When I wrote two years ago that Japan and the Trans-Pacific Partnership were key to the UK’s future as an independent trading nation, we were on the cusp of starting negotiations on a new free trade agreement with Japan.

It came into force as the Comprehensive Economic Partnership Agreement (CEPA) in January 2021, going further than the EU-Japan Economic Partnership Agreement it replaced in three principal areas: data protection, financial services and rules of origin.

The Department of International Trade had announced the UK’s intention to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, of whose 11 members Japan is the dominant economy but which includes six Commonwealth countries.

Awareness of our deepening and broadening relationship with Japan was growing and has continued to grow. Queen Elizabeth II and her Carrier Strike Group were welcomed to Japan during her Pacific tour in September 2021 and Japan’s new Prime Minister Fumio Kishida signed the Reciprocal Access Agreement in May this year, which will boost defence and trade ties between the two countries.

There is now positive talk on collaboration with Japan on the Future Combat Aircraft Strategy and a growing possibility of working together to develop Japan’s High Temperature Gas-cooled Reactor nuclear technology which is capable of making a significant contribution to the serious and partly unexpected challenges we face in our industrial energy and electricity markets, following Russia’s invasion of Ukraine.

It is true that the Japanese people know much more about Japan’s relationship with the United Kingdom than the British people’s knowledge of Japan. The latter was for decades largely confined to and negatively impacted by the disastrous policy choices made by Japan in the 1930s, which severely damaged our hitherto close relationship, for a generation.

Yet for the Japanese people, whose ability to think and plan for the very long term is legendary, the hiatus in our growing relationship was seen as a temporary setback. Overshadowed initially by the enormous American cultural influence during the occupation after 1945, the UK-Japan relationship had largely recovered by the time I worked in Japan in the 1980s and 1990s. Many Japanese associates have commented to me recently that we now appear to have a relationship approaching that of the Anglo-Japanese Alliance (1902 -1922), some have described the present state as the “Second Anglo-Japanese Alliance”!

It is interesting to contrast the relatively quick and low-key leadership election process used by Japan’s ruling Liberal Democratic Party (LDP) to select Fumio Kishida as leader, and therefore Prime Minister, following former Prime Minister Yoshihide Suga’s announcement on 3 September that, after all, he would not contest the party leadership election scheduled to take place ahead of the General Election held on 31 October 2021. The two-round party election process was completed with the second round held on 26 September, a much shorter process than the rather unedifying spectacle which the UK Conservative Party has subjected itself to this summer.

In the LDP leadership election system both party members and elected politicians of both houses participate in both rounds. The first round gives equal weight to the votes of party members in total (50 per cent) and the party’s members in both Houses of the Diet (50 per cent). In the second round the weight given to Diet members’ votes in the 2021 election was just 11 per cent. If any single candidate obtains a majority in the first round, the second round is cancelled. This system thus gives most weight to party members in the first round, whereas the Conservative Party system empowers MPs at multiple votes until the final, decisive vote by the party members alone.

Since Taro Kono was strongly preferred by the LDP party members, if the LDP operated the system which the Conservative Party operates, it is clear that he would have become Prime Minister of Japan, not Fumio Kishida. Kishida was seen as the more cautious of the two candidates as far as strengthening Japan’s defence forces and adopting a less ambiguous pro-western foreign policy were concerned, but Russia’s invasion of Ukraine and China’s increasingly aggressive stance towards Taiwan have significantly changed Japanese attitudes towards defence, security, and civil nuclear power, including those of young people and university students. These changing attitudes have emboldened the Kishida cabinet to move towards the policies advocated by Kono, who after a brief period as a party official outside the cabinet, was appointed Minister of Digital Affairs on 10 August.

The energy crisis predicts greater shortages in electricity generation and industrial heat energy than were mooted ahead of Russia’s invasion of Ukraine. Both planned British-Japanese large nuclear energy projects, Toshiba’s NuGen project at Sellafield Moorside and Hitachi’s Horizon project at Wylfa, Ynys Mon, came off the rails. The new Prime Minister should immediately reassess BEIS’ current over-cautious approach to another major nuclear energy project.

