The Rt Hon Philip Hammond MP
Secretary of State for Foreign and Commonwealth Affairs
Speech at the Lord Mayor’s Easter Banquet
25 March 2015
My Lord Mayor, Your Excellencies, Ladies and Gentlemen.
It is a great honour to deliver my first Easter Banquet address as Foreign Secretary.
Your Excellency, Khaled, thank you for your kind words, for your long service to the diplomatic corps in London and above all for your immense contribution to the rich partnership between the UK and Kuwait.
You are of course a veteran of these occasions. I am merely the fifth Foreign Secretary since you became Dean of the Diplomatic Corps and the eighth since you made London your home in 1993.
And I am delighted so many of your compatriots make Britain a second home, with approaching one in four Kuwaitis visiting the UK each year – a statistic which encapsulates the warmth of our relations.
I send my condolences to the family and friends of those affected by the air crash in France.
I am going to ask you to cast your minds back almost five years to May 2010. Britain faces the largest peacetime budget deficit ever. Negotiations are underway that would give its first coalition government for sixty-five years. And all eyes are on the markets. Would they have confidence that the incoming coalition government could put the public finances on a sustainable footing and rebuild an economy ravaged by the financial crisis? Or would they plummet on the assumption of uncertainty, weak government and further fiscal indiscipline?
We understood the challenge; we knew the stakes were high – and that the world was watching, intently, as that same Chancellor stood up to deliver his report; he addressed that challenge head on. Britain would face up to reality; we would no longer try to live beyond our means. We would pursue a long-term economic plan to rebuild our economy and our public finances.
And last week, that same Chancellor was able to report that, after five hard years, the plan was working, with UK growth the highest of any major advanced economy, living standards overtaking their 2007 peak and record employment with 2.3 million new private sector jobs created since 2010.
But the period of austerity and quite proper focus on rebuilding our economy did not mean introspection – did not mean Britain retreating from the world or accepting a diminution in our global influence. On the contrary, my predecessor, William Hague, was clear: if Britain aspired to earn its way in the world, we would have to engage actively and energetically with the world to create the conditions for success at home.
And he was clear that Britain would have to adapt rapidly to a fast changing world, characterised by a redistribution of economic power and opportunity East and South; the emergence of new security threats and new forms of conflict; and the expansion of the sheer range of opinion formers and decision makers shaping the international agenda: a phenomenon he called the “Networked World”.
In a series of speeches at the start of this Parliament, he set out how the government would systematically pursue a long-term foreign policy to extend Britain’s reach in the world. To strengthen our bilateral relations and harness the appeal of our culture and heritage to make the most of the 21st century’s opportunities. To promote our prosperity, to protect our security and to project our values throughout the world and I want tonight to assess our success against the challenges we set ourselves. And to review what the future is likely to hold for us.
The core challenge, back in 2010, was to reshape Britain’s mechanisms for exercising global influence to maximise our reach and effect in this rapidly changing and complex external environment. We resolved to pursue our priorities, mindful that as an open, trading nation Britain has a huge stake in successful globalisation. Our long-term prosperity depends on distant emerging powers making a successful transition into stable, open, modern economies and our ability to maximise new opportunities for trade and investment. The safety of our streets depends on successful international efforts to tackle cross-border terrorism and crime which originates thousands of miles away. And the future of our children and our grandchildren depends on solving the global climate, energy and resource challenges of our time, issues which no one nation could resolve on its own.
In 2010, we understood from the outset that the world would not stand still while we picked ourselves up and addressed our weaknesses: an economy in recession, armed forces bent out of shape by a decade of war in Afghanistan, a demoralised and diminished Foreign Office, lacking in confidence. And we knew that in a world laden with risk, yet rich in opportunity, successful nations must be active and engaged, not in retreat and on the defensive: nations clear about where their own interests lie and capable of pursuing them through collaborative partnerships that span the globe: the agenda setters and the weather-makers. In short, we knew that only the vigorous pursuit of sustainable global security and prosperity could serve our enlightened national interest.
So we set out determined to protect our position in the hierarchy of nations. To do so, we have invested in Britain’s comparative advantages. Above all, as the Chancellor reminded us last week, we have implemented a long-term economic plan so that Britain can now, again, walk tall in the world. We’ve been overhauling our infrastructure; investing in skills; and slashing costs for wealth generators and job creators through low inflation, low interest rates and the lowest corporation tax rates in the G20.
The Foreign Office has made a vital contribution to that plan, establishing the promotion of national prosperity as a central task of our diplomacy, supporting British business to land major deals and helping Britain retain its position as the number one destination for inward investment in Europe.
