Rishi Sunak on China, AUKUS and Britain’s relationship with Australia
In the rabbit warren of No.10 Downing Street, I find the smoothest British Prime Minister since Tony Blair, and also the most unlikely. On the most contentious issues, I’m surprised by his direct and forceful answers | WATCH
Rishi Sunak is the smoothest British Prime Minister at least since David Cameron, perhaps since Tony Blair. Surely he is the most unlikely. The first Hindu. The first Stanford MBA. The first prime minister of Indian background. The richest prime minister, perhaps ever. And, at 42, one of the youngest.
But all of that is just the sheer, shimmering surface of a politician of genuine depth and consequence. I meet Sunak at the legendary No.10 Downing Street. It is truly a rabbit warren of small rooms and narrow corridors. The most imperial presence is Larry the tabby cat, who sprawls triumphantly in front of the main door, regal and imperturbable, “Chief Mouser to the Cabinet Office”.
I meet Sunak in different guises over a couple of days. He comes down first into the small waiting room to chat with his fellow Punjabi, my wife, Jasbir. It’s a bank holiday and he’s in fluffy flip-flops and track suit, attire for “a catch-up day” as he calls it. Then we have a long discussion of foreign policy in what is, by global head of government standards, a modest working office.
No.10 reeks of decisive British history, ghosts dance discreetly in every shadow, with small, understated paintings and prints along the walls, chairs where Churchill sat, desks where Disraeli might have worked, but without pomp or announcement.
In Britain, pomp and grandeur are mostly for royals, not politicians.
They’re meant to work, and Sunak is a prodigious hard worker.
Next day I return to No.10 to meet some of his advisers and to pose with the PM for a few photos. We have another series of conversations as we stroll through the corridors. He is the soul of family charm at every meeting, recommending local Indian restaurants, swapping tales of Punjabi extended families, comparing the moments we met our respective wives.
He’s not as funny as Boris Johnson, but he knows more about government. Sunak is also making profoundly important decisions for Britain, indeed for the world, on AUKUS, on China, on Russia and Ukraine, on the direction of the British economy. He is also taking the Australia-UK relationship, which has always been strong, to an unprecedented state of intimacy and strategic common identity.
Perhaps most surprisingly, he is making an unexpected contest of British politics. British Labour under Sir Keir Starmer is still a long way ahead in the polls, but Sunak is pulling back that lead.
It was once 25 points, now it’s 15 – and Sunak’s personal ratings are good.
As a London political insider puts it: Sunak offers the Conservatives 18 months of good government. That gives them a chance to save the furniture electorally, and perhaps even a narrow road to victory. Certainly, Sunak is not going to die wondering.
Across 10 days in London, I talk to a lot of politicians. One Conservative colleague of Sunak puts it to me: “Probity, hard work, basic decency, grasp of detail, these are assets and they’ve proven their worth.”
After six years of political chaos following the Brexit referendum – with Cameron replaced by Theresa May, who was replaced by Johnson, who was replaced by Liz Truss, who was replaced by Sunak – the current occupant of No.10 offers managerial competence.
Once that was British bread and butter, now it’s strikingly novel and attractive.
But he also offers conviction, albeit leavened by pragmatism. Sunak tells me he was inspired to become a Conservative partly by Margaret Thatcher. Sunak’s parents were Punjabis who migrated with their parents from east Africa. Dad became a GP, mum a chemist. They worked hard and saved the fees to send young Rishi to Winchester College. His brilliance did the rest, with scholarships. Oxford and Stanford followed.
His parents always felt that Thatcher was working for people like them, he tells me. He ran for the Conservative leadership originally as a modern Thatcherite rather than a disciple of Ronald Reagan – sound money versus the idea that deficits don’t matter.
The most contentious issue I raise with Sunak is China. Frankly, I’m expecting some degree of equivocation and hand-wringing. Instead, I’m surprised at his direct, forceful answer: “I and the government have been very clear that China’s behaviour is increasingly authoritarian at home and assertive abroad. It represents the single biggest state threat to our economic security. It’s a systemic challenge that we need to grapple with.
“I think it’s the only country with both the means and the intent to try to reshape the rules-based international system that we have spent a long time building up, supporting and defending, as has Australia.
