East of Where? The Future of UK’s Asia Policy

INTRODUCTION

The British government’s recent reshuffle has reopened questions about the depth of the UK’s commitment to Asia. On 7 September, the role of minister for the Indo-Pacific – with responsibilities covering half the earth’s surface – became a part-time job. Seema Malhotra was appointed Under-Secretary of State in the Foreign, Commonwealth & Development Office (FCDO) but will also remain Minister for Equalities in the Department for Education. Malhotra replaces Catherine West, who had impressed many with her commitment to engagement – repeatedly travelling to the region and building relationships with diplomatic partners.

At the same time as the government announced West’s departure, tens of thousands of tonnes of British naval power were steaming through the Sea of Japan and taking part in joint exercises with the militaries of Japan and South Korea. It was a concrete demonstration of the UK’s ability to project power and influence into Asia. Yet, as defence insiders noted, the deployment of Carrier Strike Group 25 (CSG25) to the Indo-Pacific was the result of decisions taken some time ago. It is not clear whether another such deployment will be authorised again. With Russia resurgent, there are challenges closer to home.

What, then, is the outlook for the UK’s role in Asia? Will economic and security concerns in Europe push it to look outwards in search of prosperity and stability, or will the reverse be true? In November 2024, Catherine West told a London conference that the UK had three reasons to engage in the Indo-Pacific: boosting economic growth, tackling climate change, and bolstering national and international security. Almost a year later, it seems the framework for the UK’s engagement in Asia has changed. The National Security Strategy (NSS), published in June 2025, orders the UK’s ‘strategic context’ under three headings: Confrontation, Competition and Cooperation, in that order. The UK has moved towards a sharper foreign policy.

The NSS was just one of many government strategies that were completed in the summer of 2025. They included the Strategic Defence Review, Strategic Security Review, AUKUS Review, Resilience Strategy, China Audit, Modern Industrial Strategy and Trade Strategy, to name just a few. The long process of developing these papers held back the announcement and delivery of policy for most of the government’s first year. Now that they have been agreed to and published, the government is expecting civil servants to turn the fine words into action.

The potential is huge, but can the reality match up to the hope? There are a great many reasons why the UK government should pay more attention to the Asia-Pacific, but that does not mean that it will. The main problem, attested to even by those carrying out policy, is ‘bandwidth’. Who will drive action and change when the capacity of government is stretched across so many priorities, domestic and international, and when the budget of the FCDO is facing severe cuts?

ECONOMY

The Labour government elected in July 2024 has made reviving economic growth its overarching priority, but it faces immense challenges. The British economy has struggled with low growth, largely caused by low productivity growth, since the Global Financial Crisis in 2007-08. Average real wages have remained stagnant. At the same time, spending on welfare has ballooned, with almost a quarter (23 per cent) of the working-age population now in receipt of some form of social benefit, estimated to cost £66 billion annually by 2029–30. Demands for extra state spending, largely driven by poor health among a large part of the population, continue to grow beyond the capacity of the tax base to pay for that. The economic impact of Brexit has made prospects even more challenging.

The previous Conservative government had hoped to find a source for renewed growth in the markets of the Asia-Pacific region. After Brexit, it made ‘carry over’ agreements with countries that largely maintained the arrangements that had existed when the UK was part of the European Union’s single market. It also joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) ‘minilateral’ trade agreement. But none of this has made much difference to the UK’s trade with Asia. A House of Commons report published in June 2025 noted that the share of the UK’s exports going to the Asia-Pacific “has remained stubbornly flat for decades—hovering around 12% since the 1990s”.

In the language of International Relations theory, liberal internationalism is out, and realism is in. In an era of great power competition, when the UK feels under threat from Russia and China, this will make it much easier for the UK to deal with ‘swing’ regimes whose own commitments to human rights and pluralism are somewhat shallow.

The current government hopes that it can do better. The new Trade Strategy contains high hopes for CPTPP, for accession to the Digital Economy Partnership Agreement (DEPA), opportunities with China, and for the recently signed free trade agreement with India. At the same time, it noted that, “with the world trading system… facing a series of disruptions and shocks, we need a new and more strategic approach to how we sell to and buy from the world” and pledged to be “steely but also nimble and opportunistic” in negotiating new trade agreements.

The problem is the one that faces all British governments: how to persuade home-grown companies to seek out export opportunities? Will British business take up the challenge this time? The culture of the British state is rooted in a laissez-faire attitude towards business and a scepticism towards state-backed industrial or trade strategies. This government will have to work hard to be more effective in driving export dynamism than its predecessors.

