Philip Hammond – 2016 Speech at Lord Mayor’s Easter Banquet

Below is the text of the speech made by Philip Hammond, the Foreign Secretary, at the Mansion House in London on 6 April 2016.

They say that a week is a long time in politics. And I have to tell you that the last year, frankly, seems like a lifetime. But when I stood here just before the General Election, I set out what we had achieved since 2010 to re-establish Britain’s place in the world.

Re-shaping with a new National Security Council and prosperity as a central aim of diplomacy. Addressing the new security challenges we faced and consolidating our position as a major defence power. And restating our commitment in the Foreign Office to excellence in diplomacy.

And since that election, as a single party Government (because I have to confide to you, when it comes to parties in Government less is definitely more) we’ve been able to go still further:

In the post-Election Budget, we committed to continue to spend 2% of GDP on Defence – demonstrating our determination to maintain world class Armed Forces with cutting edge capabilities.

And in the spending review we protected the Foreign and Commonwealth Office budget, confirming the value that we place on our worldwide network and our global influence.

We’ve boosted our unrivalled soft power, with new cash for the British Council and a strengthened BBC World Service.

And in the Commons, last December, the new Parliament, wiped clean the stain of the August 2013 Syria vote when, by a large majority, it voted to extend our military action against Daesh from Iraq into Syria – demonstrating that Britain does have the political will to act to safeguard our national security.

But these achievements have been made against a backdrop of some serious storm clouds gathering on the horizon.

Headwinds continue to buffet the global economy, forcing economic policymakers around the world to revise growth rates down.

In the first six weeks of the year, concerns about China’s economic slowdown wiped over eight trillion dollars off world markets.

And the collapse in oil markets – which welcome for consumers – is devastating those countries which rely on oil revenues for their public finances.

Persistently weak inflation, negative interest rates in some countries, stagnating global trade, and vanishing demand. All, I’m afraid, point to turbulent times ahead.

And as we seek to protect the British economy from these headwinds we have to recognise that we also face significant and growing threats to our national security.

Last year, I set out the principal challenges we faced: Islamist extremism; Russian aggression; and EU reform.

One year on and none of these challenges has gone away.

The Prime Minister’s prediction that tackling Islamist extremism would be a “generational struggle” is looking increasingly prescient. And the succession of terrorist atrocities around the world including Sousse; the Metrojet bombing; Paris; Brussels; as well as attacks in Turkey, Pakistan, Lebanon and Nigeria, confirm that the terrorists’ desire to attack our values, our democracy and our freedom remains undiminished.

But, in spite of these tragic incidents, we should not overlook the progress we have made in tackling Daesh in their heartlands of Syria and Iraq over the last year.

In Iraq, government forces have retaken the strategically significant cities of Tikrit, Baiji, Sinjar and Ramadi, recovering some 40% of the territory that Daesh in Iraq once held. And an increasingly self-confident Iraqi Security Force is now preparing the ground for the forthcoming battle to liberate Mosul.

In Syria, we and our coalition partners have been systematically targeting the Daesh senior leadership and the external attack planners who threaten us directly, as well as the oil infrastructure that has provided so much of their financing.

But we are also upping our preparedness for the broader counter-terrorism fight: doubling the number of counter-terrorism officers on the FCO overseas network, standing up the four regional Counter Terrorism hubs announced in the recent Strategic Defence and Security Review and, I can announce tonight, creating a fifth Counter Terrorism hub in Europe, in the wake of the Paris and Brussels attacks, and the ongoing Daesh violence in Turkey. And underpinning this growth, we’re boosting our counter-terrorism funding, with an extra £80 million committed to Foreign Office CT over this next spending review period.

But while we boost our fight against terrorism, the old challenge of state-based aggression in breach of the rules-based international order has not gone away.

Just three weeks on from the second anniversary of Russia’s illegal annexation of Crimea, fighting has flared up again in the last few days in eastern Ukraine.

In Syria, Russia’s unannounced intervention last September has strengthened Asad, who continues to wage war on his own people, driving some into the arms of the terrorists, and many more out of their homes, out of their country into the refugee camps in Jordan, Lebanon and Turkey – and onward to Europe.

Russia and Iran are the two countries which have real influence on the Syrian regime and as members of the International Syria Support Group they have responsibility for telling Asad that it is time to go.

For our part, we will continue to work with Russia where it is clearly in our national interest to do so – as it is in Syria. But all nations must know that if they violate the rules by which the international community lives, that community will hold them to account.

And it is through the EU – my third topic from last year’s speech – that we’ve applied the hard-hitting, co-ordinated sanctions in response to Russia’s intervention in Ukraine.

I said last year that we would fight for reform in the European Union, and the Prime Minister has delivered it: an historic deal which protects our special status outside the Euro and outside the Schengen area, exempts us from ‘ever closer Union’, creates a red card for national parliaments, and a new mechanism for repatriating powers, as well as a new regime to limit access to our benefit system for EU migrants.

