British statecraft needs more than internationalist legal orthodoxy

This opinion piece was originally published in the Telegraph on 29th March 2026, here.

When the British Foreign Secretary Lord Castlereagh arrived on a freezing European continent on New Year’s Day 1814, he carried with him instructions from the Cabinet about the peace he was tasked to negotiate. Napoleon was on the run after his disastrous march to Moscow and the Sixth Coalition was taking shape to finally bring an end to French dominance of Europe.

Britain did not have an army that could match those of the major European powers. But it could combine its naval and financial power with deft diplomacy, and bring enough force to bear on critical regions like the Spanish peninsula where it bled out French forces, resources and morale.

After his defeat, Napoleon viewed Castlereagh and the British approach to building a post-war order as an inconceivable absurdity. Why had Britain, he wondered, not sought to grind France into the dust and remove from it all the gains that it had achieved after more than two decades of war?

The answer was that Britain did not seek dominance in Europe. Nor was it motivated by vengeance. It sought balance, equilibrium and order. It did not want to replace French dominance with a free hand for Russia. So, not only was France allowed to stay within its 1793 borders, but central Europe was also strengthened via Prussia and the Low Countries. What is more, all the great powers were to work together in a new system of Congress diplomacy whereby their disputes and dilemmas were to be settled by practical diplomacy and informal arbitration.

This order was by no means perfect. Within a few years, Castlereagh became concerned that the great powers were too willing to interfere in the sovereign affairs of smaller nations based on “abstract principles” that went beyond the terms agreed at the Congress of Vienna. Later generations complained that the Congress system stifled the emergence of liberal constitutionalism and national aspirations, leading to later explosions in European affairs and playing its part in the origin of the First World War.

At the Paris Peace Conference of 1919, Woodrow Wilson repudiated any “whiff of Vienna”, rebutting the historically-minded British diplomats who sought to learn from the past. But there is a reason why some of the great strategic thinkers of the 20th century, like Henry Kissinger, studied these efforts carefully and sought to learn the lessons – good and bad – about how to establish an element of order, rules, and norms as an antidote to the ravages of instability, anarchy and war – including in the nuclear age.

For more than 200 years, one of the central features of British diplomacy has been its ability to look beyond transactionalism and a narrow view of the national interest. Indeed, British grand strategy since the Napoleonic Wars has contained within it the goal to construct an international order, starting with but not restricted to Europe, in which a balance of power was the basis, but in which states in the system had the means to redress and resolve their disputes with measures stopping short of war.

There was, and there remains, a strong degree of self-interest in that story. But it was not simply a guise to ensure the preservation of an Empire or a global trading system which suited British interests uniquely. There was also, particularly at the conclusion of the two world wars, a genuine and deep-seated internationalism shared by both the political class and much of the electorate. Thus, Britain played a leading intellectual and architectural role in the two international orders built out of the ashes of those two conflicts.

The first effort, ultimately, was a tragic failure in which a surfeit of idealism – grand ideas about a parliament of nations, disarmament and international law – had been too far detached from both the tragic realities of geopolitics and unwilling to confront those hostile to that order through collective security. The second, the creation of the 1945 order, was a success, underwritten by American power but incorporating an ever-increasing plurality of nations under its umbrella.

It is with good reason that we celebrate the post-1945 order – an achievement that Jim Mattis, as secretary of defence in the first Trump administration, told his boss was the “greatest gift of the greatest generation”. It is with good reason that those charged with the stewardship of British foreign policy share a particular anxiety about the weakening of that international order which we are witnessing today.

And yet, there is a real danger that Britain is not prepared for the new world that is emerging before us, because it is too attached to a noble, nostalgic but partial and therefore misleading version of the past. This is an approach that risks replicating the mistakes that followed the erosion and collapse of the post-1919 order rather than learning the true lessons of order-building in 1815 and 1945. That is: a form of foreign policy in which high legalism is treated as the lodestar of our foreign policy, and in which our principal energies are focused on a rickety superstructure, with insufficient attention given to the things that truly make a functioning international order work.

We are both academics – one in international law, the other in history – who have been close to or directly involved in government. We have taught and written about the international order and have also engaged with it professionally for many years. One of us has just returned from the Peace Palace in The Hague, where he appeared for Rwanda in its dispute with the United Kingdom under the Migration and Economic Development Partnership. The other has written books about key figures who helped build the orders in 1815 and 1945, from Castlereagh to Clement Attlee. It is from this vantage point that we approach the current debate on the state of the international order.

There is no denying that the international system is undergoing a profound upheaval: wars in Europe and the Middle East; cooperation between great powers at a very low ebb; multilateral institutions like the UN or the WTO ever less relevant; and alliances like Nato looking more fragile. But we fear that much of the current debate is making it difficult for Britain to rise to the challenge of the present moment – as it did in the past.

Our concern starts from the way that the idea of a rules-based order is treated as an almost theological abstraction, as a God-given gift from which dissent cannot be contemplated. By this argument, the answer to our current discontent is to make fidelity to international law the organising goal of our foreign policy and the premise of every decision we take. This risks creating an imbalance in our foreign policy in a world where ever-fewer states share this approach.

Importantly, it is an approach that goes way beyond the astute Chilcot checklist in which international law is treated as one of 10 critical points to consider in the making of national security decisions. Yet those who may question this prioritisation – international law crowding out all other considerations – have been accused of being followers of the Nazi theorist Carl Schmitt, as somehow willing to give up on international law in favour of might over right.

The danger is that we end up as curators of an old system rather than active participants in a new world in which power is being more nakedly asserted. It is by a combination of tenacity, risk-taking and creativity that we have made ourselves present at the creation of previous international orders. If Britain is to have any say in the shaping of a future one, it cannot do so based on an abridged or ideological version of what has served us so well in the past.

The heritage of British foreign policy that we seek to invoke, one could call it Churchillian or Bevinite. It is definitely not an argument for might rather than right – an absurd and tendentious proposition designed to shut down debate – but a recognition that what is right does not transpire in international affairs simply by appeals to universal principles and laws.

Rather than Schmitt’s dark philosophy or Immanuel Kant’s ideas of “perpetual peace”, the tradition we invoke is fully in keeping with the ideas of the founding father of international law, Hugo Grotius. It was Grotius who made the case for a law of nations in a Europe divided by wars of religion. That project could only succeed, however, if it did not rest on universal theories or grand abstractions, but it remained attentive to the practice of statecraft, and fully conscious of the tension between moral aspiration and political reality.

