Bronwen Maddox
How are we doing? We strictly have 20 more seconds to go, I say, in respect of those signing on online. And thank you very much indeed for joining us, and just a few coming in now, a very warm welcome. Thank you very much for coming today. I’m Bronwen Maddox. I’m Director of Chatham House, and we’re here to talk about the report that we are putting out today, led by Olivia O’Sullivan, who is the Head of our UK and the World Programme, and which I have worked on, as well, with her, and many colleagues here in the House, and a terrific Steering Committee and Advisory committee, as well, who have chipped in ideas over what is about a year’s work.
And this is on three foreign policies for the priorities for the next government, and we’ve called it “A Case for Realistic Ambition.” And there is a lot of this around at the moment, of, suddenly, after months of focusing on domestic policy and the amount of money that the UK does not have and so on, suddenly, drawing – the election campaign in the UK, if I can call it that, beginning to focus on the decisions that are going to face the new government in these exceptionally turbulent times that we’re in. And what is the most that the UK can make on – of its hand in these circumstances?
Well, I’m delighted to have these three people here to discuss this, and you all, and please do send questions or start thinking of them, if you’re here in the room. Olivia, before she joined us last year at Chatham House, worked for ten years in the ‘D’ bit of the FCDO, as it is now, and in the Cabinet Office and in various parts of Central Government, including its Innovation Unit.
Peter Ricketts, Lord Ricketts, who is Head of the European Affairs Committee in the Lords, has done many, many things, including being the first National Security Advisor, the Permanent Secretary of the Foreign Office, Ambassador to Paris, and many others. And has written extremely well, clearly and persuasively, about exactly this question of the UK’s role in the world. And Philip Stevens, the long-time Writer for the Financial Times on politics, now a Contributing Editor, Writer and many things, who has, I think just yesterday, sent his latest book to the Publishers, with a stroke of the keyboard, which is on Britain and Ireland. Does it have a title?
Philip Stevens
It’s ‘These Trouble’ – it’s a working title, ‘These Troubled Isles…
Bronwen Maddox
There we go.
Philip Stevens
…Britain and Ireland…
Bronwen Maddox
There we go.
Philip Stevens
…Past and Future.”
Bronwen Maddox
There we go, that’s set us up perfectly for this. Well, we’re going to talk about the priorities that we think the next government, whatever it is, should have. And obviously, we speak with the polls consistently and emphatically predicting a Labour majority at the moment, but you never know, and we are some way off. And we have written this report to apply to whichever government gets in. And we – I’m going to ask Olivia to take us into the – some of the detail of it, but we are saying, get the key relationships right, particularly with the US, China, the EU, look at how the UK can find its way in global governance in these very changeable times, and spend more on all of it.
So, with that, Olivia, if you could take away some of the main points, and then we will get into a wider discussion.
Olivia O’Sullivan
Thank you, Bronwen, and thanks, everybody, for coming today. So, I’m going to do my best to summarise some of the key themes in the report, and then we’ll get into more of the discussion. In this paper, we tried to steer away from some of the more circular debates about what kind of power the UK is. Is it a middle power? Is it in decline? We studiously avoided quotes like “The UK has lost an empire and not yet found a role.” Some of the clichés of this discussion can get – become very internally focused. And that debate about what kind of power the UK is, is important. It points at a tension and a difficulty the UK has since, I think, before Brexit, in defining what sort of role it should play in the world.
But for the purposes of this report, we decided to try to look out at what kind of world will a next UK Government confront? What kind of risks will it face? What sort of trade-offs will it need to think about? And in that, rather than try to address every issue that might come up, or that’s currently on the agenda, we’ve talked about investing in some of the core ingredients for a more strategic and consistent foreign policy. So, particularly in the capabilities needed in building alliances with neighbours, in building coalitions with wider groups of partners, and in more consistent and predictable spending on defence, diplomacy and development.
Within that, we picked three big areas where we think the UK will need to focus its attention. The first is navigating a world governed by increasingly unpredictable great powers in the US and China. The second is building an improved and more effective relationship with Europe, particularly the EU, particularly on defence, security and shared geopolitical risks. And then the final area looks at how the UK can capture a role in global governance and international development, particularly building coalitions with a more assertive and activist Global South.
So, in the first area, navigating a world of more unpredictable great powers, it’s quite well rehearsed at this point that if Donald Trump wins a second term, there will be immediate and difficult questions for – about the role that the US plays in European security. There’s a likelihood that the US will take a much more transactional approach to NATO and to the War in Ukraine, but also, to broader issues, like, the crisis in the Middle East and climate. However, even if it’s not Trump, there is a longer term trend of the US seeking to focus more of its security engagement on the Indo-Pacific, and a longer term questioning, we argue, about the US’ outside role in the defence of European states. At the same time, all of that is complicated by a more difficult US-China relationship, one that is causing an increasingly protectionist approach from any US administration to the global trade order.
So, our assessment is, facing an unpredictable US and a more assertive and confrontational China, the UK is going to need to pick its way through a much more difficult and unpredictable world. It may not get the comprehensive free trade deal that it’s hoping for with the US. It may need to focus on narrow sectoral agreements. It may need to focus on defending the existing military partnerships and links it has with the US, potentially expanding them, like the AUKUS deal on nuclear submarines and critical technologies. It, like a lot of other European allies, has arrived at a point where it’s seeking to strike a very difficult balance with China. One where it cannot unpick the very intricate economic linkages that it has, but where it needs to defend itself from coercion and cyberattack at home. So, we’ve really focused on building the capabilities in government to manage those very difficult trade-offs.
