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Teneo Insights Takeaways – The United Kingdom in a Competitive Geopolitical Age

January 31, 2022
By Kevin Kajiwara & Lord Hague of Richmond

The political landscape of the United Kingdom and the country’s post-Brexit path seems more uncertain than ever. With a domestic leadership crisis and an evolving geopolitical environment characterized by the return of great power rivalry, how is the United Kingdom positioning itself for the challenges yet to come? Lord Hague of Richmond, former British Foreign Secretary and Teneo Senior Advisor joins Kevin Kajiwara for an important discussion on the future of British politics, Britain’s place in the world post-Brexit, the foreign policy issues of the day and the ramifications for global businesses.

 

Listen to the Call

 

UK Political Scene

Prime Minister Boris Johnson is on the verge of losing the support of his party over accusations that he held parties in government offices while the rest of the country was in lockdown. Citizens who couldn’t gather with their families or visit their dying relatives in hospital are outraged at the hypocrisy shown by their country’s leaders. These revelations have caused dramatic shifts in opinion polls, with the Labour party now having a 10-point lead over the Conservatives.

Despite the Conservative party being broadly supportive of Boris Johnson’s political policies, there is a  chance that he will be removed from government over this controversy. Chancellor of the Exchequer, Rishi Sunak and Foreign Secretary, Liz Truss, are among the favorites to succeed Boris Johnson as leader of the Conservative party – and potentially be the next prime minister of the UK.

Brexit

Many Brexit supporters had hoped for an ultra-competitive, low-tax, low-regulation UK, with radically different free trade deals. While that vision seems more remote than ever, Brexit has allowed the UK to pursue an agenda of innovation in an age of rapid technological change. Operating independently, the UK was able to create and distribute vaccines faster than the EU at large. Additionally, having greater control of their immigration policies will allow the UK to focus on highly educated candidates who can bring even more scientific innovation to the UK.

Scottish Independence

Scotland voted overwhelmingly to stay in the EU, and in order to escape the perceived disaster of Brexit, they continue to campaign for Scottish independence which would be detrimental to the stability of the UK. Despite there being a majority in Scottish Parliament in favor of independence, winning a referendum would be challenging. This means that Scottish nationalists need to continue their push for independence without triggering a referendum until they are ready.

Russia Situation

The U.S. military’s chaotic retreat from Kabul, the Biden administration shifting its focus to China and a new coalition government trying to find its feet in Germany have put the West off balance. Vladimir Putin sees this as an opportunity to push his advantage and try to gain concessions from the West on Ukraine and other issues. The U.S. has rejected Russia's demand to prevent Ukraine from joining NATO, amid warnings Russia might invade its neighbor. While there is a chance for peace negotiations, it is more likely to end in some form of Russian military excursion into Ukraine.

UK Foreign Policy

Despite leaving the EU, the UK has maintained most of its influence on the rest of the world. While they can no longer influence EU policies or sanctions, the UK’s financial and military power means that the EU will still need buy-in from the UK to make their sanctions effective. The UK is the largest financial center in Europe, has military capabilities unmatched by most of Europe and has been able to forge new alliances such as the AUKUS alliance with the U.S. and Australia, meaning that Brexit hasn’t resulted in a loss of foreign policy reach or influence.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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