Foreign and Commonwealth Office: Funding

Baroness Morgan of Ely Excerpts

Tuesday 9th February 2016 Lords Chamber

[Baroness Morgan of Ely (Lab)]

My Lords, I, too, thank the noble Lord, Lord Luce, for putting this issue on to the agenda and for his exposition of his analysis of the situation.

I am sure that for us all the world feels more unpredictable than it has felt in decades. We have terrorism, mass migration, the shift from west to east, and Russia now throwing its weight around again. On top of that, we have the spread of nuclear weapons and the need to tackle cybercrime. We have the challenge of climate change. These are all new challenges, yet what have we seen? A reduction in the Foreign Office budget of 16%. Yes, we should all be happy that we saw only a freeze this year, but that does not make up for the fact that we have seen a 16% cut since 2010. The task of the FCO is substantial, but we spend even less on it than New Zealand does on its foreign affairs ministry. Germany spends almost 50% more than us and, while France has cut its diplomatic effort, its operating budget is still over one-quarter larger than the UK’s. Is it any wonder that we were frozen out of the discussions over the Ukraine crisis and had to watch France and Germany taking the lead?

It is a shame that we have seen such a substantial shift in the responsibility of our embassies, so that today they are so focused on promoting exports. For every minute spent on promoting British exports, less time is spent developing an in-depth understanding of the country. The LSE Diplomacy Commission recently noted that, to make the FCO more effective, part of the solution lies in preventing UK foreign policy from prioritising commercial diplomacy above all else. The licensing of strategic arms exports is a particular case in point: in Egypt, British foreign policy is delivering development and governance assistance on the one hand while supplying arms on the other.

We should not underestimate the damage that leaving the EU would make to Britain’s ability to influence events and policies on the global stage. We could no longer count on the EU to represent us in many countries around the world and we would have to negotiate a whole raft of our own trade agreements. In theory, this would be the responsibility of the Department for Business, Innovation and Skills, but the fact is that we have no skills whatever to negotiate trade deals in this country; we have not needed to do so for over 40 years. Undoubtedly the Department for Business, Innovation and Skills would have to rely on Foreign Office expertise and there would be great pressure to redirect resources from the FCO to BIS.

Traditionally, the FCO has been the Rolls-Royce of the Civil Service machine. Its strength has a direct bearing on our position and influence in the world. We cannot let the service erode any further.