UK-Gulf ties not harmed by PM merry-go-round

Keir Starmer announced his resignation as UK prime minister on June 22, just one month after Britain became the first G7 economy to sign a free trade agreement with the Gulf Cooperation Council. Andy Burnham, the former mayor of Greater Manchester, is now the overwhelming favorite to replace him and become the country’s seventh prime minister in a decade. The question that matters for this region is whether a change of government in London will put trade relations with the Gulf at risk.
The free trade agreement signed on May 20 has been officially concluded and is substantial. It removes 93 percent of GCC tariffs on British goods, worth an estimated £580 million ($767 million), two-thirds of which will be eliminated as soon as the deal takes effect. The UK government estimates the deal will be worth £3.7 billion a year in the long run, more than double an earlier projection of £1.6 billion. Its scope runs well past goods into services, financial services, digital trade, investment protection, government procurement and the movement of people.
Negotiations began in June 2022 and ran across the tenures of four prime ministers from both of the UK’s main parties before reaching a conclusion. An agreement that survived that much turbulence in the drafting is not about to unravel because the signature changes hands once more. What remains is procedural, not solely political. The legal text needs final verification and its entry into force depends on UK parliamentary ratification and the domestic approval processes of the GCC states. That process is institutional and procedural, conducted by trade ministries and officials, and it does not turn on the identity of the resident of 10 Downing Street.
With seven different prime ministers in 10 years, Gulf capitals have watched the UK’s transitions carefully. It is a pattern they have also observed in Washington, where policy swings sharply between administrations, and the conclusion drawn in both cases is that a Western partner’s reliability cannot rest on whoever currently holds office. Instead, it must be secured through institutions, treaty-level commitments and diversified relationships.
That logic is why the Gulf states have spent the past several years deepening ties with Asia and signing trade agreements with multiple partners simultaneously. As such, a leadership change in London changes the cast of characters administering the relationship but does not change the relationship’s foundations.
What may change, however, is the government’s hierarchy of priorities. Burnham’s current political agenda suggests that the center of gravity in Westminster will be domestic. His political identity is built almost entirely around domestic renewal. His priorities include a 10-year program to raise living standards, the largest council house-building drive since the postwar period, deeper devolution and the renationalization of utilities and energy. He has signaled that he intends to travel as little as possible and concentrate on problems at home. Burnham also inherits an economy with little fiscal slack and will need to demonstrate discipline to the markets, even as he pursues an ambitious infrastructure agenda.
That combination — large capital ambitions and constrained public finances — is exactly the gap that Gulf sovereign capital exists to fill. In that sense, there could be an alignment of interests between Burnham’s domestic investment agenda and the Gulf’s long-term investment priorities.
The Gulf’s sovereign wealth funds collectively manage about $5 trillion in assets and their appetite runs toward the sectors a Burnham government would prioritize, mainly infrastructure, real estate, clean energy and digital connectivity. The pattern is already visible on the ground. Mubadala has invested in CityFibre, a British broadband infrastructure provider, and Saudi Arabia’s Public Investment Fund owns Newcastle United Football Club. Neither investment waited for political certainty in London and both reflect an appetite for UK assets that predates this transition.
None of this means that the transition will be without friction and the Gulf’s attention will fall on two questions in particular. The first is timing. A leadership contest and the Cabinet reshuffle that follows could slow the legislative calendar. So, the ratification of the free trade agreement, which is already a multistage process across seven jurisdictions, may take longer to complete than under a settled government.

There could be an alignment between Burnham’s agenda and the Gulf’s long-term investment priorities.

Zaid M. Belbagi

The second is regulatory predictability. Burnham’s instinct for returning utilities and energy to public ownership touches sectors in which Gulf funds hold or seek positions, and sovereign investors price in the stability of the rules under which their capital operates. Moreover, Gulf states have, over the past year, committed more than $2 trillion in investments in the US under a single administration, demonstrating that they engage with whoever holds power, on commercial terms and over long horizons, rather than betting on individuals or parties.
The value of the UK’s relationship with the Gulf has never been a function of who occupies Downing Street. It rests on access to London’s capital markets and professional services, to British Aerospace and advanced manufacturing, to its universities and legal and financial expertise. And now, additionally, to the institutional architecture the trade agreement provides. None of those assets change when a prime minister resigns.
The strategic conclusion is that durable bilateral relationships are built on institutions and converging economic interests rather than on the fortunes of individual leaders. Governments will change, political priorities will evolve and Westminster will continue to cycle through periods of uncertainty. However, the structural drivers governing UK-Gulf relations, with their shared economic interests, investment needs and institutional ties, are likely to endure.

• Zaid M. Belbagi is a political commentator and an adviser to private clients between London and the Gulf Cooperation Council. X: @Moulay_Zaid