The real story of the order built in 1945 reflects that more practical tradition, including direct invocation of the Grotian spirit. As recounted in Andrew Ehrhardt’s new book, A Grand Strategy of Peace, Britain played a central role in the creation of the UN system. But it was not simply the triumph of Wilsonian idealism that was the key to that peace, so much as the ability to craft it upon the basis of a great power peace.

The 1945 order was, in essence, a rules-based order alongside a power-based order. The legal framework helped protect the sovereignty of medium and small powers, but the burden of maintaining collective security – and of acting pre-emptively against threats to international peace and security when required – fell upon the great powers.

As such, they would use their own military power but also draw on the forces that all UN members undertook to place at the organisation’s disposal under Articles 43 to 45 of the Charter. Meanwhile, Article 47 established a Military Staff Committee, composed of the Chiefs of Staff of the five permanent members, to provide strategic direction. Articles 53 and 107 – seldom mentioned these days – preserved the possibility of enforcement against any State that had been an “enemy State” in the Second World War in the event of the “renewal of aggressive policy” by that State.

Even in this system of collective security, the inherent right of self-defence was considered sacrosanct and was enshrined in Article 51 of the UN Charter. The language of this provision appears to exclude anticipatory action. Yet, unless this language is understood within the wider security architecture, we are left with a completely ahistorical and distorted picture of the 1945 post-war order.

No one in San Francisco imagined they were signing up to an international order that would legally oblige them to wait for a Fourth Reich to cross the Rhine before taking action – not to mention one where they would have had to sit and watch as that Fourth Reich acquired nuclear weapons. Indeed, today it is often forgotten that this order was conceived in a world where nuclear weapons did not yet exist. The UN Charter was signed three weeks before the Trinity Test in New Mexico.

In some respects, the crisis of the 1945 order began at conception. Even the US and Britain were divided by a fundamental difference: the future of the colonial empires. With the Cold War, it soon became clear that there was no concert of Great Powers capable of ensuring international peace and security: the legal architecture would remain in place, but collective security could only be enforced by coalitions of the willing, often outside the UN system, such as the Nato alliance.

Accusations of breaches of the Charter’s principles were routinely exchanged during the Cold War, with each side keen to be viewed as rule-abiding. Yet only a very credulous observer would conclude that the relative avoidance of war, such as it was, flowed from rules such as the legal prohibition on the use of force. When the world stood on the brink of a third world war during the Cuban missile crisis in 1962, catastrophe was averted not by law, but by a last-minute accommodation between the great powers of a kind familiar to nineteenth-century diplomats.

What followed in the 1960s and 1970s was an attempt, by statesmen such as Kissinger, to build a new security architecture – not as ambitious as that which had briefly seemed achievable in 1945, but very important nonetheless. Its main elements were the bilateral agreements between the US and the USSR to limit nuclear arsenals and reduce the risk of nuclear war by accident or error; and the multilateral treaty regime on weapons of mass destruction like the 1970 Nuclear Non-Proliferation Treaty and the 1972 Biological Weapons Convention. It reflected the reality of power and was backed up by the credibility of force.

And then, from the 1990s, the international order changed its face again. With the end of the Cold War, international law experienced a surge of ambition and expansion: from the World Trade Organisation to the International Criminal Court; from the proliferation of international human rights law to a web of treaties protecting foreign investment. International adjudication grew at a rapid pace.

As this process unfolded, a new conception of international law took hold in the Western liberal imagination: international law began to be seen as the vehicle for a comprehensive moral and political project, with international institutions as its principal agents. The result of this ideological turn was a form of international law that was rhetorically confident but increasingly detached from statecraft and less capable of self‑correction. Buttressing this ideological turn was a Whiggish conviction that the role of international law was to carry humanity along the right side of history. A new set of apostles and interest groups appointed themselves as the protectors of this reconceived international law.

While some had been calling for moderation in the face of the growth of international law after 1989, this new ideology demanded an ever more activist and expansionist approach. It is this philosophy that helps explain why the European Court of Human Rights, among others, has felt compelled to adopt increasingly bold interpretations – developments that have in turn provoked political backlash.

So, in truth, many of today’s appeals to the sanctity of international law go well beyond the order of 1945 and often say more about an “end of history” mentality of 1989.

Indeed, what is really being sought is not a return to the hard-nosed and hard-fought international order of 1945 but rather the reassurance that the particular conception of international order that took hold in the liberal imagination from the 1990s – one built around ever more progressive interpretations of rules and the illusion that power could be tamed into irrelevance – can be restored.

As we look around us, however, the principal challenges facing British statecraft go well beyond matters of law alone. Can deterrence be achieved on current levels of defence spending? What is our message to Eastern European allies that have chosen, for fear of Russian invasion, to withdraw from treaties banning anti-personnel landmines and cluster munitions – treaties to which, as work by Policy Exchange has noted, the UK still subscribes? The open-ended nature of the war in Iran, which drags on with profoundly troubling implications, will not leave us in the situation of being able to revert to a happy norm.

What do we say to partners in the Gulf, worried about their future security, for whom our highly restrictive legal approach to military targeting in the current conflict seems so remote from both past British practice and the reality they now face?

To be clear, throwing the baby out with the bathwater would be the worst of all worlds. Those who take any relish from the erosion of order, and its associated norms, are entertaining a deeply misbegotten worldview. Many of the old international laws and rules continue to form the basis of our economic well-being and ability to achieve successful diplomatic outcomes. But they require adaptation rather than trenchant restatement – still less the elevation of a 1990s ideology over our national interest.

Above all, they require a proper understanding of our history that recognises the practical, Grotian tradition and the spirit of people like Castlereagh or Bevin. If that tradition is displaced by an ahistorical and overly idealised view of international order, Britain will fail to meet the demands of the present moment.

Professor John Bew is former No 10 foreign affairs adviser is a professor of War Studies at King’s College London. He is a senior fellow at Policy Exchange

Lord Verdirame KC is Professor of International Law at King’s College London and the recipient of Policy Exchange’s Grotius Prize 2026

Image: Europeana

In this column’s previous critique of the Chief of the Defence Staff’s (CDS) annual ‘state of the nation’s defences’ lecture at RUSI, it found that while Admiral Sir Tony Radakin’s tour d’horizon made much sense, it was too insouciantly unworried about NATO’s readiness to meet the threat posed by Russia and its backers: principally China but also Iran and North Korea. Now that Richard Knighton – the new Chief of the Defence Staff – has taken the helm he has put in a course correction. But has he pulled the rudder too hard over?

