Why Britain Is Feeling Bleak

The pound is weak, jobs are scarce, and the economy may slip back into recession. But few Britons believe the next government will fix what ails their country

By Catherine Mayer/London Monday, Mar. 29, 2010
    • Peter Dench for TIME

    Barking, not biting Liberal Democrat Dominic Carman chases elusive votes being wooed by the hard-right British National Party

    The giant wind turbine stands over Dagenham Heathway like an exclamation point. To Ford Motor Co., the U.S. corporation that erected it six years ago, the turbine is a vigorous declaration of modernity, generating the sustainable energy that drives what it calls a "global center of excellence for diesel engineering." These days, however, the 394-ft. (120 m) structure seems to punctuate the cry of pain that was once a busy shopping street in this hardscrabble East London suburb. Ford Dagenham produced as many as 340,617 cars annually and employed 40,000 people at its peak in the 1960s. Ford's diesel-engine plant, the only business left on the 475-acre (192 hectare) site, has a workforce of just 4,000; also gone are 60,000 other jobs that depended on the car industry and its employees. It's a depressing tableau, one all too familiar: just like Detroit, this once vibrant center of auto manufacturing seems stuck in a spiral of persistent decline.

    On the main street, stores that once sold everything from household staples to electronics and jewelry are now outnumbered by pawnbrokers. During lunchtime on a crisp Monday at Albemarle & Bond, Nicola — she doesn't wish to give her surname — 26, white and unemployed, holds a fistful of rings. "Can I get 10 quid for this?" she asks. After haggling with the assistant, she leaves with half that sum, passing a display case of trinkets earlier customers failed to redeem, including a clutch of diamanté rings spelling out the word Mum . Sentimentality is an indulgence nobody in Dagenham can afford.

    If Dagenham's decline is emblematic of the ebbing of Britain's manufacturing prowess — and the way in which shifts in the global economy can strip a place of jobs like a hurricane takes leaves off a tree — then its main street captures a national mood of hopelessness and anger. All of Britain is in a deep funk: although its economy is finally growing after a prolonged recession, that growth is so tender that many fear it will shrivel and give way to a second, deeper contraction. Britons are downcast, their politicians discredited. In one of the world's oldest democracies, there's little enthusiasm for the national and local elections due in early May. Polls show that neither of the two largest parties — the Labour incumbents or their Conservative challengers — is on course for an overall majority in Parliament. There's little enthusiasm, either, for their respective leaders, Prime Minister Gordon Brown and David Cameron.

    For the first time since the 1970s, Britons may find themselves ruled by a minority government. Back then, Labour's pact with the smaller Liberal Party proved short-lived, and the government eventually fell to a no-confidence motion. Britain's third party now has a longer name — the Liberal Democrats — and hopes to exert a more enduring influence on any new administration. Smaller parties will flex their muscles if there's a hung Parliament. This raises the specter of political instability, gridlock and even a second general election within the year. Such an outcome could only exacerbate the economic turbulence that has contributed to the recent roller-coaster ride of the British pound. After a recent poll showed Labour and Conservatives running neck and neck, the pound plunged 2% against the dollar in a few hours. Britain clings to a nostalgic sense of its place in the world as a top-tier global economic power. It's still the world's sixth largest economy, but other numbers are not so flattering. Britain's budget deficit — £178 billion, according to the Treasury — is the largest as a proportion of GDP among G-7 nations. Unemployment stands at 2.46 million, a rate of 7.8%. That's not as bad as some pundits predicted, but the ranks of the long-term unemployed have swelled to levels not seen since 1997, and the number of people working part time because they're unable to find full-time employment has reached a new record. Although the pound has lost a quarter of its value against the dollar since 2008, Britain's global goods deficit actually widened in January, with exports declining 6.9%. A weaker pound means the U.K. has to pay more for imports like fuel, increasing fears of inflation.

    This all adds to the daunting challenges facing Britain's next government. Its first priority will surely be to get the economy out of the emergency room. The parties disagree on the speed and severity of action needed to cut the British deficit, but all accept that there must be reductions in public expenditure. Inevitably such cuts will hit the nation's most deprived communities hardest. And it is in such communities that the social consensus that underpins Britain's democracy is fracturing.

    2. Previous Page
    3. 1
    4. 2
    5. 3