Did Britain's handover of former colonies have a negative impact on the UK economy?

by booem345
JasonVerber

The negative impact of decolonization on the British economy was limited. Whereas World War II had an enormous impact on both production and consumption in the UK, even years afterwards (rationing continued beyond 1945, for instance), British acknowledgement of indigenous political sovereignty was often a policy decision that took into account the potential economic impact.

Negative effects on the UK economy were mitigated by several factors:

  1. The UK worked very hard to ensure close relationships with former colonies, such that much of the benefit of empire could be maintained without the formal structure in place.

  2. British entrance into the European Economic Union brought with it trade advantages with current and many former European colonies.

  3. Numbers 1 and 2 meant that many British companies benefited from new opportunities, especially in the form of development work.

It's also worth remembering that holding onto colonies intent on independence could be an expensive proposition, economically, politically, and in terms of human capital. After World War II, this made the British position in India untenable, and the emergence of the Cold War gave other concerns higher priority.