The second big area is where we’ve suggested that, given all of that, there’s a natural case for the UK and Europe to strengthen their relationship on security, defence and geopolitical issues. There’s quite limited room to improve the trading relationship under the existing Trade and Co-operation Agreement, but there’s more both sides could do to manage what might be a precipitous decline in US support for European security. The two could work together more on – under the aegis of things like the PESCO framework, Permanent Structured Co-operation, which is where EU militaries co-operate and work with third countries. There are more projects that the UK could participate in there.
This obviously, becomes difficult and complex, because a lot of European defence initiatives, especially more recent ones, have been focused on addressing capacity gaps in Europe – in the European defence industries. And that tends to focus on building sovereign capabilities and excluding third countries like the UK. But both sides need the security offer that the other has, so there’s a long-term case for them co-ordinating and collaborating.
And finally, we suggest that the UK and the EU could do more to maximise the impact of their development and humanitarian offer to the Global South by working together. That brings me to the third priority, in a more – in a world with more activist, assertive – what the UK Government calls “middle ground powers,” Global South states and emerging economies who are not keen to be forced into US or China aligned blocs, there’s more the UK could do to be consistent in building coalitions in areas where it has credibility. International development, climate, addressing debt, technology governance, potentially.
But all of that should be underpinned by the, kind of, final section that we address, which is more consistent and predictable spending in these areas. We’re very aware in this paper that the next government is going to inherit a very difficult fiscal situation and a very difficult economy. Nonetheless, if we look at the most recent announcement on defence spending, on increasing it to 2.5% of GDP, all that will really do, if we look at the numbers, is fill some of the existing budget gaps.
Given the risks that the UK faces, especially most acutely in Europe, we argue that a new government will need to at least consider a minimum 3% spending of GDP on defence. And if the UK seeks to play the, kind of, consistent and influential global role on development that it has in the past, it would ideally return to spending 0.7% of its Gross National Income on development. Of course, we know that will be difficult, so there are ways that that spending could be done better. Addressing problems in procurement, more accountability to Parliament for defence spending, and on the development front, trying to avoid such a high fraction of the aid budget being spent by the Home Office and other agencies on housing refugees and asylum seekers at home.
So, it’s a difficult agenda, but we try to set out some of the trade-offs as clearly as possible, and our argument is that a consist – more consistency and more coherent use of the UK’s assets can enable it to have an ambitious, but realistic, role in a more difficult world.
Bronwen Maddox
Olivia, thanks very much, that’s terrific, and thanks very much. You take us right to that – some of the – one of the key problems facing the incoming government, lots to do and no money. So, Peter, if you were advising the new Foreign Secretary, it looks at the moment likely to be someone called David, might be Cameron, might be Lammy, what would you say against that backdrop?
Lord Peter Ricketts
Okay, I will steer clear of the politics, because I’m a non-political crossbencher, and stick on the policy. I think there’s a awful lot I would immediately agree with in this report, Olivia. Thank you. It certainly – I don’t think you have to be called David to make foreign policy announcements at the moment, but it certainly helps. In the last week or two, we’ve had David Cameron making a big speech, David Lammy and David Miliband, back in town, all with prescriptions. And I think they bring out a problem that…
Bronwen Maddox
There was someone called Rishi who did add his…
Lord Peter Ricketts
There were one or two called Rishi.
Bronwen Maddox
…thoughts, as well.
Lord Peter Ricketts
Yeah, they were rather less on hardcore foreign policy. I think they brought out an issue that a Labour Foreign Secretary will have, which is, what are you going to do differently from the current government? The prescriptions are all basically the same, and they’re well set out…
Bronwen Maddox
You’re talking about Labour and…
Lord Peter Ricketts
…in the report.
Bronwen Maddox
…the Conservatives?
Lord Peter Ricketts
I’m talking about between Labour and the Conservatives, yeah, and there’s an awful lot of continuity, actually. And the Labour opposition take a almost identical position on the Ukraine conflict, quite rightly, to the current government, in my view. On Israel-Gaza, at some cost in the party, they have stuck to the same line as the current government. On China, you rightly describe the delicate, complex balance we need to strike, and I don’t think Labour are in a different place there, either. David Lammy’s been in America, cementing the alliance with the US, trying to Trump-proof that. They all committed to spend 2.5% on defence. You go further than that. The question there is where the money comes from.
So, I think my advice to an incoming Foreign Secretary would be three or four quick things. One, the tone of governing counts. Gladstone’s dictum was, “My first principle of foreign policy is good governance at home,” and there is a lot to do, I think, about how we govern, stop the bombast and say – and do what we say. Overpromise, underdeliver – other way round, underdeliver, overpromise. Rebuild trust as a reliable ally, consult, listen, show that we are helping to bring ideas to solve other people’s problems.
On the continuity agenda, I think just assume it. I think maintain the high tempo of activity that David Cameron has maintained, both on Ukraine and on the Middle East. On China, I don’t think there’s much policy for the new government to make. I think there is an issue for the West, generally, about where we make China policy, where we co-ordinate. In a way, the G7 is too small, NATO is too Atlantic. We don’t have a place, and maybe a Labour Government can help a wider consultation on likeminded approaches to China.
And then, the areas of differentiation, there are two, in my view. One is Europe, and clearly, the Labour opposition are setting out a different approach to dealing with the EU on foreign and security policy. They’re talking openly about structured co-operation, both in terms of process, summits and ministerial meetings, but also, regular co-ordination. David Lammy has sketched that out. David Miliband, in his lecture last week, added a lot of detail on what a politically binding security pact between the EU and the UK would look like. I think there’s a lot in that.
I think that a Labour Government should be making an early offer to Brussels, carefully prepared, once the new Commission is in place, on what they’re proposing. Probably, also, accompany it with some gestures, some proposals, that will catch people’s eye. Youth mobility is one. Why did everyone close down the ideas from the European Commission? Another one might be Erasmus. There’ll be others, as well. So, as long as it’s carefully prepared, I think that that could really help to change the way in which the UK and EU work together on these major issues.
