Alex Morton is Director of Policy at the Centre for Policy Studies, and was a member of David Cameron’s Downing Street Policy Unit.
Britain’s curse is that it is a medium-sized economy attached to a global city, London, and with an awe-inspiring history, including an empire which once covered nearly a quarter of the globe. This can lead us into error.
We are still one of the world’s leading economies. But while we have only slipped a little in rankings, we make up a steadily falling share of the global economy. World Bank data shows in 1990, on a purchasing power parity basis, the UK made up 3.4 per cent of the world economy. In 2015, it made up 2.3 per cent. By 2040, it will be between one per cent and 1.5 per cent, depending on how well we manage our affairs.
In terms of defence spending, data from the Stockholm International Peace Research Institute shows that in 1999 we were responsible for more than five per cent of the global total, based on market exchange rates. By last year, this had fallen to just 2.7 per cent. This, too, within a couple of decades will be between one and two per cent.
None of this makes me regret my vote to leave a failing and dishonest attempt to create a European state. The fact that the EU has little interest in a decent Brexit deal is a reminder that politics, not economics, or the well-being of the people of Europe, drives both Brussels and the European project.
But to get a grip on where to go next, we need to be honest about where we start from.
If you don’t play to your strengths and know your weaknesses, you end up losing
In the wake of Brexit, some Leave campaigners claimed that a trade deal with the Europeans would be the easiest in history. It has hardly turned out that way. The main reason that we will probably not end up with an economic blockade is not because Europe (or rather German car manufacturers, Italian prosecco barons and other key players) needs our trade, but because any attempt by the EU to impose punitive actions risks destroying the fragile, rules-based trading system that Trump is already undermining. And, of course, because our military, financial and other commitments are useful to member states – if, as I’ve argued before, we are prepared to leverage them.
The problem now with ‘hard Brexit’ is that arguing that the WTO is a realistic option will sound like those earlier promises – a precedent which will make many voters worried.
We need to be realistic as we leave the EU. One of the arguments made by pro-Europeans was that we could ‘run’ Europe and mould it in our image. We failed. Consider, for example, our priority of services integration. We now export 4.6 per cent of our GDP to the EU in services – but nearly double that, at 7.9 per cent, to non-EU countries. Hard to see a victory there. We opposed the euro, the start of integration on home affairs, and much lower external tariffs – fail, fail, fail.
If we failed to run Europe, can we really hope to indirectly run the world? From our junior role in Middle Eastern adventures (with limited results, at best), to the Obama and now Trump focus on Asia and China, it is hard to hear more than the long melancholy roar of British power receding. Despite Trident submarines and a seat on the UN Security Council, we are not the force we were. Perhaps we should focus more on effectively running ourselves rather than trying to run the world.
Soft power is just an echo of hard power, and that too slowly ebbs
An alternative argument is we are a ‘soft power superpower’. Certainly, our language helps. But a recent Afro-barometersurvey showed that few former colonies say that we have the greatest influence on their affairs, or are the development model they should follow. China and America are miles ahead (and China is way ahead of us in FDI flows). Elsewhere, India is more concerned with catching up with China’s economy than building links with its former colonial master.
Soft power in many ways is the institutional inertia left by hard power – and it only remains until a new hard power displaces it. Witness the growth of T20 cricket and the rise of the Indian Premier League reshaping how the game is played. Or take another impact: in cinema, China has just become the world’s largest market (which is why more and more movies now have scenes set in China or where leading characters are a mix of American and Chinese actors, or Asian-American). We might still punch above our weight in soft power, but even here this is likely to dissipate over time.
Being great does not mean being big
In truth, none of this really matters. Our lack of global power status and relative size doesn’t mean we should be swallowed up in a European state, any more than South Korea should decide to hand over their government to the Chinese, or Canada merge with the USA. Nor should it be used as an excuse to underfund the armed and security services that keep us safe. But we need to accept our global strength will come primarily from our economic and social wellbeing.
If by 2040 our economy and wages are growing at 3-4 per cent a year, with wider ownership of homes and pensions, high quality of life, and a strong national sense of pride, this would be very different from an economically stagnant Britain with declining home ownership, lack of security in old age, riddled with division and insecurity. It is also obvious such a confident and successful society would retain more soft power around the world and afford a better military.
Take Singapore, which has some unattractive illiberal qualities but due to its booming economy and sensible policies has far more global influence than Malaysia, despite having a population one sixth the size. Thatcher’s Britain by the late ’80s gained more weight from economic renewal than military might, despite the temporary boost of the Falklands War.
A new Global Britain will come from hard-headed institutional reform, not sloganeering
Sadly, many of the arguments about ‘Global Britain’ appear to be about trying to prove to the fanatical wing of the Remain movement that Leave voters, and their leaders, were not racist and were more internationalist than them. Frankly, who cares what this hard core of anti-democrats think?
The irony is that the same Establishment fighting so desperately to overturn the EU referendum is the same Establishment that has failed to develop the policies that most ordinary people want to see.
Britain will be a global leader if it can become the first developed country to break out of the economic and social malaise that Western countries are sinking into. And the Establishment that would need to be taken on for Brexit to work is the same group that needs to be defeated for us to enact sensible social and economic policies to break out of this decline.
A renewal of our basic values of a market economy – not a rigged and corporatist system – effective but limited government, national pride, and liberal freedoms requires a plan to reform our domestic institutions, not selling dreams of past glories and chasing an illusion of lost power on the world stage.
Global Britain – powerful because it shows the way forward as a leader and example – might work and is potentially an appealing vision. But while any vision needs a salesman and leader, they must set out a vision based on a hard-headed appraisal of where we are, what our strengths are, and where we must go. Otherwise we risk not a Britain that is not seen as global, but feeble.