The UK has made clear contributions to its objectives of upholding the values and security of a liberal democratic international order. But it has undercut its commitments to support global resilience, and its international economic agenda remains very much a work in progress.
Supporting a liberal democratic international order
In terms of supporting an international order aligned with its core interests and values, the British government had a busy 2021. Its top priority was to use the UK’s presidency of the G7 to help leading democracies develop a more united front in face of the spread of authoritarianism around the world.
The practical outcomes from the G7 Leaders’ Summit, hosted by the UK government in Carbis Bay, Cornwall, in June 2021, were limited in terms of the major global issues on the agenda, such as climate change and vaccine distribution: the summit sustained momentum in each of these areas but did not catalyse action. The most important function of the leaders’ summit was to mark a return to the normal business of regular coordination between the world’s largest liberal democracies, after the turbulence caused by Donald Trump’s presidency of the US and his apparent preference for forging relations with autocratic strongmen over his G7 counterparts.
Importantly, the UK presidency of the G7 also paved the way for more formal coordination between the members of the ‘western’ G7 (Canada, France, Germany, Italy, Japan, the UK and the US – plus the EU) and the ‘eastern’ Quadrilateral Security Dialogue, or Quad (comprising Australia, India, Japan and the US), whose role as a more formal regional coordinating group is being nurtured by the Biden administration. When the UK invited the Quad members – as well as South Korea and South Africa – to attend this first post-Trump G7 summit, it sent an important signal: that the world’s largest liberal democracies intended to work together on a common agenda to strengthen their position relative to China and Russia.
Underscoring this point, the leaders of all 11 countries attending the G7 summit as members or invited guests, together with EU leaders, signed a joint statement on ‘Open Societies’, in which they committed to uphold the ‘founding values’ of liberal democracies, including the protection and promotion of individual human rights, democratic governance, the rule of law, freedom of expression and a strong civil society.
The summit also committed the G7 and its partners to coordinate their supply chains for critical technologies. They endorsed the detailed plans agreed at the April meeting of G7 digital and technology ministers to promote a ‘Secure, Resilient, and Diverse Digital, Telecoms, and ICT Infrastructure’ that would reduce their dependence on Chinese technologies and expertise. The ministerial declaration agreed in April included the establishment of a Framework for G7 Collaboration on Digital Technical Standards; a G7 Roadmap for Cooperation on Data Free Flow with Trust; and a Framework for G7 Collaboration on Electronic Transferable Records. G7 digital ministers, plus the governments of Australia and South Korea, also committed to support ‘industry-led, inclusive multi-stakeholder approaches for the development of digital technical standards in line with our core values’, thereby distinguishing their approach from the increasingly assertive Chinese and Russian efforts to embed governments at the heart of digital governance and standard-setting.
The UK and other G7 democracies also committed at the leaders’ summit to respond to China’s Belt and Road Initiative (BRI) by developing their own infrastructure investment strategy, now termed the ‘Build Back Better World’ (B3W) initiative. B3W is meant to prioritize transparent, environmentally sustainable and market-led approaches to physical and digital infrastructure investments in developing and middle-income countries – again serving as a contrast to the Chinese approach.
Five months after the summit, in November 2021, the UK sought to give the B3W initiative some much-needed substance by establishing a new official UK development fund, British International Investment (BII). The fund replaced the Commonwealth Development Corporation (CDC), and gave UK support for global infrastructure a more expansive geographic mandate – extending, for example, to the Indo-Pacific and the Caribbean. Tapping into private sector funding opportunities, including through the City of London, it emphasizes investment in climate-related finance and in digital transformation. Foreign Secretary Liz Truss was explicit about the linkage with the objectives of the Integrated Review when she stated that BII ‘aims to deepen economic, security and development ties globally and bring more countries into the orbit of free-market economies’.
BII compares favourably with the EU’s Global Gateway, which was announced just six days later, in early December 2021, and which aims to mobilize up to £255 billion for guaranteed EU investments for infrastructure projects between 2021 and 2027 (£36.5 billion per year). For its part, BII is designed to mobilize up to £40 billion over five years (£8 billion per year). If both schemes spend their maximum budgets, Global Gateway will be about 4.5 times bigger than BII, although total EU GDP was some 5.6 times bigger than UK GDP in 2020. Importantly, the pledges contained in both initiatives are likely to be significantly more generous than China’s BRI, when adjusted for GDP and population.