And then, the other is clearly in border security and migration. The Labour opposition have said that they will scrap the Rwanda policy. The issue then is, well, what are you going to do instead, because there is a common wish to reduce the number of people arriving by irregular – I don’t say illegal, means? Yvette Cooper set out last week her idea of a border security command, pulling White Hall together more tightly. That’s a good answer of process, but it’s not the full answer. Again, I think it will probably be adopting much the same policies, perhaps making them more effective, of going upstream against the traffickers, but also, the way in which asylum and migration is handled across government, I think will change.
Last point, be selective. It’s the issue that there is an enormous amount to do in rebuilding trust with the non-aligned countries, that an incoming British Government can’t do it all. They won’t have more money to spend on development, I don’t think. There are limits to the political energy they can put into it. So, choose some priorities, set them as five-year goals across a Parliament, co-ordinate them closely through the National Security Council, make better use of that, and do some burden sharing with other likeminded countries. So, collectively, we can have a more energetic approach to rebuilding trust and confidence with these countries, based on being more effective in the way we’re governing and prosecuting our foreign policy.
Bronwen Maddox
Peter, thanks very much indeed, and thanks for homing in on the two distinctions, really, between the parties at the moment. It is easy sport to tease one or the other about there not being very much difference, and they’re very indignant about this, obviously, particularly Labour. But you have identified the two where there is significant difference, and we may come back to those, particularly Europe.
But Philip, I wanted to bring you in, and we were musing upstairs on this word ‘realism’, and I would love to hear more of your just calibration, of how the UK should position itself. We’ve had years of quite grandiose statements, not always backed up by actions or money. How realistic should the UK be with itself?
Philip Stevens
Well, first of all, congratulations on the report. It’s excellent, and I thought – I think, in particular, I like the emphasis on the title, ‘Realistic Ambition’, and the fact that you can be ambitious and realistic in the – at the same time. One of the problems we have here in this country is that if you talk about realism in foreign policy, people are inclined to say, “Oh, well, that’s defeatist, you know, we’re still a great power,” or whatever. I think one – I think we need to understand that you can – countries – nations can be great nations without being great powers. I think that’s the beginning of understanding.
If you look back since the war, I was looking back the other day, and I think we’ve had about 12 or more strategic foreign policy and defence reviews. And every single one of them has – except the one just after the Cold War, has been forced on us by the gap between our ambitions, pretentions and our – the economic resources required to meet these ambitions or pretentions. And each one has sown the seeds of the problems which would lead to the next one. Because at each occasion, although we’ve been forced to scale back some of our capabilities, we still haven’t scaled back ambition. So, what we expect of ourselves and of our armed forces in the world are constantly running ahead of what they realistically can produce. And you see it now in the armed forces, where you have this hollowing out, where we have aircraft carriers that sit in dock, doing not very much, without enough frigates or destroyers to act as safeguar – as guards for them. And RAF Pilots who complain that they can’t get enough fuel to do enough training.
So, we have to be realistic and so, that the next government, of whatever sort, but I’m actually going to assume that the next government is a Labour Government, because – mostly because I’ve no idea what will happen to our foreign policy if we have another Conservative Government. I just don’t know. So, I’m assuming, without trying to pre-empt, that we’re going to have a government. So, realism, and a review of our foreign policy and defen – ambitions and our defence and security capabilities, that says that recog – you know, that recognises that Britain still has a very substantial role in promoting international peace and security, but doesn’t pretend that we are up there with the great powers.
The second thing about realism is – and I think it – see, the phrase comes from the intelligence community. There’s a phrase that – at the heart of foreign policy, which is “Know your enemy,” a very important phrase. If we’d thought more closely, for example, about what Vladimir Putin was planning when he – after he invaded Ukraine and took Crimea in 2014, if we’d really got to – thought about him, we would perhaps have realised that it was the beginning, rather than the end, of a process.
But I think alongside “Know your enemy,” there should be another phrase which says, “Nurture your allies.” And the fact is, and I picked this up travelling in continental Europe, in Paris, Eur – and in Germany, we haven’t quite realised how weak our relationships have become since we’ve left the European Union. And some of that’s the arguments that we’ve had and the bad blood and the mistrust. A lot of it is, actually, also, just institutional, functional. Someone was pointing out to me in Paris, and I heard the same in Berlin, that they used to meet their British counterparts every month at POLMIL meetings in Brussels, at the margins. And these weren’t – these were discussions they had, bilateral discussions, which weren’t just about what the EU was doing. They were about, you know, our bilateral co-operation, as such.
And if you like, multiply that across all the different fields, and climate and development, we’ve stopped talking to our European allies, except, I mean, there are obviously discussions in NATO, formal discussions, and discussions in the G7. But that casual, consistent discussion about bilateral interests and alliances, as well as institutional agreements, has gone. And that is why, and I agree very much with Peter here, it’s – for me, the first priority must be to rebuild an institutional relationship. We’re not going to rejoin the EU, and there’s no point in re-fighting the Brexit battle. But to rebuild the political, security, foreign policy, institutional relationship with Brussels, which puts us back in the room. So, we’re a part of that discussion and our officials and our Ministers are presenting their ideas at the beginning of the discussion, rather than after the rest of Europe has met. So, that would be my absolute number one priority.
On the United States, well, you know, the special relationship’s looked a bit jaded of late. I think we, you know, we really can stop calling it ‘special’ now. But I think, again, as Peter and the report makes clear, I mean, whatever happens in this autumn’s election, Biden is the last true Atlanticist in the White House. He’s the past President we’ll have who, in his bones, as it were, starts with a presumption that the Atlantic Alliance is the foundation stone of American security. Whoever comes next, whether it’s, you know, Trump in November, or someone else after Biden, in four or five years’ time, is not going to have that mindset.
