Foreign Affairs
The UK’s Accelerated Decline
A convergence of economic, demographic, and political factors is bringing Britain to a crisis.
President Harry Truman’s Secretary of State Dean Acheson said in 1962 that “Great Britain has lost an empire and has not yet found a role.” In Britain, it is cliché to echo that claim in one way or another, true as it may be.
The UK has nevertheless continued to play a notable role in global geopolitics since, primarily due to its status as the most dependable ally whenever and wherever the U.S. deploys. British and American troops work well together, and this support gives Britain some degree of influence. The British network of bases (soon to be diminished by the Chagos handover) gives the Americans more reach into the Middle Eastern theatre; British and British-American multinational corporations are key players in their own right, with London and the City wielding some American power by proxy. Britain has at many points, including right now, been a larger destination for U.S. Air Force deployments than places like Korea or Italy, and hosts the United States’ only bomber Forward Operating Location in Europe.
What has given Acheson’s observation—that we have not found a role—such staying power is that it speaks to two uncomfortable truths. The first is that Britain has rarely managed to convert the strategy of being a junior partner into results measurable as influence and prosperity. The second is that Britain’s drift and decline, and refusal to deal with the world as it is, rather than as it once was, are driving its voters away from the established parties and towards the extremes: the Greens and, more importantly, Reform UK.
Britain has endured a protracted period of near-zero economic growth and low real wage growth. The machinery of British progress has essentially ground to a halt, leaving the nation “ensnared in a cycle of slow decline.” The UK has achieved this while ballooning its debt to the point of a bond crisis, hiking taxes now to a peacetime high and paying more unemployment and long-term sick benefits than ever before. In Manchester, the UK’s second city by output, 25.5 percent of the working-age population is economically inactive. Britain pays some of the highest energy prices in the world, undermining entire value-chains and eroding those few bastions of industry that remain.
After a similar decline in the 1960s and 1970s, Thatcher prompted a resurgence of British military and economic power based on a firmly Atlanticist conception of Britain’s role, and cashed in massively on her relationship with Ronald Reagan and on a deregulatory, free-market revolution. Starting at around half of U.S. output per head, by the end of Thatcher’s three governments Britain was at 90 percent of the U.S. level. By the end of 2007, Britain had a higher GDP per capita than the United States, though this was partly a product of a strong sterling. Today, GDP per capita at purchasing power parity is back down to 71 percent of the U.S. level.
While inflicting the costs of productivity loss and unemployment, the expansion of the British state has not delivered the hypothetical benefits; instead, services are performing worse on the most common metrics, compared both to similar European countries and to previous decades in the UK itself. Britain’s public sector, from the military to the National Health Service (NHS) to the police forces, has disproportionately spent funding increases on administrative and senior bureaucratic staff. The number of full-time civil servants has grown from 384,000 in 2016 to 517,000 today, a 35 percent increase in staff levels and more than a doubling of overall costs, according to Cabinet Office expenditure data.
A 2023 study explained that this expansion was “top-heavy, London-centric, and tilted away from operational delivery”, with 87 percent of the increase accounted for by the top three pay grade levels. Between 2023 and 2024, the number of civil servants earning more than £100,000 increased by 42.5 percent, while the number working in frontline roles actually fell by 955 posts. The centre-left Institute for Government’s yearly Whitehall Monitor estimated in 2024 that grade inflation—promoting staff to higher wages who continue to perform the same junior roles—has added £1.6 billion each year to the civil service bill. UK government debt is £2.8 trillion, or 93 percent of GDP, yet the growth of the public sector and the special treatment of public sector pensions means that the taxpayer also has a hidden unfunded public sector pension liability of a further £2.6 trillion.
Centrifugal politics (in the literal sense of fleeing the center ground) is therefore on the rise. The center has been discredited for having delivered the worst of both worlds—cripplingly expensive to those on the right, and woefully insufficient to those on the left. It is the right, and Nigel Farage’s Reform UK, for whom the electoral moment has come.
