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Middle East Council

Britain after Brexit Old friendships and new opportunities in the Middle East

December 2016

Crispin Blunt MP

Kwasi Kwarteng MP

Shashank Joshi

Mark Littlewood

General Sir Graeme Lamb

Conservative Middle East Council BRITAIN AFTER BREXIT

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CONTENTS

FOREWORD 2

BY THE RT HON SIR HUGO SWIRE KCMG MP

BRITAIN & OUR MIDDLE EAST ALLIES IN THE 3

POST BREXIT ERA

BY CRISPIN BLUNT MP

THE DEFENCE AND SECURITY IMPLICATIONS OF BREXIT 6

BY SHASHANK JOSHI

BREXIT AND GLOBAL TRADE OPPORTUNITIES 10

BY KWASI KWARTENG MP

BREXIT AND OUR ARMED FORCES 14

BY GENERAL SIR GRAEME LAMB KBE, CMG, DSO

BREXIT, BRITAIN, THE MIDDLE EAST AND 17

ECONOMIC OPPORTUNITY

BY MARK LITTLEWOOD


FOREWORD

BRITAIN AFTER BREXIT

The Referendum result has changed everything in British politics the effects of which are beingfelt across the world. Brexit raises many fundamental questions and until the negotiations arecompleted a degree of uncertainty is inevitable.

But on one thing we can count and that is that the United Kingdom will want to continue totrade with the world.

Indeed, it may very well be that we will end up rediscovering that buccaneering spirit whichsaw British companies establishing trading links and pursuing business opportunities in the far flung corners of the globe. In a world where more countries are talking the language of protectionism the U.K. needs to argue for the exact opposite. We need both to increase productivity levels and our exports. Both are achievable.

Britain will still want to maintain ties with the EU as we begin to lift or ease the constraints of its many legislative and bureaucratic constraints. The EU leadership is instinctively againstthis, as it fears contagion amongst member states. Hence there is a punitive element in some of its rhetoric. This will be a huge mistake on their part, punishing us will not resolve anything. By the same token we also need to compromise; we must not reject co-operation outright. After all a disintegrating Europe is not to anyone’s advantage. A special relationshipmust continue for the Atlantic world to navigate the present crisis - the Atlantic partnership is one of the greatest achievements of the past century and Britain, whatever the outcome ofits negotiations, is an essential element of that design.

Equally important for our country is our relationships across the Middle East – and it is theseold friendships that we must now build-upon to achieve greater bi-lateral co-operation and trade. Many doors are open. The Gulf Cooperation Council has been fruitlessly trying to negotiate a trade deal with the EU for decades and now is the time for us to deal directlywith our allies across the region to pursue the host of new opportunities that bi-lateral diplomacy presents. The task is huge. But our history as a globalised trading nation shows this country is more than equal to the challenge.

I am very grateful to the authors of this publication who have, over the following pages,explained and anticipated with great skill, some of the most important themes of this newpolitical era and what lies in store for Britain after Brexit.

The Rt Hon Sir Hugo Swire KCMG MPChairmanConservative Middle East Council

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BRITAIN & OUR MIDDLE EAST ALLIES IN THE POST BREXIT ERA

Crispin Blunt MP

Crispin Blunt was elected Chair of the Foreign Affairs Select Committee in June 2015, and since 1997

has sat as MP for Reigate. Prior to entering Parliament, Crispin served in the British Army from 1979

to 1990. Crispin considers, in his piece, the close relationship between Britain and our allies in the

Arab world in the post Brexit era.

The challenges of the Middle East will not wait for Brexit. Arabic media has quite enough apocalyptic

doom of concurrent existential crises to detain it. So it was no surprise that the Middle East press’ post-

referendum interest in Britain dissipated rather faster than elsewhere. Britain’s task in reconfiguring its

relations with the institutions of the European Union bares little relation to the life and death issues that

plague millions of Arabs.

Our priorities around Brexit bear no relation to the civilians trapped in the conflicts of Syria, Yemen, and

Libya. Laying the groundwork for long term solutions for Syrian refugees and their host communities in

Lebanon, Jordan, and Turkey has already taken too long. Every additional Israeli settlement in the West

Bank places the prospects of an equitable resolution to the conflict another step away. Yet challenging

radicalisation and violent extremism and improving the stability and security of the region remain

central UK interests. Delivering these and the associated mutually beneficial economic development

continues to require high priority.

Maintaining full engagement on these issues will be a short term challenge posed by Brexit. It is for this

reason that the Foreign Affairs Select Committee recommended that in the event of Brexit the

Government should respond by committing to a substantial increase in the funding available to the FCO.

This is not only necessary to deal with the increased workload of the task ahead, but it is also required

to reverse the cuts of the last six years which have gone too close to the bone.

In the last Parliament the Foreign Affairs Select Committee found a wealth of evidence to demonstrate

that the FCO’s capability to undertake core work had dipped in recent years. The list of eminent

diplomats who have been warning of the dangers of an underfunded FCO has been growing ever since.

Government ministers now appear to have their concerns, with Rory Stewart MP, the new Minister

of State at the Department for International Development, recently arguing for a doubling of the

FCO’s budget in order to ensure that we have the capacity to carry out major operations abroad and to

stave off parochialism.