DIPLOMACY

During their terms in office, both Catherine West and Foreign Secretary David Lammy made considerable efforts to build relationships in Asia and the Pacific. In total, Lammy visited 10 countries during five visits to the region and attended the ASEAN Foreign Ministers’ Meeting in both 2024 and 2025. West made a further eight trips and visited 13 countries. Can their successors match that record? The new Foreign Secretary, Yvette Cooper, will take time to get across her brief, while Seema Malhotra is a part-timer.

On taking office, Lammy declared that British foreign policy would be driven by what he called ‘progressive realism’: advancing progressive ends by realist means. He spoke of a strategy that aimed at “how we can get to a more progressive 2035”. But Lammy also declared that the foundation of UK foreign policy would be “consistent deterrence” of threats (and he named Russia, Iran and North Korea) by working with allies in NATO and the Five Eyes (US, UK, Canada, Australia and New Zealand) and with “strategic partners”, Japan and South Korea. He then announced that he was reforming the department to work better on the “two domestic priorities of the British people that cannot be solved without work abroad”: irregular migration and economic growth. The same themes were repeated in another high-profile speech in June; The Foreign, Commonwealth and Development Office (FCDO) seemed to have become a tool of domestic policy. We do not know if Cooper believes in the same approach, but given that she has spent the past nine years focused on Home Affairs, it seems likely.

The net result appears to be a much more obviously self-interested foreign policy. There is little public talk of promoting human rights, for example, except in the context of Russia’s assault on Ukraine and of human trafficking of migrants into the UK. The FCDO has not published an annual Human Rights and Democracy Report since the Labour government came to office in July 2024. In its place is a much harder-nosed approach. In the language of International Relations theory, liberal internationalism is out, and realism is in. In an era of great power competition, when the UK feels under threat from Russia and China, this will make it much easier for the UK to deal with ‘swing’ regimes whose own commitments to human rights and pluralism are somewhat shallow.

While the National Security Strategy describes Russia as the most acute threat facing the UK, it characterises China as a “strategic challenge”. In the run-up to the 2024 election, the Labour Party promised a ‘China Audit’ to be delivered within 100 days of the new government taking office. What was described as “an audit of UK interests in the relationship with China” took about a year, but the results are secret. Instead, parts of the Audit have informed the contents of the many reviews across finance, trade, defence and diplomacy. Different parts of government view China differently, some as a threat and others as an opportunity. The Treasury, in particular, is seen by some as naïve about the threat posed by China and too credulous about the likelihood of opportunities. At the beginning of 2024, just 0.2 per cent of the total stock of foreign investment in the UK came from China. China accounted for only 5.5 per cent of total UK trade in the four quarters to the end of Q1 in 2025, with China enjoying a £42 billion surplus. There are ongoing discussions about how strictly to screen future investment from China.

The result of this change of approach is that the UK has become a status quo power in the Asia-Pacific. Rather than promoting change, it seeks to align its activities with the priorities of local partners and thereby shore up the autonomy of middle and minor powers against interference from China. Lammy described this as, “Cooperation, not condescension. Listening, not lectures”. But it does limit what the UK can hope to achieve. For example, British policymakers understand the risks to the stability of South and Southeast Asia from the civil war in Myanmar, but if ASEAN states are incapable of resolving them, what can the UK do? Does the UK have any ambition to effect change in Asia?

The UK has tools for exerting both soft and hard power. It remains a major provider of development aid in the Asia-Pacific. As the fourth-largest provider of aid globally in 2024, it gives vastly more than China, for example. In the most recent fiscal year, aid spending in the Indo-Pacific region was £280 million, with well over half of the money going to three countries: Myanmar, Bangladesh and Nepal. However, budgetary challenges and domestic criticism have driven successive governments to reduce spending in this area. From 2013 until 2020, the UK spent around 0.7 per cent of its Gross National Income on ODA. That figure was cut to 0.5 per cent in 2021, during the COVID-19 pandemic. The Labour government announced in February 2025 that it would cut the rate to 0.3 per cent in 2027, mainly to increase spending on defence. In an effort to fill the gap, the UK has pledged to help countries mobilise more funding from domestic and international sources at a much greater scale.