Many commentators appeared to think so, hearing in his message that the nation’s children must be ready to “…fight for their country” if Russia attacked us, yet asking why government wasn’t actually spending on rearmament, and so finding this talk of war hyperbolic.

Is that fair on him? Probably not. As he said early on, “[he wanted to make] a more sophisticated explanation of the risks we face.” But the subsequent explanation did invoke the words of the French Chief of the Defence Staff- Fabian Mandon – who has said pretty much exactly that about being prepared to lose one’s children. And the more sophisticated explanation of the actual threat never materialised — it majored on a more general assessment of Russia’s expanding military economy, not how it would be used against us specifically — while omitting some essential events or factors that are fundamental to our national security. We also have to allow for the ‘gagging order’ that the government has placed on senior officers, so we don’t know what he was allowed to say.

While one can imagine why he may have wanted to steer around the publication of Trump’s National Security Strategy (NSS) only the week before, it does comprise the biggest upheaval to our security architecture since 1945. Odd that that gets no mention. We pay a CDS to be able to address this unfortunate fact diplomatically; to be able to acknowledge the import without inflaming the sensitive politics. Perhaps, even, to sketch a path to making something positive of it. Which this short article will now try and do…

First the sensitivities. It would be strategically illiterate to take umbrage at some of the wording and impressions given in the US NSS – as some European commentators have done – and make the situation worse through a confrontational response. But one can take it at face value, recognise that there are pressures on the USA that are greater than at the height of the Cold War (given the levers of national power available to Xi Jinping) and that while Russia has become more bellicose most of Euro-NATO has let its defences atrophy alarmingly. Indeed, US presidents have been saying this since JFK – and Kennedy’s language in private could at times be just as fruity as Trump’s.

With honourable exceptions, Euro-NATO countries had become mired in a pathology of seeking refuge in “the middle of the pack”, which had led to a mutual ratcheting down on spending on defence while preferring welfare spending levels of which American citizens can only dream. This was not sustainable even as a status quo – let alone as NATO has had to massively restock its arsenals in the light of the Ukraine war. CDS could acknowledge this as a reality and the starting point for the subsequent conversation…

…because if we are going to start largely from scratch in refilling our arsenals then we have an opportunity to make them fit for the modern technological era, and so make a step change in “how we will fight”. (This idea of a new technological era was also in ‘C’, Blaise Metreweli’s, speech delivered on the same day.)

This is a logical, and non-inflammatory way to introduce CDS’ correct analysis that we need to think more deliberately about how to invest and mobilise national capacities – our university and tech sectors, manufacturing base, overall investment in R&D, skills base, etc – in the service of national security. We have outstanding examples among our Joint Expeditionary Force partner nations (Scandanavia, the Baltic nations, The Netherlands) for whom this is just an unremarkable part of their way of life, and of their successful economies. We could find mutual benefit in working with them, which would also bolster a NATO that can no longer rely on the US to do the heavy-lifting in our own backyard.

This also leads to the second major omission in the speech: there is no mention of the recently appointed National Armaments Director (NAD). The NAD will be pivotal to delivering CDS’s war-fighting vision, to be generated by his new Military Strategic Headquarters (MSHQ, as with the NAD a John Healey innovation mandated via the labour Manifesto.) This is odd given that the NAD, Rupert Pearce, gave his first evidence to the House of Commons Defence Committee the very next day, which could have been appropriately trailed and supported. As it is, we are all in the dark over the promised but serially delayed Defence Investment Plan. In theory, under the new model it should be a product of the MSHQ’s war plans and the NAD’s commercial acumen, but, currently, looks in practice like the old-model of back-room horse-trading between the Service Chiefs.

And in introducing the JEF there could have been a reference to the example given by, for example, Finland. With a defence budget approximately one tenth of the UK’s, Finland maintains a formidable military defence against Russia within a philosophy that thoroughly delivers on NATO’s Article 3; this demands members provide, first, a sound national defence, and then, secondly, their share of collective defence. (Finland has amassed and maintained the second biggest artillery ‘park’ in Europe outside Russia – circa 700 guns – where the British Army currently only has 14 x 155mm howitzers.)

In his nod to Deborah Haynes’ podcast, ‘The Wargame’, CDS acknowledged that the UK’s ability to defend itself has been woefully neglected in the happy times after 1989, when all wars were considered to be something done overseas and as ‘discretionary’ activities. If, as CDS says, Russia now directly threatens the UK homeland, to what extent do we need to adopt Finland’s model where Layer 1 is robust national defence, Layer 2 is regional cooperation, and Layer 3 the collective deterrence and defence provided by NATO membership? What does this mean for our expeditionary ambitions, or defending forward in NATO, in a year when CDS, inter alia, was celebrating our carrier’s deployment to the South China Sea?

In bringing such arguments to life, CDS could have presented a realistic picture of the threat landscape and the Alliance capacity arranged against it. In invoking JEF/Finnish exemplars, and in promising to do procurement differently via the NAD, he could have persuaded us, and HMT, that the era of the AJAX programme was behind us and more efficient ways would be found. Because until Defence procurement is reformed, and Defence climbs above the NHS, immigration and the economy in public polling, no chancellor is going to be giving CDS significant uplifts.

And that would have brought CDS back to his starting point about the national sense of threat. To be fair to him, he did pointedly talk about deterrence and the need to prevent war, more so than he did the implications of bringing back conscription to fight one. So he could have sketched what now needs doing in any case, and arrive at one final, more upbeat observation on the US NSS.

For the US has form here that we in the UK prefer to forget. In 1945, the US banned us from the nuclear programme to which we had committed so much during WW2. But by showing we were determined and could look after ourselves the US then let us back in, preferring to have nuclear-armed Britain on its side and seeing the benefits in cooperation.

I sense that the same applies today. The way to deal with the new US NSS is to demonstrate grip and resolve in rebuilding the defences of the new age, to demonstrate that Europe can look after itself. That is likely to keep the US wanting us onside, from which we will all benefit if the alliance evolves into an even better and more balanced form that deters our foes. And that will mean we won’t be waving our sons and daughters of to the docks and the troopship. That seems a good bargain to put to the electorate. One hopes that the government will allow senior officers more leeway to make this case, otherwise when they do finally speak their suddenly grave tone will only get more ripostes of ‘hyperbole’.