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Hopefully the Government will have the sense not to attempt to fund the upcoming Brexit efforts

through reprioritising resources within the existing FCO settlement. The Chilcot report detailed the

problems that such an approach caused for the funding of civilian programmes in Iraq, with the

FCO finding it ‘particularly difficult to identify funding for new activities’, leading to ‘a number of

civilian activities that Ministers had identified as a high priority… [being] funded late, and only in

part’. There was also ‘no indication that the Government questioned the balance of funding…

or considered what the most effective balance of effort might be to achieve the UK’s strategic objectives’.

It would be a bitter irony if our efforts in the Middle East were now downgraded in order to fund our

upcoming diplomatic challenges in Europe, despite our ongoing strategic objectives in the Arab world.

However, we should do more than merely keep our head above water. Whilst the Government has a

responsibility to adequately address the upcoming challenges, it should also position itself so that it is

ready to seize on the opportunities that Brexit present. First and foremost, a realignment of our trade

policy in the British and free trade interest and liberated from European partners lobbying in defence of

prized national sectors, Italian tomato producers comes to mind, is a great long-term opportunity to be

realised. Secondly, the United Kingdom should strive to develop a more equitable immigration system

that levels the playing field for non-EU citizens, with obvious benefits for developing the people-to-people

bonds through business and culture that underpin our political relations with the Arab world.

The apprehension amongst our Arab allies that the referendum result meant that Britain was

withdrawing from the world must be addressed. In the immediate aftermath of the result, our friends in region

saw for themselves the unguarded glee of mid-ranking officials in both Iran and Russia. Moscow’s mayor

delighted at the assumption that “Without the UK in the EU there won’t be anyone to so zealously defend the

sanctions against us”, while a senior aide to Iranian president Hassan Rouhani tweeted that “Stars in the flag

of unity are falling in Europe; Britain’s exit from the EU is an historic opportunity for Iran”.

However, such optimism from those who seek to gain from the disunity of Europe should prove

misplaced. Provided that the Government makes the appropriate commitments to properly fund our

Foreign Office, Brexit’s impact on British efforts on the issues that touch the lives of Arabs should be

relatively minimal. Our commitment to stand with our allies in the causes which we hold dear should

go unaltered. The UK should enhance its role as a leading liberal internationalist force, persistent in its

pursuit of good governance and respect for human rights across the region.

Theresa May has got off to a sure footed start establishing her commitment to a positive, international role

for Britain in the world. This has been reinforced by her appointment of her FCO team. The ex-Mayor of

London Boris Johnson and CMEC's former Chairman Sir Alan Duncan are ministers we can have every

confidence in to champion a confident and assertive vision going forward. Tobias Elwood MP, growing

his reputation as he continues in his post as Minister for the Middle East, will find his brief enhanced by

the outlook and knowledge of the Foreign Secretary and his deputy.


The core pillars of our engagement with the Arab world will be unchanged as our pledges to spend 2%

of GDP on defence and 0.7% on international aid stand strong; as we remain a leading member of

NATO and a nuclear power; as we retain our veto on the United Nations Security Council; and as we

continue to be a world leader in soft power through our excellent universities, the BBC, the British

Council, and a language that has become the world’s lingua franca.

Future British engagement with the European Union’s Common Foreign and Security Policy (CFSP) will

be a matter for negotiation as we recalibrate our relations with many of the institutions of the EU.

This will be one of the most significant long term consequences of Brexit on British foreign policy.

However, we should have no desire to walk away from ongoing intergovernmental cooperation with

European allies on security and defence issues both within Europe’s borders and beyond them. It will be

in everyone’s interests to find mechanisms for close cooperation to continue into the future.

However, British membership of important multilateral forums addressing the issue of the Middle

East is not dependent on our membership of the EU. The complex crises that afflict the region all require

the engagement of distinctive groups of international partners, with efforts often resembling diplomacy

a la carte. Britain will remain an active member of the International Syria Support Group, will continue

to work with international partners on Libya, and I hope that the new Foreign Secretary will fully engage

with the fledgling French initiative to find a solution to the Israel-Palestine conflict.

Whilst avoiding unwanted changes of policy or practice as we leave the EU, the new administration

should provide the opportunity for fresh thinking to some of the seemingly intractable crises of our

time. Much has been made of the Foreign Secretary’s questioning of whether it is morally impossible to

work with Putin or Assad in Syria when writing in The Telegraph last December. Regardless of any

view of the conflict in Syria, we should be encouraged that we now have a Foreign Secretary who has

the intellectual and moral courage to challenge establishment thinking on the toughest issues.

Many of the changes, challenges, problems and solutions in the Middle East are being driven by a

new generation who are reconstructing the worlds they were born into. They should remind us that

demographics count, and that our approach to the region must be as dynamic as they are. We must now

rise to the challenges and opportunities that Brexit presents. The quality and depth of our engagement

with the Middle East is a key test.

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THE DEFENCE AND SECURITY IMPLICATIONS OF BREXIT

Shashank Joshi

Shashank Joshi is a Senior Research Fellow at RUSI. He specialises in international security in South Asia

and the Middle East, with a particular interest in defence policy. Shashank looks at the potential impact

of Brexit on defence at home and in the region.

