On May 24th, Theresa May announced that she was stepping down from her position as a leader of the Conservative Party and as Britain’s Prime Minister. It was another significant episode for a country already roiled by controversy and turmoil.
However, Brexit and the ancillary political ramifications are just one of the country’s very prescient problems.
Their unprecedented departure from the European Union has brought incredible economic uncertainty to the country. Since the referendum, The Guardian reports that inflation is rising and the British pound has fluctuation considerably. Each of the country’s financial troubles is exacerbated by outlandish spending and apparent conflicts of interest that make tangible supportive services more challenging to implement.
For example, by the end of 2018, it was estimated that U.K. businesses were losing €350 million each week, a startling sum that collectively accounts for 2% of the country’s GDP. At the same time, everyday U.K. households are seeing costs balloon as they spend €404 more each year for the same goods and services.
Of course, although economic turbulence is never pleasant, it is at least expected when such a disruptive political event takes place. Rather, it’s the self-inflicted wounds that are most egregious.
A Case Study in Reckless Spending
In an effort to encourage the economy’s development, U.K. leaders are investing in future-ready technologies and initiatives. Most notably, in 2018, leaders passed the Space Industry Act, legislation intended to create space industry jobs to boost the U.K. economy.
While the act is evidence of the country’s initiatives to boost the economy in the right ways, its actual application is a case study in reckless spending and ineptitude.
More than $30 million went to companies like Lockheed Martin, an American aerospace company based in Maryland.
Meanwhile, some of the funding was directed to U.K. companies with little ability to follow through on their obligations. Most notably, Orbex, a U.K.-based rocket manufacturer, received millions in grants from the U.K. government to produce space-ready rocketry.
However, the company, which came out of stealth mode when the grant was announced, seems unlikely to have the capacity to deliver its first rocket launch by 2021 as it contends.
Observing the company’s relative obscurity, ZeroHedge reports, “At the stage of the Prime Rocket Discovery, not only did Orbex have no production facilities in the UK – but until this day it isn’t even registered in the UK, at all. Before the July grant, it has been in stealth mode and nobody has heard of them.”
This indicates a pattern in U.K. financial initiatives that provide funding to companies with little or no ability to successfully achieve their purpose.
In February, the BBC reported that a government contract with Seaborne Freight, a shipping company without ships or logistics capacity, was scrapped after media scrutiny highlighted the absurdity of a highly-lucrative government contract for such a company.
At a time when the U.K. government needs to support its economy with on-point financial maneuvers and job-creation initiatives, placing a bet on questionable startups is misguided at best.
Compounding Problems are Poorly Timed
Given the general political dysfunction characterizing the U.K., it’s perhaps unsurprising that some companies are finding ways to capitalize on the chaos.
As the country heads towards a more uncertain future now that Theresa May has left office, creating a leadership vacuum and plunging the Brexit negotiations into further chaos, the country needs real economic measures that can ensure that everyday citizens can effectively navigate this shifting landscape.
The U.K. has a long and storied history, and it can build a bright future for itself in the wake of the Brexit movement, but it needs to clear-headed support of its leaders to accomplish this. That means that companies that are unqualified or unfit for government contracts can’t receive lucrative deals and money spent needs to improve the lives of the country’s most vulnerable citizens, not enriching the pockets of cunning schemers.
Brexit may be in the hands of voters, but the country’s leaders are entirely in control of their spending allocations and decisions. They need to choose more wisely in the future.