United Kingdom

   
 

Executive Summary

Politics dominated by Brexit; outcome will define future EU relationship
“Brexit,” the process of the United Kingdom leaving the European Union, has dominated British politics since the June 2016 referendum. The negotiation of a withdrawal agreement between the United Kingdom and European Union has exposed profound governance problems in the United Kingdom. Domestically, Prime Minister May has struggled to secure parliamentary agreement for a UK position. In turn, the EU side’s perception of this lack of unity and the volatility of the British position have weakened her ability to negotiate a good deal. Misunderstandings of each other’s intentions have exacerbated difficulties in reaching an agreement. The issue of the future character of the border between the Republic of Ireland and Northern Ireland has emerged as the pivotal issue. The eventual solution will influence the relationship between the United Kingdom and the EU27 for years to come. Both the UK government and EU negotiating team claim to want a strong and constructive partnership, but red lines and non-negotiable demands on both sides make this difficult to achieve.
Both major parties
deeply divided
Disputes over Brexit have split both major UK parliamentary parties, threatening the party system’s ability to aggregate voters’ preferences in an effective way, with the dysfunctionality reflecting wider societal divisions engendered by Brexit. In the House of Commons, the Conservative Party and Labour Party have supporters of both “Leave” and “Remain” positions (with an overall majority for “Remain,” if added together). Yet, collectively members of parliament feel bound by the referendum result. As a consequence, with 48% of the public having voted for “Remain” in the referendum, a large proportion of people in the United Kingdom feel unrepresented.
Cross-party
cooperation absent
However, cross-party cooperation has been absent in a system in which the dynamics and the logic of party competition dominate. If the post-Brexit situation disappoints the political hopes of “Leave” voters (more independence) as well as the economic expectations of “Remain” voters (no negative impact), it could lead to increasing voter dissatisfaction and disengagement. The possibility of a second referendum that reserves the result of the first referendum has raised concerns about the legitimacy of and respect for democratic processes.
 
In other policy domains, the United Kingdom faces several major challenges, many of which have been overshadowed by Brexit. In general, these problems have been associated less with the underlying governance capacity than shortcomings in policy delivery.
Health system overstretched
As so often, health care has exemplified these difficulties: while widely cherished by citizens and politicians alike, the NHS is frequently over-stretched. Although the squeeze on public finances has eased, it has proven to be difficult for the NHS to adapt to and secure resources for rising demand associated with an aging population, or to integrate health and social care to overcome the phenomenon of “bed-blocking” by elderly patients.
Major welfare reform poorly implemented
Furthermore, a major welfare reform aiming to merge a series of benefit payments into a single Universal Credit, while regarded as sound policy, has been strongly criticized for a lack of adequate planning and poor implementation, resulting in unnecessary hardship for some claimants. Policies have been initiated to deal with the limitations of the housing market, but will take time to make a difference. The “Windrush” scandal, involving the mistreatment of a generation of UK citizens with migrant backgrounds, highlighted the inadequacies of an immigration policy that sought to create a hostile environment for immigrants.
Slowing growth, but record employment
The UK economy, in common with those of others in the European Union, slowed in 2018 – although the picture is mixed once a wider range of aggregate indicators are taken into consideration. Employment is at record levels and there has been some increase in real wages after a decade of stagnation. However, investment is low, productivity growth is stagnant and delivery of a number of major public projects – including the new Crossrail line in London and a third Heathrow runway – have been delayed due in part to poor governance. Public finances remain vulnerable and the United Kingdom’s external balance is still negative.
Uncertainty hampering investment
Brexit has been a key factor, with uncertainty contributing to the low investment rate and disrupting the potential supply of workers (e.g., into the NHS from the EU27). Concerns expressed by employers have largely fallen on deaf ears, as a result of the domestic political gridlock, amid accusations of scare-mongering.
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