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The past is another country: busting the myth of Global Britain

The world invested in Britain as a gateway to Europe. This, rather than the Anglosphere fantasies of the Brexiteers, is what Global Britain really means today.

Late last year, Groupe Eurotunnel, the Anglo-French operator of the Channel Tunnel, announced a Brexit rebrand. It would now be called Getlink, a corporate identity that, by yoking together two words of suitably Middle English origin, would advertise its Anglo-Saxon credentials. Brute business realities dictated the shift to an English idiom.

A quarter of the trade between the UK and continental Europe flows through the Channel Tunnel, as does most of the Republic of Ireland’s road freight into mainland European Union markets. The company’s shares fell sharply after the Brexit referendum and it needs to generate new revenue streams. It plans to install power cables in the tunnel to carry electricity between France and the UK, a major investment that will require the support of British-based investors and customers, including the Leave-voting communities of Kent. In Brexit Britain, the language of critical infrastructure is politically charged.

Like the border between Northern Ireland and the Republic, the Channel Tunnel has long been the focus of arguments about national identity and security. In the 19th and early 20th centuries, proposals for a tunnel were rebuffed repeatedly because of fears that it would weaken the national character and compromise the maritime defence of the “precious stone set in the silver sea”.

Only when Britain finally committed to membership of the European Economic Community in 1973, and nuclear arms had rendered reliance on naval defences increasingly redundant, did work on the Channel Tunnel properly commence. When it was opened in 1994, it symbolised Britain’s membership of the new European single market and the consolidation of mainstream political-economic support for continental engagement.

The story of the Channel Tunnel exemplifies how, historically, Britain’s national interests and relations with the rest of the world have been built into its physical infrastructure. The ideological horizons and geopolitics of British power have been embodied in the cables, railways, ports and pipelines of its land and seascapes. Once upon a time these served an empire, and particularly Britain’s relations with what Brexiteers call the “Anglosphere” of the former white settler dominions.

Yet 45 years of membership of the European club has transformed the material bases of Britain’s economy. The country’s built environment, technological networks and trade and security architecture are now deeply integrated with the rest of Europe, and not just through the Channel Tunnel. Many of the UK’s key infrastructure and public service assets are owned or operated by European companies, while its financial, professional and media sectors flourish within the European single market. And it was precisely the actions of the Thatcher government in the 1980s that set Britain firmly upon this new path, by simultaneously privatising its utilities, liberalising capital flows and drawing foreign investment into the UK as a bridgehead to the single market. Ironically, it is those who now argue most vociferously for “taking back control” that did the most to give it away in the first place.

The  Brexiteer idea of an Anglosphere has its ideological antecedents in the late 19th century discourses of “Greater Britain”, the notion that the United Kingdom was united by ties of kith and kin to the white settler colonies, constituting an Anglo-Saxon race spread across the globe. This late Victorian worldview was made possible by the material economy of empire, and particularly by the development of new telegraphic, shipping, railway and food storage and supply technologies in what the historian James Belich calls the “Anglo-World”. The expansion of railways in the 19th century took place first and foremost in this Anglo-World: the US, Great Britain, Canada, Australia and New Zealand accounted for the top five nations for rail miles per capita in 1875. The British merchant fleet dominated global steamship transport, carrying nearly half of the world’s shipping in the early 20th century, while agricultural innovations, and new methods of refrigerating and transporting meat and dairy products over long distances, created the anglophone food supply chains that would stock British larders with New Zealand lamb, American beef and Canadian cereals for decades to come. (The internationalisation of Britain’s food supplies in the 19th century is one reason why significant debates about the national interest are so often refracted through the lens of foodstuffs, from the Corn Laws to the “Big Loaf Little Loaf” tariff reform general election of 1906, New Zealand butter in the 1970s, the “bent bananas” Brussels regulations of Eurosceptic mythology, and Brexit arguments about American chlorinated chicken.)

Credit: Christina Hagerfors/ YCN

By the Edwardian era, Great Britain was also connected to Canada, Australia and New Zealand, and to the US, by a web of transoceanic subsea telegraph cables that carried commercial, financial and state communication traffic. These were vital arteries of the empire economy, and critical to military and merchant navy communications, so much so that the cables connecting the settler colonies and India to the imperial centre in London were consolidated into what became known as the “All Red Line” of British empire in 1902. They also formed a network of cultural transmission, helping to forge the identities, fashions and consumption tastes of the Anglo-World. At the institutional heart of this global web of economics, culture and war, were the Post Office, the largest state employer in Britain before the NHS; the City of London; and the Royal Navy, policeman of the trade routes and supply lines of empire.

