Antony Froggatt,Email Antony LinkedIn
Experts from across Chatham House’s research programmes give their insights on a range of issues facing Rishi Sunak as he becomes UK prime minister, covering energy prices, the climate change agenda, war in Ukraine, China and the Indo-Pacific, Africa, the US, global health, international law and security, science and technology, trade, and the global economic crisis.
Rising energy prices
The social and economic impact of high energy prices this winter may be greater than that of COVID-19. However, in contrast to the pandemic, there has been ample warning of the expected scale of this crisis.
The European Union (EU) gets much more of its energy from Russia than the UK does, but all are part of a largely informal European price zone which is why UK consumers are now facing, what would have been to many, unimaginable bills despite no longer importing energy from Russia.
The cost of energy will continue to be a major concern for households and businesses and, given the cost of interventions, will significantly affect government finance.
The current policy of capping the unit price for six months increases affordability but will only offer some relief for this winter. The new government urgently needs to look at what happens to bills in the spring and next winter which, from a gas supply perspective, may be even worse than this one.
The EU has reacted with much greater purpose, proposing new legislative packages to diversify supply, accelerate the deployment of renewable energy, make adjustments to markets, and put in place energy saving measures. While these are unlikely to be enough they will make a difference and can become a benchmark for UK policy.
The role that government plays in assisting public and private sectors to save energy will be important. This is where past administrations have wasted the last eight months, where public information campaigns and small technology changes, such as refurbishing and resetting boilers and larger energy consuming products or insulating homes, would have made a difference.
Action needs to be taken across all levels, including co-ordination with the devolved administrations and local government.
Support for new supply needs to be immediately given to new low-carbon technologies which can deliver both cheaply and rapidly, primarily onshore wind and solar, which also help to decarbonize the sector.
The UK will need to maintain, and more likely increase, its relationship with the EU on energy as it continues to trade gas and electricity which is likely to require the resolution of tricky issues such as the Northern Ireland Protocol.
However, the discussions at the European Political Community in early October on greater co-operation on North Sea grids, creating an important opportunity for the accelerated deployment of offshore wind, needs to be taken forward.
Other supply options and market restructuring will be needed and they all must balance affordability, security of supply, and environmental considerations.
The agenda on climate change
The record temperatures this summer show how the changing climate is impacting the daily lives of UK citizens. Climate change remains the most important challenge of this century and one that the prime minister will rapidly need to get a grip of ahead of COP27.
Hosting COP26 in 2021, along with Italy, was seen as an important post-Brexit opportunity for the UK in the climate space and ensured the development of many new multilateral sectorial initiatives, such as on climate finance, the Global Methane Pledge and on electric vehicles, while further supporting other emerging initiatives, such as on loss and damage. It will be important for the new prime minister, and the UK’s credibility, to continue to deliver on these.
Concrete things that are needed are a fast roll-out of renewable energy rather than fast-tracking more fossil fuel production, driving ahead the net-zero agenda particularly around land use and food and considering how to restructure markets to better deliver the long-term goals.
Grasping the need to address the demand-side of consumption growth, and not just supply, is key. The UK has prided itself on being a global leader on the climate over the last 15 years but let’s hope that is now not in peril.
Russia and the war in Ukraine
Supporting Ukraine and confronting Russia are indisputable foreign policy priorities so it is highly likely the new prime minister will look to continue on this path and go with both popular and expert consensus in assisting Ukraine generously and standing up to Russia.
The other question, though, is to what extent the UK’s position can continue to make a difference to the outcome of the war.
Bringing the waverers of western Europe more firmly on board is surely beyond any UK prime minister’s ability considering the UK’s post-Brexit behaviour where the UK still has its own questions to answer including over the failure to tackle the problems of Russian influence at home.
That said, Brexit may not always be relevant to shared hard security challenges. Other countries do see the difference training, money and weapons are making and, if these continue to bring success, it is possible even the waverers can be guilted into providing more aid and economic support.
However, supporting Ukraine is one thing. Truly understanding Russia and devising a coherent Russia strategy is another. What needs to be learned is that Russia, in its present incarnation, cannot be reasoned with whatever the state of the war.
Therefore, given the threat Russia poses to the UK and other democracies, Britain now needs to consider how it can assist with engendering change in Russia. This should not be confused with engineering ‘regime change’ as the Kremlin accuses the UK of doing already.
But it does suggest a more proactive, less defensive Russia policy is required, rather than waiting for the Russian people to instigate change from within. That will take a degree of leadership and political will rarely seen in UK politics.