The G7 Carbis Bay Summit also served as a way station for the Biden administration’s Summit for Democracy, which took place in virtual format in December 2021. The link between the two was echoed in the theme of Liz Truss’s first speeches as foreign secretary, notably at the Conservative Party Conference in October and subsequently in December at Chatham House, where she set out the UK’s commitment to supporting a ‘network of liberty’. A principal driver of this commitment is a hardening of the government’s position towards China, as well as towards Russia. Beijing’s crackdown on democracy in Hong Kong, and its growing exports of surveillance technologies to regions of interest to the UK, including sub-Saharan Africa and the Gulf Cooperation Council (GCC) member states, has led to a closer alignment between UK, US and EU positions towards China in the past year, which is likely to intensify given Beijing’s tacit (and potentially material) support for Russia’s invasion of Ukraine in February 2022.
In June 2020, the UK had convinced other G7 members to issue a statement critical of China, following the Chinese government’s imposition of a draconian new national security law in Hong Kong. It followed this by offering a pathway to citizenship for all existing Hong Kong British National (Overseas) (BN(O)) passport-holders, plus the 2.2 million Hongkongers who were entitled to apply for a BN(O) passport; suspending its extradition treaty with Hong Kong; and including the territory in the British arms embargo with mainland China. In the first nine months of 2021, nearly 88,000 BN(O) passport-holders applied for a visa. In January 2021, with growing public and political focus on the human rights abuses being perpetrated on Chinese citizens belonging to the Uighur minority in the region of Xinjiang, the UK government also instituted requirements for UK-based companies to ensure that their trade with the region did not contravene the Modern Slavery Act.
UK actions on human rights went beyond China. In September 2020, the government had begun sanctions proceedings, ahead of the then-gridlocked EU, against individuals in the government of Aliaksandr Lukashenka in Belarus, in response to the Belarusian regime’s use of political suppression following disputed elections. In February 2021, under the umbrella of its G7 presidency, the UK convened a special meeting of the UN Security Council to call for sanctions on the military junta in Myanmar for its coup against the elected government and subsequent violence against civilian protesters. The UK government then undertook sanctions against individual members of the junta, suspended UK aid and blocked trade by British companies with businesses connected to the military.
However, the one important contradiction to this otherwise positive agenda in support of the liberal democratic order resurfaced towards the end of 2021, as Western governments sought to use sanctions to push back against Russia’s growing military pressure on Ukraine. The UK’s policy and legal framework for tackling international corruption involving British companies is relatively strong, thanks to the 2010 Bribery Act. But the government had long failed to target individuals from authoritarian states found to have invested and laundered their money in the UK. As a result, the UK – and London specifically – has long been a favoured location for servicing unexplained wealth, especially for individuals from Russia and the former Soviet states, despite steps taken in 2015, and again in 2020, with the intention of strengthening UK legislation against money-laundering.
The UK – and London specifically – has long been a favoured location for servicing unexplained wealth, especially for individuals from Russia and the former Soviet states, despite steps taken in 2015 and 2020.
In April 2021, the government passed new Global Anti-Corruption Sanctions Regulations to target foreign public officials involved in bribery and misappropriating public funds, and any companies or individuals in the UK facilitating their actions. The regulations were similar to existing arrangements in the US. However, the UK continued to face the problem that the burden of proof on whether an individual’s wealth has been acquired legally tends to be determined according to whether it was assessed to be so acquired in the country of origin. This ignored the fact that the legal system in Russia and other parts of the world rarely makes this adjudication, other than for domestic political purposes.
The result was that, as Russia’s military pressure on Ukraine intensified in January 2022, the UK came under increased internal and external criticism, including from the US, as it raced to design a legal framework under which it could target oligarchs whose acquisition of vast wealth inside the Russian economy was seen as indirectly propping up the regime in the Kremlin. It was not until the end of that month that the government announced it would introduce legislation to target the UK-based assets of individuals engaged in undermining democracy. The legislation passed on 10 February, just two weeks before Russia’s invasion of Ukraine. The UK subsequently found itself in the embarrassing position of inching its way through sanctioning small numbers of Russian oligarchs under the new system, while the US and, surprisingly, the EU coordinated sanctions on hundreds of such individuals.
Nevertheless, at the time this paper was being compiled, in early 2022, the UK government was fully aligned with the US and the EU, and had jointly introduced an unprecedented set of sanctions against the regime of President Vladimir Putin and the Russian economy, including cutting the Central Bank of the Russian Federation (Bank of Russia) off from UK financial markets and steadily targeting a growing number of Russian banks and other economic actors in the effort to punish Putin for his attack on Ukraine and to build leverage for a future diplomatic solution.
Supporting international security
In terms of contributing to the security of an international order that is aligned with the UK’s interests and values, the government has lived up to many of the main objectives that it laid out in the Integrated Review. In November 2020, the government committed an additional £16.5 billion to its defence budget over four years, raising its defence spending as a proportion of GDP above 2 per cent and making it, for now, the third largest spender on defence in the world in 2021 behind the US and China. While much of this increase will go to fill gaps in funding for its ambitious procurement programme, the net result will be greater capacity to support its commitments to NATO and further afield.