The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, like other noble Lords, I begin by warmly congratulating the noble Lord, Lord Hannay, on initiating this interesting debate. He has enormous experience from his previous profession as one of our country’s leading diplomats. I also extend warm congratulations to the noble Lord, Lord Monks, on his maiden speech. He brought to our Chamber his vast experience in matters of organised labour and unions and tactfully applied that experience to the world of diplomacy in a kind and understanding way.
I shall start my comments in the limited time available by concentrating on the people, the diplomats. I start by paying tribute to the work of all our diplomats overseas and at home and our locally engaged staff, who number about 10,000 overseas in FCO posts worldwide. A third of UK-based diplomats working overseas are in hardship posts, and this debate comes only a few days before the seventh anniversary of the Istanbul bombing on 15 November 2003 when 11 colleagues lost their lives in the service of our country. As recent events in countries such as Yemen or Iceland have shown, those working on Britain’s behalf continue to do so in the face of terrorist threats as well as of natural disasters. This creates extremely difficult conditions, as noble Lords have been good enough to recognise. The safety of all our staff is paramount, and our spending settlement, which I shall come to in some detail in a moment, will allow us to invest sufficiently in our overseas estate and in the security and safety of the staff. We continue to seek to upgrade our posts to meet modern-day threats, particularly in high security environments. We expect to complete all outstanding high- and medium-risk security projects by the end of this year, and our spending-round settlement, as I shall explain, contains adequate provision to allow us to continue this work over the next few years.
I apologise if I am putting excessive emphasis on the threat from terrorism, but it is very serious. The threat arises because terrorists are empowered with new weapons technologies, as well as emanating from other non-state groups and cells. It represents the biggest danger to the safety of our staff today. The number of posts where we assess the terrorist threat to be critical or severe has increased threefold since 2006. The nature of the terrorist threat is constantly changing and indiscriminate, as we saw in the two attacks on our staff in Yemen earlier this year. Fortunately, our security procedures worked in both cases and there were no casualties. However, it is not just Yemen, as although it is the latest place where our staff face a high threat to their personal safety, there are also acute terrorist threats posed in other locations such as Iraq, Afghanistan and Pakistan. Moreover, the threat of violent crime on top of terrorism is also serious and growing. Over recent months, several of our staff and their families have been the victims of armed robberies. Overall, our diplomatic network is operating today with much higher threats to the personal safety of its staff. It is a testament to them and their families’ resilience that staff are ready to live and work with these risks. I wanted to put that on the record right at the beginning of my remarks in closing the debate.
I turn now to our objectives, which rightly have been discussed by a number of noble Lords on both sides of the House. The Government understand that to promote and safeguard Britain’s priorities, we must have a firm picture of what we want to achieve in a very fast-changing world. We must properly resource our diplomatic effort to make this vision a reality, and have a clear understanding of our national priorities and positioning in today’s global order that goes hand in hand with our internal sense of unity and purpose inside this nation. I have no doubts about that at all.
From the outset, this Government have brought a strategic basis to our overseas relations. The National Security Council was established as a centre of decision making on all international and national security issues. It oversaw the development of the National Security Strategy and the Strategic Defence and Security Review which, taken together, cement the position of the Foreign and Commonwealth Office at the centre of delivering the Government’s international priorities. The FCO played a lead role in setting the context for the National Security Strategy through its work on the changing threats and opportunities that the UK faces, and ensuring that the capabilities and structures set out in the Strategic Defence and Security Review were fit for the purposes required. I can tell your Lordships that the FCO will be instrumental in taking forward the strategic defence and security goals of tackling threats at source, bringing all of the UK Government’s influence to bear in order to achieve our objectives both at home and overseas, and working more closely with our key allies and partners, both old and new. The FCO will give the lead that allows foreign policy to be supported by other government departments.
