UK's steady, silent decline a worrying echo of the 1970s

Arab News

a day ago

https://arab.news/49hj8
In July 2025, the question of whether the UK is in decline no longer feels rhetorical in nature, it feels like resigned recognition of the fact.
One year into Prime Minister Keir Starmer's Labour government, the chaos and dysfunction of the Johnson-Truss era of Conservative rule have faded. But so too has momentum. A brittle, overstretched economic model, persistent underinvestment and political caution have combined to leave the country in a state of quiet regression.
Britain in 2025 bears an uncomfortable resemblance to that of the 1970s, not in terms of the headlines but in the undercurrents. Back then, the UK faced a decade of stagflation, industrial unrest, a weakening global role and rising domestic disillusionment. The country suffered a brain drain, watched investors flee and relied on an International Monetary Fund bailout to steady its finances. By 1979, it had become, in the words of many commentators, 'the sick man of Europe.'
Fast forward to 2025 and economic growth once again remains stagnant, with gross domestic product expected to rise by a mere 1.2 percent.
While the IMF is not directly involved this time, the UK's fiscal landscape nevertheless appears increasingly precarious. National debt has soared to 105 percent of GDP, taxes are set to climb further and rising interest costs threaten to outstrip growth over the next five years. Inflation has subsided, yet public services continue to face significant strains.
The Labour Party has managed to stabilize political tensions but failed to inspire confidence in its ability to achieve long-term revitalization. Taxation levels have reached historic postwar highs, with threshold freezes subtly shifting middle earners into higher tax brackets. Much like during the 1970s, the middle class feels excessively taxed, inadequately rewarded and uncertain about the future.
And so, the similarities between the two eras deepen. In the late 1970s, the middle class, once the engine of postwar prosperity, similarly found itself squeezed between rising prices and falling state performance. Half a century later, the same group is once again under siege. Wages are stagnant in real terms, mortgage payments have surged, rising energy bills are biting deeper into family budgets, and private education and childcare have become luxuries.
Homeownership, a once-solid symbol of middle-class stability, is increasingly out of reach. Professional families now live precariously on credit, vulnerable to shocks and increasingly disillusioned with the political class.
The outcome of all this? A demographic shift reminiscent of the brain drain witnessed in the 1970s. This decline, driven mainly by reduced work opportunities and study visa allocations, underscores a troubling issue: the UK is losing its upward potential while experiencing a contraction of its talent pool.
London, once a magnet for international capital, entrepreneurs and academics, is now seeing its allure dim. Paris, Frankfurt and even Amsterdam are claiming gains in finance and tech. The City of London remains resilient but its future feels encumbered by Brexit, bureaucracy and uncertainty.
An exodus from the London Stock Exchange marks a pivotal moment for the UK's financial sector, the Confederation of British Industry has warned. Since 2016, 213 firms have delisted amid a wave of overseas listings, private takeovers and waning investor interest in UK stocks.
Since Brexit, exports of UK goods have lagged behind its G7 peers, investment has slowed and regulatory divergence has raised costs, cumulatively undermining business confidence, cross-border trade and the UK's global competitiveness.
Meanwhile, both middle-class professionals and high-net-worth individuals have increasingly relocated to Canada, Australia, the UAE, Singapore and the US, driven in part by tax pressures and the erosion of the UK's 'non-dom' regime.
It is a quiet exodus reminiscent of the 1970s. Back then, disillusionment sparked radical realignment and Thatcherism eventually swept away the postwar consensus in favor of market liberalism.
In 2025, the response is more muted. The Reform UK party is rising on the political right, while Labour governs by managerialism. The country has chosen order over ambition. But stability, on its own, is not prosperity.
Even Britain's foreign policy posture echoes the previous decades. The country is active on the war in Ukraine, committed to NATO and respected diplomatically. But its economic weight no longer matches its strategic vocabulary. As in the 1970s, the UK of today retains influence through alliances, not autonomy.
London, once a magnet for international capital, entrepreneurs and academics, is now seeing its allure dim.
Dr. John Sfakianakis
There are differences between the eras, too, of course. Britain in 2025 is more diverse, more peaceful and less industrial than it was in the 1970s. The labor market is more flexible, inflation is less volatile.
But the psychological parallels are stark. Now, as then, there exists a pervasive sense that the country is falling behind, that its best days might be behind it and that no political force has yet made a convincing case for how to reverse the slide.
Driven more by ideology than evidence, the UK, unlike Germany or Canada, is now one of the few countries to impose a 20 percent value-added tax on private education, a policy that risks placing strain on the state sector without meaningfully reducing inequality.
What is striking is not the urgency of the decline, it is its normalization. As it did in the late 1970s, Britain is adjusting to lowered expectations; it still functions but it no longer aspires. And while it continues to avoid collapse, it increasingly tolerates stagnation and mediocrity.
The lesson of the 1970s was not just about endurance, it was about transformation. That decade ended with a revolution in Britain's political economy, one that reshaped its state, markets and global role for a generation.
In 2025, the question is not whether the UK can survive its decline, it is whether the nation can find the courage to confront it. Britain today has the institutions, human capital and democratic depth to recover. But that recovery will not come from managerial politics or minimal policy. It will require imagination and the willingness to once again ask what kind of country it wants to be.
Decline, when it is met with denial, becomes destiny. Acknowledged, it can become a moment of aspiration.
That was the lesson of the 1970s. It remains the lesson today. To reverse this present course, Britain will need more than competent administration; it must abandon its reliance on short-term fiscal management and embrace a long-term economic and institutional strategy grounded in investment, productivity and social cohesion.
To revitalize the nation, the development of a fresh growth strategy, one that recognizes the difference between stable GDP figures and actual economic vitality, is critical. The stock market alone does not represent the health of the economy.
Secondly, comprehensive reform of the tax system is overdue. Threshold freezes and stealth increases have disproportionately hurt the middle and aspiring classes, while failing to restore fiscal strength.
Thirdly, the state must regain its strategic capability, not in the form of centralized bureaucracy but in institutional capacity.
Fourthly, a radical approach to human capital is essential. From early childhood to lifelong learning, Britain's skills development system is fragmented and underfunded.
Finally, a national narrative is needed. For too long, the UK's political class has offered the rhetoric of survival and slogans of heritage, rather than a persuasive account of the future.
Britain's institutions remain intact. Its rule of law remains strong. Its people are creative, tolerant and adaptive. But these strengths must be mobilized, through ideas, investment and leadership that transcend the default settings of recent decades.
It was once said that Britain 'muddles through' — but muddling has become a strategy, and it is one that can no longer cope with the demands of a complex and shifting world.
The 1970s did not mark the end of the UK, they were a turning point. What followed was a redefinition of the state, the market and Britain's place in the world. In 2025, another pivot is required.
As Shakespeare warned, the fault lies not in fate but in our own hands. The UK's decline is not preordained, but the result of strategic drift and political timidity.