Former UK Ambassador to the US, Lord Kim Darroch, on optimism in the face of economic crisis
The UK’s former Ambassador to the US Lord Kim Darroch has worked with five prime ministers and met presidents. Ahead of his session at CA Summit 2022, he talks to Lysanne Currie about the geopolitical landscape, the coming crisis and why business leaders should shout louder
There’s a famous exchange in Ernest Hemingway’s novel The Sun Also Rises in which one character asks another: “How did you go bankrupt?” “Two ways,” comes the reply. “Gradually, then suddenly.” Lord Kim Darroch cites this quote when asked for his reflections on this July, one of the most extraordinary chapters in British political history, when 57 Tory ministers resigned in a handful of days, leading to the super-fast downfall of the Prime Minister.
“It’s a description of what has happened to Boris Johnson,” Darroch explains. “He was on the slide and in deep trouble for months but it always looked like he might get away with it. It was gradual, and then the ‘Pinchergate’ affair broke and he was gone within 48 hours. It was completely extraordinary.”
Darroch is no stranger to sudden resignations. He famously stepped down from his role as Britain’s Ambassador in Washington DC following the leaking of remarks he made in diplomatic cables about then President Donald Trump, whom he described as “inept and insecure”. (Trump tetchily replied that Darroch was “not liked or well thought of in the US”, perhaps confirming Darroch’s point.)
Whether it is Truss or Sunak, Johnson’s replacement inherits a tough hand. The challenges facing us are huge and multiple. “We’re in the depths of an economic crisis, the likes of which we have not seen since the Winter of Discontent in ’78/79,” warns Darroch. “Britain was the sick man of Europe in the late ’70s and that led to the collapse of the Callaghan government. The current situation is that extreme. And it is going to get worse over the autumn because there will be a huge jump in fuel costs, and interest rates are going to rise because inflation is out of control.”
Darroch, a former National Security Adviser, believes that the war in Ukraine, which has exacerbated many of those problems, will continue into 2023, “including the impact on energy prices and food prices,” he says.
He also cites the post-Brexit Northern Ireland protocol as a key component of the perfect storm facing the incoming PM. “[It] is still unresolved,” he says. “This is a problem that is basically binary: you’ve got to have a border somewhere, either in the Irish Sea or on land between Northern Ireland and the Republic. There isn’t an answer to that – or certainly not one the government has discovered. What is the new Prime Minister going to do about that? Because if you go down Truss’s track, you’ll be into a trade war within months.”
The new leader doesn’t just have a geopolitical and economic crisis to deal with; there’s also the issue of the damage done to political institutions over the past few years. Trust in UK politics is at an all-time low. In this, Britain is not alone: August’s Ipsos Global Trustworthiness Index saw “politicians generally” rated the least trustworthy of 18 categories, scoring just 12%, behind government ministers on 16%. (The list confirms the corrosion of trust more generally, with only doctors, scientists and teachers scoring above 50%.)
“One of the rare self-aware things Johnson said, a few weeks before his fall, was he wasn’t going to undergo a psychological transformation. He was spot-on because he wasn’t capable of controlling himself. Which meant half-truths, and less than half-truths, came to his lips as naturally as breathing,” Darroch says.
“That was his downfall but it has damaged UK politics. It’s absolutely essential we restore truth and trust in politics – any leader has to take those values as an absolute requirement of their behaviour. Otherwise, democracy starts to crumble. It’s that important and that serious.”
Darroch is a crossbench peer, who has worked alongside PMs from both parties, seeing good – and bad – leadership up close. “Thatcher, whether you agreed with her policies or not, was a commanding leader,” he says. “I was in No 10 under Tony Blair’s prime ministership and he was exceptional at the job. I worked for David Cameron as National Security Adviser. I thought for a long time he was a very good Prime Minister, but he was a gambler, and he took one gamble too many… and he lost on the EU referendum.”
So what are the requirements to be a good leader? “Apart from being committed to telling the truth at all times, you need to have both an eye for detail and be strategic,” says Darroch. “Blair was strategic, so was Thatcher: always looking at both the big picture and the global picture and trying to measure policy decisions against longer-term objectives. Both were brilliant, but you also need – and this is what Boris Johnson lacks – an eye for detail and the kind of brain that gets around policy. This enables you to get a grip on what all your ministers are doing across all those Whitehall departments. The willingness to work into the early hours to master the detail of big policy decisions is absolutely critical.”
Darroch says a good leader also needs to be able to get on with people, to command respect and understand the public. “Blair understood the public very well – much better than he understood his own party,” he says. Assembling the best people around you is also key: “I knew Boris Johnson when he was a journalist and worked with him when he was Foreign Secretary; he has many talents but selecting good people to support him isn’t one of them. If you don’t have a high-quality team around you, things will go wrong.”
