The UK’s strong institutions, diplomatic and international development expertise, and military and cultural assets all have the potential to support a more effective and sustainable foreign policy. They need to be used more coherently.
The UK has many strengths that support a foreign policy which advances its interests, values and standing in the world. A history that has brought close connections across the continents – and that underpins the UK’s web of modern alliances – is one. Nostalgia for a past when Britain was ‘Great’ is not.
The UK is a successful multi-racial democracy, comparatively harmonious, and liberal in its instincts for inclusion; high inward migration brings political strains, but this is a sign of the country’s profound attractions to millions of people. It has strengths in science and technology, higher education, global finance, defence and intelligence. It has cultural influence. The country has wide-ranging and effective diplomatic networks. Contrary to its reputation for cultural conservatism, the UK has demonstrated that it is capable of great change and improvisation (for instance, in the devolution of powers from Westminster or the introduction of same-sex marriage).
But it has lacked a clear plan for deploying these strengths. One casualty has been public trust in government, and yet that trust is essential for any kind of global role for the UK. The biggest shock to the UK’s international relations in recent years has been a withdrawal of public consent for the relationship between the UK and Europe. Brexit cost the country growth and prosperity, bewildered allies, and reduced the UK’s influence in trade negotiations.
But with a form of Brexit essentially agreed, British politicians should shed the embarrassing language of boosterism and acknowledge the realities of the UK’s position as a mid-sized power, if one with an outsized international role. The UK should build new alliances and not promise to old allies what it cannot deliver. In a world of suddenly more complex relations – with Russian troops in Ukraine, US power becoming unpredictable, and emerging powers taking on more leadership in the world, both on global issues and in the Middle East – the UK’s foreign policy must adapt to changing circumstances. At the same time, the UK’s new position outside the EU grants it the chance to do just that. It now needs to use that flexibility intelligently and constructively.
In trade policy, the UK should reach for the heights of pragmatism. Globalization is stuttering in many countries. Better to have quick, partial trade or investment deals than ones that take decades to negotiate or that demand compromises which may not get political backing. Advocating for the UK’s economic interests should be a priority for its politicians (who are too often hostile to the needs of financial markets, and uncomprehending of the speed of decisions needed in business).
Politicians should acknowledge that the UK needs to spend more on diplomacy, defence and foreign aid to achieve the goals set out in this research paper. If it chooses not to spend more in these areas, ministers will have to pick ruthlessly among the priorities.
In global governance, the UK should allow its principles and values to shape its goals, while recognizing that having a predictable and stable international system – including functional international institutions that can respond to global problems – is in its interests. The UK can reasonably aim to take a lead in governance and multilateral reform in a world in which many countries do not want an exclusively US- or China-led order. The UK has instincts and interests that are neither American nor wholly European – all the better to shape discussion of European security and the response to Russia, debt financing in low-income countries, and the complexity of shifting geopolitical relationships across Africa, Asia and the Middle East. If the UK moves quickly, it can also have a credible role in shaping the governance of new technologies, including AI. And it can and should continue to take a lead on climate change, as the energy transition will reshape global politics.
One of the next government’s hardest jobs may be at home. Any successful foreign policy rests on healthy institutions and prosperity. But Britain has been too casual about the need to protect its institutions and preserve its reputation for championing the rule of law.
One of the next government’s hardest jobs may be at home. Any successful foreign policy rests on healthy institutions and prosperity. But Britain has been too casual about the need to protect its institutions (including parliament and the courts) and preserve its reputation for championing the rule of law. Foreign and domestic policy are becoming ever more entwined, with the effects of global events evident at home in energy prices, immigration levels and a changing climate. Threats from hostile states and actors are ever more hybrid – security risks to the UK come in the form of cyberwarfare and economic coercion alongside traditional military threats. Yet foreign policy is often treated as a separate branch of state, locked away in the corridors and courtyards of the FCDO’s offices in King Charles Street, with the foreign secretary nominally one of the ‘top three’ posts in the cabinet but cut off from the horse-trading of the rest of Westminster.
The UK now needs to demonstrate to the world that it has a stable political system capable of delivering prosperity, and that government policies reflect the UK’s professed values. The ability of liberal democracies to pursue their ambitions and meet their promises to their citizens plays a central role in the global competition of values and political ideas. The UK starts with many advantages on its side. It now needs to show that it can function at home in order to secure the full potential of Britain’s role in the world.
Summary of recommendations
Navigating unpredictable great power dynamics
- A second Biden presidency might enable the UK to pursue limited sector-specific deals in critical technology sectors, including access to subsidies under the Inflation Reduction Act. In a second Trump presidency, UK priorities should be preserving the AUKUS defence partnership with the US and Australia, and working with Congress to sustain support for Ukraine and cooperation on other shared interests.
- The UK needs to increase its capabilities to manage its links to China. Currently, UK decision-making on China is dispersed between government departments, resulting in incoherent or competing agendas. One option would be to form a cross-government China-focused policy unit. Another would be to designate a clear lead department on China to manage the trade-offs between security and prosperity. An economic security strategy, with clear goals and targets, should give a better overview of UK vulnerabilities to supply-chain disruption or sanctions.