As Britain prepares to leave the European Union (EU), it is natural that we look to areas beyond

Europe where we might make compensatory reinforcements to our diplomacy. While the so-called

Anglosphere, Asia-Pacific, and Latin America have all been discussed in this context, with varying

degrees of plausibility, the Middle East is a more natural geographic and historic choice. Britain’s decision

to turn to Europe at the end of the 1960s was informed by its withdrawal ‘East of Suez’, and it would

be some irony if Brexit were to give a fillip to Britain’s position in the Persian Gulf. Britain already enjoys

defence and security relationships with the Middle East that are deeper and more extensive than with

any set of nations outside of NATO, the most important of these with the six-nation Gulf Cooperation

Council (GCC) and non-member Jordan. Over the past five years, as the Middle East has grown

significantly more unstable, these relationships have expanded in important ways, in part guided by a

dedicated Gulf strategy.

UK-GCC defence and security ties – almost all bilateral – span military basing and associated operations,

the provision of arms and training, and intelligence cooperation. In terms of basing, the two most

important sites are the UAE’s Al Minhad Airbase, which served as a crucial part of the air-bridge to

British forces in Afghanistan, and HMS Juffair, the Royal Navy’s permanent port at Bahrain that was

opened in October 2015. The former gives the Royal Air Force a range of options for supporting

military operations in the region and beyond, which would otherwise require more costly and difficult

flights from UK or Cyprus bases. Juffair can host the Royal Navy’s most advanced destroyer and support

the new Queen Elizabeth class aircraft carriers. Britain also has a military presence in Saudi Arabia,

Qatar, and Oman.

These facilities support mine-clearing ships, combat and surveillance aircraft, and possibly drones. More

broadly, the UK trains military forces across the region, and particularly in Jordan, Lebanon, and Iraq.

Finally, British arms sales are seen both as a way of generating revenue, strengthening friendly states, and

cementing these relationships – although critics argue that they encourage and abet destabilising military

action by these very same partners.


The GCC is dominated by insecure and – Saudi Arabia apart – small states that fear Iranian subversion

and domestic rebellion. They view Britain’s presence as a stabilising force, not least at a time when the

relationship between the United States and GCC is at its lowest ebb in decades and Iran is seen to have

expanded its influence in Syria, Iraq, and Yemen. These concerns were exacerbated by the landmark

nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA), agreed in October 2015

between Iran and six world powers including Britain. The JCPOA was a inventive and important

agreement. But it did give Iran more leeway to support the Assad regime in Syria against Gulf-backed

rebels, and elevated Tehran’s diplomatic and economic standing, evident in Iranian President Hassan

Rouhani’s visits to Rome and Paris in January 2016.

For its part, Britain values a stable and predictable order in a region that hosts a large British diaspora,

provides energy to the UK, and faces a severe threat from multiple, powerful jihadist groups that contain

significant numbers of British nationals. Britain’s presence enables it to participate in counter-terrorism

missions such as the counter-ISIL campaign in Iraq and Syria, support local forces engaged in other

counter-terrorism missions as in Lebanon or Tunisia, and deter conventional threats such as potential

Iranian closure of the Strait of Hormuz.

There is evidence that British intelligence agencies have benefited not only from liaison, but also joint

operations, with Saudi Arabia and Jordan in particular, against mutual threats such as Al Qaida in the

Arabian Peninsula, ISIL, and the Taliban. British access to multiple sites in Oman also enables the

collection of important signals intelligence, particularly through taps of under-sea cables. Such access can

only be understood in the context of a longstanding and extensive relationship that includes meaningful

benefits for the host or partner countries. The fact that many of the reciprocal benefits to Britain may

be necessarily secret complicates the task of the government.

But while the UK’s presence has grown, it has fallen short of the ambitions set out in the early period of

David Cameron’s government. Senior British military officers have argued for the deployment of a light

battalion – 500-1,000 troops – at a base such as Minhad, on a persistent (i.e. rotational) basis. This

would allow for more training missions, and could be surged in times of crisis to reassure and protect

partner governments, disrupt or deter emerging threats, or even to pursue British interests in South or

East Asia. Naturally, the unprecedented stretching of British military resources along with additional

commitments to NATO means that this would not be easy to achieve.

Would a deeper British relationship with Arab powers have implications for its dealings with Iran? Some

argue that Tehran’s economic re-emergence from sanctions after the JCPOA and its heightened stature in

the region suggest that Britain ought to pursue a more balanced posture in the region, less encumbered

by its web of existing relations to the GCC. Indeed, Britain has incrementally upgraded its diplomatic

relationship to Tehran over 2015-2016, each side appointing ambassadors to the other in September

2016.

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This is a welcome process, and it may help produce points of convergence – if not within the Middle

East, then potentially further east in places like Afghanistan. We should also remember that

while Iran and its Arab rivals compete for power and influence, they also have deep and extensive

economic, political, and social connections to one another. Although these ties were disrupted after

an attack on Saudi Arabia’s embassy in Tehran in January 2016, they remain intertwined. Our own

engagement therefore need not be solely with one or the other. Nevertheless, we should acknowledge

that UK-Iran ties are likely to be constrained in important ways.

First, Iran is not, and in the medium-term cannot be, a substitute for Arab partners. Iran is a divided

polity, with hardliners constraining the power of the pragmatists in the elected parts of government.

Iran’s Supreme Leader would not permit significant cooperation, let alone the degree of intimate defence

and security cooperation outlined above, even if we were to distance ourselves from current partners.

It would be foolish to abandon existing cooperation for the mere possibility of future cooperation.

