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Varun Chandra, Sir Keir Starmer’s business adviser, has missed out on the job of Britain’s next ambassador to the US and will instead remain in Downing Street with an expanded role.
Chandra, an architect of recent trade deals with Donald Trump’s administration, was interviewed by Starmer for the Washington job last week but has not been chosen.
“The prime minister decided he was doing a very important job in the UK and in Downing Street, looking after business relations,” said one ally of Starmer.
“The prime minister has decided to give him an expanded role as chief business, investment and trade adviser. In addition he will be an envoy on US trade, maintaining his strong links with the Trump administration.”
The decision will come as a surprise to Chandra’s supporters, although one ally insisted the business adviser was not disappointed and denied he had been ruled out as a result of a Whitehall vetting process.
The contest to replace Lord Peter Mandelson as Britain’s ambassador in Washington has become highly charged, with an announcement expected imminently.
Sir Olly Robbins, permanent secretary at the Foreign, Commonwealth and Development Office, has urged Starmer to appoint a career diplomat to the post rather than another political appointment such as Chandra.
The stakes are high for Starmer after Mandelson, his last political appointment to Washington, was sacked over his relationship with Jeffrey Epstein, the late disgraced financier.
Nigel Casey, Britain’s ambassador to Moscow, entered the fray at the last minute, while Christian Turner, who has been designated as the UK’s representative at the United Nations, is also a candidate.
Both were interviewed by Starmer last week and one senior Whitehall official said the prime minister had been under pressure to go for a “safer” choice from a pool of existing senior diplomats.
“Varun was the frontrunner, but there were forces that wanted to change that,” the official said, identifying Robbins as being behind a rearguard action to promote the candidacy of Casey.
An ally of Robbins insisted his only interest was to present Starmer with a strong list of “appointable candidates”.
Morale at the FCDO is low because of a series of swingeing job cuts being overseen by Robbins and the appointment of Chandra, another non-diplomatic “outsider”, might have caused further unrest.
Another official said: “I would appoint Varun — he has the established relationships, he’s an impact player and speaks business. But I can see a fragile Number 10 going for the safer option and appointing Nigel.”
Robbins and Chandra previously worked at Hakluyt, the advisory firm. Chandra, former managing partner of the company, hired Robbins, Britain’s former Brexit negotiator, to the London-based firm in March 2023.