In the 20th century, the white settler colonies gradually moved towards dominion status and independence. But the material webs of the Brittanic Anglosphere, and the people, goods and ideas that flowed along them, would endure as a recognisable political-economic world at least until the 1960s, given a new lease of life by the protectionism of the 1930s, the solidarities of the Second World War, postwar migration, and the importance of the sterling area to Britain’s economic survival.

The increasing shift from coal to oil in the fossil fuel economy, pioneered in the Royal Navy with characteristic brio by Winston Churchill before the First World War, created new material interests for the British empire in the Middle East. Meanwhile British corporations and the “warfare state”, as the historian David Edgerton memorably termed it, pioneered mid-century inventions and innovations in such fields as radio and television, radar, the jet engine and computing. All of these loomed large over the popular culture of postwar Britain.

Yet by the time Harold Macmillan tabled Britain’s first application to join the EEC in 1961, the economic and political foundations of her place in the world had been transformed in two decisive respects. First, economic and political leadership of the capitalist nations had passed to the United States, now the undisputed hegemon of the Bretton Woods era. The dollar had become the world’s main reserve currency and the City of London was considerably diminished. Western military power in Asia-Pacific was now in US hands, and over the course of the 1960s, the British government would wind up its operations East of Suez.

Second, the exigencies of war and the Attlee government’s nationalisation programme had created a powerful British state that owned much of the country’s major infrastructural assets and utilities, and used its purchasing power to procure goods and services from private suppliers, particularly in health and defence. For the most part, the corporations of the postwar British state were national in both name and substance, from the British Transport Commission (later British Rail), to British Steel, the British Gas Corporation, the National Coal Board and the NHS itself.

Frantic bidding by traders on the floor of the London International Financial Futures and Options Exchange (Liffe) in 1995. Credit: Neil Munns/ PA Archive/ PA Images

The turn to Europe in the 1960s and 1970s, followed by the election of the Thatcher government in 1979, produced what we might call a double denationalisation of the postwar British economy, the effects of which have been to integrate it ever more deeply with that of Europe. In the 1960s, trade with western Europe grew and that with the Anglosphere declined; entry to the customs union of the European common market consolidated the trend. In the 1980s, investment into the UK as a bridgehead to the European market began in earnest, creating new icons of industry such as the huge Nissan plant in Sunderland.

Meanwhile, the City of London developed the eurodollar market in the 1960s, innovating in the provision of financial services to international customers outside the strict confines of the regulated sterling domestic economy.

Its rebirth as a leading global finance centre was sealed by the Big Bang reform of UK financial services in 1986, which opened up the City to foreign owners, deregulated trading and took share dealing on to the desktop. It was the single most important piece of what would now be called industrial strategy undertaken by the Thatcher government, opening the way for the City to become Europe’s banker and facilitating a deeper financialisation of the UK economy. The City no longer served an empire nor a national economy: it was both European and global.

Simultaneously, the Thatcher privatisation programme produced not just the transfer of publicly owned assets into private hands, but their territorial denationalisation, as a series of mergers, acquisitions and franchise awards passed control to foreign companies and state-owned enterprises. Across infrastructure and key utilities, British interests are now in large part foreign-owned or operated.

Britain’s energy market is dominated by foreign-owned companies such as France’s EDF, Germany’s Innogy and E.ON, and ScottishPower, a subsidiary of Spain’s energy giant Iberdrola. These companies are also active in the UK’s burgeoning offshore wind industry, alongside Nordic energy concerns such as Denmark’s part-state-owned Dong Energy (now called Ørsted) and Sweden’s Vattenfall.

Britain’s port infrastructure is largely in foreign ownership. An international consortium of investors owns Heathrow Airport Holdings, formerly the public British Airport Authority, while Gatwick is owned by Global Infrastructure Partners, an international investment fund. Britain’s seaboard ports are also in foreign ownership. Canadian pension funds, the Kuwaiti Investment Authority and other international investors own Associated British Ports, which operates 21 key locations. P&O, which made early profits from the opium trade and became a symbol of Britain’s shipping lines and passenger ferries, is now owned by DP World, the Dubai-based port operator. 