Second, Iran’s present policy in Syria is fundamentally incompatible to a durable political solution as well

as basic humanitarian criteria. The UK should continue to press for a meaningful political transition

away from the Assad regime, consistent with the preservation of Syrian state institutions – not to pander

to Gulf allies, but because this is the formula most likely to bring long-term stability.

Third, while Britain cannot and should not aim to “roll back” Iranian influence in the region in the

manner that some Gulf states seek, even routine British reassurance of partners will at times raise the

risk of entanglement with Tehran. This is especially so with maritime operations in the congested

Persian Gulf, where the Iranian Revolutionary Guards Corps’ Navy is an assertive and risk-

acceptant presence, as we saw with the Iranian seizure of two US Navy boats in January 2016

and the more dramatic seizure of Royal Navy personnel in 2007. This could become a greater challenge

if If HMS Juffair supports a larger forward-deployed naval presence and, over the longer-term, if the

US Navy shifts resources to the Pacific.

If Britain wishes to influence the Middle East in line with its security and economic interests there,

including remaining able to project military force, it requires partners. These partners will bring

benefits and carry obligations, although the balance between these is continually negotiated, especially in

time of rapid change. Given the autocratic nature of all Gulf states, and the oftentimes blurred

boundaries between internal dissent, foreign subversion, and external security challenges, it is particularly

difficult for British governments to defend their partnerships. Political and social freedoms have, overall,

worsened in the five-plus years since the Arab uprisings began in 2011. But Britain’s choice is probably

between existing arrangements on the one hand, and a loss of influence – to friends like France and

adversaries like Russia – on the other.


Finally, Brexit is both an opportunity to reconsider our current partnerships but also a constraining

factor. In part, Brexit will have a negative impact on UK-GCC relations if prime ministerial and

ministerial attention is absorbed in the priorities of domestic politics and negotiation with the European

Union. David Cameron was due to visit Saudi Arabia in early 2016, but this was disrupted by Riyadh’s

execution of a Shia cleric in January, then by the referendum campaign, and finally by the Prime

Minister’s resignation in June.

Theresa May is not due to visit the region this year. While the royal family’s ties are important in a

region dominated by monarchies, these are no substitute for high-level political attention. Moreover,

a beefed-up air, naval, and ground presence will be especially difficult given the likely squeeze on military

spending. Professor Malcolm Chalmers estimates that the post-Brexit fall in the value of sterling could

increase the cost of defence imports by around £700 million per annum from 2018–19, amounting to

2 per cent of the whole defence budget. This does not rule out light-footprint deployments to the

Gulf, but it certainly makes the finances trickier.

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BREXIT AND GLOBAL TRADE OPPORTUNITIES

Kwasi Kwarteng MP

Kwasi Kwarteng is MP for Spelthorne. He is the author of the critically acclaimed ‘Ghosts of Empire’,

‘War and Gold’ and ‘Thatcher's Trial’. Kwasi is currently PPS to Baroness Evans of Bowes Park, the

Leader of the House of Lords. In his piece, Kwasi argues that Brexit presents Britain with a great

opportunity to engage more actively in the world through trade, diplomacy and the exchange of ideas.

In 1711, the writer Joseph Addison described a visit to the Royal Exchange. Addison described the

seemingly infinite variety of people from many different countries who traded in the City of London.

“I am infinitely delighted in mixing with these several ministers of commerce, as they are distinguished

by their different walks and different languages”.

Joseph Addison, a brilliant essayist, MP and a Secretary of State, was noted for his moderation in politics.

In one essay on the Royal Exchange, he described himself as what we might today term a global citizen:

“I am a Dane, Swede, or Frenchman at different times; or rather fancy myself like the old philosopher,

who upon being asked what countryman he was, replied, that he was a citizen of the world.”

A little more than 250 years after Addison’s essay, Charles de Gaulle gave his reasons for using his veto

against British membership of the EEC. He noted that “England [for which he meant Britain] in effect is

insular, she is maritime, she is linked through her exchanges, her markets, her supply lines to the most

diverse and often the most distant countries”.

Some things clearly stay the same.

Despite the General’s two vetoes against British membership, however, Britain finally entered the

EEC, or the Common Market as it was often then described, in 1973. On 23rd June 2016 in a highly

significant and, to some, surprising referendum the British people rejected membership of the EU, as the

EEC had become, with 52% (51.9%) voting to leave the Union.

Despite the most dire prophecies of doom, the world, as it appears three months after this historic vote,

has not substantially altered. This doesn’t mean that all dangers have simply faded away, but it does

suggest that the worst fears have not been realised. The twenty per cent drop in house prices in London

predicted by the Treasury does not appear to have taken place. The much anticipated recession has not

yet, thankfully, been visited upon us. We still need to be vigilant. We cannot be too presumptuous in

expecting plain sailing all the way but the ship of state, after some initial buffeting, seems steady.

This vote has, of course, fundamentally altered Britain’s relationship with the EU. Even if Article 50 is

delayed, it is clear that many of our European friends want us to leave as quickly as possible. Brexit

means that Britain once again faces an opportunity and a challenge. British membership of the EEC may

well be looked at by historians in a couple of decades as an aberration in British history. Should Britain

leave in 2019, it would only have been a member for 46 years, a long time for a single person perhaps,

but a relatively short period in the history of an old country like the United Kingdom.

British membership of the EEC served a purpose in the era immediately after the Suez crisis of 1956,

and during the period of decolonisation that followed. The EEC seemed modern, thriving and dynamic,

especially when compared to a Britain weighed down by industrial strife.

