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Pre-World War II
Britain was a Great Power and dominated the world through the 19h and early 20th centuries.
World War II
Britain gave its all in WWII, and paid the price. It lost its Empire, broken fighting the Nazi menace.
Post-World War II
Britain was shattered by war, its infrastructure was rubble, its empire was decaying and the country was in dire need of American aid. But the Americans, scared of the costs turned their back on lonely Albion and once more they were forced to 'go its alone'. Its neighbour, Ireland was much better off and despite being very bitter with the UK, Ireland helped exchange everyday staples of life such as food and clean water. In return for helping the United Kingdom, they ceded Northern Ireland to Ireland in exchange for continued support and an OTL equivalent of 3 billion pounds. Great Britain, however, still viewed Ireland as a realm of the Commonwealth and once basic medical and agricultural problems were put aside, the fighting resumed. Surprisingly, Ireland received support from Portugal, who helped it narrowly win most of the "Ireland Battles", which lasted from 1950 to 1952. After needing to pay war reparations to Ireland, the United Kingdom began to experience what the rest of Europe was now experiencing, the "Great European Depression". Britain had also been forced to decolonize quickly, and several nations, such as a United India were formed, not being partitioned due to the fact that economically they would have to be self sufficient without Britain being able to pay them owed money. South Africa and Canada soon left Dominion Status and signed the joint declaration in the Indian city of Lahore.
Fortunately there was help elsewhere. Canada and Australia as well as New Zealand, nations who had benefited from the War and who were former colonies of Britain began sending aid to the stricken mother country. Slowly but surely, Britain rebuilt herself. The people pulled togther like nothing before.
When the Labour Party came to power in the mid-60's, they set about requesting aid from the USSR. In return the Government would speed up the decolonisation process. With USSR aid, collective farms were introduced to speed up agricultural production. The mantra of the Party was self-sufficiency. They didn't need or want American or Irish help. Industry exploded as the shipyards of the Clyde and the Mersey began churning out steel and coal once more. The cities were rising once more from the ashes and the rubble of war.
While Britain grafted itself out of the Depression, they looked at their neighbours and ground their teeth. Ireland had begun trade relations with the United States. While Ireland became rich with little effort, Britain worked its fingers to the bone and achieved little. The 70's were a dark age for Britain. People didn't trust the government or what it was doing. Distrust became disorder.
As a result of Ireland's' economic prosperity, it attracted many of the rump states of the United Kingdom. The Isle of Mann attempted to secede from Great Britain, seeing that it could prosper more as an independent nation. Ireland partially funded the Mann Independence War, and helped it win the duration of the war. The third war in 10 years caused even worse conditions for the United Kingdom, so, as a result, it gave partial sovereignty to the Isle of Mann, which would later become an associated state of Ireland, under conditions that it remain in the British Commonwealth.
Because of this catastrophe, Labour was forced out of government in the late seventies. A National Government was formed, specifically to speed up the recovery. They encouraged immigration to former colonies to keep the population, unrestrained by birth control, from growing. Aid continued to pour in. Britain was beginning to shine again. The country was split into sectors. Agricultural Sectors, Industrial Sectors and Financial Sectors mainly. Immigration to the Industrial sectors resulted in the destruction of national identity in some areas. Oil in the North Sea made Britain a safe invest for businessmen from around the world. The Financial Sector soared and it began to look like Britain was going to become a great country once again.
However immigration out of the country became a problem when the birth control pill became available in the early nineties. The population, which had remained in balance thanks to high emigration and a high birth rate, now began to free fall. Emigration out of the country remained the same while the birth rate lowered. The government put a cap on emigration and encouraged immigration from places like Singapore or the Caribbean. A cheap and plentiful workforce. Of course the ethnic pattern of Britain remained overwhelmingly white.
Britain is a moderate state politically thanks to the policies of the National Government. The economy is not as bad as it was but it is still quite weak when compared to Ireland or Portugal. They rely on heavy industry in the North to supply countries with weaponry, and agriculture in the South to keep the population fed. Many have compared the modern Britain to Victorian Britain. There are large ethnic minorities, mostly South Asians and Caribbeans.
The economy of Britain is primarily agricultural and heavy industry. Most of the population is poor and most cities have large slums. No birth control means the population has rocketed. Agriculture is mostly to feed the islands population, though a surplus is sold in Europe. Heavy industry goes into many areas. The reconstruction of cities that are in many cases still broken. The construction of an extensive transport infrastructure that holds the island together. The maintenance of a navy to prevent invasion by unstable countries. The creation of products for sale overseas. In a way, Britain retains its title as the Workshop of the World. Now it is the Workshop of Europe, and though obviously on a much smaller scale than the US, Britain's trade links with its former colonies ensure that Britain can continue the role it has played in Europe for centuries. The re-sale of imported goods or sale of goods constructed from raw materials imported to Britain.
The army is very small when compared to the Navy, the dominant arm of the Armed Forces. The Navy defends the seas around Britain, from pirates, unstable countries, maniacal generals and their ilk. The army mostly acts as the Home Guard, building defences and training for an invasion. The Air Force, known colloquially as the Brillcream Boys are the pride of the Armed Forces. Though small, they are equipped with the best machinery money can buy. They have been used on a variety of occasions to end possibilities of attack, working as a refined scalpel to the Navies heavy hammer.