Future Diplomatic Network

Lord Hague of Richmond Excerpts

Wednesday 11th May 2011 Commons Chamber

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

With permission, Mr Speaker, I will make a statement on Britain’s future diplomatic network.

Our embassies and high commissions are the essential infrastructure of our country’s influence overseas and of our economic recovery. They provide an early warning system for threats to our security and to wider peace, and assist British nationals in times of crisis. They support our economy and help British businesses to access markets abroad. They promote our values of democracy and political freedom across the world, and help to craft vital international agreements from nuclear proliferation to climate change. We could not do without them for a single day.

I promised in our first week in office as the coalition Government that there would be no strategic shrinkage of Britain’s diplomatic influence overseas under this Government, and that instead we would strengthen Britain’s diplomatic network. Today I want to set out how we will achieve this while saving money overall.

The spending review settlement for the Foreign Office requires a 10% real-terms reduction in the budget. That is, of course, on top of years of unplanned cuts after the last Government stripped the Foreign and Commonwealth Office budget, more than half of which is spent in foreign currencies, of its protection against exchange rate fluctuations in 2007, just before the sharp fall of sterling. In the last two years before the general election, the Foreign Office experienced a 14% real-terms reduction in its budget, resulting in the sudden loss of personnel and training in many embassies. The Foreign Affairs Committee has done much to sound a warning about these matters, and I have been unable to find any other major Foreign Ministry in the world that raises and reduces its diplomatic activity on the basis of movements in exchange rates. I promised to put an end to that ludicrous situation, and the protection is now being restored under a new foreign currency mechanism agreed with the Treasury. That means that the Foreign Office can once again plan properly for the future.

Fortified by that ability to plan, we will find £100 million per year of administrative savings by the end of the Parliament, on a carefully planned basis. We will save over £30 million by simplifying procedures, removing bureaucracy and ensuring that administrative work overseas is done by locally recruited staff or in regional centres. We will save over £34 million a year from our annual estates and security costs, for instance by moving to a single site in London. We will reduce our annual staff costs by £30 million a year by 2014 by reducing to a minimum the number of junior staff posted overseas from London, by removing or reorganising their positions or recruiting locally. We will do so in consultation with staff to mitigate the impact on individuals and their careers. Those savings are not easy but they are essential. They will allow us to live within the necessary financial constraints and to provide the diplomatic network we need for the future.

We will now reverse the previous Government’s policy of closing embassies and reducing our diplomatic presence in key parts of the world, as a result of which 45 UK posts were closed after 1997, including six in Africa, seven in Latin America and eight in Asia, and the overall number of UK posts in the world fell by more than 30.

We will embark on a substantial reinvigoration of the diplomatic network to make it ready for the 21st century, to expand our connections with the emerging powers of the world, and to signal that where Britain was retreating, it is now advancing. The case for a strengthened network is utterly compelling. The only way to increase our national prosperity and secure growth for our economy is through trade, and our embassies play a vital role in supporting British business. The emerging powers are expanding their diplomatic networks. Turkey is opening many new posts and Brazil already has more posts in more countries in Africa than Britain has. Given that political influence will follow economic trends in the world and increasingly shift to the countries of the south and east over the long term, we need to plan ahead and create the right network for the future.

Although we are working closely with the new European External Action Service and ensuring that talented British candidates enter it, there is not and will never be any substitute for a strong British diplomatic service that advances the interests of the United Kingdom. We can never rely on anyone else to do that.

We will therefore significantly increase our presence in India and China, the world’s two emerging superpowers. We will strengthen our front-line staff in China by up to 50 officials and in India by 30, and will work to transform Britain’s relationship with their fastest growing cities and regions. We will also expand substantially our diplomatic strength in Brazil, Turkey, Mexico and Indonesia. We will add diplomatic staff in the following countries and places: Thailand, Burma, South Korea, North Korea, Taiwan, Mongolia, Malaysia, Nigeria, Angola, Botswana, Chile, Argentina, Colombia, Panama, Peru, Pakistan, Vietnam and the Philippines.

We will maintain the strength of our delegations to multilateral institutions, such as the United Nations in New York and Geneva, NATO, and the European Union in Brussels, all of whom have done an outstanding job in recent months. We will maintain our active and substantial embassy in Washington and our network of consulates general across the United States, which remains our indispensable ally in defence, security, foreign policy and commerce.

We have a strong network in the middle east and north Africa, on which the demands have been so great in recent months. Although there is no need to open new posts there, we have frequently and substantially reinforced our diplomats there in recent months and have sent a special mission to Benghazi. Over the coming months, we will review the need for additional deployments.

