First, our prosperity relies on a more open Britain – open to new investment and trade, to new people and ideas.  In the 21st century, the successful countries of the world will be those that are more open in their social structures, more open in their political structure....

The vision is a Britain that is a global hub. Just as the City of London acts as the centre of the global financial market, British cities and institutions and ideas can become the hubs for scientific, cultural and political collaboration.  But the vision needs to be delivered in new circumstances with new tools.

The Changing Distribution of Power

The environment for diplomacy has been affected by a series of shifts in the distribution of power at international level. ‘Balance of power’ is no longer a basis for diplomacy.  Today, the new diplomacy needs to reflect the new distribution of power.

First, for much of the last century our security concerns were primarily about excessive and expansionist state power, threatening their own citizens or neighbouring countries.  Today, some of the greatest threats are likely to emerge in countries where state power is too weak not too strong – too weak to clamp down on the creeping threat of global terrorism. The implication is clear: building the capacity of states must go hand in hand with building democratic accountability.  While we have actually seen a substantial reduction in the size of conventional and nuclear arsenals since the end of the cold war, the sense of insecurity felt by our citizens may actually have increased.  Across the world, people are demanding more power for themselves. Our task is to make this a force for progress not destruction.

Second, over the next two decades, with the growing strength of China and India, we are likely to see political, economic and military power more geographically dispersed than it has been since the rise to global dominance of the European Empires in the 19th Century. This makes our most important bilateral relationship – with the United States – more not less important.  It makes the case for our leading role within the European Union and NATO more obvious than ever.  It makes our membership of the Security Council and therefore our work with Russia and China more vital than ever.  It makes our determination to champion UN reform – with Security Council membership for a larger group of countries – more relevant than ever.  And it actually offers a new basis for a vibrant Commonwealth as a unique network of nations.

Third, there is a mismatch between national power and global problems. The risk of financial crises, climate change, and health pandemics cannot be mitigated by individual countries; they require collective action on a global scale.  Managing the risks from globalisation and maximising the benefits requires institutional innovation and the development of the EU reflects this.

Fourth, the power to coordinate at scale can be done without the hierarchies of bureaucracies or the price mechanism of markets – either the helping hand of the state or the invisible hand of the market. Technology is enabling networks to challenge the power of traditional incumbents, economically and politically. In benign forms, it can be seen with Linux challenging Microsoft Windows, Wikipeadia challenging Encyclopaedia Britannica or political campaigns such as Make Poverty History, Stop Climate Chaos, or Move On. Less welcome, obviously, is the increasing capacity of extremists and terrorists to coordinate their disparate activities without the vulnerability of a single point of control. The power of technology to connect people across the world needs to be put to strategic use.

The new distribution of power changes the way we need to analyse threats and exploit opportunities. Our security is threatened by terrorist networks using the freedom of an open society, but can be enhanced by the spread of democracy and good governance. Our prosperity is threatened by climate change but can be enhanced by free trade. Our sense of powerlessness is exacerbated by the weakness of international institutions, but can be diminished by the potential of new networks. In other words, there are new sources of insecurity, but also new resources for prosperity. 

Soft and hard power

This has implications not just for foreign policy priorities, but how we go about pursuing them. If we are to continue to be a force for good, we need to be smart about how and when we combine the soft power of ideas and influence and the hard power of economic and military incentives and interventions.

The first source of power, set out by the Prime Minister, is winning the battle of ideas.

This means being clear about objectives. Our objective is not domination. It is not to force others to live as we do. In a world as diverse and complex as ours, it is to establish, on however thin a basis, a set of rights and responsibilities, by which we can live side by side.  Our aim must be to galvanise all the resources of moderation to block the path of radical extremism. Nowhere is this more the case than in the Middle East, and in the drive for a two-state solution.….

The battle of ideas also means being clear about facts and evidence - such as whether it is in our financial self-interest to tackle climate change.  The Stern Review showed that the UK can have a major impact on debates across the globe by reframing climate change as an economic as well as an environmental challenge. So I believe Margaret Beckett was profoundly right to take the debate about climate change into the Security Council earlier this year, to reflect the importance of climate change to international security.

We need to find similar ways of leading thought on other areas, whether this is concrete and immediate challenges such as nuclear disarmament and proliferation or longer term challenges such as the future of global institutions.

The second source of power is influence within institutions. Britain acting alone does not possess the power or legitimacy to directly effect change on the scale required. Acting with others we can make a difference.

Multilateral action is not a soft option.  Just look at Afghanistan – a country that symbolises our dual goal of protecting our national security and promoting human rights. Our forces are deployed as part of a NATO operation involving over 30 countries, backed by a UN mandate.  The military operation is backed by a comprehensive approach including EU and UN investment in development and humanitarian assistance.

Multilateralism does not replace the need for bilateral relationships.  If we want Britain to be a global hub we need a strong relationship with the leading global power.  The US is our single most important bilateral partnership because of shared values but also because of political reality.  The US is the world’s largest economy.  Engaged – whether on the Middle East Peace Process or climate change or international development – it has the greatest capacity to do good of any country in the world. ...

Some people try to compare our relationship with the US with our position in the European Union. But the EU is not a bilateral relationship – we are members of the EU.  That membership is an asset in economic terms – guaranteeing open markets and setting common standards where needed.  It is an asset in tackling crime.  And it needs to be a greater asset in foreign policy – not substituting for nation states but giving better expression to the common commitments of nation states.  That is why we support the proposal to amend the EU Treaties so that we have at our disposal a single Representative to take forward our Common Foreign and Security Policy where all 27 Member States wish to act together and give authority to do so.  It just makes sense.

All multilateral institutions need a strong sense of purpose. The EU was founded to tackle a threat that no longer exists: conflict within western Europe. If it is to renew its mandate, it needs to find a new raison d’etre, including, I believe, a focus on addressing one of the greatest threats to our future prosperity and security: climate change. Creating an Environmental Union is as big a challenge in the 21st century as peace in Europe was in the 1950s.

Our longer term challenge is to adapt and strengthen other multilateral institutions and networks to renew their mandates, reform the way they work, and adapt more quickly to new threats and new opportunities.

If ideas and influence are examples of so called ‘soft power’, then the third source of power - incentives and sanctions – represent harder power.  We should use them to maximum effect. History suggests that the attraction of becoming members of ‘clubs’ such as the WTO, NATO, or most profoundly the EU, is a powerful one. The benefits of free-trade or military protection when linked to states playing by the rules can incentivise reform and establish norms of behaviour.…..

We have a range of tools at our command. The changing distribution of power in the world means we must be a force for good by virtue not of choosing hard or soft power, but combining both. In a world of conflicts within states, national sovereignty is no answer to complaints about the systematic abuse of human rights. In a world where challenges cut across country borders, we need more than ever to build regional and global institutions that are more effective and more legitimate. In a world where the ‘power to destroy’ is greater, we need both economic incentives and guarantees of security combined with a continued role for hard power interventions.….

But those of us committed to engaging with the world have faced profound questions about how to do so. We confront scepticism and fatalism. John F Kennedy got this right. He said foreign policy should be based on ‘idealism without illusions’. In this speech I have tried to speak without illusions – about the challenges and the difficulties.  But the idealism is still there – above all about Britain’s ability to be a global hub which lives out its values and advances them abroad. The job of the Foreign Office is to lead that debate, and with your help that is what we will do.