As we have heard in the debate from the noble Baroness, the high-level foreign policy priorities have a lasting and enduring continuity. As she rightly says, they are to safeguard Britain’s security, to build Britain’s prosperity and to provide—which we will do—full and effective consular support to British nationals around the world. Those are the overarching objectives, and within them I want to discuss various policy issues.
First, however, I turn to the spending settlement itself and how it fits in with those overarching and broad objectives. After a lot of pessimism in the press and elsewhere about cuts at the Foreign Office and so on, the settlement we have secured is an extremely good one. Like everyone else, of course, we have to take our share of the austerity package because of the overriding need to cope with the budget deficit that certain people left behind that we have to clear up. That is our problem and we have to grapple with it.
The noble Lord, Lord Anderson, seems to have got the wrong end of the stick on this matter. The net outcome is not a 24 per cent cut but a 10 per cent cut in real-terms spread over four years—2.5 per cent a year. It works out as a flat cash settlement which, given some of the difficulties that have to be faced, is not a dramatic change. It gets better than that: we have secured the restoration of the foreign currency protection mechanism and we will move the BBC’s World Service funding over to the BBC in 18 months’ to two years’ time, which will take 14 per cent off our budget expenditure straightaway.
Lord Anderson of Swansea
Will the flat cash settlement to which the Minister referred lead to a 10 per cent cut in Foreign Service personnel over the period until 2014?
Lord Howell of Guildford
I do not know where the noble Lord gets that figure from. I shall talk in a moment about personnel, but what he has said does not fit with what I am about to say.
What I have said means two things. First, we are reversing the previous Government’s disastrous decision to abandon the foreign exchange protection which wiped overnight 10 per cent off FCO budgets—it was an appalling decision. We now have a major boost, with the restoration of that mechanism freeing us from exchange rate gyrations. I hope that the shadow Secretary of State in the other place, who was a Treasury Minister at the time of that terrible decision, now welcomes what we have done to put it right.
Secondly, the BBC World Service move will enhance its independence—I agree with the noble Lord, Lord Hannay, about that—and it gives the BBC, at the same time, a flat-rate licence fee. The objectives will still be set by the Foreign Secretary and his approval will be required for any language service closures. The BBC has given solid guarantees that it will safeguard the World Service and I am quite sure that will be done. Your Lordships raised worries about this issue, but the position is absolutely secured.
That is the story of our comprehensive spending review outcome and it does not match some of the gloom that has been perpetrated all around. Indeed, there is still more good news to come because, in addition, our budget is being reinforced by new funding from the Treasury—I emphasise from the Treasury—which recognises the increased development work that we are now promoting in line with OECD rules. It does not come from DfID; we are not draining funds from the increased DfID budget, which is very large. It is a subvention which for us, on our scale of expenditure, is of a very pleasant kind, to match the increased development work which is undertaken in the Foreign and Commonwealth Office.
Several noble Lords raised the issue of posts, closures and postings around the country. In the coming weeks we will take strategic decisions on how to live within the settlement I have described. They will not lead to the kind of conclusion the noble Lord, Lord Anderson, has suggested. Our decisions—including on what we do, what activity we stop or scale back and whether our network of posts adequately meets the new realities—will be taken; none has been taken yet. I concede that this might mean closing some subordinate posts and consolidating in some capitals. Equally, in emerging markets or countries critical to UK security, it might mean opening new posts. We need a global diplomatic network to help bring the UK economy back to long-term health. The skills and expertise of our staff are vital to delivering active diplomacy. The settlement will allow us to invest in our staff, create a renewed focus on international policy and high-priority languages, and ensure that our diplomats are economic ambassadors for Britain, as all your Lordships wish them to be. The noble Lord, Lord Lea of Crondall, asked for total staff figures. There are approximately 4,500 UK staff working at home and abroad, and 10,000 local staff, all overseas.
