The next UK government faces a tightrope walk regarding foreign policy. Economic constraints and high debt interest payments limit funding for international relations, while global challenges persist. These challenges include an assertive China, tension between Beijing and Washington, the war in Ukraine, and an unfolding Middle East crisis. Climate change, risks from new technologies, and weaknesses in arms control also complicate the outlook.
Three long-term priorities guide this approach rather than issuing prescriptions in each area. The first is managing unpredictable great power trends. As rising US–China friction complicates the UK’s relations with both countries, the government must manage this friction carefully. The second priority is improving relations with Europe. This aims to address policy gaps created by Brexit and defend against shared risks. The third is strengthening the UK’s role in global governance and international development.
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Referring to this approach as “realistic ambition,” the paper suggests the UK should be practical about its resources but not retreat from international affairs. The UK has played a decisive role in European security and possesses significant defence, diplomatic, cultural, and scientific assets. The proliferation of problems overseas makes an agile, active foreign policy critical.
Handling Unpredictable Alliances
On the first priority, the next government must work with a US that is still a key ally but reluctant to play as prominent a role in European security as in the past. The “special relationship” will endure, but the US is becoming more focused on other parts of the world. It is also susceptible to partisan divisions that render it a less reliable partner. This dynamic will be immediately apparent should Donald Trump win the 2024 US presidential election, but the trend is likely to continue even if he does not. Both major US political parties are becoming more protectionist than in the past. Rather than pursue a full free-trade deal that is unlikely to materialize, the UK would do better to focus on sectoral agreements and continuing partnerships on military and critical technologies. It also needs to hedge against US unpredictability by deepening its relationships with Europe and middle-sized powers around the world.
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The government will need to manage a more confrontational China. Engagement with Beijing will remain essential on trade, and desirable on global problems such as climate change, technology governance, and developing-country debt. But the next government must balance trading with China against protecting the UK. This balance has been hard to achieve in the past. The UK will need to strengthen its capacity to manage cyberattacks, interference, and economic coercion. It should recruit or train more China specialists and develop more coherent decision-making on China across government departments. It should also be realistic about its broader Indo-Pacific strategy. Earlier ambitions for an “Indo-Pacific tilt” have been moderated, acknowledging constraints on UK military capacity. But the UK could still usefully focus on enhancing trade, security, and diplomatic links with Australia, India, Japan, and South Korea, and on delivering agreed defence projects such as the AUKUS initiative with Australia and the US.
Building on Ukraine Support
On the second priority, improving the relationship with the European Union, the next UK government starts with clear opportunities. The Conservative government’s vigorous support of Ukraine, maintained through three prime ministers since Russia’s 2022 invasion and echoed by the Labour opposition, has given the UK a prominent voice in the defence of Europe. This support has strengthened the UK’s conversation with EU countries about common risks, in turn opening up the chance for more constructive discussion of post-Brexit relations. The UK has a few options to improve the existing Trade and Cooperation Agreement (TCA), up for review in 2026, although the economic and strategic benefits would be modest. Greater cooperation with the EU should also be feasible on energy security and emissions trading schemes. But above all, the UK could usefully reframe its relationship with the EU more in terms of geopolitical and security cooperation.
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Funding the Agenda
To support the UK’s global role, the next government will need to spend a consistent amount on international development. It will find it easiest to restore the UK’s previously high reputation in this field if it returns official development assistance to 0.7 per cent of gross national income. But at a minimum, the UK should introduce more predictability into its development spending. It should address a lack of clarity about the purpose of its aid spending, as much of the foreign aid budget currently goes towards housing refugees and asylum seekers domestically. It should also consider more predictable and proportionate spending on diplomatic capacity – which has historically been neglected while defence and development spending targets take up significant focus in government. Both the UK’s exit from the EU and increasing global instability require more investment in diplomatic capacity, not less.
Paying for this agenda will demand hard decisions. The present government’s recent announcement that it intends to meet its target of spending 2.5 per cent of GDP on defence by 2030 is welcome. But there is a risk that this commitment – coming before an imminent election, and outside of a budget or other fiscal event that explains the trade-offs with other pressing concerns – defers difficult choices about how to fund spending and what to prioritize. Given the risks the UK faces, particularly from Russian aggression in Europe, and the existing gaps in UK defence budgets, a minimum target of 3 per cent of GDP spent on defence would be better. At the very least, the UK should maintain an army that can credibly meet operational commitments to NATO in the event of a crisis. It must ensure sufficient funding for AUKUS, and for the Global Combat Air Programme with Italy and Japan. Even if defence spending in other areas is constrained, the government must address problems of wasteful procurement and inadequate recruitment. It should prioritize defence and strategic investments that strengthen the UK’s science and research base and that promote development of critical technologies.