Secondly, we have addressed new security challenges and consolidated our position as one of the world’s major defence powers, eliminating the £38 billion black hole in the MoD’s budget and setting out a £163 billion programme of forward investment to ensure that our armed forces have the very latest, cutting edge equipment to keep Britain safe – including building the two largest ships the Royal Navy has ever had, the Queen Elizabeth class aircraft carriers.
And thirdly, we have restored, reenergised and reinvigorated our diplomacy. We created a National Security Council to ensure Britain took a systematic, cross-government approach to national security and to building strategic alliances and partnerships around the world. We revitalised the Foreign Office. We reopened the FCO language school; we launched a new Diplomatic Academy; and we deployed more staff to the fastest growing regions – upgrading existing posts and opening new ones – so that Britain now has the right people with the right skills in the right places for the twenty first century.
Indeed, the expansion of our diplomatic network in China under this Government has helped UK exports to China more than double in the last 5 years; and over the same period, Chinese investment into the UK to grow more than ten times.
And as well as making the FCO a leader amongst its peers in using digital tools, tweeting in 33 different languages we have also been focused on turning our immense soft power into hard advantage. Our language is the world’s language. Our time zone gives us global reach. With the BBC a benchmark among world broadcasters, four universities in the world’s top ten, more Nobel prize winners than any country bar the US and an unrivalled history of democratic, legal and political development which we celebrate this year, the 800th anniversary of the sealing of Magna Carta, we could not ask for better material with which to work.
So through our network of embassies, consulates and missions around the world we have been busy promoting the many advantages of doing business in, and with the UK. And through our GREAT Britain campaign, converting those advantages into investments, jobs and contracts. Thanks to the policies we have pursued and to our continued membership of a unique interlocking set of multilateral bodies, Britain remains one of the few countries in the world that can set the global foreign policy agenda.
We did so in Lough Erne where we led a G8 summit that broke new ground on trade, tax and transparency and launched the EU-US Free Trade Association negotiations. We did so at the NATO Wales Summit, where the biggest ever gathering of international leaders on British soil agreed to embark on landmark reform of the NATO alliance, to reverse the decline in our defence spending and to scale up our readiness to respond to any threat in the wake of Russia’s aggression in Ukraine. And we have done so in London, repeatedly, in international conferences on a range of topics from cyberspace, through Afghanistan to ending sexual violence in conflict, to name just three.
In Europe, we have secured safeguards for Britain in financial services regulation, including the double majority voting principle. We have secured the most ambitious programme of deregulation in EU history, including implementing a third of the deregulation recommendations of the PM’s Business Task Force in only one year; and we’ve achieved the first ever cut to the EU’s multi-annual budget, saving billions of pounds of taxpayers’ money.
And beyond the EU, we have been at the heart of global coalitions, working with NATO in Afghanistan to help that country reach the momentous point last year when it could provide its own security and achieve the first peaceful transition from one democratically elected President to another; leading the international response to Ebola in Sierra Leone; and playing a central role in the global coalition against ISIL, checking its advance in Iraq and supporting the painstaking task of reclaiming the territory it has occupied.
And we have also been working with France, Germany, the US, China and Russia in pursuit of an historic agreement to put nuclear weapons beyond Iran’s reach. In the last few weeks, our negotiators have made substantial progress. Agreement is deliverable if we continue on this track. But to reach it, the time has come for Iran now to show flexibility and take tough decisions. Iran must commit to a comprehensive, durable and verifiable deal – a deal that ensures Iran’s nuclear programme remains exclusively peaceful.
There will no doubt be difficult decisions required on all sides in the coming days and weeks. For our part, I remain clear that no deal is better than a bad deal. But we should also be clear-eyed about the alternative. No deal means no restrictions on enrichment, no restrictions on research and development, and no independent monitoring or verification. No deal means a fundamentally more unstable Middle East, with the real prospect of a nuclear arms race in the region. So now is the time, with our key allies, to build on the recent momentum, to press Iran where differences remain, and to strain every sinew to get a deal over the finishing line. The door to a nuclear deal is open, but Iran must now step through it.
Britain can stand tall in the world once again, confident that it is playing its part in maintaining peace and stability. But the world has not become any less dangerous, or uncertain. To our South and East, violent Islamist extremism is destabilising countries in North Africa and the Middle East, with a direct impact on our security at home. Meanwhile, our own security and that of our neighbours in Eastern Europe is menaced by President Putin’s flagrant disregard for international law in Ukraine. Although the world is more uncertain today than it has ever been, we can clearly identify the three major foreign policy challenges that will likely face as we move into the next Parliament.