I turn to the other theme which ran through your Lordships’ debate: soft power; that is, the capability required to match the hard-power resources that we have to maintain as a nation. We have provided the means to resource properly our diplomatic work. However, that was not the only part of the Question of the noble Lord, Lord Hannay. He also called on the Government to ensure that our diplomacy would be active. We will certainly be so in the security, conflict prevention and peacekeeping fields. If we accept, as I certainly do, the notion that our prosperity provides the foundation for our power, we must seize the openings available to us. This means developing much deeper links with key centres of influence such as Japan, South Korea, Malaysia, South Africa, Brazil, Turkey, the Gulf States and particularly, as the Foreign Secretary and the Prime Minister have made clear several times, China and India.
China may be the new giant market, and one must not forget that Japan is often seen as our best and most reliable friend in Asia, but perhaps the best gateway to the great new markets of the world is the network that is the modern Commonwealth, as my noble friend Lord Sheikh rightly pointed to. Today’s Commonwealth embraces at least six of the world’s fastest growing economies and markets, providing access to emerging powers where wealth is accumulating and purchasing power soaring. Stretching across continents and faiths, and covering almost 2 billion citizens, it is a soft-power network par excellence which Britain needs to serve our interests in, and give us access to, the new global landscape—obviously, that is a matter of great interest to me personally.
Deepening our links with these countries will have multiple benefits for British citizens. We accept that diplomacy is no longer just a government-to-government business. We must and will engage all sectors of society as well as multilateral and regional bodies. Links forged through trade, education—my noble friend Lord Bates pointed to scholarships—culture, sport, science and an active global diplomatic network will help not only to secure our economic future but to guarantee our future peace and stability.
Where combined EU action works best, we will use it to the full—the noble Lord, Lord Hannay, made a very good point here. We see the European External Action Service as a useful additional tool for our common purposes in key areas, lightening and assisting our nationally resourced activities. My noble friend Lady Falkner made the same point.
Both the British Council and BBC World Service—on which I have touched already—will remain fundamentally important parts of Britain’s presence in the world.
All parts of the FCO family will have to contribute to the cuts in public spending. I am quite clear that they will have to face budget restraints. Details have already been published. The British Council plays an important role in helping spread the UK's culture and values, and its charitable status and ability to raise a significant part of its budget through commercial and full-cost recovery activities give it independence from HMG’s policies. I was enormously impressed the other day in Kuala Lumpur to see how the British Council runs its programmes, including intercultural dialogue and promoting the UK's creative and knowledge economy, which supports our foreign policy objectives. The settlement that we have secured protects that fully.
In the face of great uncertainties and novel challenges, we need to deploy this nation's talents and resources with new agility and skill.
Lord Patel of Blackburn
The Minister has not commented on the issue of the hajj.
Lord Howell of Guildford
I can give the noble Lord a comment on the hajj and will certainly do so, but it will take the last of my precious minutes.
When the hajj delegation was first conceived, local Saudi medical facilities were not of a standard that we would like to see. Since then, this situation has changed significantly. In the light of that, the Foreign and Commonwealth Office conducted an objective review of the delegation's medical element. The number of people treated for minor ailments was 5,967 in 2007, 2,965 in 2008 and 254 in 2009. I hope that helps my noble friend.
We will pave the way into emerging markets to ensure Britain’s prosperity and our security. We will deepen our engagement with the rising powers and wealth centres and the great new markets of the modern and transforming world. We will steadily uphold our belief in human rights, political freedom, open trade and poverty reduction wherever we can. To reply to the noble Baroness, Lady Symons, I see no conflict between that commitment and the commitment to our access into markets and our new commercial drive.
People say that the age of the Atlantic and the West is passing, but our own age certainly is not so far as the UK is concerned. On the contrary, I see huge new possibilities for this nation as the pattern of world power and wealth shifts. We will move forward on to this new stage by working more closely with our partners across the world, because that is good for our own national interest and for all our citizens. I am confident that the spending settlement set out for the four years ahead enables our diplomatic community, despite all the challenges it faces, to play a full and highly effective part in this national strategy. I believe that we can have a resourced and active diplomacy of the sort that the noble Lord, Lord Hannay, has wisely called for and we can do it with great effect.