The recent resignation of Keir Starmer as the UK's Prime Minister has once again thrust Britain into the spotlight, this time highlighting the country's ongoing struggles post-Brexit. Starmer's departure, just a decade after the Brexit vote, underscores the profound impact of this decision on Britain's political and economic landscape. With six prime ministers felled by economic and political turbulence in the past decade, Britain has become a member of an unenviable club, experiencing more recent churn at the top of government than many other countries.
The rot began long before the 2016 Brexit vote, with the 2008 financial crisis setting the stage for a series of economic and political shocks. Britain's historical two-party system has fractured into a patchwork of increasingly tribal alliances and factions, straining its finances and politics. The country is now searching for a stable role between Europe, China, and an increasingly unpredictable and transactional United States.
Andy Burnham, the runaway favorite to replace Starmer, would inherit all of this. His supporters have high hopes for his mix of charisma, man-of-the-people vibe, and pro-business agenda. However, the widespread skepticism when Burnham was sworn in as lawmaker Monday, having won a special election last week to challenge Starmer, underscores the challenges ahead. Burnham will need to understand the structural forces at play and provide people with some sort of reassurance that life isn't out of control.
The instability stems from huge demands on government from an aging society, limited growth in a globalized economy, and the constant drumbeat of social media. Britain is still the world's sixth largest economy, has one of five permanent seats on the United Nations Security Council, and has an estimated arsenal of 225 nuclear weapons. However, the country's economic challenges are profound, with real-term average wages not increasing since 2008 and austerity costing the average Briton half a year of life expectancy between 2010 and 2019.
Brexit itself has been a major factor in Britain's economic instability, with the economy being 6%-8% smaller than it would have been otherwise. Brexit didn't lower immigration either, with the decline in European incomers offsetting by those from outside the EU and net migration growing from 335,000 in 2016 to 944,000 in 2023. The UK in a Changing Europe, a London think tank, has estimated that Brexit has cost the economy 6%-8%.
The next jolt came with Russia's full-scale invasion of Ukraine in February 2022, which spiked energy costs throughout Europe. Britain's reliance on imported natural gas for heating and cooking left it particularly vulnerable to the ensuing Europe-wide price shock, with inflation hitting a 40-year high of 11% in late 2022. The bleak idiom of people having to choose between 'heating and eating' reflected how bad things were for many Britons.
Starmer rode this wave of discontent against the ruling Conservatives to win a historic landslide in 2024. However, his government has struggled to break free from the economic straightjacket, with change coming more slowly than many demand. The recovery has been further sidelined by the Israel-Hamas war and the consequent global shock to oil markets and spiking prices for mortgages and other types of borrowing.
Burnham will face a similar conundrum. He has suggested he would resist doing either, but has said he wants to bring utilities companies 'under greater public control' and reform Britain's costly, dysfunctional social care system. A further wrinkle is the growing consensus across Europe that they need to dramatically increase their defense budgets to cope with a reality in which the US is withdrawing its historical support, while Russian aggression is only increasing.
In conclusion, Britain's ongoing struggles post-Brexit are multifaceted and complex. The country's economic instability, political fragmentation, and social challenges are deeply intertwined. Burnham will need to navigate these challenges with a mix of charisma, policy innovation, and a willingness to speak difficult truths to the public. The future of Britain remains uncertain, but the path ahead will be fraught with challenges and opportunities.
