Introduction
In this third and final essay, I analyse the Britain’s current economic position and then explore the case for a limited, nation-centric government that will be better equipped to deliver prosperity and growth.
I ended my last essay with a question, “Where do we go from here?” It was not rhetorical, it needs an answer. The glib answer is the same as the Irishman gave when asked for directions by a tourist, ““I wouldn’t start from here, if I were you.” Perhaps it is better asked as a different question, “Where should we go from here?” as opposed to “Where will we go from here?”. The latter invites speculation, mostly of the pessimistic kind, which isn’t necessarily helpful.
A position audit
Just as a business must assess its assets, liabilities, and strategic positioning, so too must a nation periodically confront its own economic and institutional realities:
- What is the financial position of the business, assessing the true value of assets and liabilities, and reviewing recent trading activity, is it growing or contracting?
- What strengths, weaknesses and opportunities does the business have and what threats does it face (SWOT Analysis)?
A position audit of the United Kingdom does not make for easy reading. The state has few realisable assets and significant liabilities. Public sector net debt at the end of March 2025 was £2.81 trillion and 95.8% of GDP1. This net debt figure does not include contingent liabilities such as public sector occupational pensions, old age pensions and benefits for the long-term unemployed and disabled. With taxation at the limits of public acceptability, the options for raising further revenue are limited. The economy has contracted in recent months, putting the country at risk of a technical recession and denting government revenues2. All the while, consumer prices continue to rise well above the Bank of England’s target of 2% per annum and bond yields are rising, making the debt more costly to service3.
The welfare burden continues to rise. There is an ongoing process of transferring certain age-related benefits to universal credit, making comparison difficult but nonetheless, the benefits bill increases every year4.
The United Kingdom does have some strengths, notably our well-developed financial markets and our capacity to attract inward investment. It helps that English is the lingua franca of business around the world. We have a reasonably high standard of education and health. Our international relations are generally good, although they have come at a significant cost to the taxpayer through overseas aid and ill-advised deals such as the surrender of the Chagos Islands5.
The United Kingdom’s weaknesses include the significant costs of health, social care and welfare coupled with poor productivity and patchy economic growth. Culturally, recent levels of mass immigration have caused resentment and the dismissive attitude of politicians and commentators has inflamed tensions. The impact of mass immigration has been most keenly felt in those regions that already suffering from industrial decline, where economic insecurity has amplified cultural tensions.
The United Kingdom is well-placed to take advantage of opportunities arising from Brexit, now having the ability to agree trade deals outside of the strait jacket of the EU. There are also tremendous possibilities from developing technologies, especially in emerging sectors such as Artificial Intelligence, quantum computing and green energy. These offer Britain a chance to lead in the next industrial wave if strategic investment were to be found.
There are threats from abroad: our government has manoeuvred us into supporting Ukraine in its conflict with Russia at immense cost to the British taxpayer and there is ongoing conflict between Israel and Palestine. The number of armed forces personnel is continuing its decline and we have underinvested in military hardware6.
Our present economic and cultural situation is unsustainable. We are financially overextended due to government largesse and it is simply not possible for Britain to play ‘global saviour’ while the domestic position is precarious. It is time for strategic realism to replace outdated virtuous notions of obligation to the entire world.
Hard truths
If we are to move forward and re-establish a functional democracy and economy, we have to accept some hard truths, no matter how unpalatable they may be.
Welfare dependency
A significant proportion of long-term welfare recipients face entrenched barriers to employment, whether due to educational deficits, health issues, or generational dependency. While some may be rehabilitated, many are unlikely to re-enter the workforce without radical reform. The recent vote in Parliament on the Welfare Reform Bill showed how hard it is to tackle the welfare problem.
The state pension is unsustainable and the triple lock has almost certainly hastened its demise. The myth of a national insurance fund has long been exposed as misleading but the practical result is that current earners cannot afford the overhead.
Job creation
The government cannot create private sector employment although it can foster an environment of job creation through infrastructure improvements, education, tax incentives and regulatory reform. Government initiatives alone will neither create a northern powerhouse nor transform South Wales into the next Silicon Valley.
Multi-culturalism
Multi-culturalism has struggled to foster genuine integration, particularly where cultural norms diverge from British values. However, while voluntary repatriation is politically untenable, there needs to be a coherent strategy that combines tighter enforcement of immigration law with cultural alignment for those already here.
Net Zero
The pursuit of Net Zero has committed vast public resources to targets that are poorly defined, economically disruptive and often technologically premature. A more pragmatic approach would balance environmental stewardship with industrial competitiveness.
The public sector
The public sector is too big and there are too many achieving too little. The generous defined-benefit pensions awarded to public sector employees are unsustainable and unfair, given that such schemes have all but disappeared in the private sector, the same private sector that funds those public sector pensions.
These hard truths pose a deeper question: what should be the size and scope of government and how do we determine its moral legitimacy?
What are the moral bounds of governance?
There are two axioms of good government:
- In a democracy, governance is by consent: politicians and civil servants must do as they are directed by the people.
- Every action of government must be funded by taxpayers: governments therefore have a moral obligation to the citizens to spend wisely the money that is taken under threat of penalties if they do not comply.
From these two axioms, we can conclude that moral government is nation-centric government. To be clear, ‘nation-centric’ in this context means a government whose primary moral obligation is to its own citizens, rather than to abstract global causes or foreign populations. At its most fundamental, the primary duty of government is to protect the citizens from external threats and to safeguard the territory of the people that it serves. It should also seek to preserve the wealth of the nation. Government should also provide internal security and protection for citizens from domestic threats through effective policing and a functioning criminal justice system.
