New Labour seemed to have resolved the electoral progressive dilemma, at least for a time. However, the 2008 GFC radically challenged this settlement. The implosion of global financial markets followed by crushing austerity exposed the shortcomings of a neoliberal mode of governing that had long been subject to critique by its detractors. This enduring “crisis without end” (Gamble 2014) played an important part in Gordon Brown's loss in the 2010 general election, but in truth it actually crystallized what had been a much longer process of atrophying support for New Labour that can be traced back to the aftermath of the Iraq war. This was reflected in Blair's aforementioned 2005 victory on just 35.2 per cent of the popular vote: the smallest vote share to deliver a majority in history. The seeds of the party's collapse under Brown had, then, been sown much earlier. The GFC subsequently drove the rise of a populist or “anti-system” politics more generally (Hopkin 2020). Populism in the UK context focused increasingly on Europe, at least in the right-wing media and political class, if not necessarily among the wider populace. Key reasons for Cameron's decision to hold a referendum on EU membership included the rise of UKIP and an associated emboldening of Eurosceptics within the Conservative Party.

The increasing salience of Europe as a political question created a headache not only for Cameron. It brought to the fore once again the electoral progressive dilemma for the British left. A vast majority of Labour voters and Labour MPs supported continued EU membership, albeit in many cases with greater circumspection than many associated with New Labour. Jeremy Corbyn, associated with the hard left Bennite anti-marketeer Labour faction since the 1980s, took over as Labour leader in 2015, but with the active support of young, well-educated, globally minded graduates and working-class city-dwellers. Many of these “Corbynites” supported the social liberalism of the EU while often opposing its embrace of economic neoliberalism and, as they saw it, unfettered markets. In other words, they liked free movement of people, the diversity it delivered to the UK and the opportunities for easy travel and work abroad.