How Britain Became as Poor as Mississippi

Who broke Britain? Someone—or something—must have. The past 18 years, enough time for a whole lost generation to be born and brought up, have yielded nothing but stagnation and mass disillusionment. In 2007, before the global financial crisis, Britain was at its postimperial zenith. Median household income had just surpassed that of Germany. A pound was worth more than $2, and London was arguably displacing New York as the center of international banking.Explore the July 2026 IssueCheck out more from this issue and find your next story to read.View MoreBut since then, Britain has been left behind. The country’s output per person is now only just above that of Mississippi, America’s poorest state—and that slight lead is only achieved thanks to London. Outside the capital, in places where tourists do not visit, living standards fall well below Mississippi’s. Brits visiting the United States find that their currency has depreciated to the point where the pound today buys only about $1.35. British wages have lagged well behind those in the U.S., and also those in Germany, France, the Netherlands, Denmark; once you account for inflation, they’ve barely grown at all. Within the next decade, the typical Pole will have a standard of living equal to the typical Brit, if current trends continue.Douglas Carswell: Is Mississippi really as poor as Britain?One generation ago, Britain was a major global power; today, it is a middling one, gripped by sclerosis. Taxation is at the highest level since World War II, yet public services have deteriorated. The National Health Service, the celebrated pillar of the British cradle-to-grave welfare state, has a backlog of 6 million patients—almost a tenth of the population—waiting for treatment. The health service now has to spend more money settling maternity-malpractice claims than it does on actually providing maternity care. Many Brits can neither obtain an appointment with a publicly funded dentist nor afford a private one; in a 2023 survey, one in 10 reported doing DIY dental work, in extreme cases extracting their own teeth or gluing broken crowns back together.

Incomes can be shockingly low: Junior doctors recently went on strike for the 15th time in three years over their salaries, which start at just £38,800; the median salary for British civil servants is £35,680. In April, amid the Iran conflict, the Daily Mail pounced on Prime Minister Keir Starmer for vacationing in Valencia, Spain, at what the tabloid described as a luxury hotel, costing £200 a night.Some in Britain blame rotten luck—the 2008 financial crash, the coronavirus pandemic, an energy crisis after Russia invaded Ukraine. But other countries endured these challenges too. What differentiated Britain was its self-sabotaging responses to these and other problems. Brexit is the most famous example, but hardly the only one. Bad choices, beginning just after the financial crisis, begot worse ones. As public disillusionment has grown, politicians have been rotated swiftly in and out of power, abruptly terminating whatever policies they had started. Six different prime ministers have governed since the 2010 general election. They do not seem to be getting more talented over time. Less than two years after Starmer’s Labour Party took power, his net approval rating has plunged to minus 42 points. He is widely expected to resign this year, and may have done so by the time you read this.The country’s downward slide has been consistent in one respect: As Britain has become more and more aware of its diminishment, it has retreated ever more fully into a defensive crouch. Politics have become zero-sum, descending into fights over who has robbed whom. Suspicion has fallen, above all, on immigrants, whom both major parties have turned against. There is still an enduring strain of British exceptionalism, quieter and more understated than the American version, which suggests that by retreating inward, Britain can make itself great again. Astonishingly, or perhaps predictably, it is growing stronger as the country’s problems get worse.In fairness, the 2008 financial crisis hit Britain especially hard. In the 1990s, both the Tories and Tony Blair’s “New Labour” Party made the same bet: Britain was to be a postindustrial, services-based economy, anchored in finance.

Tax receipts from a booming London would be redistributed to lagging regions in the old industrial heartland, helping to renew them. Then came 2008, and London’s financial industry cratered.But the government’s actions during and after the crisis compounded the damage. Rather than increase spending to revive depressed demand, as modern Keynesians would counsel, the government, then led by Conservative Prime Minister David Cameron, opted to slash budgets as revenue plunged. The theory was that fiscal discipline—cutting spending more sharply than Britain’s peer countries—would inspire confidence and spur growth. At the time, deficits and debt were seen as immoral; unlike profligate Greece, Britain would manage its affairs prudently.The promised growth did not materialize, and austerity left scars that linger still. Funding for day-to-day NHS operations was maintained, for instance, but only by cannibalizing the capital budget. A 2024 government report found that, as a result of austerity, Britain has “crumbling buildings, mental health patients being accommodated in Victoria-era cells infested with vermin with 17 men sharing two showers, and parts of the NHS operating in decrepit portacabins.”Read: Britain’s unbridgeable divideAfter austerity cuts to welfare benefits took effect, the share of children who grew up in long-term poverty, meaning half their childhood or more, shot up from about 14 percent to 23 percent. Nutrition appeared to suffer, and doctors reported increased cases of diseases stemming from vitamin deficiencies, such as rickets and scurvy.Local governments, called councils, saw their grants from the central government fall by 40 percent from 2010 to 2020. In 2023, Birmingham City Council, which is responsible for more than 1 million residents, effectively declared bankruptcy. One-third of all English councils could do the same within five years.Austerity was felt most harshly by those who were already suffering after deindustrialization. The welfare state had partially compensated the losers from globalization. When it abruptly shrank—because the masters of the universe had miscalculated—anger erupted upward, at British elites, and also outward, at European migrants, who were competing for jobs and public services.