Air Marshal Edward Stringer CB is a Senior Fellow at Policy Exchange and former Director-General of the Defence Academy

Image: Jannik

The hotly anticipated final report of the Nuclear Regulatory Taskforce landed just before the Budget. Led by the highly respected John Fingleton, it was extremely critical of aspects of the current regulatory regime for the construction of nuclear power stations and the ‘gold-plating’ in some areas.

The Chancellor of the Exchequer announced during the Budget that the Government ‘accepts the principle of all the recommendations’. In welcome additional news, Fingleton welcomed the Prime Minister’s decision to go considerably further earlier this week. He accepted all the recommendations and pledged to extend the approach to other infrastructure as well. He committed the Government to legislating to implement the relevant Fingleton recommendations within two years.

The Nuclear Industry Association warmly welcomed the Prime Minister’s response:

The Prime Minister said it’s time to move away from “pointless gold plating, unnecessary red tape, well intentioned but fundamentally misguided environmental regulations, and, I quote – it’s quite a stark quote, he said – ‘a mindset that favours process over outcome.’”

The Government has issued a formal strategic steer to the industry, at Fingleton’s request, ‘to accelerate the safe, secure, and affordable delivery of nuclear projects across civil, defence, and decommissioning’. It also published new guidance, labelled ‘Ways of Working – principles to guide the application of ALARP and BAT in the nuclear industry’.

ALARP and BAT stand for ‘As Low As Reasonably Practicable’ and ‘Best Available Techniques’, two principles which have had dramatic effects on how civil nuclear power plants are constructed. ALARP requires the constructor to abandon straightforward cost-benefit analysis and substitute a ratio of 10:1 for some aspects and 2:1 for other aspects, as well as requiring BAT to be taken into account. The effect of the application of these regulatory principles has been dramatic with Hinkley Point C mooted to cost £46bn and Sizewell C at least £40bn in today’s money.

This note highlights two critical issues in this debate and draws the reader’s attention to a recent report by this author for Policy Exchange that suggest two key remedies that go further in attempting to remedy the gold-plating problem.

First, the review recognises the problems caused by judicial review, not least the well-known phenomenon of defensive decision making [339] made in fear of incurring judicial review and makes some sensible if minor recommendations drawing on work by Lord Banner and others [346]. They set out a case study of the effect on Sizewell C [340].

Secondly, in the strategic steer, the Prime Minister calls on the Office of Nuclear Regulation (‘ONR’) to take a novel approach to the regulation of nuclear power.

Great Britain’s nuclear safety regime is respected the world over for its rigour and independence… However, regulation must address the whole system, not just its individual parts. I expect our regulators to be active enablers of progress, while maintaining the independence of individual regulatory decisions… (emphases added)

Unfortunately, the two italicised phrases are in considerable tension. Indeed, as my report argues, asking regulators to shift their attention from a pure safety approach fails to recognise the existing structures and ONR incentives as both prosecutor and judge. This can be illustrated by the fact that the ONR report to the Department of Work and Pensions not the Department of Energy Security and Net Zero explicitly to prevent any attempt to divert the ONR’s focus on independence and safety. This aspect of the strategic steer is thus attempting to swim up a waterfall.

This author proposes two potential solutions to these problems. First, I argue that Development Consent Orders should be granted using Hybrid Acts of Parliament, modelled on those used to build the railways in Victorian times, that cannot be judicially reviewed.

Secondly, I argue that an independent body called the Nuclear Regulatory Tribunal should be created, with a High Court judge as chair, that can weigh up regulatory disputes between the ONR and constructors with a strict time limit measured in weeks, applying a cost-benefit analysis and with no further legal challenge save for a rigidly time limited appeal to the Upper Tribunal, solely on points of law.

If implemented, these two measures would – at a stroke – radically cut the length of time these projects take. It is a little-known fact that fully two thirds of the project costs of nuclear plants is accrued interest on the capital spent during the process – sometimes it is more.

Urgent and serious measures are needed to expedite the construction of a fleet of nuclear power plants, deploying both large scale reactors such as Hinkley Point C and Sizewell C plus possibly designs approved by trusted regulators abroad, as well as Small Modular Reactors, in particular the Rolls Royce model currently being approved. The Fingleton report is a good start. Much more needs to be done.

The dramatic scenes in Parliament on Wednesday understandably dominated the news cycle. They also had an impact on the financial markets with the value of the pound and UK bonds falling while gilt yields spiked.

It is true that the markets were spooked by the tearful scenes in the House of Commons but this is because they feared it meant that the Chancellor was about to resign or be fired and be replaced by a Chancellor who was less committed to fiscal discipline. They had seen that the Government had failed to tackle the botched welfare system and any future attempts to constrain spending by the Government would ultimately end in vain.

As such, they deduced that any successor would not take the difficult decisions on the public finances and instead continue down the path of profligate spending which would have to be funded by increasing borrowing or even more growth-hampering tax rises.

Both of these would be a mistake.

We have already seen the impact of recent tax rises on the economy. Despite the Government claiming that its increase to Employers National Insurance Contributions was not increasing taxes on working people, this is clearly not the case. National Insurance is a payroll tax and there is a great deal of evidence that the incidence falls on workers, mainly in the form of lower wages but also in fewer job opportunities.

Moreover, this tends to have a disproportionate impact on younger people and the low-skilled.  It is not surprising that the most recent data from the ONS shows that the vacancy rate has decreased.

The tax burden on workers and firms is already far too high with highly productive people leaving the country and major corporations such as AstraZeneca considering moving operations to countries with more competitive tax systems where hard work and innovation are rewarded rather than penalised.

The Chancellor should also rule out increasing borrowing. It is becoming increasingly expensive for most countries around the world to borrow money and the UK is no exception. What is more, this is not free money and it will have to be paid back by current taxpayers and our children, grandchildren, and great-grandchildren.

More borrowing will increase the National Debt which already sits at an historic high of around 100% of GDP. Financing the National Debt is already one of the largest areas of Government expenditure, costing over £100 billion a year which is more than on Defence, Education, and the Criminal Justice System.

Money spent servicing the National Debt represents an opportunity cost as it is money which otherwise could have gone towards funding more teachers or nurses or purchasing more equipment for the military. Alternatively, it could help to fund tax cuts so that people can keep more of the money that they worked so hard for. Instead, it is being used to finance the irresponsible spending decisions of successive Governments.

