Liam Fox warned over plan to recruit international trade department chief from outside Britain

"Open, international" hunt for a new official to lead the Brexit-focused trade department may not be plain sailing for the trade secretary, experts tell CSW

By Matt Foster

09 Sep 2016

International trade secretary Liam Fox has been warned that he could face an uphill struggle in his quest to bring in a non-British citizen to head up his new department.

Fox announced this week that he is to look beyond the UK's shores and kick off "an open, international recruitment" process for a new permanent secretary at the Department for International Trade (DIT), which faces the mammoth task of negotiating trade deals with the European Union and the rest of the world once Britain leaves the EU.

But while Fox has said he believes such a hire could help signal that Britain is "open for business" in the wake of the Brexit vote, Whitehall-watchers have already pointed out that bringing in an outsider at the top level of the civil service at a time of pay restraint could be a challenge.

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There are few technical barriers to Fox drafting in a perm sec from overseas, according to the government's official guidance. 

The Civil Service Nationality Rules, drawn up by the Cabinet Office, say that there is a "general statutory prohibition" on the employment of non-British citizens in the organisation, with only "certain very limited exceptions" to that policy.

However, citizens of British Commonwealth countries such as Canada, Australia and New Zealand, as well as citizens of the Republic of Ireland, are not included in that general ban. Swiss nationals and citizens of the European Economic Area are also eligible for some posts.

While many "reserved" jobs – usually those with national security implications, such as in the Foreign Office or Ministry of Defence – are bound by additional nationality restrictions due to the sensitivity of the work they carry out, the rules say that ministers can request a so-called "Aliens' Certificate" allowing them to employ foreign nationals for particular jobs.

Ministers can, the guidance says, appoint a non-UK citizen to a role if "there is no suitably qualified UK national available" or if the the overseas candidate "possesses exceptional qualifications or experience for employment in that post".

Although resource reviews are underway across the civil service to try and plug skills shortages in light of the referendum – and while Fox's statement made clear he believed there was already a "great deal of expertise inside Whitehall departments" – an overseas hire could make sense, according to Jill Rutter of the Institute for Government.

"We haven't really had to do trade policy negotiation on our own since we joined the EU," Rutter pointed out. "So there's nobody sitting in the existing Whitehall structure – unless they've done some time over in the EU Commission – who will have had the sorts of hands-on experience of doing the sort of deals that Liam Fox wants DIT, ultimately, to do."

"The people who have made it from outside to permanent secretary level have tended to come in one level down, at director general level, and then move up" – Jill Rutter, Institute for Government

Rutter said Fox was "clearly" attempting to widen the pool of candidates for the perm sec job "to people who he thinks has that directly relevant experience", with senior staff at the trade departments of Commonwealth countries including Canada, Australia and New Zealand likely to be in the frame. New Zealand has reportedly already offered up senior trade negotiators to the British civil service. 

But, as well as the international dimension to Fox's announcement, Rutter pointed out that it remains rare for any outsider to come straight into the UK civil service at perm sec level, in spite of a drive from ministers in recent years to bring in "big hitters" from the world of business.

"Quite often when you ask a secretary of what they want in a permanent secretary they want someone who's going to win Whitehall battles for them," she said. "And Whitehall is a world you have to get to know and get to operate in. The people who have made it from outside to permanent secretary level have tended to come in one level down, at director general level, and then move up."

There are already some high-profile examples of top officials swapping countries, however. Australian David Pitchford was brought in to oversee the government's major projects portfolio in 2010, while Mark Carney, the governor of Canada's Central Bank, was famously brought in by George Osborne to head up the Bank of England.

"I'm not sure it's the best start for a new minister to tell his staff he doesn't think any of them are good enough to get the top job when it's advertised" – Dave Penman, FDA union

"Mark Carney came in at the top," Rutter said. "But he had done the central bank governor job before. Whitehall is a bit different – the relationship between ministers and civil servants is different in the UK to in Canada, to in Australia, to New Zealand."

Fox's international recruitment process could also be hampered by ongoing civil service pay restraint, Rutter pointed out. "One of the things that particularly interesting about the Australian civil service is that their top drawer staff are paid a lot more than our top drawer staff," she said. "And remember, we've also just had quite a devaluation [of the pound], so our salaries don't look as good in Canadian dollars. There's an interesting question of how much they're prepared to pay."

That view was echoed by Dave Penman – general secretary of the FDA union for senior civil servants – who said Fox's "disappointing" move to widen the search beyond Britain could anger existing officials who may view it as a sign that the minister "doesn't believe the UK civil service has the talent to lead the department in the future".

"I'm not sure it's the best start for a new minister to tell his staff he doesn't think any of them are good enough to get the top job when it's advertised," Penman told CSW

"Fortunately, the civil service operates on a basis of open and fair competition overseen by the independent Civil Service Commission, rather than ministerial whim."

And the FDA chief added: "I suspect there'll also be a reality check for the minister when he discovers that permanent secretaries, despite all of the responsibility and risk that comes with the job, are paid less than half that of equivalent senior roles in private sector."

The new trade department is currently being led by Sir Martin Donnelly, the former head of the business department, on an interim basis. A statement from the government this week said Donnelly would be staying on as a transitional perm sec to "help set up" DIT "over the coming months", with the hunt for a long-term successor due to get underway shortly.

Fox told MPs on Thursday that he did not want DIT, which has absorbed the existing UK Trade and Investment body, to become a "standing army of bureaucrats that would be expensive to the taxpayer".

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