By Matt.Ross

08 Aug 2012

For Foreign Office chief Simon Fraser, his relationships around Whitehall are as crucial as those with Washington. His main mission is to increase trade, he tells Matt Ross, and that means working with a host of other departments

Footsteps echo around the long, imposing corridors of the Foreign Office as our little group searches out a good spot to photograph the department’s permanent secretary, Simon Fraser. Though the grandeur of George Gilbert Scott’s Italianate ministry is rather faded these days – it probably houses many more mice than civil servants – there are plenty of impressive backdrops to be found. Yet the glittering State Stair has been commandeered for a photoshoot by a fashion magazine, and the sunlight in the spacious quadrant is too bright for good portraits. Then Fraser points to a corner of the cavernous entrance hall, where light falls through a window onto a bust of an elderly, round-faced gent. “How about a picture with Bevin?” he says.

It’s a good choice, for there are uncanny parallels between the overseas challenges facing the UK today and those with which Ernest Bevin wrestled during his post-war stint as foreign secretary. Then, Britain was close to bankruptcy, with a huge national debt: the government’s solution was a period of austerity, and a drive to boost exports. Meanwhile Europe was in dire straits, there was tumult in the Middle East, relations with Moscow were difficult, we were slowly extricating ourselves from military commitments overseas, global institutions were in need of a major overhaul, and we were hosting an Olympic Games. The foreign secretary himself was a self-made man and skilled orator with a strong regional accent: a passionate Atlanticist who wanted to invest in an independent nuclear deterrent.

All this is, of course, equally true today – plus ça change, plus c’est la même chose – but in modern times we also face new risks such as climate change, nuclear proliferation and terrorism. The full list makes for a weighty set of problems and dangers, and last year current foreign secretary William Hague made clear that the FCO must change: under Labour, he argued, it had become too reactive and bureaucratic, lost influence and allies around Whitehall, and allowed its skills, finances and consular network to weaken.

As a first step, the foreign office resolved to be more ambitious: an April strategy paper acknowledges that its “policies need to be bolder, more imaginative, and take on the strategic challenges around the globe” – and Fraser argues the FCO has indeed become much more proactive. “Look at what we’ve been doing in the last year: Libya, our role in the Middle East, the conferences we’ve run on Somalia, on cybersecurity. There are whole areas where we’ve been quite ambitious in taking a lead,” he says. “Just managing events is not enough; we want to make a difference.”

Foreign bodies
Fraser’s views on our role in international organisations illustrate this approach. While Bevin signed a military pact with France and helped to found NATO, it might be easy now for Britain to sit back and enjoy what Fraser admits is our “privileged” position in bodies such as the UN. But this, he believes, is not sustainable. “We have lots of countries like China, India, Brazil and others, whose power economically is growing; and that hasn’t yet been fully reflected in the growth of their international political power. They probably don’t feel that the existing institutions of global governance fully reflect their aspirations,” he points out. “The G20 is a new quasi-institution which has evolved in response to that change, but this is an ongoing process.”

The UK, says Fraser, must help create “a system in which the players of the future feel they have a voice. It’s in our interests to participate in that process” – and until these reforms are complete “people will have less confidence in using those institutions,” he suggests. Must those changes weaken the UK’s role? “Not necessarily,” he replies. “Our influence in those institutions will depend on how creative and active we are,” as well as soft levers such as the English language.

In Europe, Fraser admits, it’s currently difficult to actively pursue UK interests: we need the eurozone to succeed, but as non-members we have limited influence. “It does raise the question of how we’re able to best ensure our own interests within the EU,” he says. The Olympics offer safer ground: “It is incredibly important in our foreign policy – as indeed the Jubilee was – because these are major moments when we project Britain to the world,” he comments, adding that the arrival of 120-odd heads of state presents both a “major logistical question” and the opportunity to create a “massive reputational knock-on effect.”

Also high on the FCO’s priorities list are Syria, Afghanistan, Iran, the Falklands, and relations with Russia and the USA, alongside an over-arching focus on boosting exports – of which more later. And to make progress in tackling all these complex, intractable problems, the Foreign Office needs plenty of influence both in Number 10 and across Whitehall. Hague argued that the FCO had become dominated by the PM’s office, and Fraser rather reluctantly admits that “a number of people feel that over a period of time the Foreign Office perhaps had lost some of its influence in government, which had been taken more into Number 10”.