“That’s my starting view of China and the challenges it poses. What does that mean for us?
“First and foremost we need to make sure that we have the resources, the capabilities, the laws in place to protect ourselves against actions that would be damaging to our interests and our values. We passed a National Security Investment Act that allows us to block foreign investment in sensitive sectors that we think is actually there for nefarious reasons, and that is damaging to our interests. We’ve used that power recently to block a Chinese investment in a semi-conductor company.
“We also need to make sure UK businesses are alert to what hostile states and other actors might be trying to do.”
So his government set up the National Protective Security Authority to help British companies build their resilience.
The British PM is not the least shy, when questioned, about saying what he thinks of specific Chinese state behaviour.
Hong Kong? “We’ve been very vocal in calling out their behaviour in Hong Kong, and we’ve welcomed many BNOs (British Nationals Overseas Hong Kongers with a claim on the UK).”
Xinjiang? “Ditto the situation in Xinjiang, where we worked in the United Nations and other forums to shine a spotlight on what’s happening there.
“We’ve also been vocal with allies in saying that economic coercion of any kind isn’t acceptable. And some of their (Beijing’s) behaviour is clearly undermining stability in the Indo-Pacific region and we continue to call it out.”
Yet, naturally, sensibly, inevitably, there is also a realistic balance to Sunak’s view on China. He says: “China remains one of the largest economies in the world, a permanent member of the Security Council, with a population over one billion. When it comes to climate change, macro-economic stability, global public health – these are all global issues that require Chinese involvement if we’re going to make a difference on them.”
Sunak emphasises that Britain’s evolving attitude to China is at one with Australia, but is also similar to the attitude of a raft of British allies: “I think everything I’ve said Australia would agree with. And the language I’m using is very similar to the language in your Defence Strategic Review. I’ve discussed this with Anthony (Albanese) as well. And we see this in a very similar way, as do other partners Japan and Canada.
“As one over-arching observation: our approach (to China) is completely aligned with our allies – Australia, Japan, Canada, the US.”
Sunak has become, like his friend Albanese, a champion of AUKUS. This agreement was forged by Joe Biden, Scott Morrison and Boris Johnson. For Sunak to embrace a Johnson initiative as strongly as he has is almost as bipartisan as Albanese embracing and developing a Morrison initiative.
Now, Sunak makes the maximum claim for the tripartite agreement: “I think AUKUS is the most significant multilateral defence partnership in generations. It speaks to the incredible trust between the three nations, and the respect we have for each others’ armed forces.”
When Biden, Sunak and Albanese met in San Diego, in Sunak’s view: “The world took notice. Leaders everywhere sat up, looked at what was happening and recognised the significance of the moment. For the three countries to have that depth of trust, that sharing of technology, and that desire to work together is a significant development.
“It also speaks to the UK’s commitment to the Indo-Pacific. Australia and the US are obviously Pacific nations, but the fact that the UK is part of it as well speaks to our desire to be more engaged in the Indo-Pacific. It’s part of our foreign policy, our Indo-Pacific tilt.”
AUKUS involves the US and UK providing nuclear propulsion technology for a new generation of Australian submarines, but it also involves a commitment to much deeper military technology sharing among the three nations in critical technology areas such as artificial intelligence, quantum computing, cyber, hypersonics, machine learning and much else.
Sunak believes the agreement will create new and well-paid jobs in all three nations.
One critical task will be for Australia and the UK to persuade the Americans to relax their strict national limitations on the export of defence-related IP. London and Canberra will need to work well together to maximise the chances of this happening. The relationship between the respective prime ministers is encouraging. Sunak speaks of Albanese with respect and affection.
As it happens Albanese is in London for the coronation during the week when I interview Sunak, and so I ask the Australian PM for his assessment of his British counterpart. Albanese says his meetings with Sunak “have been warm, engaging and constructive. We have each other’s numbers and have a lot of contact. AUKUS is such an important development for our countries, and we both understand how important it is in an uncertain environment.”
Biden, Sunak and Albanese all regard AUKUS as much more than just a transactional relationship. All three leaders take values seriously and consider AUKUS is possible because of the trust that emerges from shared values, as well as history and interests.