So, takes me back, building those relationships in Europe is – would be my number one priority, and as I say, it’s not just about institut – doing things in Europe, although industri – rationalisation of military product – of indust – of mil – of arms equipment is going to be very important, but it’s the bilateral relationships. Doing my latest book, I was struck how the Anglo-Irish Agreement of 1985, the building block for the Good Friday Agreement, was essentially negotiated by Margaret Thatcher and Garret FitzGerald in the margins of summits of the EU in Brussels.
Bronwen Maddox
Philip, thanks very much, indeed. There’s some terrific questions coming in. I want to try and touch on two things, if we can, before we come to wider questions. One, just picking up this point about the relations with the US, an, Olivia, I’d love to hear your views. It’s always a pleasure to be able to have this kind of conversation in front of other people, having had it for months. But your views on whether it makes much difference to the UK’s relationship with the US, whether it is Trump or Biden.
Olivia O’Sullivan
I think it makes a huge difference. I think in the – we – emphasising some of the underlying drivers of the US becoming less focused on European security, we wouldn’t want to detract from. If it is Trump, I think that will be a huge jolt to the Transatlantic Alliance. The – a lot of people reflect – a lot of people we meet reflect that the first Trump term, we relatively picked our way through it. There’s a way to be transactional, there’s a way to build a relationship with Trump. Some leaders were successful at it.
But we shouldn’t discount that in a second term, many of the establishment voices that previously surrounded him, especially on defence and foreign policy, have broken with him. There are – and our US and Americas Programme has done great work on it here. There are lots of public statements from think tanks and people surrounding Trump about the way they will approach a second term with a much more focused and organised approach, particularly to leaning less on and maybe further politicising the US bureaucracy.
So, I think it will be a significant shift. The fact is, we have some fundamental and enduring, particularly military and intelligence, structural partnerships with the US, that I don’t think will go away. I don’t think we should seek to be too sanguine about the difference that Trump would make, but the long-term trend of a US more inclined to focus on the Indo-Pacific, and with more, kind of, broader, global interests away from its historic role in Europe, I do think will continue.
Bronwen Maddox
And the Indo-Pacific is an area where we’ve suggested Britain not raise US hopes too far, of what Britain is…
Olivia O’Sullivan
Yeah.
Bronwen Maddox
…actually prepared or able to contribute. Peter, one of the things Britain doesn’t have is a Free Trade Agreement with the US, and many signs suggesting that whether Biden or Trump, a wall of tariffs is likely to confront UK companies, Europeans and so on. I’m recently back from Japan, where they were in some mild shock at the Nippon Steel takeover being blocked, saying, “This is how they treat their friends,” and the Canadians might have something similar to say about Trump One. Do you think that these ties are loosening and we should be careful not to expect too much?
Lord Peter Ricketts
I mean, I think the difference between Biden and Trump over the next four years would be something like this. I think they are both more and more focused on the threat from China, the confrontation that they see as generational. I think they’re deeply worried by the China-Russia Axis developing, the China-Iran-Russia Axis, and that’s going to be number one. The difference, I think, is that Biden would seek to deal with that with European and Asian allies and Trump would seek to deal with it ignoring, at best, or possibly being aggressive towards, the European allies, as well. But as you say, the seminal trend is in that direction, and we have to expect that over the next decade or two, there will be less US power in Europe, and so, we’d better get better at building up our power Europe-wide, and I think that’s true.
I mean, I think, you know, the era of free trade deals is over. The Inflation Reduction Act, you know, that highly protectionist, nationalist, aggressive Act, is directed at, you know, the whole world, including us, and I don’t think Biden has any scruple about that, at all. So, we have to get used to the fact that we are deep allies, with huge strategic interests in common, in defence, in nuclear relation – weapons, in security, in intelligence, which won’t change. But above that, on the more surface of politics, you know, we are, like any other country, subject to this increasingly protectionist, nationalist tone in the US. And, you know, that’s a fact of life. Whether you call it a ‘special relationship’ or not is politics.
I always thought that Americans had a special smile on their face when they told British Prime Ministers of the special relationship. They, kind of, remembered to check it off. It’s like when the French President visits Washington and they have to remember to say, “our oldest ally,” which Brits don’t like, at all. So, yeah, it’s a gesture of politics.
Bronwen Maddox
Thank you, and that, as you said then, encourages the UK to look more to Europe for some of these relationships. Philip, given that we’re coming up to the European elections and that these may show, because of concerns about migration and all kinds of other things, something of a rightward shift in some countries, do you – does that complicate the relationship?
Philip Stevens
I think it – I mean, I think there will be a shift to the right. It looks, on the press – you know, on – as far as one can opinion poll such, you know, such multinational elections, it looks that there’ll be fairly substantial shift to the right. Although it looks like the mainstream parties at centre-left and centre-right will hol – continue to hold power. But we are – migration, we tend to think is – sometimes here that it’s just our problem. Actually, most of these countries are facing much bigger migration flows than we are across the channel. So, migration will become a – or remain and become more important as a European issue.
Now, is that a problem or an opportunity? Is that an opportunity for a British Government to play a role in a pan-European approach to policing and regulating migration? I would hope that it’s that rather than a threat. I don’t think anyone here will have instant solutions for the boats, although, you know, I sometimes think we amplify the problem. I think 750,000 people came to live in Britain last year legally, and 40,000 came across illegally there. So, there’s a proportionality question, and apparently, I was reading the other day that more are still coming over through Heathrow or in the lorries than in the small boats.