China and the Indo-Pacific tilt
Both candidates in the last Conservative leadership contest argued during their campaigns that China was the biggest long-term threat to the UK’s national security. They both promised to call out China’s violations of human rights and international law and extend curbs on China’s access to sensitive technology.
However, to successfully respond to the scale of the challenge, the next prime minister will need to do much more than say what they do not want from Beijing. There needs to be a convincing, positive vision for how the UK can navigate a world where the centre of global economic and geopolitical gravity is moving eastwards.
There needs to be a convincing, positive vision for how the UK can navigate a world where the centre of global economic and geopolitical gravity is moving eastwards.
At a time when its in-tray is full of problems closer to home, the UK government needs to sustain enhanced levels of engagement in the Indo-Pacific, particularly in Southeast Asia, while investing at home in the UK’s Asia literacy.
That should include more support for research and education about China as well as the rest of this dynamic region. Labelling China a threat does not make it go away. The UK needs to learn how to live in a world where Chinese power and influence will continue to grow from Asia to Latin America and across the UN and other multilateral organizations.
Investing in the UK’s knowledge of, and relationships in, Asia will also support British businesses as they look for new opportunities in fast-growing but challenging emerging markets such as India, Indonesia, and Vietnam.
The UK’s Middle East policy
The UK government must restore a distinct cabinet position for the Middle East and North Africa and reorient to give Iran’s regional role greater focus.
The Middle East portfolio remains hefty and complex and requires diplomatic engagement to match. No sooner had the UK merged the ministerial Middle East portfolio into the broader one of minister of state for Asia and the Middle East than the war on Ukraine began, directing Western attention to Gulf Arab countries as one potential energy source to offset the loss of Russian oil and gas. Yet Gulf Arab countries are hesitating to fully heed Western calls to increase energy production.
One key cause is Gulf Arab perceptions that the UK and other Western countries have overlooked their concerns of the threats that Iran poses to their security and political clout.
Despite the UK’s characterization of Iraq as ‘post-conflict’, and of the situation in Syria as a ‘crisis’, recent clashes in Baghdad’s Green Zone and American and Israeli bombing of Iran-linked targets in Syria, as well as recurring attacks by Iran-backed groups on targets in Gulf Cooperation Council (GCC) countries, underline Iran’s role in ongoing instability in the Middle East, which threatens the interests of the UK and its allies in the region.
Although the UK’s Foreign, Commonwealth and Development Office resources have been recently redistributed to further support response to the Russian invasion of Ukraine, the UK can, and must, use existing resources earmarked for the Middle East to engage more effectively.
The two are not wholly distinct: Russia is using Iranian drones to attack Ukraine and Iranian military personnel are active on the ground in Ukraine in aid of the Russian military. Iran and Russia’s ongoing military intervention in Syria paved the way for their cooperation in the invasion of Ukraine.
The UK must restore diplomatic cabinet distribution to give the Middle East the attention it requires, but also revising its approach, putting Iran’s regional and international interventions high on the agenda and in parallel to efforts on the Iran nuclear deal.
The UK sees GCC countries as a potential alternative source of energy to Russian oil and gas specifically and as important trade partners more broadly. UK foreign policy must not compartmentalize its approach to the Middle East.
Diplomatic engagement on Iran’s regional role is a key factor in strengthening trust between the UK and its Middle Eastern allies, including in the GCC, which in turn supports the UK’s economic and security priorities. This means UK policy must approach Iran not just more comprehensively, and coherently, but also as a component of the broader strategy of dealing with the geopolitical and economic threats presented by Russia.
Africa and the UK
Senior UK politicians often claim that Africa is a priority but UK prime ministers and foreign secretaries rarely visit the continent. Boris Johnson attending the Commonwealth Heads of Government Summit in Kigali in August was his first as prime minister where he was accompanied by Liz Truss who was then his foreign secretary.
Despite saying she was an Africa enthusiast as secretary of state for international trade and president of the Board of Trade, Truss had never visited the continent. Her focus was consistently on other parts of the world except for defending the UK’s contested partnership with Rwanda to repatriate to Kigali informal migrants to the UK.
Viewing global politics through the lens of great power rivalry has cast African states as second tier players, disrespecting their agency and prided sovereignty and ignoring the preference of many states to remain non-aligned on issues pertaining to great power competition.
This is a mistake as 25 per cent of the UNGA is comprised of African member states and, of them, 21 are Commonwealth members with Gabon and Togo recently joining. The Russian invasion of Ukraine and intensifying competition with China is a reminder that in this era of sharper geopolitics, Africa increasingly matters for UK’s foreign policy objectives.
