(january 2022)
Nations in crisis: Britain
Young people don't realize that Britain used to be an empire the same way that
my generation didn't realize that Austria used to be an empire.
When empires fall, they are quickly forgotten.
The British Empire collapsed in less than 25 years, between India's independence
and the independence of the African and Middle Eastern colonies.
Besides losing its colonies, Britain also suffered some embarrassing setbacks,
from the crisis of the Suez Canal (Egypt was perhaps the first country to
realize that Britain had become a paper tiger) to the Islamic revolution in Iran (that deposed the Shah installed by Britain and the USA in a coup that they had engineered).
During the 1980s and 1990s Britain was a member of the European Union and was
busier building a stable economy.
In the last 20 years, however, Britain has gone from one crisis to the next one,
without a clear strategy. First the wars in Afghanistan and Iraq to support the USA, both based on dubious legality and both eventually lost.
Then the financial crisis of 2008, then the Brexit saga/farce that ended in
2020 with Britain's secession from the European Union.
Britain didn't cause the 2008 financial crisis, but government incompetence
did cause the Brexit mess and made covid worse than it should have been.
Britain's recent prime ministers have been so inept and erratic that,
for the first time in history, Italy's government looks positively better than
Britain's.
In fact, Britain's biggest problem could be the very problem that afflicted
Italian politics until the 1990s: corruption. Just on a much grander scale.
If France has a problem with Islamic terrorism, Britain has potentially a bigger problem: interference by both Russia and China.
No other country has been infiltrated as much as Britain has by Russia and China.
"The Russia Report", prepared by the British Intelligence and Security Committee of Parliament in 2019, whose publication was delayed by prime minister Boris Johson for more than one year, details the degree to which Russia can influence
British politics, starting with the 2016 Brexit referendum and with the career of (guess whom) Boris Johnson.
A blind man can see why Johnson delayed the publication of the report: he finally approved its publication one day after the key elections of 12 December 2019 that kept him in power. It was finally published in July 2020.
The very fact that Johnson delayed the publication of a report of national security is evidence of Russia's influence on the top echelon of the British government.
The report details
Russian influence in British politics. Eager to get their cash, for decades Britain has been welcoming
the Russian oligarchs who got rich under Putin. London offered efficient ways to launder money and, above all, to launder "reputations": Russians who are considered gangsters in Russia live the life of well-respected investors in London.
Wealthy Russians with close links to Putin,
who employ army of lawyers, P.R. agencies, tax accountants and real-estate agents,
now pervade the social and political
system of Britain and cannot easily be eradicated.
No wonder that the Russian secret services can freely move around London and
stage attacks against dissidents who are theoretically protected by political asylum:
Alexander Litvinenko was murdered with plutonium by Russian agents in 2006, and in 2018 Sergei Skripal was almost killed in an attack with nerve gas.
The report details payments from Russia to members of the House of Lords and the
degree to which the "lords" of Britain work for Russian conglomerates linked to Putin.
In January 2022 Britain's secret services issued a rare warning that the British political system has been compromised also by Chinese agents, singling out a Chinese lawyer named Christine Ching-kui Lee working on behalf of the Chinese Communist Party to disrupt Britain's House of Commons, and specifically mentioning "financial donations to political parties, lawmakers and potential candidates for public office".
While China's presence is negligible compared with Russia's widespread presence in London, it proves again how common it is for British politicians to accept gifts from adversary foreign powers.
Regardless of whether Brexit will turn out to have been a good or bad decision for the economy,
Brexit has created two tensions within the so called "United Kingdom".
The first one is between young people and old people. Young people voted
overwhelmingly to remain in the European Union, and, worse, many young people
who were of voting age in 2020 (when Brexit was finally consummated) did not
have the right to vote in 2016 (when the decision was made) but now have to
live with it - they are right
to feel that Brexit was forced on them by the older people.
(See Brexit's Lesson to the Young Voters of the World)
No wonder that a poll in October 2021 showed that only 36% of the British public would vote "leave" today.
The second tension is between England and
two of the kingdom's constituent parts, Scotland and Northern Ireland, which
both voted to remain in the EU.
Now they are out of the EU and still part of the UK, while in fact many of them feel closer to Europe than to Britain.
To many Irish and Scots, Boris Johnson is the prime minister of England, not of Britain.
His government is an English one, not a British one.
This happens when Britain faces the worst "cost of living" crisis in a generation, as most British media keep repeating.
Britain is affected by the same rising inflation as the USA (5% in November),
but its inflation is mainly due to skyrocketing gas prices (like in Europe).
Brexit compounded the problem by sending home thousands of low-salaried Europeans so that their jobs have been replaced by British workers who demand higher salaries, and the cost is passed on to the consumers.
Britain was slow to phase out gas and slow to adopt renewables, so it is
in the same situation that most of Europe is: dependent on imports.
Boris Johnson's government, to pay for the National Health Service, has also increased taxes on the middle class, and some estimate that the tax burden will be the highest overall since 1950.
There is a more structural problem with the British economy. After World War II
it became self-evident that British industry was not competitive. First Germany
and then Japan (but even France and Italy) successfully outgunned British
manufacturers. During the 1970s the British government (notably Margaret Thatcher, whose government was packed with financial experts) introduced financial
deregulations aimed at improving British competitiveness:
the Competition and Credit Control measures in 1971, the abolition of exchange controls in 1978, the Big Bang and Financial Services Act in 1986, and so on.
Those deregulations failed (so much so that today it is hard to mention a single British manufacturing firm of a significant size) but indirectly they concentrated financial power in the City of London. The City used its power to create a
new financialized global order that, to this day, revolves around it.
The deregulations of the 1970s-80s failed to reinvigorate the British industry
but involuntarily succeeded in turning Britain into a financial superpower.
It helped that Britain joined the European Union.
In 2022 every major country has a financial center that competes with
London (New York, of course, but also Tokyo, Singapore, Hong Kong, Dubai, Frankfurt...).
Inevitably, Brexit have made London less open and less globalized, i.e. the
British government itself has hurt London at the very time when it has to
compete with so many other financial centers.
It is not surprising that in October 2021 Richard Hughes, the chairman of the Office for Budget Responsibility, estimated that
the long-term impact of Brexit on the British economy will be worse
than the one due to covid (about double).
Britain needs to reinvent its economy, and to do so in the middle of a vast and pervading social and political struggle.
TM, ®, Copyright © 2021 Piero Scaruffi All rights reserved.
Back to the world news | Top of this page