Let’s get together
Furthermore, while partnership working between the FCO, the Department for International Development (DfID) and the Ministry of Defence has been improving for some years, Hague identified what he called “dysfunction and rivalry” in their relationships. “There was rivalry between departments, and there was of course an example in the relationship between the FCO and DfID, which has been quite difficult at times; not easy,” Fraser says. “We are absolutely determined to break through that, because the Foreign Office is quite a small department in terms of the number of people it has – and there are other departments that have real expertise in areas of policy that really matter internationally.” Fraser’s organisation, light on people and resources, needs the help of departments such as those for international development, energy and climate change, business, defence and education in order to achieve its aims, he says, and “one of the key culture points is about breaking down the distinction between foreign policy and domestic policy, because foreign policy has to service domestic policy objectives.”

Fraser must work more closely with domestic departments, in part, because one of his key aims has its roots firmly in British soil: “If you were to ask me what’s the single most important foreign policy objective at the moment, I’d say it’s contributing to the growth of jobs,” he says. “We do that through trade promotion; encouraging inward investment; building political relationships that enable us to pursue that agenda.” Britain’s universities and health service, he believes, could do a lot for our overseas image and income: this isn’t just about touting UK manufactured goods abroad.

The FCO chief is well-placed to support both more cross-Whitehall collaboration, and efforts to boost trade. He used to work for Peter Mandelson in his role as a European trade commissioner, and Fraser’s last job was as the business department’s permanent secretary: “Most of my policy career in recent years has been on economic, trade-related and European aspects of diplomacy,” he notes. On the collaboration side, he points out that he’s the first FCO perm sec to have run one of the home departments, and also undertook a long stint at the European Commission. “I’ve had a slightly different career path from most of my predecessors,” he says. “I have a different skill set and range of experience. The key thing that comes out of that is that it enables me to straddle a bit more effectively, I hope, the diplomatic service and the FCO [on the one side] and the home civil service and the home departments. I think that’s important.”

As a symbol of his desire to close the traditional gap between the FCO and the home departments, Fraser emphasises that “we want to be part of” the current set of civil service reforms, “and we’re participating in the process. Although there are some aspects of our work – the international network, for example, and our high security work – which we have to protect, our basic attitude is to participate as much as we can”.

And looking inwards
As well as working more closely with its peers, the FCO also needs to improve its diplomatic, economic and language skills, while Hague has argued that “the pendulum had swung too far in recent years away from policymaking expertise and towards cumbersome bureaucracy”. Fraser resists this latter point: “There has been some criticism saying that the Foreign Office has abandoned its traditional skills and become too managerial, and I don’t subscribe to that view – but I accept that we have to focus on developing those skills” he says. More money is going into language training, and the FCO is working hard to improve its workforce’s economic and commercial awareness (see box). This isn’t about replicating UK Trade & Investment’s role in “transactional trade and promotion work”, he adds, but improving consular staff’s understanding of how to help UK businesses find markets overseas, and how to embed trade objectives more firmly into foreign policy aims. “Commercial and economic diplomacy is an integral part of broader foreign policy and our understanding of what we’re here to do,” he says.

Over time, the FCO’s overseas network will evolve to reflect our changing economic priorities – so “we’ve increased our effort and energy in Latin America, China and India,” he explains. “We’re sending more people and opening new posts, trying to build the political and people contacts which will give companies confidence to go there and help us to defuse political issues”.

Much of this work is integrated into the FCO’s major change programme, Diplomatic Excellence. Built around the three strands of “policy, people and network”, the programme’s delivery – in contrast to the approach taken by many departments – has been devolved to local managers: Fraser argues that “reform and improvement and change should be something that’s done through the culture of the organisation: it’s got to be in people’s minds and hearts that they want to do it. And my feeling is that if you have it set aside as the responsibility of a particular unit, that doesn’t engage people; they don’t feel it’s their initiative and their responsibility. So I wanted to mainstream it across the whole organisation – and it’s true, it took a bit of time for that approach to be more widely understood. Maybe I could have communicated it more effectively. But if my approach works, over time I think it will be more strategic in terms of changing the whole body language, mindset and aspiration of the organisation and giving us a shared vision.”

On cash and congratulations
In part, that shared vision has to be of a cheaper FCO. “In our administrative budgets we’ve got a saving of about a seventh of our disposable spending over this spending round: £100m,” Fraser notes. The shift to hiring more local employees – who are less pricey than Brits posted overseas – has worried the foreign affairs select committee, but the permanent secretary is firm that “our local staff bring a huge amount to our support functions overseas, and also to some of our policy functions.” On the ambitious property savings that the Treasury wants to see, he’s less radical: the FCO must keep many of its “big, high-profile assets” to maintain the right image overseas, he says, and can only move towards co-location as and when other departments are ready. If the Foreign Office wants to release enough money to upgrade its technologies and its networks in emerging economies, though, the axe will have to fall somewhere: the Treasury is insisting that most of its investment is funded by asset disposals. “If we’reto achieve some of the things we need to do, we’re going to have some pretty demanding targets,” says Fraser.

