If Britain truly wants to learn from Brexit, it should re-examine its ‘special relationship’ with the US

In no sense has Britain more spectacularly lost control than in its cringing client state relationship to Washington

Nazism was a nightmare from which German people struggled to awake. But since unification, the nation that spawned Adolf Hitler has made a concerted effort to face the truth about the Nazi era. Germans speak of Vergangenheitsbewältigung, the struggle to overcome the past.

For the British, the past as a source of present torment is a less familiar notion. After all, the story is that “we” defeated fascism and proceeded to vouchsafe independence to the peoples who comprised the British empire.

Yet, in the era of Brexit, this story has begun to seem more than a little complacent. It may be that the British psyche was more wounded by the loss of imperial power than was ever properly understood. Arguably, Brexit signals what Freud called the “return of the repressed”. For if Britain were reconciled to its geopolitical diminution, would it now be mired in a crisis that has made foreign observers suspect the British have lost contact with reality?

Not that discussion of national decline has been taboo. People talked of how Britain “won the war and lost the peace”, and when Margaret Thatcher became Conservative prime minister 1979, it was a sworn enemy of defeatism. Preaching “Victorian values”, Britain’s first female leader championed thrift and private enterprise, though her vision of a regenerated Britain derived as much from the United States as 19th-century England. Most memorably, she struck the posture of a new Winston Churchill or latter-day Boadicea.

Her triumphant deployment of the British navy to the south Atlantic to eject Argentine invaders from the British Falklands Islands gave her a mandate to prosecute her radical agenda. Amid the ensuing jingoism, she routed the coal miners and their militant socialist leader Arthur Scargill, and introduced Britain to the “discipline of the market”. Often she seemed equally bent on routing Britain’s European partners as she clashed with them over Britain’s budgetary liabilities. Little in evidence was the Thatcher who campaigned ardently for Britain to stay in the then European Community in the 1975 referendum on the issue.

A new narrative crystallised, according to which Mrs Thatcher had reversed British decline. It was true that the wholesale privatising of public assets, the selling off of what former prime minister Harold Macmillan called the “family silver”, generated the impression of a dynamic new Americanised Britain. But if it bristled with entrepreneurial nouveaux riche, Thatcher’s Britain was a savagely divided country with an ever more lopsided economy centred on the deregulated City of London and the booming London property market. Conflict consumed the Tory party itself. Inseparable from her confrontational stance on Europe, Mrs Thatcher’s fall from power in 1990 plunged her party into civil war. Anti-European Conservatives could not forgive the toppling of a leader whose truculence towards the EU was their inspiration. But at the time of Mrs Thatcher’s departure, pro-European opinion held sway in the Tory hierarchy. The irony – if those who knew her are to be believed – is that Thatcher herself would not have voted to leave the European Union.

Thatcherite Europhobes made life hell for her successor as prime minister, John Major. In their accusing eyes, the pro-Europe Major had betrayed not just their heroine but the British people. Behind the landslide victory won by Tony Blair and New Labour in the general election of 1997 lay public recoil at the coarse, self-seeking country bequeathed by 18 years of Conservative rule. But no small contribution to the result was also made by the Conservatives’ interminable internecine warfare over Europe. Britain, it seemed, had had enough of it.

Under the French-speaking Europhile, Blair, Britain’s vexed relations with Europe appeared at last to have been settled. Nobody guessed that Blair would accede to US pressure to embroil Britain in military action in Iraq and Afghanistan – in the process setting Britain more sharply at odds with France and Germany than Mrs Thatcher ever did. Far more than Thatcherism, Blairism was made in America. Indeed, with its commitment to business and unsleeping media operation, New Labour was more akin to the US Democratic Party than to historic Labour. And if Blair lined up with the US on foreign policy, his party turned to America, too, for much of its domestic agenda, adopting US initiatives on welfare, education and crime. General de Gaulle’s belief that Britain’s fundamental orientation was to the US never seemed more pertinent. Blair’s Britain was a febrile mini-America.

