17 Mar 2021

The Prime Minister has today release his long-delayed defence and diplomatic strategy Global Britain in a Competitive Age, which he flagged as the most thorough review of Britain’s foreign policy since the second world war. The paper sets out the Prime Minister’s vision for a strong, outward-looking and trade-focused county. This statement put some meat on the bones of the much used phrase “Global Britain”. The PM also managed to use the statement to support the other much used “levelling up” phrase with the UK’s national cyber force in future being located in a cyber corridor in the north-west of England.

Sitting behind the document are three aims for the Prime Minister:

  • Emphasising the speed and agility with which he believes the UK can now move, in trade, defence and diplomacy, after Brexit (though critics have been quick to point out that the paper may not address lost opportunities with the EU).
  • Positioning the UK to thrive amid a changing global balance of power, in which in which both hard and economic power will increasingly be focused in the Indo-Pacific region.
  • Highlighting the government’s view that “the Union between England, Scotland, Wales and Northern Ireland…is our greatest source of strength at home and abroad”, showing the seriousness with which No10 is taking the potential for renewed focus on Scottish independence.   

Behind the headlines focused on increasing Britain’s nuclear capabilities and new counterterrorism work, this strategy is important for our industry in demonstrating that the government sees trade as key to the UK’s future prosperity. Coupled with last week’s Board of Trade report, it underlines the government’s belief that there are “few things more important than free and fair trade, rooted in our values of sovereignty, democracy, the rule of law and a fierce commitment to high standards”. Championing industries such as investment management in which the UK can lead the world should be high on the government’s agenda, potentially providing an opportunity for us to suggest ideas that would cement the UK’s place as a world leader.

Government’s emphasis on the Indo-Pacific region is also noteworthy, underlying a post-Brexit move towards trade with emerging markets. The programme’s focus on China in particular is likely to prove controversial (including among some Conservative backbenchers), because it aims to “continue to pursue a positive trade and investment relationship with China”, while also noting that China is the “biggest state-based risk” to UK economic security. The tension between these two positions will play out in many policy areas for years to come, as we are already seeing with debates generate by the current National Security and Investment Bill.  

Climate change gets more than fifty references in the document, showing how it will be central to the UK's approach to diplomacy in the coming years. This presents a major opportunity for the industry to demonstrate its role as a driver of responsible investment on behalf of British and international savers and investors, and adds impetus to the work that is being done now by the IA and members in this field. 

Overall, today’s review is welcome news in terms of longer-term thinking of the type that the UK needs.  The areas of overlap and reinforcing messages with the investment management industry's agenda include the need for the UK to think globally,  the rise of the Indo-Pacific region,  and the importance of technology as a driver of innovation and growth.