This is, then, a difficult time in the Foreign Office. In that context, is it helpful to have unnamed ministers attacking the civil service in the newspapers? “I think it’s important, and that we’re most effective, when there’s a supportive mutual respect between ministers and civil servants in both directions,” Fraser replies. “And in this department we have a very strong relationship between the foreign secretary and the official leadership, and he gives us tremendous support as an organisation.” That support, he adds, is “really important in terms of creating a positive environment and helping sustain morale in circumstances which are otherwise not easy.”

To be fair, that last comment contains a generous dollop of British understatement. “We’ve had to close six embassies this year because of the threat to our staff,” Fraser points out. “We recently had an RPG attack on the ambassador in Libya. We have people in Iraq and Afghanistan living in containers.” The life of a diplomat certainly isn’t all waltzes, bow ties and Ferrero Rocher.

On the other hand, the FCO doesn’t get everything right, and isn’t known for being humble or self-critical: do Foreign Office staff sometimes give themselves a little too much praise? After all, its handling of the uprisings in Egypt and Libya had black spots as well as highlights, but CSW has only heard FCO staff congratulating themselves on their work there.

No, Fraser replies: the FCO does do self-criticism. “This is an old and proud institution, and it should be – but I think the fact that we’re challenging ourselves on our aspiration to get better in terms of policy and management means we’re constantly striving for improvement,” he argues. “And I don’t think we have a culture of self-congratulation, but I do think it’s important to recognise your achievements and what people do for you. A lot of our people are working around the world in difficult and often dangerous circumstances, and they quite often get criticised in the media but they rarely get praised. I think we should recognise people’s contribution, without going over the line into self-congratulation and self-satisfaction.”

Anyway, he says, the FCO did see the Arab Spring coming: it “had predicted up to ten years ago that change was going to come in the Middle East, that the status quo was not sustainable. What we didn’t predict was exactly how it would be triggered.” Errors were made during the airlift evacuation from Tripoli, Fraser admits, but “we learned a lot of lessons around consular response through that crisis.” Changes have been made since to the FCO’s “rapid deployment capabilities; to the way we register citizens; to introduce more formal triggering mechanisms for decisions about evacuations; to double the capacity of our emergency unit.”

Back in 1945, Bevin’s Britain faced challenges of near-existential proportions: there was no guarantee that the UK would see off the Soviet Union, extricate itself from the Middle East and its colonies without fighting long wars, witness the reconstruction of Europe, help develop effective international institutions, build a nuclear deterrent, run a successful Olympics and pay off its vast debts. Over time, though, all these things came to pass – and the Foreign Office certainly played its part in getting those results. This is an organisation which, while preserving many strong traditions, is working hard to keep abreast of a world that’s changing at incredible speed. And it wouldn’t be able to do that, Fraser argues, if it didn’t challenge itself to do better every step of the way. Just look at our operations in Libya, he says: “I’d say we took the credit for what we’d done well, and learned lessons about the things we could have done better. And that, I think, is the right culture to have.”

The business of diplomacy: how the FCO is improving its economic skills
The Foreign Office’s drive to improve its economic and commercial diplomacy is built around training and placements, Fraser explains. “We’ve trained over 300 staff this year in commercial awareness, and put 200 staff through training in economics,” he says. “When we talk about trade we tend to focus on goods, but trade in services and inward investment is equally important.” This commercial awareness course has so far been provided for London staff, the FCO’s head of commercial and economic diplomacy Edward Barker told a House of Lords Committee last month, but “we plan to deliver that same training package around our networks, our regional training centres.” There is also now a “private sector mentor for new entrants to the Foreign Office,” Barker added.

The objective, Fraser explains, is to equip FCO staff with the skills and knowledge to carry out analytical and communications work that helps business understand how to operate in a country, and to “address policy issues that are inhibiting trade, like market access.” And what if other issues threaten our ability to promote British business, in the same way that the argument over the Falklands is threatening UK trade across South America? “That is where you have to use your foreign policy work to support your broader objectives,” he replies. “In that case, we’ve increased our effort and energy in Latin America; we’ve opened some new posts there, for example. Our job is to try to create the political environment in which trade and economic flows can go ahead.”

Meanwhile, top diplomats are being sent on one-week placements with UK companies, in a bid to improve their understanding of the world of business. “Our ambition is that all our heads of mission – certainly the more senior ones – should go on business attachments before they go out on post, and we’ve been writing to major companies asking them to get involved in a scheme to do that,” says Fraser. An FCO spokeswoman explains that these placements have been running since last November. “Heads of mission who have completed placements have consistently reported that the placement provided the opportunity to understand what business wants, and underlined how they can help and what would really deliver impact to British trade,” she says.

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