it has dug for itself. Given Britain’s postwar history, I’m not holding my breath.
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. Indeed, one of the reasons people voted to leave the EU was because things weren’t very good. The truth is that Britain’s economy has been struggling to recover from the global financial crisis that began in 2008—and with it, the political settlement that underpinned the country’s apparently golden years of Tony Blair’s premiership. From that point on, wages stagnated, public services deteriorated, and voters—understandably—got ever more angry.
In politics, though, a lot of things can be true at once. Frustrated Brexiteers can remind people that all was not rosy in Britain before Brexit. They can argue that leaving the EU did not require a future prime minister to slash taxes with no indication of how she planned to pay for those cuts. And they can point out that Britain’s first post-Brexit prime minister, Boris Johnson, did the opposite from 2019 to 2022, when he raised taxes to pay for extra spending on elder care and the National Health Service, having promised—in the campaign that led to the biggest Tory election victory in 30 years—an end to austerity.
Yet pretending Brexit has nothing to do with the country’s current woes is equally self-serving. About half of the giant fiscal hole that now exists as a result of Truss’s tax-cutting madness is attributable to the permanently lower economic-growth forecast caused by Brexit. In other words, “Trussonomics” would have been less foolhardy inside the EU than out. Also true is 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, remains stupid whether you’re inside or outside the EU. You can pursue a balanced budget inside the EU, as Germany does, or not, as Greece didn’t. And Britain was perfectly capable of disastrous acts of self-harm before Brexit came along. The closest parallel to Truss’s absurd self-immolation, after all, is “Black Wednesday,” in 1992, when John Major’s government tried to keep the pound inside the system that preceded the European single currency. This was the last time Britain tried, and failed, to defy economic reality, and it wasted billions of pounds in the process—in pursuit of pro-European policies that didn’t make sense. Today, the opposite is the case, but the result is the same.
Even if Britain has been languishing in the economic doldrums since the global financial crisis, laying the blame there seems too reductive. The harder truth is that Britain has been failing for longer still. Since the turn of the century, in fact, Britain has been lamentably mismanaged. The serial failures encompass its military missions in Iraq and Afghanistan, its regulatory regime in the great financial crisis, its political elite during Brexit, and its institutional machinery during the pandemic. Westminster devolved power to Scotland in the hope of neutering secessionism, only to see the reverse happen. It gave voters a referendum on leaving the EU without any idea of how it would do so if they voted yes. And when it found itself outmaneuvered during the Brexit negotiations, it signed up for the economic division of its own country, knowing that this would imperil the fragile political settlement in Northern Ireland. In short, Britain has done a lot of stupid shit.
Of course, other countries have also struggled during the pandemic, but the U.K.’s vaccine-research program will have saved millions of lives worldwide. Unlike some backsliding democracies, Britain does not have leaders who seek to overturn the results of elections. Despite the recent turbulence and humiliation, the country remains as wealthy as France. But the bigger picture is unflattering: Unlike in France, secessionist nationalisms are only one referendum from success, and the governing elite no longer seem to have a coherent strategy for what to do next.
When faced with such challenges, the impulse to reach for simple, populist explanations—it’s all Brexit’s fault!—is understandable. To believe that the country’s problems can be explained by a single act of stupidity, rather than by structural issues much harder to rectify, is, after all, comforting.
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 Centre for European Reform, a London-based think tank, Britain’s average GDP growth rate (in real terms) from 1945 to 1973—outside what was then called the European Common Market—was 2.8 percent. From 1974 to 2008—with Britain a full member of the European Economic Community, as it became before its final form as the EU—this fell to 2.3 percent. From 2009 to 2019, between the financial crisis and Brexit, this dropped further to 1.3 percent. Britain’s growth rate, in other words, has shown a long-term slowdown irrespective of membership in Europe, much like that of the rest of the West. When compared with the growth rate of other countries, however, Britain’s performance looks better in Europe than out. Outside, its economy grew about half as quickly as France’s and Germany’s did. Inside, up until 2016, it grew at roughly the same rate; after Brexit, it slowed slightly. Which figures are more significant? That depends on what story you’re trying to tell about in or out.
The research for a book I am writing on Britain’s troubled relationship with Europe has clarified for me that delusion is the consistent strand uniting almost all U.K. governments since 1945, whether enthusiastically pro-European or skeptically anti-European. Throughout this time, Europe has hovered in the public mind as either the great savior or the great Satan, but always as the catch-all explanation. If only Britain would join Europe, some said. If only Britain would leave Europe, others later said. Now some are back to thinking, If only Britain would rejoin.
Each explanation is easier than settling in for decades of boring good government supported by effective institutions, sound money, and wise investment. Even so, Europe might still be part of the answer—or it might not. But Europe alone will not be the answer. That lies within Britain itself. If the country wants to succeed, it needs to stop obsessing about its reputation beyond its borders and the magical powers of Europe, and start obsessing about the systemic failures that are Britain’s alone and no one else’s. History does not make me optimistic that it will.