Press play to listen to this article
Voice by artificial intelligence.
London – and so the first era of global Britain ended – not with Johnsonian bluster, but with Sunakian discretion.
Rishi Sunak’s decision to merge the trade and business departments is a clear departure from Boris Johnson’s post-Brexit policymaking, and confirms what has been clear to observers for months – that the current UK prime minister is not prioritizing major new trade deals.
Instead, Sunak is pursuing less sexy goals, such as boosting exports and boosting inward foreign direct investment, and hopes his Whitehall merger will better align those goals with Britain’s broader business policy.
It’s a far cry from the slick attempt by Johnson and his trade secretary Liz Truss—who briefly succeeded him as prime minister—to use the now-defunct Department for International Trade (DIT) as a way to sell “Brand Britain” around the world. And secure post-Brexit PR wins.
“Lease Truss thought trade was a trade deal, which it’s not,” said a former UK trade minister, speaking anonymously. While title-grabbing deals are certainly worth exploring, the same person said, less “glamorous” tasks such as tackling trade barriers are “much more important.”
“[Business and Trade Secretary] Kimmy Badenoch got it, where Liz Truss didn’t,” added the former minister. Badenoch’s newly expanded Whitehall empire is unlikely to hurt his popularity among the Conservative grassroots, with whom he is already a firm favourite.
The move to scrap DIT came as part of a wider shake-up in Whitehall on Tuesday by Sunak, who, in addition to dismantling the dedicated trade department, is setting up a ministry focused on energy and another with an eye on technology. Science.
Initial reaction to the Whitehall overhaul has been largely positive – although some are questioning whether it will eat up valuable government time at a time when Sunak has nothing to waste.
A sitting business and commerce minister, also speaking on condition of anonymity, said it “makes sense” in his view to link the trade portfolio more closely with business and industrial strategy.
Creating the DIT was one of then-prime minister Theresa May’s first acts in office after the EU referendum, with the shiny new department – which swallowed the existing UK Trade and Investment wing of the Business Ministry – created just a day after she moved into No 10 Downing Street in July 2016. It has been billed by his government as one of the central pillars of the UK’s efforts to get the most out of Brexit.
The department has certainly had rapid success with copy-and-paste EU trade deals with a long list of foreign countries.
However, many senior figures have questioned the value of the UK’s next newly signed trade deal — including Sunak himself.
He said during last year’s Tory leadership contest that the UK-Australia trade deal was rushed and “one-sided.” Sunak told the rural audience that both the Australian and New Zealand trade deals – which have been criticized by the UK’s farming lobby – conceded too much to agricultural imports in return for too little.
What was once seen as the department’s biggest prize — a U.S. trade deal — has so far eluded successive commerce secretaries and is unlikely to happen in the near future. There is hope in the government that Badenoch will instead seal a deal with India and secure its accession to the 11-nation CPTPP trading bloc this year.
The trade minister quoted above said: “Many trade deals have been done, be it through rollover deals or something new that we have signed. What we need to do now is break down other trade barriers and focus on tariffs and trade remedies, which have sometimes been overlooked.”
Alexander Horne, visiting professor at Durham University and a former Whitehall lawyer, agreed that the “low-hanging fruit” had now gone and said departmental mergers therefore “made sense.”
Farewell to boosterism
Sunak’s political opponents see the shake-up as a clear downgrading of the trade agenda, although Sunak’s official spokesman on Tuesday vehemently denied that. He said it was simply “a recognition that business and commerce naturally go together.”
What is clear, however, is that Sunak sees a different role for his government’s trade policy. With the next general election less than two years away, parliamentary time is short to hammer out new trade deals, and the government’s focus is now largely on domestic policy.
Badenoch is therefore expected to focus on increasing access to British markets abroad by unlocking trade deals in areas including digital and financial services. The Business and Trade Secretary said in a speech last month that one of his top priorities would be to “make the UK the undisputed top investment destination in Europe.”
Marco Forgione, director-general of the Institute of Export and International Trade, said Tuesday’s Whitehall shake-up could help achieve that goal, describing the merger as “an opportunity to better integrate exports into the wider UK growth strategy”.
“The focus needs to be on doing what is best to stimulate growth through international trade,” he argued.
Departmental consolidation may seem overly technical to some in Westminster — and it’s a charge often leveled at a prime minister seen as a technocrat. But they symbolize a key difference between Sunak and gung-ho Johnson.
Johnson was never more comfortable than giving tub-thumping speeches to sell Britain as a buccaneering spring of genius. Sunak seems more likely to immerse himself in the details of world trade and investment patterns.
Through his overhaul of the government machinery, the Prime Minister hopes to put the Johnson era behind him in bluster and boosterism and promote a different vision of Britain around the world.