Key Events- Loss of American Colonies

Britain fought in the American War of Independence, starting in 1775, and ended in British failure in 1783. Losing the American colonies had a profound impact on Britain. It is often assumed that losing the colonies had a completely negative effect on Britain. However, it can be argued that Britain not only survived, but thrived following the War.
The effects that the American War of Independence had on Britain can be split into 3 distinct categories, political impacts, economic impacts, and diplomatic and imperial effects. Here is a brief explanation of each. 

Political Impacts

• Failure in the war led to calls for constitutional reforms to be made
• Government was heavily criticised for their actions during the war
• Fears that they had too much power
• Parliament was criticised for being corrupt and only listening to wealthy, powerful people and just accepting what government did without a second thought 
• This caused the people to retaliate with the Association Movement ( a group of people demanding the government be re assessed, more people enfranchised, and the electoral map be redrawn)
• In early 1870 the Movement had power and national support however, following the devastating Gordon Riots (though caused for religious reasons), made wealthy, powerful upper class fearful of any reforms  

Economical Impacts

• The war cost a huge amount to fund, this created a huge National Debt which created a yearly interest of around £10 million
• To pay off the debt taxes had to be raised
• Trade that Britain depended on got interrupted, imports and exports experienced big drops; a recession followed which caused the prices of land and stock prices to plummet 
• Imports and exports were effected by the capture of British naval ships 
• However, wartime industry (e.g. textile), boomed and unemployment fell as enlistment went up. In fact, Britain was so desperate for soldiers that German soldiers were hired. 
• Effects on trade were short term and actually improved in the years following the loss of the colonies. Trade with the new USA managed to rise to the same amount as when it was part of the Empire, and trade with Europe doubled by 1792 
• Britain managed to avoid economically motivated revolts during the National Debt (unlike those seen in France at the time)
• By the Napoleonic wars, Britain had recovered from their debt and were financially stable enough to support their own armies
• Overall, whilst there were many negative short term, economical impacts, it can be argued that the long term positive ones outweigh the negative, short term ones and therefore the economical impacts are generally beneficial.   

Imperial and Diplomatic Effects

• Whilst Britain had lost over a dozen colonies in America, it maintained control of Canada, Africa, India, and the Caribbean.
• Losing the colonies in America paved the way for Britain to expand and improve their control in the areas listed above which eventually developed into the Second British Empire- the largest empire in the history of the world
• Britain also quickly re-established its diplomatic power in Europe due to the key role it played in both the French Revolution and the Napoleonic Wars