State bloat has persisted through both the Labour governments of 1997–2010 and the Conservative governments of 2010–2024, though it has accelerated during the premiership of Keir Starmer. Within a week of taking office, the incoming Chancellor of the Exchequer Rachel Reeves had announced a general pay increase of £11.6 billion to public sector workers, in addition to cancelling the previous government’s commitment to reducing the size of the civil service by 15 percent. These pay rises, again, were not focused on frontline staff, nor were they attached to efficiency or productivity conditions. The Strategic Defence Review (SDR) 2025, the UK’s premier military and geostrategic governmental report, seeing declining capability in combat, intelligence, and logistics roles, recommended as a minimum first step to “release military personnel in back-office functions to front-line roles” and automate 20 percent of HR, finance and commercial functions by July 2028. No progress has been reported so far.
This discussion does not yet include the shadow state—the £7.5 billion (and growing) spent annually on temporary staff—nor the £1.5 billion of contracts won annually by the Big Four consulting firms, nor the £240 billion spent on local government, nor the staggering £270 billion spent annually on more than 300 quasi-autonomous non-governmental organisations (“quangos”) employing the equivalent of nearly 391,000 full-time staff. A 2025 report recorded much higher spending on quangos at £390 billion.
The rules and regulations produced by the quangos in turn create the need for more permanent staff in local government and the civil service to interpret and comply with the growing corpus of statute and non-governmental regulations, as well as consuming the time of frontline staff, and often reproducing the very same costs in the private sector. The results can be seen from the police investigating non-crime hate incidents (NCHIs) to infrastructure projects funding £100 million ‘bat bridges’ and builders completing multi-stage applications for the protection of certain newts.
The Better Regulation Taskforce in 2008 estimated the total cost of government regulation to be around 8 percent of GDP, while a 2020 model estimated the costs at around 12 percent of GDP, or approximately £330 billion. The cost of some quangos are harder to quantify when activity is not made more costly but prevented altogether. For instance, in addition to compliance costs, Natural England’s “Nutrient Neutrality” regulations have blocked some 160,000 homes at any cost, with an imputed £29 billion gross value lost, but also played their part in a homebuilding shortage and the downstream economic costs of that need going unmet. Both hidden costs must be added to estimates of the cost of government.
Despite these trends, it is underappreciated how close Britain came to eliminating its structural fiscal deficit in 2019. While, as discussed, it was by no means getting value for money for the billions it was spending; cheap gas, cheap credit, and growing tax receipts saw Britain on track for a slight budget surplus forecast for the early 2020s. The government’s enormous fiscal response to Covid would, however, massively increase spending to new peacetime highs, taking government spending from an already historic high of 39.5 percent of GDP in 2019 to 45 percent today. The 2025 Autumn Budget confirmed that the government has chosen to keep spending at this elevated level for the foreseeable future.
The productive part of the economy is squeezed by new record levels of taxation in order to fund the engorgement of the unproductive part of the economy. The complexity of the mammoth government we have created, and the breakdown of responsibility and accountability it has caused, have led to Britain’s apparent inability to take remedial steps to reform even on its clearest priorities: housebuilding, limiting mass migration and asylum, or lowering energy costs. Boxed in by itself, successive Labour and Conservative governments have seen no choice but to keep digging. At the individual level, this means Britain has increased taxes on workers while making its democratic processes less responsive to their demands than ever.
Individuals and markets see that the UK’s leaders are committing to the failing model. In one true sense, they feel they have no choice: The bond markets are primed to punish Britain heavily for breaking borrowing rules; taxes must rise save for significant spending cuts they aren’t willing to make. Farage has seen spectacular success framing and reframing this decision as a deliberate policy choice. He draws political capital from the costs of over-government increasingly landing on middle earners and the self-employed. Britain is losing bankers, lawyers, doctors, and high-value businesses while bringing in unprecedented numbers of low-skilled immigrants and asylum-seekers.
Our leaders have given Reform UK the ideal narrative of victimhood. The seemingly unreformable status quo rewards welfare claimants, pensioners, and public-sector workers. It should be no surprise that this model produces more of them by creating incentives to remain out of work, retire early, immigrate, and get on the payroll of the government.