But I think, you know, I think a lot could change with just bet – I – Peter mentioned, you know, this idea of “tone and consistency.” Someone, a Permanent Secretary, said to me a little while ago, “Just having the same Ministers for two, three or four or five years, rather than four or five every five years,” well, he said, “it would immeasurably change the quality of policy making in government,” in a way. So, you know, I think – you know, I don’t know whether the Home Office is recoverable, but I hope it is. And – but having the same people following consistent policies will make a difference in all these difficult areas. They won’t solve the problems, but they can make a difference.
Bronwen Maddox
We could have a whole session just on the Home Office and, in fact, no, almost had that with Theresa May the other week, and she was, indeed, there for quite a long time. Sorry, Olivia, did I interrupt you? Were you going to…?
Olivia O’Sullivan
No.
Bronwen Maddox
No. So, let’s just touch really briefly on – just on this final point about the UK, even if not the soft power/superpower that the Prime Minister sometimes invokes, still has an opportunity, this report argues, to use its influence at a point when the world’s governance and rules are being challenged, are, kind of, up for grabs, and many countries from the Global South want more of a voice. And I’ll just stir in the question from Carl Wright, who’s saying, “How can the UK use the Commonwealth more effectively to engage with the Global South on these kind of things?” Peter, do you think – you talked – your last point in your opening statement was about the need to prioritise because there is so little time in governent…
Lord Peter Ricketts
Hmmm.
Bronwen Maddox
…in governments. Is there room for this kind of subtly, using of influence, that the UK wants to have, and what – is part of what it wants to do, and yet, it’s very time consuming?
Lord Peter Ricketts
Yeah, well, I mean, that’s a fact that all Ministers find, that, you know, the diary fills up with all we’ve been talking about, and the time to go out and actually try and exercise UK soft power is limited. Of cour – a lot of the soft power that we definitely have as a country is not under the control of government. You know, our football, our culture, our media, you know, the language, the role of the British Council, they could fund it better, the universities, the popularity of the education sector, you know, our thinktank, well, you know, there are these soft power assets which means the British voice is listened to. And any other government would invest a lot more in the BBC World Service and the British Council than we do, both of which are very strong brands, but the government itself can’t really orchestrate that.
I do think that there is an opportunity, partly by showing, you know, that we practise what we preach at home, that we really do believe in the rule of law, that we do stand up for international humanitarian law. We are prepared to speak truth to tyrants and call them out, and that’s not always been the case, I have to say, in the place of current government, that helps a bit, but they will come back to this bandwidth issue, yes, absolutely.
And so, using the Commonwealth, I mean, you know, to a limited extent, but it’s not going to change the game. We are a very good convening country. So, I’m delighted we’re having the European political community here in July, just before the election, because London is good at having major conferences. People like coming here. British Ministers are quite good at crafting communiqués out of complex discussions. So, I think we can use the convening power of London more than we have been doing.
Bronwen Maddox
An argument we make for the strength of Chatham House, the crossroads…
Lord Peter Ricketts
Good.
Bronwen Maddox
…of the world. Olivia, one quick point on this before we go to questions, one tip you would give the next government on this, on how to use this kind of power?
Olivia O’Sullivan
Well, I think we’re often overly casual about the soft power that we do have, and we, sort of, fail to invest in our assets on that front. The only thing I would add to what Peter has said, because, of course, the whole power of soft power is it’s, sort of, the power of attraction, if you try to direct it too hard you can squash it.
Lord Peter Ricketts
Hmmm hmm.
Olivia O’Sullivan
That doesn’t mean we shouldn’t consistently invest and fund things like the BBC World Service. But we also sometimes fail to neglect our domestic sources of global power. So, particularly things that are also sources of economic growth, and fundamentally, a prosperous country is also a pretty attractive and powerful country. So, we don’t focus too much on domestic policy here at Chatham House, but I think there’s an argument that the domestic and foreign can and should be interlinked more. Things like investing in our science and tech research base, things like removing barriers to expanding our labs, making sure that we capitalise on the kind of global health research that we’ve – assets that we have that have contributed to solving global problems.
Lord Peter Ricketts
Hmmm.
Olivia O’Sullivan
So, I think we’re too casual about some of the sources of that power, and don’t always think about the ways we can invest domestically to have an outsize impact on the world.
Lord Peter Ricketts
Can I just add? I mean…
Bronwen Maddox
Hmmm hmm.
Lord Peter Ricketts
…Olivia, your background is in development.
Olivia O’Sullivan
Hmmm.
Lord Peter Ricketts
I should have said, one of the massive soft power assets we had was DFID…
Olivia O’Sullivan
So did I.
Lord Peter Ricketts
…which was really a world-class brand, and appreciated partly for its consistency, for its funding, but also, for its development policy, leadership…
Olivia O’Sullivan
Yeah.
Lord Peter Ricketts
…in thinking about these ideas. That has been really, really damaged, both by the crashing together of the FCO and DFID, which I don’t think has worked very well, and then by the massive cut in the budget. So, there is a potential to rebuild that, but it’s going to take time and I think it is going to take money…
Olivia O’Sullivan
Hmmm.
Lord Peter Ricketts
…as you’re suggesting in your report. But we used to be one of the world’s leaders in development policy, and I think we’ve lost that.
Bronwen Maddox
On that note, let’s have some questions, and that perhaps knocked out that question. Right, here on the aisle.
John Peet
Yes, hello, I’m John Peet from The Economist. Realistic ambition, I’m just wondering whether any of the panel think that there is a risk that Labour, and we assume it will be Labour, may be insufficiently ambitious about relations with the European Union? I mean, it’s not just that Labour is heading for a victory, but public opinion clearly shows really substantial majorities who think the decision in 2016 was a mistake. Most voters don’t seem to have a problem with greater regulatory alignment. I just wonder if ruling out things like the Customs Union, stronger alignment, possibly one day, even membership of the single market, is too unambitious?
