This week marked the third anniversary of Brexit, and it coincided with a grim verdict from the International Monetary Fund: This year, the British economy will do worse than all of the world’s major economies — including Russia. The 2016 vote to leave the European Union marked the symbolic start of the wave of populism that has been coursing through much of the Western world ever since. It was a conscious choice by a major country to have poorer economic relations with its largest market. (In 2021, the European Union took in around 42 percent of British exports.) British voters thus put nationalism and politics above economics.
On virtually every measure, from business investment to exports to employment, Britain is falling behind its peers. Think tank scholar John Springford put it simply: “If you impose barriers to trade, investment and migration with your biggest trading partner (EU), then you’re going to have quite a big hit to trade volumes, and to investment and to GDP.” Everywhere you look, Britain is feeling the pinch, from a shortage of workers to small companies struggling to send their goods into Europe to reduced traffic on the Eurostar train between Britain and Europe. Bloomberg Economics estimates that British GDP would be 4 percent higher had it stayed in the European Union.
Britons know they were conned. According to one survey, a clear majority now believe that leaving the European Union was a bad idea, and almost two-thirds want a future referendum on rejoining. The current prime minister, Rishi Sunak, was a Brexiteer himself and continues to mouth platitudes about its virtues — while he faces a series of crises that has in part been generated by Brexit. Even now, Britain has not resolved how it will handle the border between itself and European Union member Ireland — which could further derail economic growth.
Brexit was part of a broader collapse of British confidence. After the global financial crisis of 2008, British productivity turned downward sharply and has never recovered. Austerity policies made things worse as Tory governments slashed public spending, widening inequality and heightening general anxiety. As always, when times get tough, it is easy to blame foreigners, and opportunistic politicians such as Boris Johnson did just that, promising that Brexit would cure all the evils that faced the country and lying about the costs and benefits. Johnson’s fantasies of a lean and productive “Global Britain” that, once unshackled by Brexit, would become a kind of Singapore-on-Thames have gone nowhere. In fact, Britain now spends more on its welfare state, faces strikes across many crucial sectors and is experiencing deepening wage stagnation. According to Financial Times reporter John Burn-Murdoch, if things continue this way, the average British family will be poorer than the average Slovenian family by the end of next year.
The effects go beyond economics. Over the years, I have listened to every prime minister from Margaret Thatcher through David Cameron. They varied in political philosophy but all had an ambitious conception of Britain’s role in the world. Though they acknowledged that Britain would never be a superpower like the United States or China, they envisioned it as an energetic, engaged global player that cared deeply about the world. Britain had a powerful voice in the European Union as one of its three biggest economies; it also enjoyed special status thanks to its U.N. veto, its close relations with Washington, and its impressive armed forces. Most important, it had a long tradition of generating ideas and agendas on global issues — rooted in its legacy as a liberal, free-trading country with deep historical ties around the world. It had a voice that was heard everywhere and listened to seriously.
But over the past decade, defense spending has stagnated while funds for the foreign service, foreign aid and even the BBC have been cut in real terms. With Brexit, even the rhetoric about a larger role collapsed, as politicians ran away from anything that seemed too global. Now British prime ministers rarely speak to the international media — and when they do, they have nothing to say. Britain has become a middling island nation isolated off the coast of Europe, without the heft to matter on its own or to set the agenda in its partnerships. Even Washington has little time for a country that is not even part of the E.U. As journalist Neal Ascherson once feared, Great Britain has become Little England.
There is a remedy that would restore British growth, enlarge the country’s ambitions and return it to a central place in shaping a new world of great power competition. It would, of course, require that Britain return to the European Union.
Rishi Sunak is looking for a way to make a mark and turn Britain’s fortunes around. He has the solution staring him in the face. He just needs the courage to grab it.