The UK government has agreed an £18bn investment deal with Japan in a bid to boost post-Brexit international ties but questions are now looming over Sir Keir Starmer’s “reset” deal with the EU.
Starmer said “landmark agreements” with Japan on technology and life sciences would lift the UK economy and improve trade with the fourth largest economy in the world.
Japanese prime minister Sanae Takaichi visited Downing Street to develop security ties with the UK, just months after Starmer visited Tokyo.
Deals include a new export agreement involving Rolls-Royce, which will work on nuclear research with Japan’s Atomic Energy Agency.
Japanese life sciences firm Eisai is also set to invest £48m to work on AI and quantum tech.
Starmer said: “The visit delivers a major vote of confidence in the UK economy, with Japanese investors setting out a five-year investment pipeline worth more than £9bn, expected to build new towns and provide high-quality office space and innovation hubs.”
Key defence deal not confirmed #
Downing Street did not provide any details on the Global Combat Air Programme in security, with the Defence Investment Plan (DIP) having been set back by another delay following the resignation of John Healey.
The £6bn joint programme with Italy and Japan is seen as a crucial part of the DIP given the significance and cost of stealth fighter jets in warfare.
A text shared on the investment deal with Japan said parties expected to confirm their “shared commitment” to GCAP while an international contract would be signed “by the end of the month”.
Improved relations with Japan come as the UK has pushed to boost international ties in the years since Brexit.
Starmer has also made a Brexit “reset” central to his bid on improving growth in the UK, with last year’s agreement on food standards and energy markets set to be scrutinised in parliament before coming into effect.
Starmer’s Brexit reset scrutinised #
But 10 years since the Brexit vote, Policy Exchange researchers have suggested that the UK’s new deal will cost Brits more than the benefits estimated by government analysts.
The report argued that the government’s claim the food standards deal would add £9bn to the UK economy each year would end up costing UK producers more due to new regulations.
It also raised alarm over a need to adopt a target of 42.5 per cent renewables in total energy consumption by 2030 when the current UK share went as low as 16.4 per cent.
Lord Lilley, the trade secretary who oversaw the UK’s entry into the EU single market, said he was “wrong” to claim the free trade framework would boost exports.
“Over our 28-year membership British goods exports to the EU grew less than one per cent a year, while our exports to countries we had no trade deal with grew four times as much—by 87 per cent,” he said.
“This unilateral submission won’t help our exporters (who already conform to EU rules) but will burden the 92 per cent of British firms that don’t export to the EU with the overregulation which has crippled EU growth.”