Foreign Affairs

Baroness Stroud Excerpts

Tuesday 5th March 2024 Lords Chamber

[Baroness Stroud (Con)]

My Lords, at a recent meeting, Xi Jinping said to Vladimir Putin that right now we are witnessing changes

“the likes of which we have not seen in 100 years”.

He was referencing the change in the balance of power. It sounds like grandstanding, but what if he is right?

Today’s debate comes at a very important time. If the events of 2023 and 2024 tell us anything, it is that for the first time in a generation there is a genuine global challenge to our way of life in the West and to the international rules-based order. The geopolitical dynamics are changing and we need to wake up if Britain is not to be caught in the crosshairs of increasing competition between great powers. The gathering of the BRICS in 2023 was perhaps the most important gathering last year that nobody was talking about. Niall Ferguson talks of an “axis of ill will” comprising nations that are hostile to the West and to the liberal democratic rules-based system. We should take his words seriously.

This gathering is not just a talking shop. It is underwritten by China, a global superpower intent on rebalancing the geopolitical dynamics. To see this, look at three nations: Iran, Russia, and Saudi Arabia. Iran’s economy has grown faster than western counterparts despite US sanctions. Why? It is because Beijing consumed 90% of Iranian oil imports in 2023 and signed a $400 billion partnership agreement in 2021. Russia’s GDP is growing faster than any country in the G7. Why? It is because Beijing is now its main export partner for gas and other commodities. Beijing has ensured that sanctions against Russia have hurt Germany far more than they have hurt Putin. Meanwhile, the Chinese have poured in $17 billion in investment and construction into Saudi Arabia in the last three years, changing the balance for Sunni states too. The aggression of the Houthis against western nations started only once Beijing had brokered rapprochement between Saudi and Iran in that nation.

Furthermore, we would be naive to think that the wars in the Middle East and Ukraine are purely isolated incidents. They are emblematic of the shifting of geopolitical tectonic plates. The odds that a third front opens up in Taiwan or the South China Sea grow sadly shorter by the day. Xi has consistently stressed that the Taiwan issue cannot be passed on from generation to generation. US intelligence sources and the Taiwan Foreign Minister have said that 2027 is the year they are concerned about.

If Britain is to stand tall and be resilient in the coming years, it is essential that we prepare now. Three principles should govern our actions. First, we must set our economy and society on to a resilient footing. Geopolitical risk should be run through our every decision. If this means directing investment into local and reliable supply chains, that may be necessary. If it means increasing military spending, we should do that too. If it means adjusting our net-zero targets to avoid critical dependencies on China, then we need to consider this as well.

We urgently need to know how a crisis in Taiwan would impact us. A recent study by the Rhodium Group forecast that a conservative estimate puts the damage at $2 trillion globally. Given that our trade-to-GDP ratio is 70% and the odds of the US, which is far less vulnerable than us to these shocks, using the full force of economic statecraft in the context of any confrontation are high, we should make this a priority. I ask my noble friend the Foreign Secretary: what assessment have His Majesty’s Government made of these risks and will he make any such assessment public?

We must work with allies to strategically prioritise the maintenance of the international rules-based order. The liberal democratic world underpinned by the West has provided for greater prosperity worldwide than any other system. If we do not understand this and do not invest in this, we will hand over the rules-based order to nations which play by different rules. Finally, we must take a step back and ask ourselves: who are we and what are we building? Confidence in our identity and character as a nation matters. In a time of shaking, will Britain allow itself to be riven by division internally or will we stand tall?

In the early 20th century, we were resilient in crises and came out stronger on the other side. Our current internal weaknesses and lack of confidence in our own civilisation leave us vulnerable. We must remember who we are and why our way of life is worth defending. If we fail to do this, we may not like the world order that our children inherit. If we succeed, not only will we still have an important role to play in the world but we will have the resilience to stand in a time of shaking and a clearer identity as to who we are as a nation.