The Government should heed the warning signs in the financial markets. The Chancellor should commit to not placing even greater pressure on the public finances by increasing borrowing. Furthermore, the Government should rule out further growth destroying tax cuts. Instead it should do the responsible thing and cut public spending while introducing supply side reforms to boost economic growth.

Ben Ramanauskas is a Senior Fellow in Economics at Policy Exchange

Much of the noise around the recent Budget has centred on those subjects with emotional resonance with the public: painful tax rises for employers (and, as it will undoubtedly be passed on to them, employees); devastating changes around agricultural property relief; higher inflation. But in her Mansion House speech last week, the Chancellor had an opportunity to return to her key policy priority for the coming years: that is, driving higher investment. And on this occasion, there was much to be welcomed.

Since 2022, Policy Exchange has been highlighting the enormous opportunity that UK pension assets offer our economy. The UK market is the largest in Europe and the third largest in the world with some £3 trillion in assets. This a deep source of potential finance for future investment, which if properly tapped could provide a sustainable source of funding for wealth-generating infrastructure, as well as secure incomes for savers in retirement.

To pick out some particulars, Policy Exchange has called for three big reforms over the last few years. Firstly, in Unleashing Capital, we made the case that our still highly fragmented pensions market should be consolidated so that pensioners might benefit from scale, and to make it easier for schemes to invest in alternative assets like capital projects.

Secondly, in Growing Pensions Capital, we argued that the regulatory framework for the increasingly large Defined Contribution (DC) pension market needs to be reformed so that it promotes return maximisation, rather than simply risk (and cost) minimisation.

And finally, in the Property Owning Democracy, Policy Exchange argued that a concerted effort was required to improve access to financial advice for the next generation of potential retail investors, and to support wider financial ownership in the UK.

The previous Chancellor made great strides across these agendas in his own Edinburgh and Mansion House reforms. Hunt’s reforms were praised by Reeves herself in her speech at Mansion House. And the policies she announced as part of that speech will build on that progress in a meaningful way.

Amongst other things, she committed the Government to consolidation in the local government and DC pension markets, she has announced a consultation on addressing the “culture of cost before value” to deliver better long-term returns, and she has pledged “transformational” changes to financial advice regulation. These are welcome interventions, and they will go some way towards improving the UK investment environment.

Nevertheless, there remains much more to be done. Policy Exchange has spoken about how much can be learned from the Australians about effective pension reforms. Part of the reason that their system works so well is the high levels of transparency, competition and contestability, in conjunction with regulatory objectives that focus on maximising returns. Such transparency is conspicuously lacking in the UK at the moment, and the present value for money framework privileges lower costs over high investment performance. We are delighted that the Government is looking at the Australian model; we think it can go much further in replicating its strengths here in the UK.

At a more macro level, additional action is still required if pension capital is to actually drive higher investment in the UK, rather than seeking better returns abroad. Some have spoken about mandating higher domestic allocations, but not only might this depress returns for savers – it also would not fundamentally address the reasons why overseas destinations are a more attractive prospect for capital. A far better approach would be to scrap stamp duty on shares and deliver a pump-priming programme of planning reforms. That is what pension funds themselves are telling us.

And finally, the Government should move forward with the previous Chancellor’s plans to introduce a portable pension pot that follows workers from job to job. It’s the system used in Australia, it gives the individual saver much more control and ownership over their pension investments, and it would likely support higher savings rates. It would undoubtedly be a technically challenging reform, but it’s the sort of serious reform that a government intent on delivering growth and with a huge parliamentary majority would undertake.

Pension reform should be at the core of any plan to transform the UK’s economic prospects. It’s not just about ensuring greater prosperity for individual pensioners – although that is of vital importance if we want people to have prosperous retirements without ever increasing fiscal burdens upon the state. It is equally about boosting the sort of investment that will permanently increase the productive capacity of our country such as transport and energy infrastructure, and funding that investment in a way that promotes wide-based prosperity and national economic resilience.

Reeves’s Mansion House reforms are a step in the right direction. But there is much more work still to be done.

President-elect Donald Trump has pulled off the biggest Republican victory since George H.W. Bush in 1988. The stage is set for the return of a Republican approach to national security at the most geopolitically consequential moment since the Cold War.

But what exactly constitutes a broad, common denominator ‘Republican’ national security approach today? Some of the answers can be found in Policy Exchange’s recent event series – which hosted four senior officials who are shortlisted for major roles in the next administration.

The broad GOP national security tent shares a particular interpretation of state power. This concept is of the traditional Realpolitik variety that Bismarck would have recognised: hard power, military dominance, and favourable balances of power.

All Republicans are united by the belief that Biden has resided over a loss of American power, although their causal explanations differ: for some, Biden has expended resources imprudently in Ukraine; for others, he has not supported global allies enough. But none of them pushes the neoconservative agenda, as defined say by ‘The Project for a New American Century’ that was supposed to be so influential in the administration of George W. Bush (2001-2009).

All these currently influential perspectives may seem contradictory, but they are two sides of the same coin: the U.S. is weaker because it has haemorrhaged credible deterrence. By restoring this ‘forward defence’, the U.S. will avoid future wars while preserving the conditions which bring it security and prosperity. Former National Security Advisor Ambassador Robert O’Brien succinctly expresses this as he calls for “the return of peace through strength”. It is thus clear that the accusation of ‘isolationist’ tendencies within the GOP is misguided. They do not propose a retrenchment, but a reconfiguration, of U.S. power.

It is on the means of re-acquiring this deterrence that Republicans split. This divergence stems from a fundamental disagreement over the nature of contemporary geopolitical conflict.

The first camp is defined by the belief that interstate conflict is systemic, and so the U.S., which is implicated in an alliance system across the world, cannot always pick its battles. According to this analysis, the West is pitted against a multicontinental ‘new axis’ of ‘revisionist’ powers united by the desire to reconfigure world order. Advocates of this view, including former Secretary of State Michael R. Pompeo and former Deputy National Security Advisor Matthew Pottinger, point to evidence of growing adversarial cooperation amongst America’s adversaries – Chinese purchases of Russian and Iranian energy to sustain their economies; North Korean troops in Ukraine; and the Iranian drones and Chinese dual-use components flowing into Russia’s war machine. During his event at Policy Exchange, Pompeo criticised those Republicans who do not appreciate the “connectivity” of world order. For him, they fail to see that American interests are implicated everywhere.

