The Contemporary History of Britain Part II

By | September 14, 2021

Financial Crisis

In the first year after the change of prime minister, Brown also had to constantly record new lows on his popularity curve. Increasing demands for his departure, including from prominent positions in his own ranks, reinforced the impression of a serious crisis in the party. The picture changed temporarily when the financial crisis hit in full in late 2008 and Brown took a leadership role in international crisis cooperation.

In the choice of instruments, the UK placed itself here with the United States, with a different emphasis than its major EU partners, in that the government implemented comprehensive measures packages, based on extensive borrowing, at a time of record inflation. But unemployment increased and passed two million for the first time since the 1990s. Interest rates reached their lowest level since the 18th century, down to zero percent, which forced other instruments.

Production slowed, and despite special government billion-dollar government loan schemes, flagships such as Jaguar and Land Rover were sold to the Tata Group – in the former colonial state of India. In the spring of 2009, the United Kingdom emerged with a larger budget deficit than comparable countries.


The financial crisis also seemed to weaken the Scottish independence movement, with the British state in 2008 taking control of the two largest financial institutions Royal Bank of Scotland (RBS) and HBOS after embarking on comprehensive crisis packages. For the first time, the Scottish Nationalist Party SNP was the largest – though only with 47 of the 129 seats – when Labor was dethroned in the election to the state parliament the year before. The SNP chose to make Scotland an independent state, and Prime Minister Alex Salmond’s minority government immediately began work to get the other parties to a referendum on whether Scottish and UK authorities should start negotiations on this goal.

Northern Ireland

In Northern Ireland, internal self-government was restored on May 8, 2007, six years after the British government dissolved Parliament in the Stormont building in Belfast. The year before, it was officially confirmed that the disarmament of the IRA was completed. Both the 2005 parliamentary elections and the Northern Ireland regional elections in 2007 made the most progress for the most irreconcilable wing parties, the Democratic Unionist Party (DUP) and Sinn Fein respectively.

But the change of mood was still evident – as was the announcement of the last chance from the London government – when the old main protesters on the Protestant and Catholic side, Ian Paisley and Martin McGuinness, met for the first time – to form the coalition government they were to lead; the then 82-year-old Paisley retired in May 2008 and was succeeded by Peter Robinson as First Minister. New episodes of violence showed that it was still smoldering beneath the surface, and the authorities feared new recruitment to extreme environments in the wake of the financial crisis; economically, Northern Ireland was still far below the UK average, unemployment increased steeply, and almost every third child lived in homes that fell below the poverty line.

But a more than four-month political crisis found its solution in November 2008, when the two largest parties agreed on a plan to transfer police and judicial authority from London to Belfast.

Multi-Party System

The 2010 parliamentary elections gave what the British call a Hung Parliament, that is, neither party got a pure majority. After some negotiations, a coalition government was formed between the Conservatives, who became by far the largest party, and the Liberal Democrats. New Prime Minister became Conservative leader David Cameron, while Nick Clegg of Liberal Democrats became new Deputy Prime Minister. In 2011, a new electoral law was introduced that removed the prime minister’s opportunity to print new elections, which led to the government having to sit for five years.

The period between 2010 and 2015 was also marked by the progress of the Scottish Nationalist Party (SNP) in Scotland. In the Scottish parliamentary election in 2011, the party got a majority for the first time and the party’s leader Alex Salmond wanted to hold a Scottish independence vote either in 2014 or 2015. After much teasing with the London government, the vote was held on September 18, 2014. The result showed that the Scots wanted to remain in the UK with a 55% majority.

Between 2010 and 2015, British policy changed from a two-party to a multi-party system. Thus, a Hung Parliament was also very likely after the parliamentary elections in 2015. However, against all odds, Cameron and the Conservatives managed to strike back and formed a small majority government after the election. This was a big victory for Cameron, as he had repeatedly felt that the right wing of the Conservative Party had attacked his more center-oriented politics, and that this had led to the electoral defeat of the Conservatives to the EU-skeptical UKIP party. Cameron’s critics believed that the Conservatives lost the majority in the 2010 election because EU skeptic voters voted UKIP rather than the Tories.

It was estimated that several of the EU-skeptical voters went back to the Conservatives in the elections in 2015. In 2013, Cameron had announced for the first time that he wanted to hold a referendum on the British’s relationship with the EU if the Conservatives won a majority in the election in 2015. When this majority was secured, Cameron had to keep his word (see below).

The election result was disastrous for the Liberal Democrats and that led Clegg to resign as party leader. Labor also did worse than expected and thus Ed Miliband resigned as Labor leader. In Scotland, the Scottish Nationalist Party (SNP) made almost a clean table, winning 56 out of 59 seats in the Under House, despite the SNP “losing” the battle for Scottish independence in 2014.

The Contemporary History of Britain 2