Since we left the EU in January 2020 a worldwide pandemic and a European war propagated by a UN Security Council member has ended globalisation as we knew it (forever) and ushered in a new era of complex geopolitics driven by growing competition between China and ‘the West’ (a collective that now has fresh impetus), Russian aggression and the accelerating impact of climate change.
The high inflation that has followed the pirate Putin’s invasion of Ukraine will have wicked economic consequences for all of us. To navigate the coming decades states will need political and economic resilience: the ability to create wealth and keep the lights on, maintain social cohesion and protect core values through one storm after another.
The years from 2020 to 2022 created moments of advantage for a UK now free (and obliged) to move with greater agility, and in some cases we have grabbed the opportunity in a way that demonstrates capability and intent as we saw with COP26, vaccines, Aukus, Ukraine and the Global Combat Air Programme.
Yet a divided United Kingdom has so far been unable to construct a convincing strategy for the new world order.
This shouldn’t come as a surprise – despite the jeopardy of leaving the EU, an unexpected act of deviance from global orthodoxy, our political attention span is currently shorter than any other G7 countries, and three Prime Ministers have so far proved unable to do very much with Brexit.
Thus we enter 2023 in a bad way: our government sclerotic, our under-invested infrastructure creaking, our public services striking and a shrinking economy.
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So far, so New York Times. And the Gray Lady’s commentators have a point: the UK has lost its mojo. Our political class can behave as if government is an amusing game, officials process urgent requests at glacial speed and the business mood has turned sour and risk averse.
The Treasury’s suppression of industrial strategy since the 1990s now looks complacent and has left our economy un-anchored. British boardrooms are more reluctant to adopt new technologies than their G7 peers, while only a small fraction of our pension capital (at nearly £3 trillion in 2020, the second largest in the world) is invested in UK equities and scale-ups.
The sense that Britain needed a cold shower was why many voted to leave the EU back in 2016, but so far Brexit hasn’t provided many useful answers, and its chilling effect on our EU trade and Foreign Direct Investment has ratcheted up the anxiety levels. Low morale matters because it saps confidence and changes expectations and behaviour – what the Prime Minister recently called the “creeping acceptance of a narrative of decline”.
But there is a counter narrative: that the New York Times’s anglo-scepticism blinds it to the fact that the UK’s underlying condition is not nostalgia but nonconformity, and a healthy obsession with holding power to account. You might call it “Democracy First”.
Leaving the EU restored the direct link between British voters and their government. The implementation of a controversial and deeply problematic referendum result made plain that when forced to choose between the rights of citizens and the interests of capital, the British state is on the side of the people. This matters.
British society is as open, diverse and tolerant as any in the world, and unlike the US is free of religious fervour and deep-rooted racial tension. An already robust system of constitutional monarchy – Brexit’s agonies would have blown the roof off most other parliaments – will become fairer and more resilient as Brexit drives further devolution and political reform.
“Democracy First” should also build our economic resilience because liberal democracies tend to create attractive operating platforms for wealth creators and investors. From the Industrial Revolution to the emergence of London as a global financial centre, the UK has been an exemplar of this connection. Our economy has underperformed since the 2008 Financial Crisis but it still possesses fundamental strengths: the world’s elite chooses to speak our language, we control our (dented) currency, we have the best research universities in Europe and are strong in growth industries like science, innovation (only the US and China have more unicorns), finance and services.
Over time our businesses will learn to work around the frictions of being outside the Single Market, and because of Brexit we should remain open rather than raising barriers as the EU is doing, and ensure that our regulatory regime, already one of the most admired in the world, continues to deliver the best possible outcomes for businesses and consumers.
But democratic rigour, and jam tomorrow, don’t provide solutions to today’s problems. We have a choice: use Brexit as a starting point for national renewal, or remain divided and start teaching our children the decline narrative.
First, we need to heal the divisions of 2016. Those of us who backed Leave must acknowledge that Brexit isn’t working, has hampered the lived experience of many, particularly young people, and has done damage to our trade with the EU that has not yet been balanced by better trade with the rest of the world. It is not clear to most people what Brexit is actually for. And pragmatic Remain supporters need to accept that our relationship with the EU has been irreversibly altered, that Leave voters weren’t “stupid” but made a decision to reject an EU-UK status quo that they neither understood nor regarded as in their interests, and that Brexit doesn’t mean a lurch towards extremism – you’ll find representatives of the hard right and left in the Assemblée nationale, Bundestag and European Parliament but not in the House of Common). The UK can be a good European without being in the EU. The concept of Global Britain should be welcomed by internationalists.
It might help if we learnt to regard the Brexit years as a shared trauma, one that we all survived. The referendum result was, in political terms, the most difficult imaginable because it was decisive but close and provided no instruction as to what leaving the EU actually meant. The closeness and ambiguity of the result emboldened some on the Remain side to demand another referendum: re-runs worked for the European Commission when Ireland, France and the Netherlands voted against the flow of European integration in the noughties.