In 2016, the countries of the EU seem less exciting and dynamic than they had appeared during the

1960s and the thirty-year post war boom, known to the French as “les trente glorieuses”, which saw an

immense improvement in living across much of Western Europe. Today, by contrast, it has almost

become a cliché to refer to countries outside the EU which are leading the world in economic growth and

dynamism.

Countries such as India, China and Brazil have, in recent years dominated the financial pages with

stories of their increasing economic importance. Despite Brazil’s recent political and economic problems,

Rio 2016 very much revealed a country whose influence is growing in the world.

Brexit can be a great opportunity for Britain to engage with the rest of the world. British companies

and political leaders will be forced to cut deals with countries across the world, forging new trading

relationships or strengthening old ties. South Korea has Free Trade Agreements (FTAs) with Chile,

Singapore India, the EU and the United States, among others. It is currently negotiating with Canada,

Mexico, Australia, China and New Zealand. There is no reason why, with decent strategy, Britain cannot

emulate the South Koreans in this regard.

British prosperity will depend, as it has done for hundreds of years, on finance and trade. The Britain of

the future will not be substantially different from the Britain eloquently described by Addison in 1711.

Charles de Gaulle recognised this in his portrait of Britain in 1963.

From a strategic and military point of view, Britain’s membership of NATO and the retention of a

permanent seat on the UN Security Council will ensure that British voices are heard in diplomatic

and defence arenas. There is no reason to suppose that Brexit will, beyond a temporary dislocation, upset

key strategic relationships that Britain enjoys across the world.

As a Member of Parliament who has travelled widely in the Middle East, particularly in the Gulf states,

I have often been struck by how Britain’s relationship with these countries is seen as the product of a long

history. Many of our relationships in the Middle East are at least 200 years old. It is fitting that 2016

marks the 200th anniversary of the Treaty of Friendship signed between Britain and Bahrain. The latest

manifestation of this fruitful relationship is the recent opening of Britain’s HMS Juffair Naval Base.

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Many people in the Middle East speak of the Sykes-Picot treaty, whose centenary we celebrated this

May. What is striking is the fact that many people outside Britain have a much longer perspective of the

arc of British history in relation to their own countries than the British themselves.

Such ideas as the “special relationship” have origins which predate modern circumstances. It is likely that

the historic ties of language, and the sharing of common institutions such as common law, educational

and political structures will help Britain maintain and develop relations with Australia, Canada,

New Zealand, and even the United States, as well as many other countries.

As in most cases in politics, it is the choices of governments which largely determine success or failure.

Brexit is no different. A British government which seizes the opportunity by seeking to engage more

actively in the world through trade, diplomacy and the exchange of ideas will successfully exploit the

new circumstances caused by Britain’s departure from the EU. A government less certain of purpose, and

more pessimistic about its ability to shape its environment, may squander these opportunities. As Cassius

says to Brutus in Julius Caesar “The fault, dear Brutus, is not in our stars, but in ourselves”. This is very

much true of our governments.

As we look across the world today, over the next 10 - 15 years I would dare to suggest that three factors in

the international scene pose the greatest challenges. The first undoubtedly is the series of crises in the Middle

East. Can stable regimes emerge in Syria, Iraq, Libya and Yemen? What will be the nature of jihadist

extremism? What does the “war on terror” mean, and how can we measure success in this struggle?

The second question relates to China, and the extraordinary strides it has made in economic development

of the last 20 years. Can such a pace of economic transformation be sustained? Does China have

geo-political ambitions commensurate with its increasing economic power?

The third big question concerns the United States and its role as a hegemonic power. Since the year 2000,

the United States has pursued two often contradictory paths. In the first years of this century, George

Bush and his neo-con advisors were unafraid directly to intervene in foreign countries, and the Americans

pursued active military engagement in Afghanistan and Iraq, with mixed results. Under President

Obama, a desire to retreat from such direct military intervention has widely been discerned.

Certainly, as a politician who speaks to a number of actors across the Middle East, it is clear that Russian

involvement in the region is perceived to be a direct response to US retrenchment in this part of the world.

The US State Department and the Pentagon will deny that this is happening, but I can only comment on

what the perception is among many of our allies in the Arab world.

Britain and Europe face other problems. Issues relating to migration will continue to baffle politicians,

while populist movements such as Five Star in Italy, the Freedom Party in Austria and the Front National

in France continue to make gains in elections in their respective countries.


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By contrast, British politics remains fairly stable. We have a new Prime Minister who came to the role

after six years in the Home Office. As an MP of nearly 20 years’ standing, and after 10 years serving

as a local councillor in London, Theresa May has an unrivalled experience in both national and local

government. The threat from UKIP, our main populist political party, seems very much to have subsided,

particularly after the vote to leave the EU. British politics is largely protected from the squalls which

often destabilise politics on the continent.

Britain, as a strong economic power with political institutions whose integrity is admired, will continue

to play an important role in global politics.

In stark contrast to the “splendid isolation” supposedly favoured by Lord Salisbury and other 19th

century statesmen, Britain in 2016 is a robustly outward-looking country, eager to engage with the

outside world.


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BREXIT AND OUR ARMED FORCES

General Sir Graeme Lamb KBE, CMG, DSO

Lieutenant General Sir Graeme Lamb is a former director of UK Special Forces and Commander of the

British Field Army. He was Deputy Commander to US General Petraeus in Iraq and key adviser to US

General McChrystal in Afghanistan. In this piece, General Lamb looks at the military and strategic

implications of Brexit.