- The Indo-Pacific remains important to UK security and trade, but the UK lacks the resources to fulfil its initial ambition in the 2021 Integrated Review of ‘establishing a greater and more persistent presence than any other European country’ in the region. The next UK government might continue to pursue a cooperative and limited version of an ‘Indo-Pacific tilt’. This could focus on enhancing links with regional partners – Australia, India, Japan, South Korea – and delivering UK commitments in defence partnerships, including AUKUS and GCAP. The UK might consider expanding access to the technology-sharing pillar of AUKUS to include regional allies such as Japan and South Korea, though this will need to be balanced with maintaining the partnership with the US and Australia; there is also possibly the option of expanding access to the other two Five Eyes members (Canada and New Zealand).
Improving the UK’s relations with Europe
- The UK should pursue limited improvements to the trading relationship with the EU when the Trade and Cooperation Agreement (TCA) is up for review in 2026 – but policymakers should recognize that any changes will not massively improve the UK’s economic or strategic position.
- The most fruitful immediate area for collaboration is likely to be in energy and climate policy – particularly linking the UK’s emissions trading scheme with that of the EU to avoid disparities between UK and EU carbon prices. Such disparities, if allowed to persist, will cause UK exporters to incur carbon taxes at the EU border and will also create other trade disruptions.
- The UK should seek closer geopolitical, defence and security cooperation with Europe as the EU considers expanding and reforming. Steps might include:
- Adopting regular security and defence consultation.
- Pursuing an administrative arrangement with the European Defence Agency, similar to the relationships Norway, Switzerland and Ukraine already have. This could help to reassure the UK defence industry about long-term contracts and markets, and could rebuild links with the EU on defence industrial discussions. However, if the new arrangement contained exclusions for joint exports and technology development, it could prove of limited use to the UK. Nonetheless, it would still be a step to rebuilding trust and relations.
- Working more closely with the European Defence Fund as a medium- to long-term ambition.This would carry a much higher price than just pursuing structured dialogues on defence and foreign policy, as it could involve financial contributions by the UK and would be sensitive politically. However, it would have more impact in linking the UK defence industry to EU-wide projects.
- Regular discussions on defence and security with the EU might also lay the groundwork for coordination on economic security and ‘de-risking’ economic links with China, and potentially on humanitarian and development partnerships with countries in the Global South.
Strengthening a role in global governance and international development
- The UK can use its experience in international development, its diplomatic networks and expertise, and its prominence in the multilateral system to address global problems while building alliances with mid-sized powers and a more assertive Global South. Priorities should include:
- Focusing development spending on consistent and cost-effective areas of strength. This could include tackling extreme poverty through well-evidenced approaches such as cash transfers, and financing global health initiatives.
- Focusing on reforming multilateral financial institutions and pushing them to provide more support to low-income countries. In particular, UK efforts in this area should include the continued use of loan guarantees.
- Continuing to support low-income countries and some middle-income ones with the climate transition, including through Just Energy Transition Partnerships. This could also involve building partnerships with countries rich in critical minerals to share the benefits of resource wealth, including helping them to build production and processing capacity. That could help make green technology less dependent on supply chains dominated by China, and spread more widely the economic benefits of developing such technology. The UK would also be well positioned to influence standards on resource investment.
- Working with others on more effective engagement with China and private creditors around debt restructuring and debt relief for poor countries.
- On conflict, the next government should continue to seek a constructive role in the Middle East through the UK’s regional relationships. It should assist efforts to put forward credible plans for resolving the Israel–Palestine conflict, and should give more attention to preventing instability in flashpoints in its outer neighbourhood, such as in Sudan, Ethiopia and the Sahel.
Affording a global role
- The next government needs to work out how it will afford these improvements in foreign policy:
- In the current international security environment, any UK government should aim to spend more on defence and readiness. We would recommend a minimum target of 3 per cent of GDP spent on defence. The UK should have credible plans for meeting its NATO commitments, should improve recruitment and retention to reverse the shrinkage of the Army, and should streamline the many tasks the military is being asked to address.
- On foreign aid, the government needs to re-establish the predictability and governance of its spending. It could base the ODA spending target on the previous year’s GNI, and hold a reserve for emergencies and shocks. It could ensure that the Home Office does not compete for the UK’s aid budget to spend on housing refugees and asylum seekers. A good start would be to situate accountability and oversight for all aid spending with the FCDO, and further strengthen the role of international development within the department.
- The next government should invest more in domestic sources of global power, in upholding the UK’s reputation for impartial media, in science, technology and the UK’s defence-industrial base, and in critical technologies where the UK has an existing commercial and research advantage. It should address barriers to investment such as lack of laboratory space, problems with planning, regulatory uncertainty for businesses, and complex immigration rules that make it difficult for employers to attract talent.