I have historically been a sceptic on the EU, and if you’d asked me a decade ago whether I believed it would be possible to achieve the package which is now on offer to the UK, I would have said “no”.

Because at that time, many of our partners suffered from the belief that there could only be a one-size-fits-all model for the European Union.

But that has changed, and it’s changed, I believe, for three reasons:

First, the dawning realisation that the Eurozone countries will inevitably require further fiscal and political integration. The recent financial crisis has underscored that reality. With Euro-ins and Euro-outs, a multi-destination EU has become inevitable, destroying the federalists’ vision of a one-track Europe. So now, different views of the future can be accommodated: greater integration for those who want or need it; a looser model for those of us who do not.

Secondly, the impact of the global financial crisis on the Eurozone. In Britain, we were hit hard, but thanks to the measures we’ve taken since 2010, and thanks to the fact that we’ve kept the pound, we are back on the path of economic growth and rising employment. But in the Eurozone, without the safety valve of devaluation, the impact has been longer term. Many countries are still suffering from sclerotic growth and record unemployment. This bitter experience has been a wake-up call for those whose principal concern used to be protecting something called the “European social model” – an awakening to the fact that you can’t protect any kind of social model if you don’t have a competitive economy. Boosting competitiveness and a focus on job creation are the new policy drivers in Europe. The penny has finally dropped: without a strong and competitive economy, everything we value is built on sand.

And thirdly, political views across the EU have shifted decisively. Seven or eight years ago, the UK was a genuine outlier in terms of what we believed the EU should look like and what role it should play in people’s lives. But no longer. There is now a long list of countries who believe, to quote Italian Prime Minister Renzi, in “Better Europe, not more Europe”. What used to be regarded as eccentrically British views on the future on Europe are now firmly established in the mainstream of European political thought.

It’s probably fair to observe that we, in my party, may not always have been the greatest cheerleaders for Mr Juncker but he has certainly detected, and taken on board, this change of mood – and this Commission is now delivering on a reform agenda. Proposals for new legislation have been cut by 80%. And the Prime Minister’s deal commits the Commission to sectoral targets for burden reduction, with a special focus on SMEs.

That’s a good start, but our job is far from done. We now need to lock this change of mood into the DNA of the European Union, and turn the commitments made to the UK into a working reality, institutionalising our reform agenda. And if Britain votes, as I hope it will, to remain, taking active leadership of the reform agenda in the European Union. So despite my historic scepticism about the EU, it is my firm judgement that, on balance, the benefits of the single market with the unique terms of membership now offered to the UK, mean that we will be safer, stronger and better off in.

Increasing competitiveness through strengthening the single market and driving more EU trade deals… while maintaining Britain’s attractiveness as a destination for inward investment by staying in the 500 million-consumer Single Market, but keeping the Pound.

Britain is, and will remain, a world-class player. But our ability to project our influence around the world is enhanced by our EU membership. Acting as part of a European bloc to deliver stronger trade deals, to bolster the resilience of fragile partners around our periphery and to impose tough economic sanctions against those who threaten our security, gives us greater reach and greater influence.

So to those of my countrymen who care passionately about maintaining Britain’s influence in the world, I say this: our voice will be louder and more persuasive if the United Kingdom votes to “remain” on June 23rd.

There was of course, I have to admit, one big challenge I did not foresee in my speech last year, and that was the migration crisis in Europe.

The movement of hundreds of thousands, perhaps a million or more, of people across the Middle East into Europe is at a level not seen since the immediate aftermath of the Second World War.

Some of them are fleeing terror and conflict; others are simply pursuing a better life – enabled in their quest by the ubiquitous smart phone, delivering the instant access to information that has revolutionised all of our lives.

The fact is, the digital revolution means access to information is now ubiquitous, but economic opportunity is not.

And it’s clear to me that information-enabled economic migration will be a major challenge for all rich countries, long after the Syria crisis is resolved.

Working out how we discharge our moral and legal obligations to genuine refugees fleeing persecution and conflict while dealing robustly with the traffickers and those who are seeking to circumvent the rules to access a better standard of living, will be a major challenge for politicians across the developed world for many years to come.

My Lord Mayor, Excellencies, Ladies and Gentlemen, I’ve focused this year and last on we’ve acted to restore and enhance Britain’s role on the world stage.

We’re rebuilding our economy, the foundation of everything we do.

We’ve committed the funding to strengthen our defences and protect our diplomatic network.

And we’ve rediscovered the political will to act to protect our national security.

In the fight against Islamist extremism, we’re degrading Daesh and exposing the fallacy of the so-called “Caliphate”;

We’re keeping up the pressure on Russia over Ukraine and seeking a negotiated solution and an end to Asad’s rule in Syria;

We’ve secured a unique membership arrangement from the European Union and we’re giving the British people the final say on it at the ballot box;

And we’re working with the EU and with Turkey to crush the traffickers, stem the flow of economic migrants and protect genuine refugees.

Through the actions we’re taking, we’re ensuring that Britain is better prepared both to deal with the major threats today and for the unknown challenges yet to come.