Admittedly, New Labour mitigated the harsh economic legacy of the Thatcher and Major era – albeit through mortgaging the state to the private sector. Championing diversity and embracing gay rights, the party also set a distance between itself and the Conservative Party on social and cultural issues. It was the great boast of New Labour that Britain, unlike France, was an exemplary progressive nation at ease with its multi-ethnic character.

Yet the atmosphere of Britain under Blair and his successor Gordon Brown was brittle at best. On top of dismay about Blair’s wars, there was creeping disquiet about New Labour’s incestuous relationship with bankers and neglect of Britain’s decaying regions. Even before the 2008 financial crash, the “modernising” Conservative leader, David Cameron, was campaigning on the theme of “broken Britain”, while the influx of migrants from eastern Europe was fuelling the rise of anti-EU party, UKIP, led by the right-wing demagogue, Nigel Farage.

It was not Europe, though, that dominated British politics when Cameron became prime minister in 2010 as leader of a Conservative-Liberal Democrat coalition government. It was austerity, the swingeing retrenchment in public spending proclaimed by Cameron’s Chancellor of the Exchequer, George Osborne, as vital to rescuing the British economy after years of alleged New Labour profligacy. For all that Cameron faced in terms of mounting pressure from Conservative Eurosceptics, he never seemed likely to be the prime minister who presided over Britain’s exit from Europe. Styling himself the “heir to Blair”, he set out to rebrand the Tory Party as open-minded, tolerant and compassionate. It was under the coalition government that London staged the 2012 Olympic Games. Britain vaunted itself as a pioneer of a National Health Service that had become a vibrant 21st-century melting pot, a country where anyone could strive for success. The American dream was now co-extensive with the British dream.

How, in the space of four years, did the spirit of 2012 yield to the rancour and isolationism of Brexit? Almost certainly, the answer lies in the parlous consequences for social cohesion of austerity as it decimated the public services and welfare provision of a country already ravaged by inequality.

The cynical view is that Cameron and Osborne exploited austerity to pare the state to the bone and complete Mrs Thatcher’s “unfinished revolution”, her ambition to turn the UK into the world capital of privatisation. What is certain is that under both the coalition and the Cameron-led Conservative government that succeeded it in 2014, the numbers of Britons who felt disempowered and disenfranchised rose steeply. No less certain is that many believed they had been disadvantaged by the free movement of labour imposed on Britain by the EU.

Posterity may marvel at how Britons who maligned the EU appeared heedless of the zeal with which – in contrast to the rest of Europe – their country imported a brutalising US-style culture of winners and losers. It is not by chance that Britain increasingly resembles America as a country where vast private wealth co-exists with ubiquitous insecurity and proliferating social casualties. Nothing did more to energise the Brexit campaign than the slogan that Britain needed to “take back control” from the EU.

Yet, in no sense has Britain more spectacularly lost control than in its cringing client state relationship to Washington and espousal of an extreme version of the American faith that the market furnishes a solution for everything. If little of this is widely grasped, it will be thanks to Britain’s dysfunctional education system, with its division between elite, fee-paying, public schools and a state sector of hugely uneven quality. Not least does the UK mirror the US in its startling levels of illiteracy and sub-literacy – a scourge unlikely to be eradicated by the increasing involvement in British schools of US private providers that fetishise competition.

It was in 1962 that the US secretary of state, Dean Acheson, famously observed that “Great Britain has lost an empire but not yet found a role”. Yet, in a sense, Britain did find a role – in self-deceiving equivocation. Bereft of imperial power and its once captive markets, it went into Europe out of desperation while never ceasing to cling to its “special relationship” with the US as it struggled to sustain its image as a major world power. If Germany is haunted by the past, so, to a disabling degree, is Britain. The country that plumes itself on having won two world wars has proved no match for its own indomitable illusions.