The second camp rejects this connectivity. They instead advocate drawing down American security commitments elsewhere to focus on pinning China down in its backward. The staunchest proponent of this approach – which we may call a ‘compartmentalist’ approach to geopolitical conflict – is Elbridge Colby, former Deputy Assistant Secretary of Defense for Strategy and Force Development, and mooted in some quarters as future National Security Advisor to Vice President-elect JD Vance. Colby does acknowledge the ‘new axis’, but he is willing to abnegate responsibility for other regional security architectures due to his belief that primary U.S. interests are not at stake.

From these different analyses of conflict arise two secondary contentions: on the nature of deterrence; and on the nature of alliances.

For Pompeo and O’Brien, the credibility of deterrence is universal. In other words, it must apply everywhere – or else it will exist nowhere. Both highlight the Middle East as a case study, rationalising 7 October as the product of an Iranian regime which became emboldened and enriched after four years of appeasement. Both also made the same observation that Russia did not take any Ukrainian territory during Trump’s first presidency. For both, the causal linkage is clear, and the deduction simple: the West’s enemies study our words and actions, drawing conclusions about our competence and readiness for war. Sending a message to one means sending a message to all.

Colby disagrees. Rather than construing deterrence as a system-wide construct, he espouses what he calls “differentiated credibility”. This form of deterrence is ‘positionable’, resembling a finite number of chips on a board to be shuffled around and stacked. In a “world of bad choices”, the U.S. must prioritise whom it deters. This is possible because, to his mind, our adversaries are blinkered and preoccupied with their own region: “China is looking at the decision about Taiwan… through the lens of the regional military balance vis-à-vis the United States in Asia.” He thus demands a (re)prioritisation – rather than expansion – of military capabilities.

Alternative theories of alliance flow from these concepts of deterrence. Those such as Pompeo who interpret conflict as systemic, and deterrence as universal, perceive the holistic value of deep-rooted and lasting allies. They interpret the longevity and depth of the Transatlantic Alliance as a source of American strength, to be called on when the moment requires.

In contrast, ‘compartmentalists’ are sceptical of such enduring benefits. For Colby, an ally’s importance does not exceed a “business-like or pragmatic point of view”. As conditions evolve and needs change, so too do interstate partnerships. Given his belief that Europe can only make “marginal contributions” to the Indo-Pacific balance of power,[1] there is little reason for the U.S. to invest in our defence.

This faultline is at the heart of the most vexed issue in the battle for the soul of Trump 2.0’s approach to national security: under the looming Chinese shadow, how should the U.S. allocate its limited resources to Ukraine, or NATO, or Israel and the Sunni Gulf, or partners in Asia? In each case, the dividing line is over the function of alliances, and the sources of American strength.

The verdict of these debates will reverberate across the globe. In the Indo-Pacific, Pottinger sees increased U.S. support for Asian partners such as South Korea and Australia as essential to curbing China. Colby, meanwhile, has euphemistically suggested that the U.S. should “overhaul” its military presence in South Korea, and that he is “quite sceptical” about AUKUS given U.S ship-building constraints.

The same is true of Europe. Pompeo’s prime concern is to buttress the continent’s stability, “crucial” as it is to U.S. security. O’Brien would continue to support Europe, but he also takes umbrage, à la Trump, at those trade partners – including the EU and Germany – who have run up large surpluses with the U.S. The working assumption in European capitals must be that Trump 2.0 will reduce spending on European security, or impose tariffs to adjust trade balances – or both.

The Middle East is another point of contention. Pompeo and O’Brien offer unwavering support for Israel in its showdown with Iran, and the latter condemned the UK’s decision to suspend 30 weapons licences to Jerusalem – implying that a future Trump administration might re-evaluate our position in the F-35 programme. Both men place great importance on bringing Saudi Arabia into the Israeli-Gulf pact to counterbalance against Tehran. This contrasts with the ‘compartmentalists’ who view Israel as an ally but, as with Europe, one that must become more self-sufficient.

These are all live issues which will be thrashed out internally during the presidential transition. For the UK, the prudent way to spend the intervening period is by contingency planning for all probable outcomes.

This exercise must be conducted in the same language as that used by Republicans – the language of global conflict, deterrence, and alliance. This means adopting the same realist grammar of hard power, transaction, and priorities. The UK Government’s championing of a maximalist interpretation of international law above strategic interests – as with the Israeli weapons suspension and decision to transfer sovereignty of the Chagos Islands to Mauritius – appears incompatible with the Republican worldview. Reports that Trump’s team disagreed with the Chagos decision serve as a wake-up call about the need to think differently in order to preserve currency in the American-British relationship.

It is only by engaging with the worldview of Trump 2.0 that we can hope to fit into it – let alone shape it.

New Head of National Security Unit, Marcus Solarz Hendriks

[1] From Elbridge Colby, Strategy of Denial: American Defense in an Age of Great Power Conflict, (Yale University Press, 2021).

When Rachel Reeves stood up in the Commons on Wednesday as the first Labour Chancellor in 14 years and the first ever female Chancellor, she faced a myriad of challenges. Chronic levels of underinvestment – both public and private – had been holding back economic growth since the financial crisis more than 15 years ago; public services were starting to crumble, particularly in the health sector, when getting a GP appointment had started to seem like an almost Herculean task. Yet at the same time, she had inherited both a tax burden and debt levels that were already at historically high levels. And all this in the context of the previous reckless Truss budget, still reverberating around the financial markets, making every move just that bit more risky.

Key to squaring the circle was unlocking the country’s economic growth and starting to rebuild the nation’s infrastructure. According to World Bank data, total UK investment as a proportion of GDP has been lower than every other G7 economy in almost every year over the past 30 years. Faring  particularly poorly was public sector investment – and it was due to get worse. Plans set by the previous Conservative Government at the Spring Budget 2024 were for public investment to fall from 2.6% of national output in 2023-24 to 1.7% in 2028-29.

So perhaps it wasn’t that surprising that alongside her tax-raising measures, Reeves proposed changes to the Government’s self-imposed fiscal rules to allow for public investment to rise. On the one hand the rules governing borrowing for public investment were loosened (but the time-scale for resuming a downward profile shortened), while on the other, the rules governing current spending were tightened, giving some comfort to financial markets that the brakes on spending hadn’t been totally removed. The seemingly technical change to the definition of public sector debt to include financial assets and liabilities, such as the student loan book, saw the Government giving itself licence to lift capital spending by up to £25 billion a year.