The new prime minister will need to review the 2021 Integrated Review, which downplayed much of Africa for UK strategy and advocated a pivot focus to East Africa. The war in Ukraine, coupled with democratic reversals in East Africa and worsening stability in West Africa requires a UK priority rethink. With limited resources to support an expanded UK footprint, sharper focus and defined ambition is important.
Continuity is important too. Since 1989, there have been 21 ministers for Africa, an average tenure of just over 18 months. This is not the time to change the UK’s minister responsible for Africa but it is the moment to make once again that post focused just on sub-Saharan Africa rather than also covering the Caribbean and Latin America too.
The UK-US relationship
As the US approaches its midterm elections, the new prime minister should think carefully about the UK’s response to potential disruption or challenges to the legitimacy of electoral results.
The US faces a period of unpredictable politics with the possibility of significant disruption, upheaval, and the potential for violence. The UK should be careful to differentiate between being independent with respect to partisan politics, which is essential, from being neutral with respect to democracy and especially the integrity of elections.
It would be a mistake for the UK prime minister or the next foreign secretary to be neutral on the question of free and fair elections and the importance of democracy in the US. Boris Johnson’s administration, especially his foreign secretary, was poorly equipped to respond to questions about the outcome of the 2020 presidential elections and prevaricated more than once.
On foreign policy, a shared interest in supporting Ukraine and strengthening NATO is the current anchor for this partnership, but its historical foundation is both deeper and wider.
The new UK prime minister should demonstrate to the US, and to the world, that Britain is serious about its existing international commitments, especially in the Euro-Atlantic and through NATO, but also with respect to Northern Ireland and Europe.
The UK should deepen its participation in the new European Political Community and seize any opportunity to strengthen mechanisms for security cooperation with Europe. It should aim to restore Britain’s reputation as a nation committed to international, regional and domestic multilateral and legal frameworks.
These measures strengthen Britain’s attractiveness to the US and so lend it greater influence in this essential partnership. Any move to undermine the Northern Ireland protocol should be carefully measured against its wider impacts, not only with Europe, but also with the US.
Continuing Boris Johnson’s policy of restraint, rather than demanding a US-UK trade deal, is wise given the persistence of anti-trade sentiment in the US Congress and the looming US midterm elections.
The prime minister should also do what they can to lend support and work effectively and pragmatically with this US administration. What comes next could be disruptive so now is the time to leverage US power and lock the US into durable commitments that enhance international stability and prosperity.
US president Joe Biden is determined and pragmatic. He will choose the partners that best enable him to deliver his foreign policy priorities. The UK will be both more attractive, and less supplicant, to the US if it has a strong relationship with Europe.
Global health priorities
Robert Yates, Director, Global Health Programme and Executive Director, Centre for Universal Health, Chatham House and Emma Ross, Senior Research Fellow, Global Health Programme.
Global health has been one of the areas where the UK has historically been seen as punching above its weight due to the magnitude of its financing for global health programmes and its reputation as a leader in global health initiatives.
However, the UK’s standing has taken a significant hit since the start of the pandemic with it demonstrating a lack of solidarity in combatting COVID-19 when it hoarded vaccines and failed to lead the G7 in raising adequate funding for the COVAX facility and blocked attempts to share vaccine technologies with developing countries.
Slashing the international aid budget and deprioritizing global health within its aid strategy has further tarnished the UK’s reputation as a global health leader.
Rebuilding the UK’s hard-earned status as a leading force in global health by at least restoring the level of official development assistance (ODA) for health, if not enhancing it, should be one of the new prime minister’s top priorities.
This should include support for major initiatives such as the Financial Intermediary Fund for Pandemic Prevention, Preparedness and Response (FIF), the Hub for Pandemic and Epidemic Intelligence in Berlin and the vaccine technology transfer hub in Africa.
There is a risk that the ongoing pandemic treaty negotiations will result in a weak instrument of little value. The UK prime minister should prioritize the successful outcome of the negotiations by championing provisions that ensure the treaty makes a meaningful difference in enhancing global health security.
There is a need for workable mechanisms to ensure countries cooperate next time in preventing, preparing for and responding to a pandemic and supporting countries that need extra resources while, another related priority, should be to engage in efforts to reform the International Health Regulations in a way that strengthens global health security.
Championing international law
Compliance with international law is in the best interests of the UK, and the new UK government needs to recognize this.