Months then years of recrimination followed between individuals and interest groups each convinced that only they were truly acting in the national interest (though only one side had won the referendum), producing a furious stasis and then – suddenly – an act of constitutional violence by Theresa May’s successor that wrenched the UK free in a clean break. This was a hard Brexit in every sense of the word and though it provided a blooded kind of justice for the 52%, it landed the UK further from the EU than many Leave voters had intended.
This year, the Prime Minister will attempt to narrow the gap. His first objective is to unlock the Northern Ireland Protocol. Rishi Sunak hopes that removing the stone in the shoe of the UK/EU relationship will enable mutually rewarding collaborations in areas like scientific research, energy strategy and mobility. The European Commission would also like better relations with Europe’s leading defence and security power, and the EU’s biggest trading partner, although Brussels regards our messy democracy with Olympian hauteur and is in no mood to hand us any freebies.
If a thaw does set in, the European Political Community (EPC) championed by Emmanuel Macron could emerge as a new structure to contain Britain in Europe. The EPC is a possible solution to other unresolved EU relationships including the challenge of where to accommodate post-war Ukraine; the UK’s endorsement would be a big plus.
Meanwhile, the man who looks likely to be the next Prime Minister has established himself as the most pragmatic of Remainers, pledging to keep the UK out of the Single Market and deliver on Vote Leave’s promise to take back control. Rishi Sunak would be smart to involve Sir Kier Starmer in his discussions with Brussels, signalling that the UK’s Brexit divisions really are coming to an end.
Even better if Sunak can persuade Starmer to participate in a public dialogue about the contours of a new British consensus. What sort of country do we want to be, at home and abroad? This might seem a strange question to ask one of the most successful countries in the world, but you try and answer it. Or point to where a British plan is written down in language that is easily understood?
Although a post-Brexit consensus must be pitched high enough to allow enough democratic space for the political parties to compete for primacy, the (unspeakable) truth is that Labour and the Conservatives are currently in broad agreement on the UK’s economic and political priorities – Labour’s recent review into how to make the UK the best place in the world to start and scale a business could have been written by CCHQ. Post Corbyn, Brexit and Truss the competition isn’t about “what”, but “how”.
A new British consensus must be built on a long term plan. Since 1945 Whitehall strategy has been light on detail, laissez faire in spirit, and held tight by the centre. Westminster’s adversarial system created a fig leaf for the absence of grand strategy – there was something un-British about the idea of consensus, and what was the point of making one plan when the next Government was sure to rip it up in favour of another? The elite’s failure to construct and communicate a convincing strategy plan helps explain why we left the EU. It also explains why our infrastructure is creaking, why the NHS is failing and why the City of London is not better integrated with, or more deeply invested in, the rest of the country. We need uncontested, widely understood long-term strategic objectives on matters like our transition to renewable energy, infrastructure investment and healthcare set out for the next few decades.
If our politicians can’t agree upon what these strategic objectives are then maybe we need a Royal Commission – with the theme of British Resilience maybe – to decide for them.
A new British consensus will require a more effective and hard-headed government. After resigning from No10, Munira Mirza, Boris Johnson’s respected former Policy Director, set up Civic Future, a foundation to prepare the next generation of leaders for public life.
We need more initiatives like this, and we need to change a Civil Service culture that often appears to prefer consulting to decision-making, and makes it very difficult to remove poorly performing officials. And Westminster must learn to temper its tribalism, celebrate what is held in common, and steer debates and enquiries towards producing solutions and efficiencies, rather than rows. This will require a change in the behaviour of Ministers, Civil Servants, MPs and – hardest of all – the media; can the lobby build as well as destroy?
Finally, a new consensus needs to draw on science and technology as the driver of British prosperity and influence. We have an unrivalled history of invention, and a rich innovation ecosystem UK-wide. London is the tech capital of Europe, and the continent’s VC HQ. We are leaders in AI, biotech, cybersecurity, gaming, fintech, quantum computing and nuclear fusion. British science supports the defence and security capability that underwrites our global role.
It is not crazy to aspire to become a science and tech superpower, but it will require constant policy and investment focus from a succession of Governments, a well targeted visa programme and a transformation in the quality of our scale-up ecosystem so that more founders choose to “go global” from the UK.
A new British consensus is what a majority of voters wish for. But that doesn’t mean that they will get it. The UK possesses the tools of good statecraft: liberal democracy, an advanced economy, soft and hard power. But these capabilities mean little while so many are so divided. If our elected representatives can find a way of coalescing around an ambitious, long-term plan, the UK could turn out to be the most successful democracy of the 21st century.
The author is a Senior Managing Director at Teneo, the global CEO advisory firm. He worked as Prime Minister Boris Johnson’s Chief Business Adviser 2020-2022.