British Empire - Decolonisation and Decline (1945–1997)

Decolonisation and Decline (1945–1997)

Though Britain and the empire emerged victorious from the Second World War, the effects of the conflict were profound, both at home and abroad. Much of Europe, a continent that had dominated the world for several centuries, was in ruins, and host to the armies of the United States and the Soviet Union, to whom the balance of global power had now shifted. Britain was left virtually bankrupt, with insolvency only averted in 1946 after the negotiation of a $US 4.33 billion loan (US$56 billion in 2012) from the United States, the last installment of which was repaid in 2006.

At the same time, anti-colonial movements were on the rise in the colonies of European nations. The situation was complicated further by the increasing Cold War rivalry of the United States and the Soviet Union. In principle, both nations were opposed to European colonialism. In practice, however, American anti-Communism prevailed over anti-imperialism, and therefore the United States supported the continued existence of the British Empire where it kept Communist expansion in check.

The "wind of change" ultimately meant that the British Empire's days were numbered, and on the whole, Britain adopted a policy of peaceful disengagement from its colonies once stable, non-Communist governments were available to transfer power to. This was in contrast to other European powers such as France and Portugal, which waged costly and ultimately unsuccessful wars to keep their empires intact. Between 1945 and 1965, the number of people under British rule outside the UK itself fell from 700 million to five million, three million of whom were in Hong Kong.