It was because of this political pressure that Cameron made another fateful decision: to hold the Brexit referendum in 2016. This was a gambit; Cameron expected the vote to fail. He did not want to leave the European Union, but he wanted to arrest the rise of figures such as Nigel Farage, the longtime gadfly of British politics, who had been campaigning for withdrawal from the EU for decades. Left-behind Britain, the places especially harmed by austerity cuts, voted overwhelmingly to leave. The morning after he lost the referendum, Cameron resigned, ushering in a period of political instability that has now lasted a decade, and shows no sign of ending.David Frum: The costs of Brexit are undeniable nowSettling the formal Brexit deal took almost four years of negotiations between Britain and the EU. The resulting uncertainty took a toll on British businesses even then. In 2018, one year before his ascension to prime minister, Boris Johnson was asked by a European diplomat about these adverse effects. He replied, “Fuck business.” And indeed, something like that happened. A recent paper on “The Economic Impact of Brexit,” by five economists, calculated that Brexit caused business investment to drop by 12 to 18 percent, productivity and employment to decline by about 3 to 4 percent, and, most striking, GDP per capita to fall by 6 to 8 percent—twice as much as earlier estimates. The harms weren’t all immediately visible. As with austerity, they accumulated over time.Outside London, the consequences of almost two lost decades are unignorable. Stoke-on-Trent, in the West Midlands, about 150 miles north of London, was once the ceramics capital of Britain, and quite probably the world. It was geologically blessed by rich seams of both coal and clay; its wares were transported by canal to Liverpool for export. The whole area became known as the Potteries. Stoke once held some 2,000 bottle kilns—huge, bulbous structures in which crockery from companies such as Wedgwood were fired.Today only 47 remain; the industry employs perhaps 5,000 people—down from some 300,000 in 1984.

And because of Britain’s extraordinary energy costs, this number is still declining. Depleted oil drilling in the North Sea and a failure to invest in alternative energy sources have left the country reliant on imported energy, staggering consumers and industry alike. From 2004 to 2024, electricity costs for British businesses more than tripled (even after adjusting for inflation), and are now the highest in the world.Hulton Archive / GettyBottle kilns, used in the manufacture of dinnerware and other pottery, in Stoke-on-Trent, circa 1948In March, I visited Middleport Pottery, the last remaining ceramics factory that has operated continuously since the Victorian era. A charming elderly guide named Phil Knott showed me around, pointing out the ceramics and crockery that the company supplies to the private residence of King Charles III. In most rooms we entered, he introduced me by saying, “This man here is from Washington to write an article about the ceramics industry.” Though the factory once employed some 400 workers, it now has only 18. Middleport uses smaller gas ovens today, but its last bottle kiln (there once were seven) still sits outside, a vestige of a bygone time. All along the kiln’s exterior—where heat and smoke and ash once escaped—small trees and plants have taken root in the dormant structure.The deindustrialization of Stoke began a long time ago. In the 1980s, Prime Minister Margaret Thatcher ushered in her “supply side” revolution, emphasizing privatization and breaking the trade unions. This improved the country’s fortunes, but not those of all its parts. Thatcherism hit Stoke hard, causing closures of factories, steelworks, and mines. Lisa Healings, who runs the charity Voluntary Action Stoke-on-Trent, lived through that as a young girl. VAST works with a network of charities to provide food, job training, and counseling, but the group is fighting economic gravity. “There’s now a third generation almost coming through,” Healings told me, whose “parents were unemployed, their grandparents were unemployed, and they don’t see any future for themselves other than living on benefits and being unemployed.”Austerity was particularly brutal to places like Stoke, where a large share of the population was already dependent on government benefits.