Former Prime Minister David Cameron’s gamble of a referendum to determine if Britain should “stay” or “leave” the EU was beyond reckless. Now, six years after deciding by a slim margin to divorce from Europe, Britain has plummeted into Third World territory. Following the hapless Cameron, the country has been afflicted with three mediocre Prime Ministers–Theresa May, Boris Johnson, and here-today, gone-tomorrow Liz Truss–proof positive that the Peter Principle is alive and well in un-merry old England. It is stunning to think that these three minnows occupied the same office that previously hosted giants like William Pitt the Younger, Castlereagh, Disraeli, Gladstone, Salisbury, Lloyd George and Churchill. The jury is still out on Truss’s replacement, Rishi Sunak. The signs, however, are not good. Sunak continues to insist that Brexit was a good idea.
Britain’s standard of living is declining and accelerating downward at a dizzying rate. The nation is in recession and headed for depression. Its 11 percent inflation is the highest among G-7 countries. Incomes are plummeting while energy costs skyrocket. There are no good economic policy alternatives available to a government that less than a third of Britons still support.
Trade has been disrupted because the price of an open border between Northern Ireland (part of the UK) and the Irish Republic (a member of the European Union) is border checks when goods travel between Northern Ireland and Great Britain. Trade between the UK and EU is down by 20 percent. The pound sterling is not so sterling anymore. The weak pound has increased the costs of imports, leaving UK households poorer. Wage growth has stagnated while the cost of everything rises. Britain’s labor supply has crashed due to a massive outflow of EU workers. Investment is down by 14 percent. British companies are voting with their feet, leaving for the continent. All in all, Brexit has been a catastrophe for Britain. Prospects moving forward are dismal.
Nicola Sturgeon, Scotland’s First Minister, believes that the time has arrived to move forward with another referendum on Scottish independence. Why would Scotland want to continue to be dragged down by affiliation with the governmental chaos and disastrous economic policies foisted upon the nation by Westminster? The courts have stalled an independence referendum for now, but if Scotland succeeds in saying goodbye, can Northern Ireland and Wales be far behind? London may soon find itself governing a tiny, no longer relevant rump state like Austria after World War I.
U.S. Republicans should heed what the markets told Truss after she proposed tax cuts for wealthy Britons and large corporations without paying for them other than by printing money and fueling even more of the double-digit inflation that torments the country today. It was stunning to listen to her argument, identical to the Republicans’ failed playbook, that the benefits would trickle down to the masses and that tax revenues would subsequently rise. That this specious thesis discredited multiple times in the U.S. over the past 40 years could seamlessly cross the pond and find favor in the mother country is proof beyond any doubt that Truss and her now-deposed cronies were in way over their heads. We on this side of the Atlantic can only wonder why the markets give a pass to this absurd Republican notion every time the GOP goes down this potholed path. Maybe now that they slapped down Truss, the markets will react similarly the next time the GOP promotes it.
UK polls reveal that almost two-thirds of Britons have buyer’s remorse regarding Brexit. It may be too late for the only solution to bedraggled Britain’s self-induced dive into the rabbit hole of economic penury: going hat-in-hand to Brussels and begging to be let back into the EU. They can only hope the continentals don’t respond with: you can’t have your crow and eat it too.
November 27, 2022