Sir Keir Starmer has secured an £18bn investment agreement with Japan, strengthening post-Brexit international ties as questions mount over his EU reset strategy.
Starmer described the agreements on technology and life sciences as “landmark agreements” that would lift the UK economy and improve trade with the world’s fourth largest economy.
Japanese Prime Minister Sanae Takaichi visited Downing Street to deepen security ties, coming just months after Starmer made his own visit to Tokyo.
Among the deals confirmed is a new export agreement involving Rolls-Royce (LON: RR), which will collaborate on nuclear research with Japan’s Atomic Energy Agency.
Japanese life sciences company Eisai is also set to invest £48m in artificial intelligence and quantum technology development within the UK.
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.”
Notably absent from the announcement was any confirmed progress on the Global Combat Air Programme, with the Defence Investment Plan having suffered another setback following the resignation of John Healey.
The £6bn joint stealth fighter programme with Italy and Japan is considered a critical component of UK defence investment, given the strategic importance and cost of next-generation combat aircraft.
A text shared alongside the investment deal stated that parties expected to confirm their “shared commitment” to GCAP while an international contract would be signed “by the end of the month.”
The Japan agreement arrives as Starmer faces growing criticism over his Brexit reset deal, with Policy Exchange researchers arguing the arrangement will cost British businesses more than government analysts have projected.
The think tank’s report challenged the government’s claim that a food standards deal with the EU would add £9bn to the UK economy annually, suggesting new regulations would impose greater costs on UK producers.
Researchers also raised concerns about a requirement to meet a 42.5 per cent renewables target in total energy consumption by 2030, against a current UK share that has fallen as low as 16.4 per cent.
Lord Lilley, the trade secretary who oversaw the UK’s entry into the EU single market, admitted he was “wrong” to claim that the free trade framework would meaningfully boost British 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.
Lord Lilley added: “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.”