The UK wants Russia to comply with the UN Charter and stop its aggressive war against Ukraine. It wants China to recognize the rights of its Uighur citizens, for women to be protected from violence in armed conflict, for compliance with nuclear non-proliferation treaties and negotiate lucrative international trade agreements.
These are all excellent aims and they should continue to be pursued. But exhortations to the rest of the world to support the international rules-based order ring hollow if they come from a government which itself does not itself adhere to those rules.
How the UK conducts itself domestically is a mirror of how it conducts itself internationally. What elected UK officials say and do here matters elsewhere. How we treat the rule of law in this country impacts how others treat it – and us.
The new prime minister has an opportunity to lead by example by ending the slow but dangerous habitualization of the British public becoming numb to government ‘intentions’ to break international law whether or not such threats are ultimately carried out.
There should also be a full public and parliamentary scrutiny of constitutionally significant proposals, such as the Northern Ireland Protocol bill and reform of the Human Rights Act, rather than fast-track them past a public distracted by the cost-of-living crisis.
International law is founded upon principles of mutual trust, cooperation, good faith and reciprocity. To be a credible global leader, the UK must put the rule of law, including international law, at the heart of both its foreign and domestic policy. They cannot be disaggregated.
Strengthening international security
Security and defence will be high on the agenda for the new UK prime minister. Russia’s war in Ukraine and the potential for sudden, wider escalation remains a serious concern.
Threats of nuclear weapons use, possible false flag ‘dirty bomb’ threats, the continuing attacks on the Zaporizhzhia nuclear power plant threats and veiled references to chemical or biological attacks has demonstrated the willingness of Russia to take enormous risks in regard to threatening Europe as a whole in order to achieve its aims.
If Ukraine’s counter-offensive continues to make gains, then NATO countries will likely be threatened again in this manner. These are not just threats to Ukraine but to NATO states. And, most likely, given the significant role it has played in supporting Ukraine militarily, aimed primarily at the UK.
In the longer term, the UK prime minister needs to review the 2021 Integrated Review of Security, Defence, Development and Foreign Policy. The review came following the decision to increase defence spending and the UK secretary of defence Ben Wallace – continuing in place –has been clear that he has no need to increase his budget further although that may change as the impact of inflation becomes clearer across the board.
The Integrated Review is all about serious investment in the science and technology needed for security and defence in the future. Without such investment the UK will not be able to contribute to international security even in the limited way it can now and certainly not in an ambitious way in decades hence.
There are many long-term security threats that the UK will need to grapple with in addition to Russia’s aggression in Europe, not least of which are China’s rising military capabilities and global ambitions.
In the Arctic and Antarctic, China along with several other major economies, has serious ambitions for exploiting natural resources in terms of minerals, energy, particularly as climate change drives fish stock to the polar seas.
The newly-established AUKUS arrangement which plans to produce a nuclear-powered submarine capability for Australia also provides a mechanism for joint investment by Australia, the UK and the US in science and technologies such as in artificial intelligence (AI) and quantum technology. There are discussions about extending this arrangement to other countries such as Japan and could also include the space sector.
Meanwhile, at home, in the short-term, there will be increasing calls to end Russia’s war in Ukraine. The prime minister will need to be ahead of that game so that Ukraine is supported and European security is enhanced rather than further stressed.
This will require a new approach to international security – a need that was further highlighted at the end of August in New York with yet another collapse of agreement in the Treaty on the Non-Proliferation of Nuclear Weapons as a result of Russia’s veto.
The UK has long played an important diplomatic role in finding creative solutions for international security and the new prime minister would be well advised to lever that reputation.
Supporting science and technology
Marjorie Buchser, Executive Director, Digital Society Initiative, Chatham House, David Lawrence, Research Fellow, UK in the World Initiative Chatham House and Alex Krasodomski, Head of Innovation Partnerships, Chatham House
In science and technology, the UK currently finds itself in a balancing act between the US and the EU: ideologically attached to the light-touch approach of the US while dependent on the EU as an export market and for supply chains.
While Brexit in theory gives Britain more regulatory freedom, UK companies have often ended up abiding by EU regulations they are unable to shape. The new prime minister should explore forms of regulatory cooperation with the EU that prioritize market access while offering incentives to attract scientists and boost technical innovation.
Beyond transatlantic and European partnerships, it is essential for the UK to foster coalitions with a broader group of like-minded democracies which will be crucial to addressing global technology concerns and countering China’s digital model expansion.