Having stood on a manifesto promise to not raise taxes “on working people,” the government has done exactly that. Starmer’s government has been polling as the least popular in Britain’s very long history. Right-wing discontent in particular focuses on immigration and on the perceived discrimination against right-wing views by police and in courts. Rising taxation at a time when the families of foreign nationals who have arrived in the UK are receiving a minimum of £7.6 billion in “Universal Credit” and at least £3.6 billion in non-welfare expenditure, in addition to the £5.3 billion spent on asylum seekers in the UK, has put the country on the precipice of serious social unrest.
What sets this decline apart from previous phases is both that Britain’s relative importance to the global order is now smaller than it was in the 1970s, and that there is no hint that fortunes will change soon. The latter point is easy to make: Starmer has only succeeded in spending more money on these groups since his election and in taxing employment yet further. His attempt to make modest cuts to welfare spending was stopped dead by his own party—they know, as does he, that they need these welfare votes to stand a chance of reelection. The party pivoted to something they could all agree on: Extending the vote to 16- and 17-year-olds while simultaneously restricting their access to a free internet.
That the British public wish to be governed by a party with no experience in government and no shortage of early scandals concerning their candidates, shows just how corrosive Britain’s recent regimes have been on the fabric of its near-millennia-old democracy. Both older parties’ comms suggest they see Reform as a manifestation of primarily anti-immigration sentiment, but the wide base of support suggests otherwise. The Conservatives in particular are uncomfortable admitting that one of their prized voter bases, the “aspirational working class,” has largely taken its vote elsewhere. The combination of frozen tax brackets, increasing rates, and cost-push inflation is radicalizing middle England just as much, if not more, than rapid demographic change from mass immigration.
What characterizes this government’s consensus on Britain’s decline is a reluctance to pursue many of the available policy options. The government has not authorized the development of the UK’s domestic oil resources, citing climate policy objectives, while at the same time importing record levels of oil and gas. It has also not implemented the measures proposed by Emmanuel Macron to reduce incentives for irregular migration into the UK. The UK has yet to take significant steps to position itself as a more attractive destination for foreign capital and investment; instead, it has increased certain taxes and publicly discussed a potential “wealth tax.” Even if such a measure is unlikely to be enacted, the absence of a clear rejection may be influencing the rapid outflow of capital. In the past year, the UK has experienced the second-highest net loss of millionaires globally, after China. This is not business as usual.
The government has not prioritized reducing the size of the bureaucracy, lowering taxes, reducing benefits, or pursuing deregulation. Unlike previous periods, the current trajectory of decline appears less a case of gradual management and more one of acceleration. The government’s approach appears to be to oversee events as economic and structural pressures move towards their outcome.
One core institution of the British state whose controversies have travelled internationally is the courts. Perceptions that the police and the courts have been suppressing freedom of speech have reached the United States, where they have made a strongly negative impression, particularly in the Oval Office. It is difficult to get a true sense of the scale of the problem from individual stories, but it seems likely that policy designed with the best of intentions has had the inadvertent side effect of creating ambiguous law; and that some citizens, particularly those on the right, have found themselves prosecuted for speech. Yet again, the inaction on this issue, and in some cases the outright denial that there is one, is fuelling the radicalization of middle England.
At a higher level, there is an increasing tendency of judges and courts to insert themselves into political matters. The former Supreme Court Justice Lord Sumption has warned that in recent years “courts… have come to exercise ever more authority over an ever-wider range of public questions,” usurping issues “that ought to be decided by… politics.” In his famous Reith Lectures, Sumption lamented “the decline of politics and the rise of law to fill the void. Fundamental questions of social policy are being settled by judges rather than elected lawmakers.”
This judicial politicization, however well-intentioned, threatens the democratic balance, and Reform UK is the response. Judicial activism has engendered public cynicism as controversial decisions (on matters from Brexit procedures to immigration policy and the aforementioned free speech controversies) appear to elevate judges above Parliament and politics, placing key electoral issues outside the influence of the voters. The result is a loss of trust in the impartiality of the courts and a feeling that the political process is being subverted by an activist legal caste, giving rise to Starmer’s most enduring nickname: “two-tier Keir.”
