America was meant to be Britain’s route to the sunlit uplands of Brexit. Then, after hopes of a free trade deal evaporated, successive Conservative governments have set their sights lower, by trying to forge closer ties with individual US states.
Now the civil servants responsible for delivering those state-level deals have been let go, in what a furious British businessman described as “an act of arson”.
More than one-sixth of trade posts within British consulates in the US have been axed, with 24 people losing their jobs and other vacancies left unfilled, out of 150 posts. The decision was taken barely two weeks before Rishi Sunak called the general election.
Many of the trade teams, based in the nine consulates across the US, had worked on trade pacts with Kemi Badenoch, the business and trade secretary, jetting around America to sign memorandums of understanding with governors of states including Florida, Indiana and Oklahoma.
But more importantly, according to British business leaders in the US, the regional trade directors and their staff had decades of experience and had built up contacts with American businesses from Google and Meta to the heads of Hollywood studios.
Jules Ehrhardt, a designer and investor, said there was “outrage and disbelief in the British business community” at the decision.
“They are tossing out collective centuries of relational and institutional knowledge core to the UK-US trading relationship,” he said. Ehrhardt moved to the US in 2012 to open the American arm of Ustwo, a digital design studio behind award-winning games such as Monument Valley, and worked with Google, Nike and Twitter, before founding a venture capital firm, FKTRY.
He said the consulate directors had “served as the connective tissue” between British and American business leaders, making introductions, giving advice and lending their expertise. “We shot ourselves in both feet by undermining Britain’s ‘gateway to Europe’ status for American companies following Brexit, and were told to go west, and now we’ve self-elected a lobotomy,” Ehrhardt said.
“This [is an] act of arson in the final stages of this government. We claim it is a special relationship, yet remove our people at the very heart of it.”
Allan Rooney, founder of Rooney Law, which has helped more than 300 companies from the UK, Ireland and Australia enter the US market, said the directors were “absolutely critical in building strong and mutually beneficial trade relationships between UK and US businesses”.
“The facilitation of strategic introductions that these directors provide is a massive benefit,” he said. “They plug companies into a market they otherwise don’t know anything about. They familiarise them via trade missions and other methods to support and understand the market and the subtle differences between the UK and the US ‘doing business’ culture. Removing that layer will impact trade relations.
“More than a million Brits are employed by American businesses – I can’t think of a more important trade relationship post-Brexit. It’s critical. And I think the removal of a very large swathe of intellectual capital and institutional knowledge is potentially worrisome. It could strain the trade teams who are already short on resources.”
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Another US-based British business executive said that there was very little stability in the UK’s consulates because they were usually staffed by Foreign & Commonwealth Office officials who stayed in the US for two- or three-year periods. “It’s a constant revolving door,” the executive said. “Those are the people we lean on.”
William Bain, head of trade policy at the British Chambers of Commerce, said: “If we want to grow our economy then we need to boost trade, so it’s a concern if cuts are being made to the team supporting key export sectors in the US, our second largest trading partner.
“We need to scale up, not slash, our support for companies seeking to enter or raise market share in the US. This is especially true as we hope to see deals on critical minerals and digital trade reached with the US federal government in the next year or so.”
Boris Johnson, Liam Fox and other Brexiters had hoped that signing a trade deal with the US would provide economic growth for the UK, but Johnson failed to persuade either Donald Trump or Joe Biden. Last June, Rishi Sunak signed an “Atlantic declaration” with Biden which allowed UK firms access to some US subsidies.
State-level deals have seen some recognition of British professional qualifications and removed some regulatory barriers.
A UK government spokesperson said: “The UK’s trade and investment teams in America are fully focused on furthering UK interests in the US, driving investment and strengthening our trading relationship with our closest ally. We continually keep our structures under review to ensure they deliver maximum impact for the UK, ensure the highest quality service to businesses, while offering taxpayers the very best value for money.”