Few will recall the loss of HMS Birkenhead in 1852 on the 26th of February and with it what became

known as the ‘Birkenhead drill’. The senior British officer on the vessel, Lieutenant Colonel Alexander

Seaton, with all aboard facing certain death if panic broke out, ordered his soldiers on the sinking ship

to stand fast; they did. Their attention to orders, steadfast and selfless action saved the lives of a great

many. This stoic regard for the old military ideals of duty, service, sacrifice so impressed the Kaiser that

in its aftermath he issued an ‘Order of the Day’ to be read by the Prussian troops asking them to be as

brave as the men on the Birkenhead.

The decision over 150 years later on the 23rd of June 2016 by Great Britain to leave The European

Union (EU) is for the British Armed Forces just another ‘Birkenhead’ moment and calls for those in

uniform to stand fast as they have for over 300 hundred years. Their sworn allegiance is to the Crown,

their accountability to Parliament while their personal rights are attended to through the ballet box.

Thereafter, providing the request that is placed upon them is legal, they attend to their duty, which is to

continue to defend steadfastly the realm against all enemies. So as it affects the Armed Forces, impending

Brexit has changed little.

In Europe, the EU has at best a marginal mandate on defence issues. Article 42 of the Treaty on European

Union remains politically gridlocked while the Common Security and Defence Policy (CSDP) lacks the

collective will of its participants. As a result, European military deeds under the EU simply do not match

its political rhetoric; what it wants and what it does are very different. Hard decisions are predominately

based on the national interests of its members while EU collective responsibilities are captured in

statements of outrage or through softer non-military actions including sanctions. As a result, the

UK Armed Forces relationship with Europe is set through a series of direct bi-lateral and broader EU

collective arrangements. I suspect many of these bi-lateral deals involving Intelligence, Special Forces and

Counter-Terrorism amongst others will remain in place irrespective of our negotiating position. The more

conventional National military forces have never fitted well into the European force structures.

These organisations have always been much more diverse and significantly less assured than NATO.

They include multiple differing defence and security standing arrangements such as Finabel, the

European Corps, the Gendarmerie Force, the European Air Transport, the Air Group, the Maritime


Force, the Movement Coordination Centre and the European Organisation for joint Armament

Cooperation and while France and Spain are members of all these standing forces, Bulgaria is a member

of none and Greece only one of these defence initiatives. This collection of Defence and Security

organisations are not hard wired and while these European Defence forces have theoretically some 1.4

million personnel and a total budget of nearly 2,000 Billion Euros, the majority are very much structured

and organised for National and individual security needs. Thomas Hobbes in the Leviathan (1651) wrote

‘The bonds of words are too weak to bridle men’s ambition, avarice, anger and other passions, without

the fear of some coercive power’ and here is the European rub. For without a binding clause or cast iron

commitment, choice allows nations to opt out or to endlessly prevaricate on difficult issues. Unless they

are faced with a clear and unequivocal present danger to them, their way of life or their prosperity they

are unlikely to act decisively. Standing arrangements for integration, interoperability and intelligence

sharing will continue but the best that Europe offers is not nor ever likely to be the match of NATO.

For collective and meaningful defence our strategic alliance firmly rests with NATO, an alliance

bound in place on the 4th April 1949 in the Washington Treaty. That treaty set out the very specific

responsibility to its signatories to challenge and check armed aggression in Europe and North America.

NATO’s military response was firmly tethered to its member states. This alliance remains the bedrock

to ensure peace in Europe and is unchanged by Brexit. It is worth labouring the point here that

NATO’s journey to become the effective collective and credible defence of Europe took over 60 years and

two World Wars.

The road to Article 5, NATO’s sword of Damocles, had been omitted from previous global policing

best efforts such as the Inter-Parliamentary Union and the League of Nations. The IPU established in 1889

from the great European parliamentarians set out with the worthy intention of bringing the rational voice

of reason to restrain the use of force, but for all its intellectual power was found wanting in 1914 in its

failure to arrest Europe’s rapid slide to WWI. It was the missing muscle, recognised in Article 10 of an early

draft of the League of Nations without which the well-meaning and best efforts of the founding

42, eventually 58 signatories, failed to curb Germany’s growing military power and influence in the

1920s and 1930s. This blinded Europe to the rapidly approaching Second World War.

The upshot of two near catastrophic World Wars was the harsh realisation that good intentions,

principles and heartfelt desire alone cannot and would not save the world from political and military

recklessness. Reluctant before the 1940s to challenge open aggression, Germany’s assault on Europe for

the second time forced the international community to quite literally bite the bullet and create a military

force underpinned by an uncompromising legal and political framework fit for a resolute, meaningful

and collective European defence.

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NATO was underpinned by a fierce and equally comprehensive collective political will, which set out to

bring order and curb the possibility of an International conflict in Europe. Led by the United States, NATO

was prepared to embrace and to underwrite the Melian Dialogue and provide guaranteed

protection to those threatened weaker European nations bordering The Soviet Union. The response by all,

under Article 5 of the Washington Treaty, to armed intervention by the USSR would be pre-determined

and decisive. Furthermore, this response was at that time without limits, including the use of nuclear

weapons. NATO’s charter remains unchanged and its obligations to Article 5 resolute; that an attack on

one member state is deemed an attack on all. To test that today would be an act of recklessness.