Other forms of soft power are easy to find. The UK possesses universities, media outlets, financial institutions, scientific laboratories, unicorn start-ups, cultural organisations and law courts with global reputations. They are autonomous of government but are key strategic assets for the UK. In January 2025, the FCDO created a ‘Soft Power Council’ to try to marshal all these forces, “to champion a new, hard-nosed approach to soft power”. It is too early to tell whether the initiative will be successful. A Parliamentary inquiry into the work of the Soft Power Council is due to report soon. What is clear is that it will depend on the underlying institutions maintaining their world-leading reputations. In addition, the UK has many historical and diasporic connections to countries in Asia. If handled badly, these can be a liability, but if handled well, they are another important vector of soft power influence.

SECURITY

The UK remains a significant military power, one of the few that can flex significant muscle far from its shores. But there is a consensus among British policymakers that, faced with an aggressive Russia in Europe, budgetary difficulties at home and an unpredictable president in the United States, the UK needs to focus on the challenges close to home. Prompted by the war in Ukraine and the demands of President Donald Trump, the British government has – reluctantly – pledged major increases in defence spending (reaching 5 per cent of GDP by 2035), primarily to meet the challenges posed by Russia. This may allow the UK to maintain a military presence in Asia, particularly since both Lammy and the UK Defence Secretary John Healey have declared that security in the Euro-Atlantic area cannot be separated from the Indo-Pacific. NATO has made a strategic choice to engage more deeply with the Indo-Pacific Four (Japan, South Korea, Australia and New Zealand); and the UK also has its own security partnerships in the region.

This is particularly true in the area of defence procurement. Pillar One of AUKUS, the three-way defence technology agreement between Australia, the UK and the US, is critical to the future of the Royal Navy’s submarine fleet (and thus to the UK’s nuclear deterrent since it helps to maintain the necessary skills and capacity). Pillar Two of AUKUS has wider benefits for all three militaries – and may expand to include other countries in Asia. There are, however, risks with AUKUS, given doubts about the project in both Australia and the US. The Japan-Italy-UK Global Combat Air Programme (GCAP) – aimed at jointly developing sixth-generation stealth fighter aircraft by 2035 – is critical to the future of the Royal Air Force. So long as these programmes continue, the strategic interests of the UK will remain tethered to the Indo-Pacific by necessity.

Following other governments, the UK is likely to become more transactional in its foreign policy.

There is undoubtedly plenty of support in the region for a UK presence. Dozens of countries have engaged with the Royal Navy’s Carrier Strike Group over the past few months with port visits and military exercises. When CSG25 leaves the region, that engagement mission will be maintained by two, much smaller, Offshore Patrol Vessels (OPVs). Earlier in 2025, there were hints that these ships might have to return home in order to focus on the Russia threat, and that may yet happen. However, there will be continuing engagement in regional exercises such as Talisman Sabre. Other engagements – including the Five Power Defence Arrangements, contributions to ASEAN defence ministers’ expert working groups, and the military presence in Brunei (which is largely funded by Brunei) and in Singapore (which is of a tiny scale) will continue.

CONCLUSION

By the end of its term in office, the previous Conservative government in the UK had developed a reputation for inconsistency and incoherence in its domestic and foreign policies. The current government places great weight on being seen as stable and reliable. In place of ‘flip-flopping’ on policy, it wants to reassure allies and partners that it will live up to commitments. It spent its entire first year in office conducting large-scale reviews of domestic and international policy to define what these commitments should be. These reviews have been concluded and, following the September government reshuffle, there is now a “relentless focus on delivery”. The question is whether Starmer’s government can actually deliver.

Given the changed world situation, the foreign policies of all states have shifted. Where once they viewed international co-operation as the best way to advance their own state’s interests, there has been a global shift towards a more populist conception of the national interest. Domestic politics in the UK have moved in the same direction, and public support for altruistic initiatives around human rights, overseas aid, and even climate change has diminished. As a result, they have become ‘nice to haves’ rather than core elements of British foreign policy. Given the state of government finances, this is likely to be a long-term change.

Following other governments, the UK is likely to become more transactional in its foreign policy. Given the rising calls at home to address domestic issues, there will be much more focus on what certain policies – whether focused on the economy, diplomacy or security – deliver for the UK. The UK will continue to spend money on naval deployments and diplomatic initiatives, but – to be sustainable – it will need to see economic returns. For the time being, what will keep the UK government’s attention anchored in the Indo-Pacific is the defence trade, especially through AUKUS and GCAP, both of which are also critical to UK security. As for normal trade, boosting exports will not be easy. As all governments eventually discover, it is easier to send ships and ministers on foreign trips than to persuade businesses to become better exporters, especially amid intensifying global competition and rising protectionism.

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This is an adapted version of ISEAS Perspective 2025/79 published on 23 October 2025. The paper and its references can be accessed at this link.