So will the greater capital investment help turbo-charge growth?  At first sight, the figures produced by the Government-sponsored Office for Budget Responsibility look disappointing.  The growth of the UK economy over the next few years are strikingly similar to that forecast just six months ago under the previous Conservative government. While there is a slight boost from fiscal loosening in the first couple of years offset by slightly slower growth later in the Parliament, growth rates look nothing like the 3% seen in the 1990s and early 2000s, before the financial crisis.

Why? Largely because, the OBR says, the positive effects of higher investment are more or less offset by dampening impact of higher employers’ national insurance contributions, which will feed through into wages. In addition, there is a real chance that higher borrowing could push up interest rates and lead to less private sector investment than there otherwise would have been.

Arguably, however, that short-term analysis misses the point. This budget can only be seen as step one among several designed to boost growth over the longer term.

The only way of telling a sensible economic story is to view the rise in capital spending as a downpayment on a longer-term vision for the UK economy, one in which over time the productive potential of the economy rises. Indeed, the OBR itself acknowledges that  over 10 years higher public investment should encourage more private investment and increase the underlying rate of growth of the economy.

But whatever the theory says, the fact is that poorly targeted investment will have a much less positive impact on the economy than investment targeted at those areas which underpin economic growth – skills, R&D, innovation and transport infrastructure linking people to jobs, for example. In other words, money needs to be spent well.

Hence the importance of plans for an Office for Value for Money, alongside the ten-year capital plan and the industrial strategy due to be published next year. Another important plank in the strategy will be five year Departmental capital plans that are extended at every Spending Review every two years, allowing sensible decisions to be made over priorities, gaps to be identified and addressed. Departments will also be told to publish business cases for major projects and programmes in a bid to increase transparency.

And any increase in public sector investment can only be one part of the broader package of economic reforms.

Phase Two of the economic plan therefore must therefore have two prongs. First, there needs to be an acceleration of reforms to the planning system, a greater emphasis on promoting competition, and reforms to the regulation of utilities to promote greater private sector investment and economic growth (full disclosure: I am Chair of Water UK which has been arguing for more investment). Some of this has already been touted.

Second, and just as importantly, there needs to be a recognition that the demands on the state are currently on a one-way upward trend, leading to an every-increasing pressure on public spending and a rise in the tax burden. For that to stabilise and start to reverse, one part of the national renewal narrative needs to be the rebuilding our social as well as our economic infrastructure. Of course, there is a chance that the injection of cash into the NHS will help do just that.  There needs to be a concerted effort to tackle worklessness and encourage more people into the workforce. That in itself would increase economic growth.

But the challenge goes even further than that. The demands on front-line care have become so intolerable, that only a focus on prevention will reduce demand and stabilise the sector overall. Such as strategy could involve more care for elderly or sick relatives enabled in the home or, for example, a greater use of community groups in battling loneliness or encouraging physical activity.  It would see a revival of the Sure Start programme and help for young mothers to support each other and their families. It could see housing policy adapted to facilitate people with caring responsibilities to leave nearer to each other. Rebuilding needs to come from the bottom up as well as the top down.

Rt Hon. Ruth Kelly is a Senior Fellow at Policy Exchange. She has served as Labour Secretary of State for Transport, Secretary of State for Communities and Local Government, Secretary of State for Education and Skills and Minister for Women and Equalities, as well as holding ministerial roles in HM Treasury.

It may horrify us that Vladimir Putin can call an international conference and the leaders of China, India, Brazil, the UAE, the UN and many others of the BRICs+ all willingly turn up. But this is not an aberration but part of a plan to sideline us and our allies in the club of democracies often referred to collectively as ‘The West’. And in our casual use of “The Global South” to bracket ‘The Non-West’ we have been complicit in that. It is deliberately being used by Putin and Xi, and others, to undermine our position with the countries we have so clumped together. It is time to stop using the term. 

The label “The Global South” might be useful conversationally, as a shorthand for all those nations who might not share our NW European, Atlanticist view of the World’s problems. Even then it should have quotation marks around it in admission of its limits as a useful analytic term.

When it gets used in official Government communication justifying policy changes with genuine strategic implications then we should take notice, and ask questions. The Foreign Secretary’s public statement explaining why he had decided upon ceding to Mauritius the sovereignty of the Chagos Islands, and its hugely important military base on Diego Garcia, gave the following justification:  

“…it undermined our international standing. We are showing that what we mean is what we say on international law and desire for partnerships with “the Global South”. This strengthens our arguments when it comes to issues like Ukraine or the South China Sea.”

In testing this rationale, one must ask to what extent “the Global South” can be considered to have been positively influenced by the UK’s assumed gesture of magnanimity and understanding of their shared concerns and interests. The issue itself has been hotly debated, and the true position of the US in this deal remains opaque. But the thinking behind it should be analysed as it may well underpin future foreign and security policy decisions by this administration and its executive. 

A new paper for Policy Exchange comprehensively explores the provenance, life and utility of “The Global South” as a concept and useful lens by which to view the bloc of countries that comprise the majority of the World’s population. Unsurprisingly, it tells us as much about ourselves as about those nations with whom we treat. And it suggests we are not helping ourselves, in fact we are being counter-productive.

Membership of “the Global South” is somewhat malleable. The use of ‘South” suggests a geographic coherence, yet we exclude Australia which is very definitely in ‘our’ club of aligned nations, while arctic Russia is clearly a sponsor of the ‘South’. Indeed that that is a major current concern is revealed in the Foreign Secretary’s acknowledging Ukraine in his justification. And, ditto, China in his nod to the South China Sea – is that P5, nuclear armed, economic superpower aligned with, even a member of, “the Global South”? What of North v South Korea?

If we simply measure economic clout as a measure of emerging nations, then we find that other assumed members include emerging superpowers with advanced Space programmes: India. Or are members of our Euro-centric alliances even as they have polities and a World View different to our own: Turkey. Many nations we include in our club of enlightened, democratic, European neighbours have lower GDP per capita than some of “the Global South”. Puerto Rico is richer per capita than Spain and Portugal.

