Defend Truth


The plight of the UK after its historic economic, social and political self-harm


Natale Labia writes on the economy and finance. Partner and chief economist of a global investment firm, he writes in his personal capacity. MBA from Università Bocconi. Supports Juventus.

A country on a losing streak, beset with myriad political, social and economic crises: such is the generally agreed take on the current plight of the UK.

It did not have to be like this. History may regard the turning point to be the holding of a referendum on membership of the European Union, an act of social, political and economic self-harm with few equivalents.

The perennially dubious benefits of leaving the EU were recently clarified in an official government paper released last week, entitled “The Benefits of Brexit”. It boasted of being able to have blue passports and a crown stamped on pint glasses. It would be funny if it was not also economically ruinous.

The promise of a free trading, regulation-lite, low-tax UK sold by Brexiteers is no closer to materialising than it ever was. Meanwhile, the ongoing stasis over what to do about that region on another island to the main part (which includes a country which may vote to leave the country) and shares a border that cannot exist for political reasons, across a sea on which there must now be a border but which is now unconstitutional, and which is also inhabited by two religious groupings who have a history of mutual violence and antipathy with few equals, seems further than ever from being resolved. The issue of a post-Brexit Northern Ireland is indeed a conundrum which may get a lot worse before it gets easier. Winston Churchill’s musing on Russia – “a riddle, wrapped in a mystery, inside an enigma” – could not be more accurate.

On top of this situation of political and economic no return comes a prime minister who increasingly looks catastrophically incapable of leading. Boris Johnson’s unfounded allegations last week about the leader of the opposition, Labour chief Keir Starmer, having played a role in defending paedophile Jimmy Savile – which resulted in Starmer being attacked by a violent mob – is just the latest failure of an administration rocked by waves of “Partygate” and associated crises. Johnson’s team of advisers have now largely departed, leaving him wounded and only still in power because it seems no one dares challenge him for fear of inheriting a lethally poisoned chalice.

The fact that the Metropolitan Police Force, once a bastion of respectability and indeed a symbol of everything that was once great about Great Britain, is facing a blizzard of crises, from the covert surveillance of murder victim Stephen Lawrence’s family to allegations of corruption, bribe-taking and covering up fatal police errors related to the Hillsborough Massacre, seems an oddly metaphorical testament to a country losing its way. The rule of law, at one time more essential to the UK’s DNA than any other, has seemingly been misplaced. To call it farcical would be an understatement.

And then, finally, as if to add insult to injury, the son of the Queen is implicated in charges of sex with minors after his close friendship with Jeffrey Epstein.

A litany of crises such as these would be unfortunate in any country. However, they are particularly damaging when combined with an economy which also finds itself in the rough.

This week, statistics released by the Office of Budget Responsibility, the UK’s fiscal watchdog, show that GDP is roughly 4% smaller than it would have been without Brexit. Although, thankfully, initial nightmares of tailbacks of trucks and empty supermarket shelves have abated, costs of food and living are higher and aggregate demand is lower.

Johnson famously recently exclaimed “f*ck business” and has subsequently hiked taxes to their highest in 40 years.

The Tory party, which always prided itself on being a safe, steady and sensible custodian of the economy, now seems hellbent on destroying it.

UK growth over the last five years has lagged behind those of the US and the Eurozone. GDP in the UK was 3% higher in the third quarter of 2021 than in the second quarter of 2016, while, over the same period, the Eurozone produced 7.2% growth and the US 10.6%.

This trend is both worrying and increasingly irreversible, and is starting to have material socioeconomic consequences.

Where does all this leave a country which still has an important role in shaping the liberal, and ultimately democratic, discourse for the Western world? The UK is, still, the world’s fifth-largest economy.

“Unclear” is really the only answer. For South Africans, the UK has always presented a semblance of a place of developed world living and somewhat staid solidity. Therefore, it must be deeply disconcerting to those many South Africans who have sought refuge in the UK to be confronted with a once unimaginable level of dysfunction and self-harm. However, as history has proven, one should never underestimate the inevitability of consequences.

There are few easy fixes. It remains to be seen where the leadership will come from, to reposition the UK as a country that once again can act as a dynamic example of the benefits of free markets, democracy and the rule of law.

It must be remembered that this is not the first time perfidious Albion has faced such challenges. It was only in the 1970s that it was it labelled the “poor man of Europe”, and was later forced to leave the Exchange Rate Mechanism as George Soros “broke the Bank of England”. The UK has been through tough times before.

However, the question remains: Just how much worse will it get before economically, socially and politically, things start improving?

It remains to be seen where the leadership will come from, to reposition the UK as a country which once again can act as a dynamic example of the benefits of free markets, democracy and the rule of law. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.


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  • Bob Marsden says:

    Our governance and the organs of state have been progressively captured, increasingly since Margaret Thatcher established neoliberal orthodoxy as the ideology of power.

    Public school old boys’ network (probably through post-school masonic lodges collaborating) captured parliament. Merchant corporations captured the civil service, including the Treasury, the Ministry of Defence; and the Home office; intelligence cabals captured the judiciary, the Metropolitan and other police forces; influential Non-Government Organisations such as the BBC have had their offices of control filled with establishment placemen, and so on.

    The Labour Party, founded on socialism and opposition to social institutions of enforced inequality, has been captured in a putsch by anti-socialists in order to destroy it.

    South Africa’s recent experience parallels Britain’s. But we have no Zondo, so on it goes.

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