Since 2018 Penultimate Power, of Newcastle-upon-Tyne, has been discussing with the Japan Atomic Energy Agency (JAEA) plans to commercialise for the UK market the High Temperature Gas-cooled Reactor technology, which interestingly was originally developed as the “Dragon Reactor” by the former United Kingdom Atomic Energy Authority at Winfrith in Dorset in 1965. This is classified as an “AMR” technology and BEIS has committed only to support the first phase of a small competition intended to select an AMR technology for which a demonstrator can be built by the early 2030s. Early adoption of this flexible and efficient technology, which also enables the production of hydrogen at scale, would provide an economically viable solution to the need to reduce our reliance on natural gas as the source of the major part of our industrial heat energy, which amounts to the remaining 80 per cent of our total energy market of which only 20 per cent is accounted for by electricity generation.

For geostrategic reasons as well as the ever more urgent need to increase our energy sources it makes perfect sense to accelerate the commercial development of this technology, which is inherently safe and for which the Japanese demonstrator has been running for ten years. It would be complementary to the Rolls-Royce SMR technology for which BEIS has already approved the grant of public funds. In March the Prime Minster, referring to the “intense levels of frustration that we can’t build enough nuclear capacity in this country and we can’t do it fast enough”, said that he wanted to see Britain getting at least 25 per cent of its energy from nuclear. If the UK is again to become a leader in nuclear power it is essential to step up our collaboration with Japan on this technology starting now.

In my view the UK-Japan relationship will thrive under a government led by Liz Truss. As Secretary of State for International Trade, she successfully negotiated the CEPA with Japan and as Foreign Secretary she has recognised and leveraged sensibly this key relationship as “Global Britain” has steadily and surely started to develop its footprint on the world stage. On the other hand, Rishi Sunak, despite the experience he gained as an investment banker, appears to have little understanding of Global Britain and our increased need to demonstrate and exercise soft power around the world. He has reportedly bulldozed the Prime Minister into withdrawing his previous support for Truss’s sensible attempt to reverse her predecessor’s decision to sell three acres of the seven remaining acres of our prestigious embassy estate. To do this will open us up to the charge of cashing in on that which we never bought, as the original perpetual lease was a gift in 1872, 150 years ago. 

I am sure Kishida has told him it doesn’t make any difference. However, the truth is that it will make a great difference to the perception of the UK among the Japanese people. A large apartment building in the middle of what is today the finest and largest diplomatic mission by far in Tokyo, will act as a permanent reminder of our opportunistic sale of a large part of what is by far the most impressive diplomatic estate of any country, not so far from the Emperor’s residence within the Imperial Palace estate across the moat. If implemented, it will be seen as a symbol of a smaller Britain, which doesn’t seem to make much sense given the ever growing importance of our relationship with Japan.

I assume that Rishi Sunak argued that it is not worth £700 million to keep that land. I think he was wrong. The value to us of keeping the estate in Japan is vastly greater and benefits every British business operating in Japan, and would continue to do so indefinitely into the future. Reportedly many senior diplomats have bought into the plan, believing that Treasury strictures mean that there is no other way to secure funds for necessary maintenance and improvements to the remaining estate.

Indeed, last year’s “red book” revealed that the FCDO was the only Department of State to suffer a reduction in Departmental Expenditure Limit (by 4 per cent) over the five years 2018-2023. Global Britain surely provides reason enough to treat our Foreign Office more generously, and it makes no sense to dispose of an asset which helps us to “punch above our weight”. This proposed sale would be a serious misjudgement. I know what the real feelings of many senior Japanese ministers and officials are about this matter. It would be damaging to the perception of the United Kingdom in the eyes of the Japanese people, which would be especially unfortunate given the increased importance of our relationship with Japan. 

I guess the Prime Minister was not aware that the embassy estate in Tokyo was granted to the United Kingdom under a perpetual lease in 1872, at the time of the visit to this country by the Iwakura Mission. The IoD is planning to celebrate the 150th anniversary of that visit in December. The Iwakura Mission, which spent 122 days in this country studying how we arranged our political, economic and education structures, is better remembered in Japan than in the UK. The Japanese Government were well pleased with the work of the mission and, the same year, 1872, granted us a perpetual lease on the estate for use as a diplomatic mission.  In the words of one very senior Japanese associate of mine, “the premises and the buildings are the symbol of the historic bilateral relations; they are the source of the special and unique status that the British Embassy and the British Government have in the Japanese society.” Even at this late stage, to reverse the FCDO’s misguided decision would make it easier for the UK to maintain and strengthen further the excellent bilateral relationship on which our growing trade, cultural and security relationships depend.

The author is a Vice-chairman of the British-Japanese Parliamentary Group. He managed Kleinwort Benson’s business in Japan for many years and has served as Chairman of The Japan Society, as a Director of the Japan Securities Dealers Association, and as a Senior Adviser to Her Majesty’s Government on Japanese Financial Services.