Bronwen Maddox
Thank you very much. Who’d like to start?
Philip Stevens
I…
Bronwen Maddox
Philip, go on.
Lord Peter Ricketts
Philip.
Philip Stevens
I put the very same point t o a member of the Shadow Cabinet a little while ago, and here’s the answer I got. “So, you think you are a Political Journalist?” I said, “Yeah.” “Well, here’s what’s happening. We’re going into a general election, which is being fought on the government’s dismal record, the unpopularity of the Prime Minister and most of the Ministers, the war, the internal strife and war, the cost of living crisis. And what you’re saying is we should change the subject and start talking about Europe?” And, you know – so, I think the answer is we don’t know. I mean, I would like to…
Bronwen Maddox
So – but you would say it’s as strong as that, that really, Labour might be considering that for after the election?
Philip Stevens
Yeah, I don’t think they’re thinking – they’re not considering rejoining the EU, I’m pretty sure of that. And they would be mad, I think, if they were, because that would, basically, consume the whole of a first term, and it may make it only a first term. But I do think that they may well be ambitious. I do hope, I mean, it’s a mixture of hope and expectation, I do. But I think they are absolutely correct to say, “Look, we want to win an election, and the subject, the issues for the electorate are focused on are all ones that help us, so we’re not going to change the subject.”
Bronwen Maddox
But – absolutely and actually, I want to come to Olivia next, just on this point about – John raised about, okay, well, there’s something – oh right, not rejoining the EU, but Customs Union, something else. Do you – how far do you think there is really room to get closer to Europe, before Europe says, “You’re trying to have all the benefits of the single market without…
Olivia O’Sullivan
Well…
Bronwen Maddox
…rejoining”?
Olivia O’Sullivan
…you took the words out of my mouth, ‘cause I think the question is, what will Europe think? They will – obviously, if they win really big, Labour, they’ll have a big flank of remainers, both in their public and in their political party, that will put pressure on them to go further. But I think if you were the European Commission, you wouldn’t be inclined to start discussions about a really intensive revisiting of the current arrangement, if you thought, well, this government might be out in five years’ time, and then we’re going to have the discussion all over again.
So, I think it’s not just a question of – although I agree with you, public opinion is shifting in really interesting ways. It’s both becoming less important to people and less salient. We – it’s not just opinion at home that they’re going to have to contend with. So, I think the – some of what they’re saying about foreign policy co-operation is not just because that’s in our interest, but is also because it’s terrain on which they can rebuild trust.
Bronwen Maddox
Thank you. Peter?
Lord Peter Ricketts
Well, I agree with all that. One more sentence, the EU has just invited Ukraine and I think, 11 other countries, to open accession negotiations. You know, that’s going to be the agenda. The idea that they’re suddenly going to start a multi-year negotiation to unpick the TCA and go back into all that, I mean, I don’t think it’s on the radar screen, at all. So, I think that Olivia’s right.
Bronwen Maddox
Well, if you haven’t seen our discussion with the Hungarian Foreign Minister last week on exactly that subject of accession, do – I didn’t actually – I didn’t ask him would he accept the UK back in, but he had strong views on all the others. Here in the front.
Jeremy Greenstock
[Pause] Jeremy Greenstock, Gatehouse Advisory Partners, former British Diplomat. There are two things you’ve only touched lightly on so far in this discussion. One is the fading of the institutions. You haven’t mentioned the United Nations once so far in this discussion, and yet, we’re a permanent member. But more important than that is the need to restore – refurbish the British economy. What can foreign policy do in the most important obligation of the next government, after defence and security, which is the British economy? And Rachel Reeves is clearly very fixated on this, but what can foreign policy do to help restore an economy that’s close to bankrupt, without which restoration, we will not be able to put money into the diplomatic resources that are needed to replace the loss of the institutions and the constant recreation of ad hoc diplomacy in the world, and personalised, great power activity? The British presence has got to be restored through diplomacy, and that needs resources, but look at all the other things that need money.
Bronwen Maddox
Thank you for that. I – fascinated the panel’s views, and I will give you my own briefly at the end. Olivia, do you want to start, as we addressed the money question quite a bit?
Olivia O’Sullivan
I mean, I think the area where those two issues are linking the most at the moment is in the UK confronting a much more protectionist world. So, with the Inflation Reduction Act, but, also, with the EU’s approach to green industrial policy. You have, you know, the UK is outside of these major blocs and is not benefiting from these kinds of subsidy programmes.
I think that what a next government is going to have to do is figure out ways that – many of those protectionist initiatives, not just in the US and the EU, have focused on the climate transition and subsidising green transition in countries around the world. I think there might be opportunities for the UK to build more partnerships with countries that are sources of critical minerals, to think about shared approaches to more resilient supply chains. And to think about how to benefit from some of those programmes in piecemeal ways. There are options to get more benefits under the Inflation Reduction Act, for example. But I’m conscious as I give it that this is a partial answer.
I think it will be growth at home first that underpins any broader UK international role. We – I mean, I’m curious what other think – others think about this, but we are, arguably, moving from an era where the UK was able to do well out of a services-oriented economy into a global economy that is much more underpinned by a need to invest in infrastructure, because it’s focused on things like technological development. So, we’re possibly looking at, in some ways, a more active role for the state in the economy. I think if you ask the Labour Party, they’re not quite sure what level of role that should be, but I expect it will be top of their agenda when they come in. I mean, I’m conscious of not resolving the question there, but I think those are some of the ways in which the two will interlink.
Bronwen Maddox
You went…
Philip Stevens
I’m not as pessimistic as perhaps you are, Jeremy, about the economy, in the short-term. I actually think we may have been, sort of, reaching bottom, as it were, and the – I – you know, and this is a perhaps foolhardy prediction, but in a year or so’s time, people will be talking about, “Well, actually, you know, Labour have inherited, you know, something that doesn’t look quite so bad, after all,” so that’s one point.
