UK a Small Economy Bystander as Geopolitical Instability Grows

What would you do if you were Keir Starmer now? Would you rejoin the EU, meet China’s President Xi Jinping, stop supplying arms to Israel, encourage the Chancellor to free up regulations on bankers’ bonuses, adopt a ‘pragmatic’ approach to Trump’s election victory or tell the UK public they don’t have to change their behaviour in the face of out of control climate change?

Global politics is an ever gloomier tale of conflict, instability, growing authoritarianism and corruption, while many democracies falter and struggle. Historical parallels with the 1930s are being frequently drawn while commentators warn, following Mark Twain, history rhymes  rather than repeats (not particularly reassuring).

How will the UK rise to these accelerating challenges? It’s still relatively early days for Keir Starmer’s government. But what we see, after 4 months, is an old-style Conservative government concerned with growth above all, desperately keen for the private sector to invest and grow, and for the wider public to feel a bit better off as a result, with some money thrown at the NHS too.

It looks like a government that thinks it’s the 1960s – and competitiveness and the value of the pound in your pocket (as Harold Wilson put it) are what matters. Or perhaps it thinks it’s in the heady days of the 1990s, after the Berlin Wall fell – though at least then there was a lot of discussion about democratic transitions and underpinnings (and the UK was in the EU).

Is there a Geopolitical Strategy?

Today, we see Keir Starmer prioritising meeting President Xi at the G20 in Brazil, his foreign secretary having already visited China this autumn, and Rachel Reeves apparently likely to go early in the new year. That China is committing crimes against humanity in Xinjiang or its authoritarian suppression of democracy in Hong Kong is not the point when trade is important, it seems. And too, Reuters has reported, Russia appears to be developing production of long-range attack drones in China. But Starmer’s view, on his way to the G20, was that China “is one of our biggest trading partners and therefore I will be having serious, pragmatic discussions with the president when I meet him.”

This is not serious, strategic international politics and foreign policy at a time of ever-growing threats. It’s the behaviour of a small, inward-looking country, despite Starmer’s assertion that the UK and China “are both global players, global powers, both permanent members of the security council.”

On Ukraine, President Biden has made a belated move to let Ukraine use long-range missiles in some circumstances. Whether this will change anything, as the clock ticks down to Trump’s presidency, is unclear. Starmer has said Ukraine will be top of the agenda at the G20. But that is a political choice for all the leaders there. And Trump’s shadow is looming large.

Meanwhile, on Gaza, Starmer has no such passionate words for the Palestinians – the small cuts in arms supplies to Israel leaving the UK entirely complicit in the genocidal destruction of Gaza. That has left the UK, and EU, with much less geopolitical influence let alone any moral leadership, on the Middle East and beyond. But for Starmer, with growth as his low-level mantra, Ukraine is perhaps all he can cope with in terms of a substantive, geopolitical strategy, given the middle-sized power that the UK is.

That Small Majority

Keir Starmer is a technocratic, right-wing prime minister, ill-suited for developing a strategic, substantive approach to the crises of our times. And driving this narrow, inadequate approach, too,  is that Starmer and his advisers are also concerned about the 2029 election.

This is a long way off. President Trump will have been and gone (with the world in whatever state by then). But what we see is that a huge Westminster majority does not drive strategic leadership from a Labour government that worries it barely got 34% of the vote. Those once Tory and Brexit-voters who chose Labour this time are still Starmer’s key focus. And Starmer seems to have decided that those voters only need a narrow economic boost, plus a somewhat better NHS, and that will do it. Otherwise, they need reassuring that nothing has to change.

Starmer went to the faltering COP29 summit last week – held in fossil-fuel promoting and authoritarian Azerbaijan. He announced ambitious new targets of a cut in emissions by 81% by 2035 – targets that are vital to get the UK to net zero by 2050.

But the prime minister anxiously underlined that he would not “tell people how to live their lives", rather his government would "tread lightly on people's lives". So, never mind leadership on using public transport more or a switch to electric vehicles or a need to reduce meat consumption and flying. 

