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Whitehall’s institutional memory gap

Brexit will be a process not an event

By Sue Cameron  

© Chris Ratcliffe/Bloomberg via Getty Images

Find Prospect’s full report, “Brexit Britain: the trade challenge,” here

There is growing anxiety in Whitehall about whether the government can assemble enough trade experts to negotiate a successful Brexit, a project described as the greatest challenge to face the civil service in peacetime. On the surface, recruitment is moving ahead but behind the scenes difficulties are emerging.

It is more than 40 years since we had our own cadre of specialist trade negotiators and there is a huge gap in Whitehall’s institutional memory. If the past is problematic, so is the lack of planning for a Brexit future. David Cameron banned it, but as one Whitehall knight remarked: “What kind of an excuse was that? The civil service should have had a deeply secret bunker under the Cabinet Office to do contingency planning, in a deniable way of course, and the potential shortage of trade negotiators should have been identified a year or two out.”

The bitter legacy of the referendum campaign is also a handicap, with reports that some experts on Europe are being side-lined because they were Remainers. “We are patriotic and if asked for advice we would be loyal,” said one dismayed mandarin. Then there is the Liam Fox problem.

Fox, a passionate Brexiteer, heads the new International Trade Department, which has taken over staff from UK Trade and Investment (UKTI). Insiders say he is so poorly rated in Whitehall that top officials in other Departments are reluctant to work for him. His dismissal of British exporters as “fat and lazy” has not helped. Nor has his decision to look abroad for a new top civil servant to replace Martin Donnelly, his acting permanent secretary.

So are there any crumbs of comfort? Can Whitehall salvage anything from its past? Yes. Nicholas, now Lord, Macpherson, former head of the Treasury, told Civil Service World:

“The longer I worked in the civil service, the more conscious I became that history repeats itself. The Treasury’s files contain a lot of relevant information but it’s extraordinary how often officials tend to develop policy from first principles rather than going back and getting a deeper understanding of why we are where we are now and what has informed the development of policy.”

During the 2008 crash, Treasury officials studied the International Monetary Fund crisis of 1976. Other government departments have long valued lessons from the past, including the Cabinet Office and the Foreign Office, whose history service was revamped in 2012. Meanwhile the Treasury has gone into partnership with Kings College, London, to create a group whose aim is to strengthen Whitehall’s institutional memory. Macpherson is a visiting professor there.

“Whitehall is already hiring from the private sector, particularly lawyers and consultants, but at eye-watering fees of up to £5,000 a day”

When it comes to recruitment, several skills are required. The UK has experts on trade policy and those, like former UKTI staff, who know about trade promotion. It is the people who can hammer out the details of trade agreements that are in short supply. It is complex work and negotiators need to know literally thousands of tariffs. Get one line of a deal “wrong” and it can mean major job losses at home. Whitehall is already hiring from the private sector, particularly lawyers and consultants, but at eye-watering fees of up to £5,000 a day.

Departments are also looking to countries like Australia or Canada, which have hundreds of trade negotiators, but that raises questions of loyalty. How far could they be trusted to negotiate on behalf of the UK? On the other hand, such countries have an institutional memory of trade negotiations; a dialogue with them about how to develop UK expertise would be fruitful.

No trade agreements can be signed until we have left the EU—not only is that the rule but other governments will be reluctant to negotiate details until the terms of the UK/EU divorce are settled. So we will have at least two years to build a UK team.

Whitehall insiders say non-tariff barriers will be more of a constraint on UK exporters than duties. “Our lorries could be queuing at every frontier in Europe, just like the Albanians,” said one senior official grimly. “There’ll be customs officials asking, ‘how do we know these goods are British-made? Where are your certificates of origin? We’ll need certificates for all component parts of your product before we can let you through… and where’s the paperwork proving your goods meet EU standards?’”

Avoiding such Kafka-esque nightmares will depend on what access Britain has to the single market. Yet so far ministers cannot agree on this among themselves. It is not a happy start. Brexit will be a process not an event, one requiring hugely skilled negotiation. The history of trade agreements shows that the process is likely to take decades rather than years.

 


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On the 17th of January 2017, Prospect hosted a roundtable discussion with the contributors to: Brexit Britain: the trade challenge. This report is designed to act as a guide for parliamentarians, officials and businesses with a stake in the UK’s changing relationship with the world following Brexit. The discussion was chaired by Tom Clark, Editor of Prospect. Participants included Tasmina Ahmed-Sheikh MP, Miriam González and Vicky Pryce.  

To find out more about how you can become involved in Prospect’s Trade Challenge programme, please contact david.tl@prospect-magazine.co.uk

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