Nor can we consider nations of “the Global South” to be unified in their approach to a range of global issues, as the conflicts between its members reveal clearly. Understanding these differing individual positions well is the necessary bedrock of successful diplomacy and intervention. Throwing them together casually looks careless – and inhibits clear, strategic thinking on our part.

For what we are left with is a grouping whose only essential, defining characteristic is ‘not like us’. In this its rationale shares a similar, and troubling, provenance with the now largely discredited term ‘BAME’ for Black and Minority Ethnic Britons. As many ethnicities pointed out, there was as much difference, perhaps more, between them as between ‘black’ and ‘white’. The only differentiator was ‘not white’, and for those minorities doing better than some white social groups this grouping appeared patronising; it was in reality white condescension cloaked in altruism.

And that is the problem with using “The Global South” as a foreign policy framework for dealing with a hugely diverse group of peoples. It patronisingly lumps them together, it has shades of “The Third World” de nos jours, and its users can be taken to be not so subtly saying ‘these are people who need our enlightened help’.

 This latter point is revealed in commentary from African nations where a common trope is “the Chinese bring us infrastructure, the Europeans bring us lectures”. These sentiments are being weaponised against us by China and Russia, who play up that sense of “The Global South” being historically disadvantaged and so quite justified in demanding post-colonial reparations whether ever colonised or not. Indian political parties now promote themselves as champions of the oppressed “Global South”. All this plays to and preys on Western ideas such as Critical Theory. One result is the organised ‘lawfare’ we saw in action to persuade us to give up the Chagos Islands to a Chinese ally.

Engaging widely and creating global partnerships is a necessary part of addressing immensely serious global challenges. We could help ourselves by treating and respecting all actors as individuals, and dropping unhelpful and divisive collective labels such as “The Global South”. In so doing we might get more respect, not through signalling our own virtue but by acknowledging, understanding and defending where necessary vital national interests. We should not be giving others a stick with which to beat us.

Air Marshal Edward Stringer CB CBE, Senior Fellow at Policy Exchange and former Director-General of the Defence Academy

[Image: Andrew Stutesman]

Britain and Russia set out their stalls this week at the Commonwealth and BRICS summits, in a competition to court global opinion. And there was one clear winner.

As an isolated Keir Starmer still fends off mounting demands for slavery reparations, Vladimir Putin smugly hosted 36 world leaders – as well as the UN’s Secretary-General – to bring about the end of Western hegemony. While British representatives engaged in discussions around climate change, health justice, and gender inclusivity, the leaders of Russia, China, India and Iran advanced de-dollarisation initiatives and beckoned a ‘new world order’.

This juxtaposition brings to light the growing perception that the British Government is out of touch with the character and major trends of an evolving world order. That’s because it is – stemming from a misinterpretation of the drivers of a shifting geopolitical landscape.

This fundamental analytical failure is embodied in Labour’s ‘Global South’ foreign policy agenda. Per this analysis, Britain is haemorrhaging global influence because we have displayed a selective commitment to the ‘rules-based international order’. Appalled by our hypocrisy, countries across Africa, Asia and Latin America are leaving the West’s flock – firing a Parthian shot as they go by gravitating towards our adversaries: China and Russia.

The solution, according to Foreign Secretary David Lammy, is for Britain to course-correct and lead by example once more. This explains the suspension of weapons licences to Israel, the flurry of humanitarian aid packages committed to Africa in recent weeks, and the decision to transfer sovereignty of the Chagos Islands to Mauritius.

However, this approach will bear little fruit across the so-called ‘Global South’. The reason for this, as Policy Exchange’s report The Myth of the ‘Global South’: A Flawed Foreign Policy Construct shows, is because the ‘Global South’ does not really exist. It is instead an artificial composite of states – with no historical, geographical, economic or political basis – which are guided by, and acting upon, their individual material interests.

There is absolutely nothing unusual about this. Throughout history, nations have sought to navigate their environment in a manner conducive to their security, prosperity, and freedom. Contrary to the ‘end of history’ narrative, this did not change after the end of the Cold War. It was simply the conditions which changed, as the US – supported by its Western partners – reached the apex of its power. Under American hegemony, there was little to be gained by not playing ball.

This is no longer the case, as rival poles increasingly destabilise the previous geopolitical equilibrium. In this context, non-aligned states – some tentatively, others audaciously – are shopping around and hedging their bets. They feel enabled and emboldened to accept Chinese largesse, and to sign ‘security for resources’ deals with Russia – knowing full well that hesitant Western powers feel unable to do anything about it. It is for this reason we saw the leaders of Turkey – a NATO ally – and India – a member of the ‘Quad’ security partnership alongside the US, Japan, and Australia – pay Putin a visit this week. This central geopolitical fact also explains why the bonhomie and limited good-will gestures of Commonwealth summits will not translate into geopolitical advantage, unless – as Policy Exchange’s new report One Family: Harnessing the Strategic Potential of the Commonwealth argues – the association is imbued with greater strategic ambition.

One of Lammy’s peculiarities is that his diagnosis is correct: that ‘hard power’ interests are dictating non-aligned state behaviour. But his solution – to double down on ‘soft power’ – is wrong. Our strategy must be based on the rules of the game, not the one we wish were in play. The Myth of the ‘Global South’ proposes what that strategy might entail.

First, we must stop basing strategy and foreign policy on the framework of the ‘Global South’. It is a meaningless, generalising concept which obfuscates the material drivers of state behaviour. What’s worse, it promulgates a narrative – ‘Global Southism’ – which exists to drive a wedge between us and the rest of the world. As Russia and China now actively promote ‘Global Southism’ as a ‘clash of civilisations’ battle stacked against us, we do nothing but harm ourselves and help our adversaries by granting it legitimacy.

Second, we must develop specific regional approaches in place of ‘one-size-fits-all’ frameworks. What is happening in Africa is not the same as what is happening in Central Asia or Oceania. A complex geopolitical environment demands specificity and nuance. This calls for bespoke regional strategies, new counter-disinformation units to track and rebut Russia’s rampant anti-Western invective, and establishing a diplomatic presence in all strategically important ‘Southern’ states.

Third, we must work alongside our global partners to present the non-aligned world with counteroffers to those of Russia and China. Alone, we cannot compete with Beijing’s economic heft, nor neutralise Moscow’s sprawling disinformation networks. Together, we can overwhelm both.

This week’s international gatherings serve as a serious wake-up call. We must heed it to arrest the slide towards a future we wish to avoid.