This is a government that genuinely wants to tackle climate change, it seems, but without having a serious democratic discussion across the board about all that is involved. Growth is rarely called green growth by ministers, and green energy is carefully called ‘clean’ not ‘green’. It’s climate policies if not by stealth then certainly by cautious steps and cautious wording. And whether the public think that winter fuel payment cuts or ‘shaming’ NHS league tables count as treading lightly on their lives, we will see – the government’s growing unpopularity suggests not (latest YouGov data shows a mere 20% approve of the government).

Rachel Reeves gave her Mansion House speech in the City last week. Labour needs the City if it is to get the investment that it believes is the only route to political and economic success. Learning nothing, shockingly, from the 2008 financial crisis, Reeves announced that now was the time to loosen up again. Regulatory changes made after the global financial crisis, she said: “have resulted in a system which sought to eliminate risk-taking. That has gone too far and, in places, it has had unintended consequences, which we must now address.” Rules around bankers bonuses look set to be eased once again. This is, effectively, a Conservative government – and Labour can get away with that mainly because the actual Conservative opposition, plus Reform, have gone so much further towards the far-right. But it’s not what the UK needs.

Rejoin the EU Anyone?

In such turbulent times, rejoining the EU would look like a wise strategy. Being back in the EU would take away barriers to trade and so to growth. But, as Starmer and ministers have repeatedly told us, Labour is sticking to Tory red lines on no EU, no customs union, no single market or free movement. This is mainly because Labour don’t want to give a stick to the opposition and right-wing media to hit them with, as well as a disinclination to recreate the divisive, politically unstable Brexit years again.

This is cowardly indeed. But, again, if you only got 33.7% of the vote at the election, then even though those still supporting Brexit are in a minority, you may still need them.

There is a more substantive problem here. The EU is certainly open to a closer relationship with the UK, and a bit impatient that the UK government has been slow to set out in more depth what it really wants to agree with the EU. The broad lines of more security, climate and migration cooperation are known, plus too the minimal but still positive UK ideas on reducing trade barriers in some areas. But there is no urgency or, so far, more detail.

But the EU has its own problems including political instability, climate-change, Trump, Ukraine, and a range of far-right parties and governments. Would it welcome an application from the UK to rejoin the EU right now? It would not. And the main reason for this is linked to that 33.7%. The UK’s political system does not suggest there would or could be a reliable, long-term re-commitment to the EU. Public opinion suggests that long-term commitment is there. But while Labour could still lose to the Tories at the next election and while the Tories are more closely tied to Brexit than Labour (though Labour’s doing a good imitation) then there’s no reason for the EU to buy into that UK political instability.

There could be other steps – a customs union deal that gives the UK some say on EU trade policy for instance. But all serious substantial steps have been ruled out by Starmer’s government. Trump’s looming trade war with the EU and UK could change that. But, for now, indications are that the UK government will try to ‘pragmatically’ get on with both sides. This is, of course, not pragmatic, and quite likely will not work. And when it doesn’t work, then UK-EU relations might be up for more of a rethink. But that’s not what Labour wants. It wants its minimalist, highly inappropriate to the times, ‘growth’ strategy to be what it’s about.

UK governments often imagine the UK to be a bigger, more influential global player than it is. The UK is a medium-sized power, with less influence than a decade ago due to Brexit. But, in Keir Starmer’s government, we have a ‘vision’ of the UK as barely more than a small economy, dependent on private-sector growth, with a bit of public sector investment to help.

Such a narrow, minimalist approach could, in calmer and earlier times, have been at least preferable to a tub-thumping imperial nostalgia, though still deeply inadequate. But these are not calm times, neither geopolitically nor economically. A clear, strategic approach to global instability, rising to the moment and emphasising democracy, rights and political and economic equality, including on climate change, is what’s needed. But the UK’s former human-rights lawyer prime minister is not the leader for that.