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- Ten years after the 52% to 48% vote on June 23rd 2016, Britain is more divided, less influential and poorer than it would otherwise have been.
- The GDP hit is at least 2.5%, and years spent arguing how to “get Brexit done” distracted government and business.
- Closer EU ties on trade and programmes like Erasmus can help; trying to rejoin now would risk another lost decade.
A decade on from the referendum of June 23rd 2016, when Britons chose to leave the European Union by 52% to 48%, Britain has, in Dean Acheson’s famous phrase, lost a continent but not yet found a role. Six prime ministers later, the country is more divided, less influential and poorer than it would otherwise have been. The central lesson is not that every problem has one cause, but that pretending it does only makes things worse.
The next ten years could be brighter, but only if Britain stops hunting for silver bullets — whether blaming the EU for all its woes or imagining that rejoining the EU would solve them — and instead fixes its own weaknesses in policymaking, the state and the private sector.
Hit to GDP from Brexit
Debt as share of GDP
Budget deficit
What a decade of drift has cost
As this newspaper warned at the time, Brexit was a terrible blunder. Britain failed to make anything of the flexibility that Brexit was supposed to bring. Dreams of a free-market Singapore-on-Thames have evaporated. Instead of deregulating, the state has become more intrusive, more inclined to meddle and, partly as a result, broke.
The economic damage is material: the hit to GDP has been at least 2.5% and probably much more. The distraction mattered as well. Officials and businesses have spent countless hours haranguing each other, first over how to “get Brexit done” — and then over how to mitigate the damage. On the world stage, Britain has been diminished.
The promise of “taking back control” has proved a cruel joke. Global events have buffeted the nation, and the Brexiteers’ pledge that immigration would fall was inverted under Boris Johnson, when it soared.
of Britons now see Brexit as a mistake, with just 30% still thinking it was right — fueling centrist calls to rejoin that would risk another decade lost to rowing over Europe.
Worse, the doomed search for silver bullets continues. The populist right is still obsessed with immigration, the populist left with curbing the evils of capitalism. Now centrists, pointing to buyer’s remorse, argue Britain should strive to rejoin the EU. That would be a recipe for the same error in reverse: treating membership as the answer to every problem.
National renewal means grappling with many reasons why Britain is failing to live up to its potential. Policymaking is adrift, the state is inefficient, and the private sector is weighed down by taxes and regulation. The country has mustered the leadership for a fresh start before, in the post-1945 invention of the welfare state and the reinvigoration under Margaret Thatcher. It must do so again.
A changed world, and Britain’s lost advantages
The world looks very different from a decade ago. Amid war and pestilence, geopolitics has come storming back. Artificial intelligence looks poised to upend pretty much everything, from work to warfare. Yet government policy is plagued by the ailments that took hold during Britain’s lost decade.
Defence: willing but not spending
NATO allies reckon Russia could attack as soon as 2030. Looking to Asia and resentful of Europe, America is increasingly semi-detached. Britain has the instincts and experience to take a leading role in mustering Europe’s defences, just as it played a vital part in helping Ukraine. Public opinion is supportive: according to Ipsos, only 8% of Britons are opposed to defence co-operation with other Europeans, while 60% are in favour.
Sir Keir Starmer, the prime minister, says all the right things, but has been hopeless about finding the resources to match his rhetoric. On June 11th the defence secretary, John Healey, resigned after the government broke yet another promise to spend more. Britain looks weak — and hence a target for Russia. Its wavering negates one of the country’s main potential attractions for partners across the English Channel.
AI and energy: squandering natural strengths
The government is also squandering Britain’s advantages in AI. Britain will never match America’s dominance — which has security implications, too. But it has strengths in basic research, innovative startups, tech talent and creative policies that could help boost productivity in a moribund economy.
Alas, the sums businesses are investing in AI infrastructure and institutions are piddling. One reason is a net-zero policy that ends up limiting the production and consumption of energy, throttling the construction of data centres. Another is hostility towards American tech firms, including Palantir, which can work with law enforcement and health care.
Closer to Europe, not back inside it
Nobody said solving these problems would be easy. Against the backdrop of covid-19 and wars, it has only got harder. Debt as a share of GDP is 94%, a level not seen since the 1960s. The budget deficit is 4.3%. And Britain’s government debt is the most expensive to service in the G7.
Closer relations with the EU, Britain’s main trading partner, could help. The government has been right to seek to remove barriers to trade in food, aiming to align rules and sometimes being prepared to pay a price to take part in desirable EU programmes, such as the Erasmus student-exchange scheme. This involves continual negotiation with the EU, as it has over years for Switzerland.
But the relationship must not become an all-consuming distraction. Britain is not yet ready to rejoin the EU. Nigel Farage, arch-Eurosceptic, could be prime minister within a few years. The EU would be wary of a country without a settled majority for membership. Britain must manage outside the club, as it has in finance or farming, a rare Brexit success story.
- Remove food-trade barriers through rule alignment.
- Pay to join valuable EU programmes such as Erasmus when worthwhile.
- Negotiate continuously, as Switzerland does, without reopening membership.
- Risks another decade dominated by an all-consuming row over Europe.
- Faces an unsettled domestic majority and a wary EU.
- Distracts from defence, energy, planning and productivity reforms.
The hard choices behind national renewal
The pro-growth policies Britain needs are not a mystery. More Britons, especially the young, need to get off benefits and into work; the labour market is over-regulated; energy must be cheaper; government decisions are subject to too many veto-points, especially in planning; power must be devolved from Westminster; and so on. But each policy involves someone, somewhere giving something up.
Brexit imbued voters with the fantasy that they can escape hard choices. Someone else will take the pain, be they foreigners or the super-rich, while Britons pocket all the gains. That world never existed and, despite ten bad years, British voters are still in denial. It increasingly looks as if they will need a Thatcher-style shaking to awaken them.
Sources
Referendum result and polling: 52% to 48% on June 23rd 2016; 57% see Brexit as mistake vs 30% who think it was right. Defence and security: NATO assessment on Russia by 2030; Ipsos on defence co-operation (8% opposed, 60% in favour); John Healey resignation June 11th. Economy: GDP hit at least 2.5%; debt 94% of GDP, deficit 4.3%, most expensive debt to service in G7.
Links: Brexit analysis and Europe debate via cited GlobeBriefly explainers; US AI dominance and East Asia productivity context as linked.
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