First: Russia. Secondly, the generational struggle against Islamist extremism. And thirdly, reforming the EU so the British people can support our continued membership of it. Let me take each in turn.
Russia’s illegal annexation of Crimea and its aggression in eastern Ukraine are both attacks on the international rules-based system. In the place of partnership, Russia has chosen the role of strategic competitor, at the very time when the diffusion of power more widely around the world makes the international rules-based system all the more important as the principal means to keep the peace between nations. So we must be steadfast in the defence of where nations threaten to undermine it, as we have been, and will remain, in response to Russia’s actions.
We will maintain our efforts to ensure the European Union remains resolute, robust, united and aligned with the United States in the face of this challenge. Because this isn’t just about Ukraine: it is about Russia and its future intentions; about its apparent aspiration to exercise control over the former Soviet republics which were liberated by the collapse of the Soviet Union in 1989 – an event we celebrate, but which President Putin describes as “the greatest geo-political catastrophe of the 20th Century”. It is about standing firm and standing united now, to prevent renewed tests of our resolve in the future.
Secondly, we will remain engaged in what the Prime Minister has described as “a generational struggle” against Islamist extremism. As a leading member of the global coalition against ISIL we will take the military, diplomatic and homeland security measures to keep Britain safe and to defeat the murderous regime that ISIL has established in Iraq and Syria.
But we must address the causes of violent extremism, as well as its symptoms. That means, where we can, helping to create the conditions in which moderate Islam can flourish and supporting those countries where the forces of moderation are under threat. Britain has a long and deep history in the Middle East, which gives us a unique role to play. We must build on the efforts of the past five years to create new partnerships fit for the 21st Century in the Gulf and the wider region. We must support prosperity, security and development across the Middle East and we must work with our Muslim partners to challenge ISIL’s narrative that corrupts and debases their religion. These aims are mutually reinforcing, critical to creating the conditions for the sustainable and inclusive economic growth which is the best long-term defence against radicalisation.
Thirdly, the moment is fast approaching when the European Union must define its response to the pressures and opportunities of globalisation and answer British concerns about fairness, effectiveness, and balance between Brussels and national capitals. As Foreign Secretary I have visited all but two of the member states of the European Union (and the bad news for those two lucky escapees is I am going there next week). I have found that the British thirst for reform in Europe is echoed widely in other European capitals. There is now, on the back of years of recession, a growing, continent-wide recognition, that Europe must reform itself to be a globally competitive and democratically accountable leader in the world if we are to sustain the living standards that the peoples of Europe have come to expect.
There will be difference over the details of how to achieve this goal. But the message is clear: reform or decline. The rest of the world will not wait for the EU to get its own house in order. If we continue along the path of more regulation, more red tape and more powers hoovered up by Brussels then the result will be lower competitiveness, declining influence, fewer jobs and lower living standards – not just in Britain, but across our continent. But with hard work and good will on all sides, I am convinced that we will be able to agree a package of reforms on competitiveness, on accountability, on allocation of competences and on fairness that is good for Britain, good for Europe and which the British public will back in an in/out referendum in 2017.
So the next five years promise a world with challenges as serious, complex and substantial as those of the past five. The effective protection of our security, promotion of our prosperity and projection of our values will require us to work harder and smarter than ever before. It will mean even closer co-operation with likeminded allies and partners to confront aggressors and solve seemingly intractable problems.
And it will mean being focused as never before on relentlessly championing our national interest. We’ll need to forge new partnerships to tackle extremism across the globe. We’ll need to develop new resources to counter asymmetric attacks. And we’ll need to harness all our diplomatic firepower to deliver the EU reform we need. When the world is this dangerous and this uncertain, we cannot afford to relax or rest on our laurels. But it’s precisely because we deliberately set out five years ago, as my predecessor put it, “to position our country for the long term” that I’m confident of Britain’s ability to make a decisive contribution to shaping the global agenda.
After five years of rebuilding our diplomatic excellence, we have the tools, we have the people and have the global footprint we need. But the FCO can’t do it alone. This is a UK Plc enterprise. And I want to close, my Lord Mayor, by paying tribute to the work you and your colleagues do – championing Britain’s world-beating financial services industry around the world: the very model of export promotion, making a crucial contribution to the economic growth which is the foundation of our security and our prosperity.
Thank you for your attention; and may I now invite you to join me in a toast to: the Lord Mayor and the Lady Mayoress.