But on the underlying problems, you’re right, and they’re underlying problems of prod – I mean, the big problem that Britain has is productivity, low productivity, slow growth in productivity. The next thing, you move from there to investment. So, what we need above all is investment, and a lot of that will be foreign investment. I think you – what foreign policy and security policy can do is by projecting stability, consistency, predictability, it can attract that investment.
So, again, I think, you know, there are opportunities there. There will be big battles over the allocation of resources, it’s inevitable. I think if the next government is sensible in interpreting the fiscal rules to say that investment is not the same as current spending, and it really can afford to invest, it – there may be more room than some people presume.
So – but I think, again, it’s like good gov – you know, it’s not going to have – it’s not going to change things in a year or two years or three years, although direction counts for as much as, you know, as the, sort of – as visible change now. But I think, you know, good gov – good, consistent, stable rule of law government will make a difference economically.
Bronwen Maddox
Yeah.
Lord Peter Ricketts
Well, I’m replying to the former UK Permanent Representative to the UN and I do so with some discretion. Jeremy, as you know better than anyone here, when the great powers are at loggerheads, the Security Council cannot act on the major issues of the day. And so, it’s frustrating for everybody to see Ukraine and the Middle East pretty much becalmed, although the US did make quite interesting tactical use of the Security Council recently on an Israel resolution. And that’s been built into the UN since 1945. I mean, we wouldn’t have had the Soviet Union and the US as members of the UN without the permanent member veto, and that means that it’s deadlocked when they disagree sharply.
But let’s not forget all the rest of the UN, the heroic work of the UN agencies around the world, highlighted by UNRWA in Gaza. And I would very much – excuse me – very much like to see the UK get back to funding UNRWA as soon as possible. And the World Health Organization, the children’s agencies, the fact that the climate negotiations are anchored in a UN agreement. So, there is a great deal that the UN is doing below the level of the Security Council, which is vital. We could not recreate another global organisation, so we ought to be nurturing the UN agencies as well as the alliances that Philip referred to.
Bronwen Maddox
Thank you, and I will just add on your point about the economy, I was very struck by one long conversation I had with a leading Indian businessman, who said, “Look, the UK doesn’t have to get everything right, and too bad about the water and forget the railways, but at least get 5G right,” where India is charging ahead, because it enables so much else. And other companies saying to us, “If only the UK could get its power network right, we would queue up to invest.” So, it’s a shame about the transport, but we don’t have to move around the whole country, but you do need the things of modern connectivity. And the UK, if – one thing the government could do, in their view, to encourage investment, it would be those things that the private sector cannot lead in doing.
Right, let’s have another. Was there – there was one in the middle, here. Here. Yeah, so I think – was there? Yes, or behind you? Yes, alright, yeah.
Peter Hurst
Thank you. Peter Hurst, member. This is partly a comment, but do you think that – if I could move it to the next UK Prime Minister, that he or she could put more resources into the Foreign Office? It’ll be very tempting to put everything into internal matters, which we have great challenges with, but to be brave, he would need to – I think be well advised to beef up, as much as he can, the Foreign Office, in terms of resources, and the personnel. Make sure that the personnel are top people in the Foreign Office…
Bronwen Maddox
Thank you. I…
Peter Hurst
…for the next term.
Bronwen Maddox
…I’m going to take one or two more. I’m going to guess that this is not a panel or an audience that is going to say, “Defund the Foreign Office now.” Here.
Trisha de Borchgrave
Thank you. Trisha de Borchgrave, Current Affairs Writer. I just – I – of course, we all need to reach across the EU, etc., but do we – I know this sounds maybe a little bit La La land, but I’m hoping not, because I think there’s a lot of public sentiment this way, do we need to lead the way and work across domestically through a genuine cross-party strategy on long-term issues like climate and biodiversity and food production and decarbonisation? Could we enact commitments into law, as everyone’s getting sued now for things, so that every party must follow these commitments? And would this allow the UK to genuinely grow its global influence? I know it sounds like a very – we have a very politicised landscape, but you also point out that there’s a lot of commonality between the two parties.
Bronwen Maddox
Thank you ver…
Trisha de Borchgrave
Thanks.
Bronwen Maddox
…very much indeed. And there was one over here. Alright, I’ll take, actually, these two, as well.
Domenic Carratu
Just following on from that – Domenic Carrat – sorry, Domenic Carratu. Just following on the last point, we’ve got COP29 coming up this year. How important is playing at this global stage for the UK foreign policy, particularly when this COP’s been badged as a finance COP, requiring us to potentially stump up billions of dollars?
Bronwen Maddox
Thank you.
HE Bader Alawadi
Thank you very much. Ambassador of Kuwait, Bader Alawadi. I have just a question for maybe Mr Stevens can help me with it. I will pick up from your point, I like it, about foreign investment. Because recently, we hear a lot in the discussions about the link between the foreign policy, defence and strategic defence and the – and foreign investment, to have many foreign investment in there. We have a lot in London, I’m talking about Kuwait personally, like, my country. We have other GCC, other Arab countries. We didn’t hear yet – there is some signals that Labour will continue working with us, about the – strengthening the investment co-operation between, well, GCC and especially Kuwait, and this is very important.
But I think we need to hear from them what are their plan about this investment? How they will come and who we will talk with, and to fulfil this invest – which is ambitious. There’s big, big plans coming, and there’s money coming and it’s very important go along with what you said, to have foreign investment, to have, you know, a good economy, to help you with the foreign policy, and I agree with you. But we need a clear idea on the strategy about that.