Institutions that were meant to referee law impartially are now viewed, by many, as having taken sides against certain interests in a way that, despite the complexity of the system, has cut through to the average voter. Put plainly: The same constituency that feels it is shouldering more of society’s burdens than ever detects that institutions view it as undesirable. It is, again, a recipe for unrest.
One of the more consequential dynamics affecting Britain’s domestic and international posture is the elevation of a strict interpretation of environmental and human rights law over a more pragmatic assessment of national interest. This approach has domestic implications, including for infrastructure development and the handling of asylum and immigration cases, and it also influences foreign policy. Under Starmer and Attorney General Lord Hermer—both with extensive backgrounds in human rights law—policy decisions are often framed through a legal lens rather than primarily through strategic considerations of allies and adversaries.
This orientation can result in outcomes that are severely misaligned with broader strategic objectives, such as the decision to transfer sovereignty of the Chagos Archipelago to a state with close ties to Beijing. Britain will, as a result, trade the freehold for a leasehold on the crucial military base while any hope amongst the Chagossians of returning home will be quashed by Mauritians colonizing the islands in their place. The legal lens also causes hesitancy in providing timely support to allies. On the 2025 Iran strikes or Venezuela, our prime minister seemed quite bizarrely proud of the fact that Donald Trump had kept him firmly out of the loop. The pattern is one in which the UK may initially adopt a cautious or qualified stance, subsequently endorsing actions already taken by others less hampered by indecision. In the most recent war on Iran, the delay in Starmer’s decision to allow the U.S. to make use of British bases was reportedly entirely down to questions of legality. The UK couldn’t commit ships that were not available. The UK made significant efforts to be useful. Yet the couching of Britain’s position in such legal terms irritated Trump so greatly that Sir Keir was singled out for the heaviest criticism.
Britain not long ago billed itself as “Global Britain.” It did so recognizing the logic of its close U.S. relationship, the network of Commonwealth states, and a good trade and cooperation deal with the European Union, its largest and closest neighbour. Indeed, the UK left the EU bloc because it correctly identified that Europe was in decline, just as the UK itself was. There was some merit to the idea that leaving Europe could jolt the UK into a more ambitious path for influence. Instead, the UK has found itself frequently outmanoeuvred by larger and smaller powers alike.
Both Britain and the EU have taxed and regulated themselves into a position where they are uncompetitive and almost entirely dependent on the United States in all strategic industries. Energy, manufacturing, gas, defence, and technology—the whole hog. The frustration is that Britain, again, refuses to take the opportunities presented to it. The recent Tech Prosperity Deal is an example of the kind of partnership that is possible, though it has encountered turbulence.
Reform UK has not yet created a coherent foreign policy role for Britain. Yet British voters continue to rightly care about our role in the world and securing our prosperity as the post-war order morphs into a multipolar and more authoritarian landscape. Reform signals only, in a way that echoes Trump, that it will protect British interests. Against the backdrop of Chagos and botched EU resets, this is enough for many voters.
The portrait of modern Britain that emerges is one of an accumulation of failed projects: a failed pivot to high-value manufacturing stopped dead by confected energy scarcity; a failed attempt to create a multicultural society; an equivocating and unprincipled ally. The failure is institutional, apparent in the failures of governance, the erosion of accountability, and the loss of that famed British administrative competence. And it is geopolitical, manifest in a retreat from global leadership and a noncommittal contradiction between larger blocs. The reputation and dependability that underpinned Britain’s continuing postwar influence is being lost.
None of this is to say that Britain’s decline is irreversible. But reversing it would require candor and courage that Britain’s current government, like those that came before it, lacks. Reform UK has positioned itself, spiritually, as the change required.
The consequences of further decline are clear. If current trends continue, Britain will drift into relative poverty: a deindustrialized, sectarian, indebted island with first-rate pretensions and third-rate power. The question is whether Britain will find the will to arrest this trajectory. Electorally, the question is whether Britain’s historic parties will make a better offer to disaffected voter blocs. History, and Britain’s own storied past, teach that national decline is a choice, not an inevitability. But time is running short to make the choice to turn things around. The “gradually” of decline could become the “suddenly” of collapse all too soon.
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