Britain’s economic and social challenges are now so monumental that they require a response on a transformational scale. Addressing a failing capitalism and a society grossly disfigured by inequality and collapsing public services rests, above all, on a repudiation of the laissez-faire economics of the past 45 years. But the most serious failure of Conservatism is the despair it has created about Britain’s future. Without a feasible, inspiring vision of our future, we cannot reach first base – a revival of sustained growth.
The prerequisite for growth is investment that drives productivity. That is a truism. Britain does not invest sufficiently. But no business invests in a wider economic, social and political vacuum. Nor, indeed, does government. The heart of the right’s failure is that it has no plausible story to fill this gaping vacuum. The right, with its vision of Britain’s exceptionalism, rooted in lost 19th-century glories of free trade, empire and victory in two world wars, is grotesquely out of kilter with what Britain now is, how contemporary capitalism works and what vision might inspire most of our entrepreneurs and people.
Yet for the past 14 years it has defined the national debate, vainly trying to ape the market-fundamentalist revolution Margaret Thatcher began, and in the process trashing one obvious partial solution to the question. Britain should be part of Europe and its economic and political structures. Instead, Conservatism gave us Brexit, and an attempt to transmute a very European country with social democratic values into a Hayekian utopia. It convinces no one but a shrinking echo chamber of ideological obsessives and cranks.
By contrast, postwar Conservative politicians had lived through the shock of the 1929 financial crash and being forced off the gold standard. They had had to accept decolonisation and the end of empire as inevitable. In that era, most in the party would have known that any ideas of “global Britain” strutting the world stage were ludicrous. Leaders then knew the future lay in making common cause with Europe.
Joining the Common Market, which morphed into the EU, did answer the question of national direction, even if at the time the case was made more in terms of economic benefits than addressing the existential question of Britain’s national purpose. The launch of the single market in 1993 had a particularly stimulating impact on the UK, which became an increasingly attractive destination for multinational investors. The UK car industry was reinvented around European and Japanese car manufacturers investing in order to export to the EU. Financial services also boomed, with the City of London becoming Europe’s financial centre.
By the eve of the financial crisis, Britain was becoming a fully fledged European economy. British investment levels equalled the G7 average. British household incomes were actually higher than in France or Germany. London in particular was becoming the New York of Europe – not only its de facto financial but also services capital.
But not enough was done to ensure that prosperity was shared around the country, despite the European Investment Bank lending aggressively in Britain’s poorer regions. The UK’s deep problems – the corporate governance regime, the structure of the financial system, the propensity to create monopoly – were masked. But no leading politician and only a handful of businesses spoke up for the EU as a driver of prosperity – let alone how central it was to Britain’s destiny.
Then the financial crisis rocked the economy with a shock that was multiplied by Brexit. The UK’s productivity deficit with France and Germany has almost tripled since 2008. Typical household incomes are now 16% lower in the UK than in Germany, and 9% lower than in France. The City of London is suffering accelerating decline. Had Britain remained in the EU, by 2030 we would have been an economy coequal, if very different, to Germany’s. As it stands, the post-Brexit decade will be a lost one. It is a tragedy.
To turn the economy around demands above all an intellectual and cultural readjustment – an honest recognition of what Britain can reasonably be, and an agreement to claim exceptionalism only when it is earned. Vainglorious boasting about being “world-beating” or “world-class” in almost every sphere, however extravagantly at variance with the truth, must be derided and buried.
Take the empire. Portugal, Spain, France and the Netherlands all built great overseas empires. Britain’s was the biggest, certainly, but it was part of a larger European story of overseas expansion. Magellan circumnavigated the globe 50 years before Drake. Amerigo Vespucci was an early voyager to what he called the New World. Abel Tasman arrived in Tasmania and New Zealand a century before James Cook. Jacques Cartier and Samuel de Champlain opened up Canada to Europeans.
Nor was the British empire genial, liberal and generous, as some wild-eyed conservative historians have claimed. We may have left India a national railway system, but little is said about the crucial role that monumental British trade surpluses with India for the 50 years up to the first world war, throttling its textile industry in order to control its gold, had in sustaining sterling on the gold standard.
Like other European powers, Britain’s overseas expansion was exploitative, extractive and racist. Portugal pioneered the transatlantic slave trade from Africa to Brazil, but after the middle of the 17th century, the British overtook it, becoming Europe’s leading slave trader. Bristol and Liverpool rose to prosperity on the proceeds of slavery.
Nantes, Europe’s third great slave port, memorialised its apology for the victims of slavery in 2012. Gradually, and too often against rightwing resistance, Britain is making similar, if belated, steps. Liverpool now has a slavery museum. Tate Britain has recently rehung its paintings, carefully describing their associations with empire and slavery. The National Trust in 2020 set out its approach to colonialism and slavery, identifying some 90 properties in its charge that had such links.
This is no denigration of our past, as some MPs have claimed. It is an essential part of the necessary acknowledgment of the realities of empire, and its deep and continuing impact on our culture and institutions. If Britain is to become what it can be – a progressive, front-rank European power with a vigorous economy and fair society, committed to European peace and the achievement of net zero – it can no longer be trapped by its past. This is not “unpicking our history”, as the prime minister, Rishi Sunak, told the House of Commons in April 2023, when pressed to apologise over slavery; it is looking at it in the eye to keep our feet squarely on the ground. We build a future not by inventing a fantasy lala land of yesteryear, but by rooting ourselves in shared truths.
Will Hutton is a regular columnist for the Observer. This article is an edited extract from his new book, This Time No Mistakes