Beyond the borders of Europe, Great Britain’s Armed Forces will continue to operate as we have in the

past: independently, bi-laterally and where we are committed as coalition partners. Our Prime Minister,

The Right Honorable Theresa May MP, who will oversee the negotiations of our new relationship

with Europe, made it very clear that under her leadership Great Britain will continue to be a world

power. So our place with Europe and Brexit must be set within that global context.

As a standing member of the UN Security Council, the G8, G20 and so many other world institutions our

Armed Forces will play their part in the wider defence and security challenges. And those challenges are

changing, morphing into new and dynamic threats, which will necessitate equally new and dynamic

technologies, alliances, interdepartmental initiatives and operating methods. Our enemies seek to avoid

our known capabilities while undermining our will by operating below our recognised tolerance levels.

The EU will by nature of 27 differing positions take time to consider responses and with that, present an

inability to adapt. Migration, cyber, terrorism, social disorder, economic disruption, propaganda, criminal

organisations, the use of Proxy forces and militias are the modern day weapons of first use. These wide

spread emergent 21st century threats demand a range of legal, legislative, social, political, diplomatic,

economic and military rapid responses to retain the advantage. Out of Europe we can act when necessary,

quickly and decisively.

Great Britain, by standing up for those old fashioned ideals of respect for others, guided by our deep

rooted values and long standing sense of decency, will continue to be prepared and ready to protect

weaker states, the oppressed and those wronged. We have by dint of history a respectable understanding

and measure of other cultures, which will continue to allow Britain to recognise and accommodate

differences, often acting as a bridge of understanding between nations to improve a measured response.

In this her Armed Forces have a significant role to play, be that in the United Kingdom across our own

Departments of State or overseas as contributing partners in the fights against Global State and non-State

actors. Old and new friends will be both partners and competitors but those who would harm us or seek

to disrupt or destroy our way of life should be in no doubt that the sons and daughters of George Orwell

will continue to sleep peacefully in their beds as our Armed Forces defend this realm.

So Brexit will in many sectors significantly change the British landscape but on Defence and for her

Armed Forces, I predict the impact will be less than many predicted.


BREXIT, BRITAIN, THE MIDDLE EAST AND ECONOMIC OPPORTUNITY

Mark Littlewood

Mark Littlewood is the Director General of the Institute of Economic Affairs and the IEA’s Ralph Harris

Fellow. Mark looks at the economic implications and opportunities presented by Brexit for the UK and

the Middle East.

Let us imagine for a moment, a nation on the brink of an economic catastrophe. The economy, desperately

over-leveraged on one industry, is seeing the crash in that industry drive the rest of the economy to

recession and near crisis. The government fiscal position collapses as the underlying deficit from vast

government spending is laid bare by an external shock. But a young and dynamic new leader takes the

reins and leads a major diversification of the economy. Where one might see the United Kingdom in

2008-12, others may see Saudi Arabia since 2014. The economies of the UK and Middle East suffer from

a number of the same problems – an overlarge welfare state, over-regulation and an unwillingness to let

businesses get on with the job of doing business, rather than serving a ‘social’ or ‘state’ need. Happily, the

UK has not yet reached the stage where street vendors set themselves ablaze fighting for the right to own

and operate a business.

But the immolation of Mohamed Bouazizi did show that the peoples of the Middle East yearn for economic

freedom as much as we do in Britain. While Britain must encourage our friends and allies in the Middle

East to take on more of the open economic policies that have done so much to bring health, wealth and

happiness to tens of millions around the world, we must also make sure we do not backslide and give up

the hard-won benefits ourselves.

As we have heard repeatedly since the referendum just over 100 days ago, Brexit is a chance to redefine

our relationships. But this debate must be about more than technical issues, such as what sort of access

we have to the European Single Market. Instead, as well as the relationship between Britain and the

outside world, Brexit must fundamentally be an opportunity to radically redefine the relationship between

the state and the individual. For the UK to succeed we cannot simply have a good working relationship

with the rest of the world, we must also ensure that the UK is an attractive place to do business.

In many ways (with the exception of the Commonwealth), a closer economic relationship with the

Middle East makes the most sense for a free and open post-Brexit Britain. Not only does the Greater

Arab Free Trade Area cover an economic area worth over US$6 trillion (a third the size of the European

Union), the Islamic world has much natural affinity for the benefits of trade and capitalism.

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While Jesus Christ argued that it was ‘easier for a camel to pass through the eye of a needle than a

rich man enter the kingdom of God’, the Prophet Mohammed argued that ‘nine-tenths of all provision

comes from trading’. Many of the hadiths of the Prophet speak of the value of trade and commerce –

while some speak of British liberals having a ‘religion of free trade’, the Islamic world was there centuries

earlier!

But the importance of the Middle East – particularly the nations around the Gulf – for Britain’s trade

goes beyond bilateral trading relationships. The hub effect of countries such as the United Arab Emirates

provides billions more in exports for the UK economy, as it is estimated by the International Trade

Department that more than half of the UK’s exports to the UAE are on sold to further points in the

Middle East and North Africa.

There is also clearly an appetite for free trade across the Gulf States, as both their successful free trade

negotiations with the European Free Trade Area and their ongoing negotiations with the European Union

will attest, and an active and vibrant free trade agenda by the new Department for International Trade

should make this a priority.