Sunak sees AUKUS bringing Australia and the UK closer together. He says: “Clearly, it’s a deepening of our already strong partnership. This doesn’t happen very often that nations share technology like this, with inter-operable submarine fleets. That’s a rare if not unique occurrence, and speaks to the incredible trust between our countries.
“Australia and the UK see the world very similarly. I was going through the DSR and the overlap between the DSR and our Integrated Review, which was our version of the DSR, is quite striking.”
So how militarily significant are the nuclear-powered submarines? Says Sunak: “They’re vital. If you talk to most defence experts they will tell you this is one of the most important offensive capabilities countries like ours will possess. They have a range of capabilities, whether it’s intelligence gathering, protecting other assets, and obviously they’re offensive attack submarines as well. They’re going to be a critical part of how we protect ourselves and ensure our security.”
But the deepening Australia/UK relationship is not just about security. Albanese and Sunak at the time of writing were planning to announce when the free-trade agreement between the two nations will come into operation.
At the same time, Britain is just about to be accepted into the Comprehensive and Progressive Agreement on Trans-Pacific Partnership. When it joins, Britain will become the CPTPP’s second biggest economy after Japan.
The FTA and the CPTPP are central elements of Britain’s general economic push into Asia.
Says Sunak: “Where is global growth going to come from over the next few decades? Disproportionately it’s going to come from the Indo-Pacific. What happens in that region is incredibly important to us in the UK.
“The CPTPP is important not just for the economic benefits it will bring for us; it has geopolitical benefits as well. It’s a grouping of like-minded countries that share the same values, and that’s free and fair trade. It’s important that those countries which share those values unite together to defend and express them.”
The Australia/UK FTA, he says, is “fantastic, an incredible economic opportunity for our two countries. It’s our first post-Brexit bilateral trade deal, we’re really excited about it. There’s billions of pounds of trade that’s going to be unlocked, it will support tens of thousands of businesses in both our countries.”
Sunak is proud of Britain’s leading role in providing aid to Ukraine in its fight against Russian invasion. He greatly appreciates Australia’s active support for the Ukrainian people’s struggle: “We should all just be incredibly struck by the bravery and resilience of the Ukrainian people. This was a war which people thought would be over in a matter of days or weeks.
“And here we are a year later with Ukraine having recaptured a large chunk of the territory Russia initially took; with a global alliance of more than 140 countries in the UN condemning Russian behaviour, with the largest, most effective, most co-ordinated sanctions package the world has ever seen, and NATO strengthened with the addition of Finland, and Sweden to come.”
As well as restoring stability, Sunak will be judged on the performance of the British economy. Inflation in January nudged up to a disturbing 10 per cent. There are a lot of strikes, though these are not society wide and not crippling. Yet total employment is incredibly strong, nearly at record levels. Britain has avoided recession and seems to be moving back towards solid growth.
Naturally, Sunak is upbeat about the prospects of the British economy. He cites a PWC survey of global CEOs that rated Britain still as the third-most popular destination for foreign investment, after only the US and China.
“Our economy is the sixth-largest in the world,” he says, “and possesses what are truly world class strengths, such as financial services, increasingly in fintech; creative industries; life sciences – everyone saw our vaccine in response to Covid; advanced manufacturing; and digital and technology businesses.
“Outside of Silicon Valley, this is probably the No.1 destination for venture capital.
“There’s more venture capital here, and more unicorns (unlisted companies with valuations in excess of $US1bn), than in the whole of France and Germany combined.”
Famously, Sunak supported Brexit, campaigning for it as a backbencher, and argues today that Brexit gives Britain the freedom to regulate businesses and society in a way that assists wealth creation. It allows Britain the freedom to respond to global trends through moves such as joining the CPTPP or negotiating an FTA with Australia.
Global supply chains are becoming more complex and Britain can respond globally to that complexity, Sunak argues, saying: “Britain is a global economy. It’s European geographically, but also signing trade deals in the Indo-Pacific and defence deals with Australia and Britain. That ability to operate around the world, both from a security and an economic perspective, that is unique.”
Sunak himself is unique and, as a British Prime Minister, uniquely important to Australia.
Can he win? “Yes!” he says.
“But it’s about delivering on the things I said.”
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