No national government has a mandate, and it cannot award itself a mandate, to go beyond governance of the people that elected it and to whom it is subordinate. The principle of democratic consent, enshrined in parliamentary sovereignty, implies that no government may act beyond the scope of its electoral legitimacy. National governments do not have the right to interfere in the governance of other countries unless they pose a direct and unequivocal threat. Governments certainly do not have the right to impose ‘regime change’ on other countries because they disapprove of their governance.
Of course, governments may wish to seek alliances with other countries in what is described as the ‘national interest’ for reasons of defence, trade and easing international travel and communications through agreed standards and airspace treaties.
If we take the view that moral government is nation-centric government, we can see that recent actions by successive British governments have been immoral, reckless and treacherous:
- The surrender of the Chagos Islands to Mauritius and to pay extortionate sums to lease it back: Mauritius has no legitimate claim to it and such a surrender is contrary to the will of the Chagossians themselves.
- Billions paid in overseas aid: the British people are being impoverished by vast sums of money being paid to regimes widely criticised for corruption and to countries that have higher per capita GDP than we do, at a time when the public sector net borrowing is annually £150 billion per year.
- Billions committed to Ukraine: the British government has pledged billions of pounds to Ukraine over the course of the next 100 years. Ukraine is a land of abundance, blessed with vast natural resources and fertile land.
- Realignment with the EU: the government has agreed to make financial contributions to the EU in a number of key areas without having any say in the rules which must now be followed. The government was given an express instruction in 2016 for the United Kingdom to leave the strictures of the EU. That instruction was not followed and we now have a government that is further undermining the result of that referendum.
- The use of a judicial injunction to obscure public and media scrutiny of the Afghan relocation scheme7 raises serious questions about transparency and democratic accountability.
Equally, national government does not have the right to outsource the sovereignty of the people to supranational bodies or quasi-governments. Those elected to represent citizens must not abdicate their responsibilities in this way but shoulder the heavy mantle of duty and remain accountable for their decisions.
Drawing the line
We also need to decide what the government should do and perhaps, more importantly, what it should not do. This adaptation of Maslow’s ‘hierarchy of needs’ is a potential model for determining the limits of governance. Note that the lower levels of governance have to be met before the higher levels can be met. I have proposed a limit of acceptable governance as I believe that the British government is currently failing in its duty to deliver adequately the lower levels and therefore the highest level is not achievable or desirable in the medium term, if ever. Others may differ in their view of where the line should be drawn: a libertarian may argue that it is too high, a Marxist may argue that it is too low.
Once national defence and national security is established, government can consider extending its reach to infrastructure and public health. As these government activities become established, so government is able, at further cost to the taxpayers, to progress to higher level goals which may be worthy and desirable but should not necessarily be within the ambit of the government. Where we draw the line is a matter for debate and individuals will have different preferences, hence the need for regular debate and for politicians to put the case for the level of government activity to the electorate once every four or five years.
In all of this, the absolute priority of the citizenry of a country should be observed. Apart from enabling trade and travel, governments have no right and no obligation to fund the activities of NGOs and governments in other countries. Whilst individual citizens may be concerned about overseas citizens in times of crisis such as floods, earthquakes and famines, it should be left to the conscience of the individual as to the level of assistance. Indeed, the British people have always been remarkably generous when other countries have endured natural disasters. As noted above, government has a moral obligation to use taxpayers’ money only for the benefit of the national interest. In rare cases, it may be that funding other governments in times of crisis is in the national interest, but it should generally be avoided. There is certainly no moral justification for ongoing aid to overseas countries: it simply entrenches dependency at continued expense to taxpayers without commensurate national benefits for those taxpayers.
Conclusion
We have seen how government concern for world affairs while neglecting domestic issues has created a bloated, ineffective public sector with vast liabilities. The outsourcing of decision-making to supranational and quasi-governmental organisations has led to suboptimal outcomes, a lack of accountability and a democratic deficit.
So where should we go from here? The road to social and economic renewal can only come through an end to misdirection of taxpayers’ money at home and abroad and through targeted interventions and investments in infrastructure and education. Rewards must accrue to the risk takers and wealth creators: it is no longer acceptable for the bureaucratic class to siphon off the wealth while leaving the private sector to struggle for a share of the wealth that it has created. By limiting the size and scope of government, the public sector can focus on fostering an environment of wealth creation and rebuild trust in, and the effectiveness of, our institutions.
There must also be a concomitant change in attitudes and behaviours, both of the bureaucratic class and by those who are governed. We must seek an end to the infantilisation of the citizenry and we must demand higher standards and better value.
The moral case for limited, nation-centric government is clear and we should not shy away from making the case at every opportunity.
1 Public finances databank 2025-26 – Office for Budget Responsibility
2 forecomp June (2).xlsx
3 Inflation and price indices – Office for National Statistics
4 DWP benefits statistics: February 2025 – GOV.UK
5 Agreement between Mauritius and the UK fails to guarantee rights of Chagossians say UN experts | OHCHR
6 Quarterly service personnel statistics: 1 April 2025 – GOV.UK
7 https://assets.publishing.service.gov.uk/media/683dc7801b807cfa6995e089/ARP_guidance_v8.pdf
© Paul_Southampton 2025
