Lionel Barber / Feb 2026
Photo: Shutterstock
Allow me to introduce readers to The Draghi Rule. According to the former ECB president and Italian prime minister, citizens of European countries habitually believe their economies are worse off than they actually are. Thus, the bolshy French ignore the fact they live in a rich country. Italians focus on unserious politics and forget they enjoy low prices and high culture. Germans are full of angst. Period.
Where does Britain stand in Europe’s misery index? It has become fashionable to suggest we are heading back to the winter of discontent in 1979, when the dead lay unburied, supermarket shelves were empty and stinking rubbish piled high in the street. The Sun front page captured the grim mood at the time, with the avuncular prime minister James Callaghan returning from a G-7 summit in Guadeloupe under a banner headline “Crisis, what crisis?”.
Today, the “Broken Britain” narrative is driven by stories of rampant crime, boatloads of illegal migrants arriving across the English Channel, a buckling National Health Service, and a military barely fit for purpose because of 20 years of budget cuts after inflation. There is some truth in all of these propositions, but the sum does not add up to Britain slipping back to its parlous state at the end of the 1970s.
Trade unions are not bossing the country. Inflation is not running at 20 per cent. There are no queues at petrol stations. British soldiers are not driving ambulances or fire engines. There’s plenty of food (and booze) on the supermarket shelves. Petty crime such as smartphone theft and shoplifting is a problem, but as Fraser Nelson has consistently argued: serious, violent crime in England and Wales has been in significant long-term decline.
In short, Britain is not broken, even if there’s plenty that needs fixing. So why is the sense of drift so pervasive?
The truth is that British politics - not Britain - is broken. The two-party system which governed the country for almost a century has fractured. Decision-making has stalled. Nothing is ever settled, whether an extra runway for Heathrow airport or a solution to long-term care for the aged. The answer to any serious issues, past or present, is a commission or a costly public inquiry. “Everything is about process rather than outcome,” a top businessman complained to me the other day.
The quality of people in public life has slumped, too. Look at the second and third-raters in the upper ranks of the Starmer government. Most would have struggled to make minister of state in the Blair or Brown administrations. Starmer himself is a decent man who means well but he fails the three tests of leadership. He is a poor communicator. He cannot pick the right team. And he has no natural political instinct.
Starmer’s first response to a problem is almost always wrong. He is an inveterate flip-flopper, despite winning a 174-seat majority in the House of Commons. Little wonder that half his Cabinet are on manoeuvres, while the popular mayor of Manchester Andy Burnham - “the King of the North” - continues to plot a leadership challenge. They all think they could do a better job.
Whether Burnham or any of the other pretenders (Health Sec Wes Streeting, Home Sec Shabana Mahmood, former deputy leader Angela Rayner or ex Labour leader Ed Miliband) are in fact better suited is open to question.. Starmer is quite entitled to point out - as has former MI6 chief Richard Moore - that Britain has seen four prime ministers in five years, five deputy prime ministers, and six foreign secretaries. The musical chairs a l’anglaise took place during a period of violent geopolitical turmoil marked by a pandemic, a land war in Europe and the re-election of Donald Trump.
The Conservative Party is hardly in better shape. Brexit purged sensible centrists and cleared the way for faux populists like Boris Johnson and Liz Truss. Both loved campaigning; neither had a clue about governing. Their combined legacy was chaos. The “Boriswave”, though legal, led to a surge in immigration. Then came the Truss-Kwarteng mini-budget consisting of $45bn of unfunded tax cuts. The result: a crisis in the bond markets which continues to weigh heavily on market sentiment toward the UK.
The current Tory leader Kemi Badenoch is struggling to stem the drip-drip of defections to Nigel Farage’s Reform UK. She’s upped her game at Question Time in the House of Commons, but that’s hardly difficult against Starmer and hardly qualifies as the most reliable measure of leadership. Too many of her policy pronouncements are performative.
This week, on the eve of Starmer’s visit to China, the first by a prime minister in more than seven years, Badenoch announced she would not have gone to Beijing. We await a more serious analysis of where Britain’s interests and dependence lie with regard to China, especially given the erratic behaviour of America, the UK’s most important partner.
What to make of Farage? On the mildly positive side, he attended Dulwich College, my own high school. However, we clearly did not share the same teachers. Farage continues to be plagued by accusations of anti-semitism and racism by school contemporaries.
Forty plus years on, his blokeish humour goes down well with punters in contrast to the grating style of Badenoch and the charismatically challenged Starmer. Farage is also a good television performer, having worked as a presenter on LBC radio and on GB news. The parallels with media-savvy Trump are obvious.
But Farage remains a one-man band who likes a fag and a pint of bitter. His stamina and work appetite are open to question. Like Trump and Badenoch, he has a penchant for winging it. However, the nearer he gets to power, the more likely he is to buckle down.
There are signs that new recruits such as Danny Kruger and Zia Yusuf are thinking hard about preparing for government. And then there is the X factor: whether Elon Musk, the richest man in the world, will throw his weight behind Reform UK in the next general election, which must be held by 2029.
In conversations with business people, there is an air of resignation about the Starmer government and his hapless chancellor Rachel Reeves. Nothing terrible has happened, but the buyer’s remorse is palpable. Neither have any empathy for business or risk-taking. Political capital has been frittered away on secondary matters such as cutting winter fuel payments, an inheritance tax raid on family farms, raising VAT on private schools, driving out non-doms and ceding sovereignty of the Chagos Island to Mauritius for an outlandish sum.
The subsequent U-turns, latterly on business rate tax hikes on pubs, reinforces the impression of a government out of touch. Starner and Reeves are held hostage by Labour backbenchers whose grasp of economics is tenuous at best. No wonder, hundreds of wealthy businesspeople have departed for friendlier tax climes in Abu Dhabi, Dubai or Milan.
At this point, I feel obliged to issue a health warning which goes beyond my usual comment to leavers that the theatre in Abu Dhabi is not up to much compared to London, never mind the summer heat which frequently exceeds 50 degree Celsius in the Gulf.
There is in fact another story to tell which defies the conventional narrative. British politics may be broken, but the spirit of enterprise has not been extinguished. Things are moving.
The author’s substack can be found here.