In rail, major franchises are run by Deutsche Bahn, the Dutch state-owned company Abellio and the French firm Keolis. England’s water supply is provided by companies such as Thames Water, which is owned by an international consortia, and Wessex Water, owned by Malaysia’s YTL Power International. Even the British cement industry is dominated by global players: Mexico’s Cemex, Franco-Swiss LafargeHolcim, and Hanson, part of the HeidelbergCement Group.

Much of this recent economic history is the result of Britain’s endemic weaknesses: rapid deindustrialisation in the 1980s and a desperate lack of strategic business investment produced current account deficits that could only be covered by foreign direct investment. Even though both firms are British, the sale of the industrial giant GKN, maker of the Spitfire, to takeover specialists Melrose, is just the latest in a long line of contentious acquisitions of major UK industrial companies.

Lacking the workforce skills, patient capital and management acumen to prosper in the global economy, Britain’s companies became key targets for overseas acquisition, while public sector franchises were opened up to European competitors that could do a better job of running services than their British counterparts.

Lacking both the corporatist traditions and public support for national champions found in continental Europe and the steady focus on productivity improvements typical of coordinated market economies, British companies lost out in the stiff competition of the single market. (In contrast, Britain prospered in the key services sectors, such as finance, law and education, sports and the arts, that were able to flourish in the post-industrial economy, and in which the legacies of empire – the City’s global reach, the worldwide use of the English language, cultural networks and common law traditions – endowed the UK with advantages.)

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In this context, the Labour Party might claim plausibly that its commitment to the renationalisation of public utilities represents the best expression of the Brexit plebiscitary pledge to “take back control”. While the “kindness of strangers” has brought new investment and improved competitiveness for sectors such as car manufacturing, the privatisation and passage into foreign ownership of so much of our physical infrastructure has weakened the capabilities of the British state to pursue strategic economic goals, and left public services vulnerable to corporate failure. For many, it has been experienced as an act of national dispossession.

But Brexit is not the answer. The deep integration of Britain into the European economy, the supply chains that criss-cross the Channel Tunnel and British ports in the manufacture of goods, the network of regional airports and low-cost airlines that now densely connect the UK with the rest of the EU, and the financial, media and business services that the UK exports to the continent, are all the product of Britain’s turn to Europe. The material economy of the Anglosphere cannot substitute for these, and quitting the single market and customs union, whether under a Labour or Conservative government, will constrain British business, not revive it.

Meanwhile, as the Article 50 deadline approaches, the infrastructure of the global economy continues to pivot towards Asia. Today’s transoceanic cables are being built by US tech giants: Google, Facebook and Amazon are all investing in the major undersea cables that carry almost all of the globe’s cloud computer traffic.

The All Red Line of the British empire has been replaced by the technicolour cables of platform capitalism, stretching across the Pacific as well as the Atlantic, guided by the geo-locational imperatives of the digital economy.

China is pushing forward the building of its signature foreign policy initiative, the “Belt and Road” infrastructure that will connect it to Europe along the countries of the old Silk Route. The state-owned China Ocean Shipping Company has purchased Greece’s Piraeus port, a key terminus for the maritime trade route from China, and Beijing has opened its first offshore naval port in Djibouti, in the Horn of Africa. Europe’s leaders, led by Emmanuel Macron, turn their faces from Trump histrionics to the world’s new strongman, Xi Jinping. Australia and New Zealand debate how to limit Chinese acquisitions of their land, high-end property and passports; Brexit does not loom large in their calculations.

When it comes to trade between countries, geography trumps history. Proximity matters. But it is our recent history that has hard-wired geographical imperatives into Britain’s future.

When Britain joined the EEC we started to build a relationship with our European neighbours into the country’s economic and political infrastructure. The City was reinvented to serve Europe, as much as the wider world. The Thatcher revolution created the conditions in which the operation, management and ownership of major national assets passed to European companies. The world invested in Britain as a gateway to European markets. This is what Global Britain means today. The past is another country. 

Nick Pearce is the author, with Michael Kenny, of “Shadows of Empire: the Anglosphere in British Politics” (Polity)

Nick Pearce is Professor of Public Policy & Director of the Institute for Policy Research, University of Bath.

This article first appeared in the 04 April 2018 issue of the New Statesman, Delusions of empire