The other thing has concern me a little bit there about Europe is – of course, is a legitimate for UK and for even us in the area, but also, I didn’t hear about Middle East. And I think – I’ve been saying that for all – when we talk with the official here, if we don’t have stability in the Middle East, we don’t have economic in the world, we don’t have, you know, strategic partnership in the economic and, you know, many projects that we have with UK together, we want to fulfil it. But if the issue, or the situation in the Middle East, especially in Gaza, there…
Bronwen Maddox
Hmmm.
Bader Alawadi
…we need to have clear, also policy about that. That recognition of Palestinian state. This is crucial, this is crucial and important. I think this is very important to continue strategic, you know, foreign policy in the future. Thank you.
Bronwen Maddox
Thank you very much, indeed, for the question. Philip, I’m going to start with you, the question of investment in Kuwait and the region. And the first part of the Ambassador’s question was very much about – talking about what Britain might do in the region, and we got quite a long way into it before the shadow of Gaza reared itself. And then, of the other questions, we had the Foreign Office diplomacy funding, bipartisan agreements and putting things in law, and COP29. This is the Azerbaijan one, and what the UK might do. We start with you, Philip…
Philip Stevens
Okay.
Bronwen Maddox
…and then Olivia and Peter, pick what you…
Philip Stevens
Well, I can be…
Bronwen Maddox
…want.
Philip Stevens
…quite quick, ‘cause I can – I’m just going to agree with you on both points, actually. On the first point, yes, I do think Labour will want to be consistent. But I don’t speak for them, and I don’t know who is in the Labour Treasury and industry team who’s responsible. But I take your point, and I think if they were sensible, they would be spelling out the sort of framework that they intend to put in place.
On the second, I think, yeah, absolutely. I mean, Europe used to have a Middle East – Europe, including Britain, used to have a Middle East policy, a policy for Israel-Palestine. There was something a very long time ago, which shows how old one is, called the ‘Venice Declaration’, which said, you know, Brit – that Europe – Britain had distinct views. We have, collectively, Britain and Europe, abandoned a Middle East policy, and basically, deferred to the Americans. That’s a terrible mistake and, you know, this is our neighbourhood, as you said. I mean, if you ask me, “How do we work back from there?” I think we need some – several of these meetings leading over a long period, ‘cause – but I don’t, you know, I don’t have a glib or quick answer, I’m afraid. But I think you’re absolutely right on both points.
Bronwen Maddox
Great. Olivia?
Olivia O’Sullivan
Well, without a lot of time left, I’ll pick one, so I’ll take your question on climate. I mean, I think the domestic, political and public consensus on climate that did exist in the UK, including legal commitments that went further than a lot of other countries, is a real example of a domestic policy that has been a foreign policy asset for this country. Because by demonstrating that we’re prepared to make commitments at home and prepared to take the crisis seriously at home, we have a, kind of, foundation for our international leadership. There’s clearly been an attempt to somewhat politicise that and to separate the idea of energy security from the idea of reaching Net zero.
I don’t think it’s been particularly successful. I don’t think if you look at the debate around this election, that it is being fought on climate policy, and I think it’s interesting that if you look at polls, the UK public pretty consistently put climate as their, sort of, top – in their top three issues of concern. I think this is a good example of an area where a lot of what we’ve been talking about today is about the ways in which the domestic underpin the international and vice versa. Our commitments and our consensus on climate is one of those, and despite the fact that it’s become somewhat politicised this year, I actually think that might well continue, and it’s a, sort of, interesting way in which the UK is a bit of an outlier. But it, sort of, underpins a global role on climate diplomacy, quite well, I think.
Lord Peter Ricketts
It feels like I’m on the Today Programme, watching the clock count down to the hour and…
Bronwen Maddox
We’re watching the clock, Peter. You can just – you can say what you like.
Lord Peter Ricketts
…get to the pips.
Bronwen Maddox
Yeah.
Lord Peter Ricketts
Beefing up the Foreign Office, I’m always going to be in favour of more money for the Foreign Office, absolutely, given my career. We’re only talking tiny, tiny amounts of money, in terms of, you know, the 3% for defence and the 0.7 for development, which Olivia is advocating in her report. But we should put the FCO on a footing where it can fund itself without having to depend on raiding the aid budget, which I suspect is going quite a bit at the moment.
I think there’s no problem about the quality of people. Honestly, from the young people I meet from the Foreign Office, saving Olivia’s presence, they are high quality. Yes, we could do with more resource, but stable, ministerial team, working through a five-year Parliament, putting the effort in to promote the policy, I think is what’s needed. Honestly, David Cameron, I think, is doing a good job, and if the Labour Foreign Secretary follow the same sort of approach, that would be good.
Just on legislating long-term targets, I mean, it’s a very attractive idea. Indeed, we’ve done it for carbon reduction targets. You know, here are targets. They’re sufficiently far away that each individual government can pull back from the intermediate measures needed to get to the target. That’s always going to be the problem. I mean, given the fractured and polarised nature of British politics, there are not many areas where we could hope for a bigger consensus. I would like to see the country working back to some, sort of, broad, settled view on the future of our relationship with Europe, which has been so toxic over the last decade. And I think if we could get to some kind of broad sense of where we’re going to go on Europe in the next ten or 20 years, that would be a great thing for any government to achieve.
Bronwen Maddox
Well, thank you very much for that. We are, as you were spotting, almost up against the clock. I just want to note one question from online, from Tameta Nydelowan, about how we might see “the Labour Government’s relationship with Africa changing in the next government.” We have, I believe, thanks to our terrific Events Team, another discussion on Labour’s foreign policy coming up, and I will take that question into that and into some of our other work. But we are going to have to stop there, so thank you all enormously for coming. Thank you for terrific questions. Thank you to my panel. Thank you to everyone, and there are many people who have contributed to this work. Thank you [applause].