Politically, America is in a slump, its reputation tarnished, with President Biden struggling and Trump teasing a comeback. “There’s a chance of him coming back,” Darroch nods. “He certainly wants to.” But he cites the congressional hearing into the storming of the Capitol by his supporters as a major obstacle. “He is at risk [of criminal charges],” he says. “The most damaging would be conspiracy to defraud the American electorate. But there is also a conspiracy to interfere in the electoral process. Some of the evidence coming out is compelling and extraordinarily damaging. I’m sure he can’t run if facing criminal charges – but I’m unsure the rules are written down. The worst-case scenario is the Justice Department proceeds with criminal charges, the case is lost, and he’s made a martyr.”
A second factor is the competition, with Ron DeSantis, Governor of Florida, a likely contender for the Republican nomination. “He is the one Trump will be worried about,” says Darroch. “He makes speeches about the future, whereas all Trump ever talks about is how the election was stolen. If I had to put money on it, I’d bet Trump won’t be the candidate in 2024 – he will pull out if he thinks he might lose. He can’t psychologically cope with the humiliation.”
The US is currently a troubled land: GDP shrank 0.9% last quarter, the second straight quarter of negative growth. President Biden has shrugged off talk of a US recession, insisting the path is the right one. “The US economy is still massively vibrant and has a huge amount of energy,” Darroch says. “It will have its ups and downs, but it’s a very strong economy with a strong spirit of entrepreneurialism. What is more questionable for its future is that it is such a divided country, on issues from abortion rights to gun law. It’s like two different countries, and that’s worrying. Can they heal those divisions? You would need a visionary, inspiring leader to bring all sides together. That’s not Joe Biden or Kamala Harris. The interesting one to watch on the Democrat side is California Governor Gavin Newsom.”
Darroch admires Trump’s predecessor, whom he met while National Security Adviser for David Cameron. “In terms of sheer intellect, Obama was as brilliant as I’ve ever seen in a leader,” he says. “Not that many leaders are massive intellects – no one would say Reagan was. Obama was so clever and analytical, but sometimes this led to a very cautious approach. You could argue that his decision not to intervene in Syria has given the country to both radical extremists and Russia. Maybe he was a bit too cautious – although if he was reading he would give me the reasons why I’m wrong! But America must look at what they have got now and wish they could elect him again. They would be in a better place.”
Darroch believes the special relationship will remain, whoever is in the White House or No 10. “Its foundations are in security, defence and intelligence, which are stronger than ever,” he says. “They’re more integrated than they used to be – that’s not just good for us and America, it’s good for the whole global community, because together we tackle international terrorism with more effect than anyone else.
“Second, the cultural relationship is key. The creative industries are among the great growth industries. The UK is exceptionally good at this – our TV, our films, our theatre, our writers, our actors are going to be as important in America in the future as in the past, if not more so. However [nurturing] the relationship depends on the personalities of the leaders, but more importantly our position. We matter most when we are economically successful and influential in Europe, and globally. We are currently less relevant and less important to Americans because of Brexit. We’re still big players in Nato and the UN Security Council, but we need to be economically successful and look stable. I’m confident about the future but we do need to get our act together.”
“Getting our act together” is possibly easier said than done, but Darroch is optimistic, as befits the Chair of Best For Britain. Originally created to campaign against Brexit, its mission is now, he says, “to encourage greater internationalism rather than an immediate push to rejoin the EU. I’m not a fan of Brexit, particularly not the form the government has chosen [outside] the single market and customs union. But now we must look forward and work out how we deliver ‘global Britain’.”
Darroch cites three things we need to do: keep our presence on the global stage, invest in the international network, and “model our values much better”, a point on which he is passionate. “One of the values we’ve always stood up for is respecting the law,” he says. “You just cannot threaten to rewrite parts of an international treaty, which in effect is what the Northern Ireland protocol is. There is barely a lawyer in the country outside the Attorney General who thinks that’s okay. And you can’t ignore our commitments under the international convention on refugees – in my view the Rwanda proposal is not legally sound – or threaten withdrawal from the European Convention on Human Rights when we were one of the authors. We are destroying our reputation.”
The business community has a bigger role to play here, Darroch says: “Things are definitely going to get worse before they get better, but we will come out of it in the next few years. There is still a huge amount of wealth and intellectual capability in the UK. We are world class on science and technology and in culture. We now need to find a way to maximise these strengths while restoring our reputation internationally."
So is Darroch part of the “keep calm and carry on” tribe? “Partly, yes,” he says. “The world is still a much more prosperous place than it was 20, 30, 50 years ago. The war in Ukraine is obviously a terrible thing but there are a lot of people making sure it’s not turning into World War III, thank goodness. I have great respect for the common sense the business community can bring to most policy issues. I don’t think it uses that enough. We’re a great trading nation – people in business understand that instinctively whereas not all politicians do.
“I wish business leaders would exert their influence and authority more. The business voice was largely absent from the Brexit debate – even now it’s too quiet. The Conservative party is meant to be the party for business, but it’s not doing a great job of it at the moment. The business community should be tougher with government. This is a beautiful country, it has a great history and great value. There are things we can do to make things better. Business is where we get our wealth from. We have to remember that.”