For the Middle East, this welcome view of free trade should be matched with liberalising reforms.

While those nations that are not reliant on oil have already done much to reform and others (such

as Saudi Arabia) have been compelled by oil prices to begin the change, much more must be done,

specifically ending the pretence that ‘crony capitalism’ is somehow free market reform. In a number of

countries, these reforms have meant that assets, wealth and power have simply been transferred from the

state to the already rich and powerful elites, protecting privilege rather than encouraging entrepreneurial

drive. Considering that, according to the ‘Economic Freedom in the Arab World’ report, the most

economically free countries in the Middle East have a per capita income more than five times greater

than that of the least free, the benefits of more countries making similar reforms to the UAE,

Saudi Arabia and Oman could be widely felt and significant.

However, despite the best intentions of both parties, the future of the UK’s relationship with the Middle

Eastern nations will depend greatly on what sort of Brexit we can expect. The Prime Minister has so far

been unwilling to give a lot of specifics, but we can view two likely post-Brexit futures.

The first is if the UK retreats into protectionism and big government interventionism. The signs on this

are worrying. The Prime Minister has spoken of introducing an industrial policy, likely to be made up

of policies that will be unlikely to endear the UK to foreign companies seeking a new headquarters or

investment opportunities.

Ironically, the risk is the UK will jettison the positive policies of the European Union (such as bans on

state aid and forcing competition on unwilling sectors), and absorb many of the statist and over-regulatory

policies that eventually led to Europe being the slowest growing continent on Planet Earth.


The other option is if the UK takes a liberal, outward, free trading view of Brexit. The United Kingdom

has the chance to, almost at a stroke, remove many of the most suffocating and egregious regulations

that choke our economy – originating both from Brussels and Westminster. We must be truly open for

business – not as a slogan, but as a reality.

This means liberalising the suffocating planning laws that hold up major infrastructure developments for

three decades (and counting). This means running a fine-tooth comb through the regulations we inherited

from the European Union and deciding which should be repealed or replaced. This means avoiding

the pitfall of radically tightened immigration rules that will starve parts of the country of the trained

workforce required. And this means a tax system that is fit for purpose in a globalised world, rather than

a throwback to the 1960’s.

The elephant in the room around the Brexit debate is the future of the UK’s immigration policy. It is

estimated that more than 300,000 Middle East immigrants live in the UK presently, and as Britain opens

itself to the world seeking trade and inward investment it is imperative that we do not put a policy in

place which will restrict both foreign workers and foreign investors coming to the country.

As to how they will get here, the government has promised a decision on airport expansion – as has every

government since DOS was still the main computing system. The expansion of any London airport

(whether Gatwick, Stansted, Heathrow, City or some combination of the above) has been repeatedly

kicked into the long grass, thanks to the objection of those who would be the worst affected by the

change, but who see vanishingly few of the benefits that accrue to the national economy. The same is true

of housing. Conservative estimates show that UK housing supply is falling approximately 200,000

houses behind demand a year, meaning we have the lowest rate of housebuilding in Europe.

The government should return major infrastructure decisions to local communities, as well as ensuring

both the benefits of economic growth and the costs of blocking development are borne by the communities

who make the decisions. There is currently more land put aside for golf courses in Surrey than there is for

housing. This might be a decision for the local communities wish to make, but they should then pay the

costs of higher housing benefit bills due to a lack of new houses. Alternatively, if the residents of Hounslow

and Hillingdon Councils decide to support Heathrow expansion, the increases in business taxes and other

benefits from the increase in economic activity should go to the councils to either cut taxes or improve

other services.

Leaving the European Union is a chance to sweep away many of the worst rules and regulations that

cost British businesses up to £33bn a year. However, the Prime Minister’s announcement that all EU

regulation will be simply transposed into UK law is risking the inertia of the bureaucracy preventing

serious deregulation. Instead, Parliament should sunset all EU regulations in the Great Repeal Bill over the

course of (say) ten years, giving both businesses short-term regulatory certainty and requiring every

regulation to be scrutinised and considered, rather than just nodded through.

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Finally, we should take a look at the tax system from top to bottom. If the ongoing arguments about

the tax liabilities of Facebook, Google, Apple or other companies has shown us anything, it is that the

tax code is far too complicated. Instead of trying to fight ‘tax avoidance’ through publicly shaming

companies, doing deals with specific companies deciding how much tax they ‘should’ pay, or draconian

legislation, the government should get rid of corporation tax altogether. Instead of a tax regime that

harkens back to the economy of the 1960’s, the UK should be looking to lead the way on a new regime.

The UK and the Middle East have had a good working and economic relationship in the past. There is

no reason to doubt this will continue. But Brexit gives us a once in a lifetime chance to radically liberalise

markets. Maybe if the UK can become the shining city on the hill of free and open trade, these policies

can spread ever wider. Liberalising markets and freeing trade has, in the past fifty years, brought about

the greatest flowering of human prosperity in the history of the world. But there is more to do, both in

Britain, and in the Middle East.

Middle East Council

Conservative Middle East Council55 Tufton Street, London, SW1P 3QL

t: +44 (0) 20 7340 6007 e: [email protected]: www.cmec.org.uk@CMECnews

The views expressed herein are those of the author not of the Conservative Middle East Council or the Conservative Party.

britain after brexit - conservative middle east council · 2016-11-14 · britain after brexit old...

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