Entrenching the UK as a science and technology ‘superpower’ will require a collaborative approach and involve identifying critical areas where the UK can drive international efforts. For example, the UK should build on its recent successes in the sensitive issues of data flows and digital technical standards as well as encourage investment in open-source security and infrastructure.
Finally, it is essential to unblock the skills and talent pipeline. It is difficult and expensive for high-skilled workers to move to the UK and a key source of labour supply has been lost since leaving the EU. The UK should consider introducing a Commonwealth visa scheme and radically reduce the cost for science and technology companies to offer those visas.
Strengthening infrastructure and housing, particularly in areas that need levelling up, will allow talent to move to areas with the most productive opportunities.
Trade, climate and green supply chains
The new prime minister will soon find the answers to the UK’s supply security challenges and soaring energy and food prices as well as future growth lie not at home but are global problems.
At a time of crisis, solutions can only come from countries working together. The UK is a perfectly sized state with plenty of heft but it is not so large as to be able to afford to ignore the needs of others.
It should lead the convening of a growing ‘coalition of the willing’ on trade, climate and green supply chains which could include Australia and Canada as well as developing nations with large extractive sectors in Africa and Asia that are pro-trade, pro-climate, pro-development and pro-growth.
Even though working together on trade and green supply chains can reduce unwanted dependencies, support climate action and help businesses unlock the $26 trillion in market opportunities, many governments have yet to take bold steps due to a fear of disguised protectionism.
Meanwhile, the European Union (EU) carbon border adjustment mechanism (CBAM) is fuelling bitter divides on competitiveness and development concerns.
Trade retaliation is likely and most probably will happen in parallel with legal processes at the WTO. These dynamics mean trade will be underused as an instrument but will create challenging dynamics for COP27.
Although the Agreement on Climate Change, Trade, and Sustainability (ACCTS) was launched in 2019, the UK could fill a leadership gap since no major economies have positioned themselves as leaders at the intersection of trade, climate, and green supply chains.
British International Investment, the UK’s development institution, should support the establishment and scaling of low-carbon, resource-efficient, sustainable and deforestation-free supply chains which could help fuel the next generation of growth in the UK and beyond.
Improve regulation, give priority to trade relations with the EU, and maintain transparency
Creon Butler, Research Director, Trade, Investment and New Governance Models, and Director, Global Economy and Finance Programme
The UK’s new prime minister comes into office with the country facing the most serious set of economic challenges since 2008-09.
But, in contrast to the global financial crisis, the causes of today’s crisis are more multifaceted and to a degree more UK-specific: the Brexit trade shock; increased public spending pressures linked to the backlog in the NHS and potentially serious long-term effects of ‘long COVID’ and disrupted schooling; the unprecedented shock to energy prices following Russia’s invasion of Ukraine linked in part to the UK’s lack of gas storage capacity; and the shock to market confidence in the UK’s economic management resulting from the 44-day Liz Truss administration.
While the new prime minister should not delay addressing the UK’s long-term challenges, there are three critical questions which will help determine the success or failure of the government’s approach.
First, should the priority be less regulation or, in the context of the tech revolution and the need to accelerate the transformation of the economy to net zero, smarter regulation?
Second, whether the UK government willing to give adequate attention to the substantial economic costs of Brexit? The government has been resolute in its belief that Brexit is an under-exploited opportunity rather than a drag on growth, but the available empirical evidence increasingly highlights the costs.
Meanwhile, growing geopolitical tensions with China and the political consensus in the US on the need to protect its own industries means it is unlikely the UK will find large and rapidly expanding alternatives to compensate for stagnation in its trade with the EU.
Third, whether the financial markets will give the UK government sufficient leeway on debt and inflation. The Cameron-Osborne administration was arguably trying to overachieve on public debt reduction after the global financial crisis and ideally the UK would take a different course now. But there is a real possibility today’s government will also have to over-correct as a result of the shock to market confidence caused by the 23 September mini budget.
Coordination between the monetary and fiscal authorities was a successful feature of the economic response to the pandemic, but the wider context there was very low inflation. There is a fine line between effective coordination and loss of operational autonomy.
Therefore, the new UK government should interpret its mandate to:Focus primarily on the goal of improving regulation, whether that means elimination or enhancement.
Give high priority, however discretely, to stabilizing – and if possible improving – the UK’s trade relations with the EU, drawing on the common sense of purpose arising from the energy crisis.
Maintain a high degree of transparency in its dealings with the Bank of England, particularly in relation to economic policy coordination, so as to minimize the risk of a misunderstanding by the markets.
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