This expansion does come at a price. In Europe, there have already been significant savings in our diplomatic network. I am determined not to hollow out our embassies there, but we will need to find further savings in recognition of the fact that only three of the world’s 30 richest cities in total gross domestic product terms are in Europe, and the fact that our embassies there still cost more than elsewhere. So although we will fully maintain our embassy network across Europe, we will also find additional resource for our expansion elsewhere in the world from the network of subordinate posts in Europe outside capital cities. We will withdraw diplomatic staff from some subordinate posts, while retaining UK Trade & Investment and consular staff in many cases. That will lead to there being fewer subordinate posts in European countries.

With those additional resources we will be able to open new British embassies, including in places where they had previously been closed. We will reopen the embassy in El Salvador, closed in 2003, as part of a major diplomatic advance in Latin America after years of retreat. We will open a new consulate general in Brazil at Recife, which will be one of approximately seven new consulates general that we will open in the emerging powers. We will open a new embassy in strategically important Kyrgyzstan, and another in July in the new nation of South Sudan.

I always doubted the last Government’s decision to close the embassy in Madagascar, to which I know many Members of all parties objected. I am delighted to say that we will reopen that embassy as soon as the local political situation is right. I will also consider upgrading our political office in Côte d’Ivoire to a full embassy. I have made provision within our budget to open a new embassy in Somalia when the security situation has improved sufficiently. It is vital for our security that we are present in the horn of Africa, so I have made that decision now so that we will be ready to open the new embassy as soon as possible.

In addition to those new embassies, I give the House a commitment today that whereas the previous Government shut 17 sovereign posts in their time in office, we intend to retain all 140 existing British embassies and high commissions throughout the life of this Parliament. Other savings will be found as we reduce, over time, our diplomatic footprint in Iraq and Afghanistan, which is very large relative to the rest of the network. As the nature of the UK military involvement in Afghanistan changes, we will redeploy staff elsewhere.

The strength of our embassies is a signal to the world of our engagement and our role in international peace and security. They are the platform for the strong bilateral relations that are increasingly vital in a networked world, and indispensable to success in multilateral diplomacy. Our decisions will mean that our reach when British companies need assistance or British nationals are in danger will go further and be stronger. That is why the maintenance, extension and strengthening of our global diplomatic network is a central objective of this Government and will be a priority for the use of Foreign and Commonwealth Office funds over the coming years.

Although I have increased programme funding in the FCO to £139 million this year, our financial constraints and the priority that I am placing on retaining and improving our diplomatic network for the future mean that it will have to fall in future years, although it will remain above £100 million. I am sure it is right to give priority to long-term relations and the reversal of Britain’s strategic shrinkage.

This development of our network should be seen alongside the diplomatic excellence initiative that I have instigated in the FCO, which began six months ago. That places a renewed emphasis on policy creativity, in-depth knowledge of other nations, geographic and linguistic expertise and the enhancement of traditional diplomatic skills in a manner suitable for the modern world. A combination of strict savings in administrative spending, reductions in our subordinate posts in Europe and the other savings that I have set out will allow us, for the first time in many years, to mount a diplomatic advance. For the first time in decades, our diplomatic reach will be extended, not reduced. That is the right use of public money, and it is the right course for Britain in this century.

This Government will work to build up Britain’s influence in the world, to forge stronger bilateral relations with emerging giants and some old allies that have been neglected for too long, and to seize opportunities for prosperity and advance democratic values. We will maintain and enhance the Foreign and Commonwealth Office as a central Department of State leading an ambitious and distinctive British foreign policy, and we will expand and use Britain’s diplomatic network to the very full, in the interests of the United Kingdom and in support of the wider peace and security of the world.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

I thank the right hon. Gentleman for advance sight of his statement. I first join him, of course, in paying tribute to the work of all Britain’s diplomats around the world. Their work often goes unrecognised here at home, but Britain’s prosperity and influence would be hugely diminished were it not for their considerable efforts.

The Government are right to assess where best to deploy the Foreign and Commonwealth Office’s finite resources. In particular, I welcome the decision to expand Britain’s diplomatic presence in China. UK exports to China were worth £5.5 billion in 2007—by 2009, that had grown by more than 40% in cash terms—and 17,000 British nationals are permanently resident in China. Next week, I will visit Britain’s embassy in Beijing. I am conscious that it is playing a hugely valuable role in supporting the promotion of Britain’s values and interests in the world’s most populous country.

The FCO should not, of course, be exempt from the need to reduce the deficit, but in making cuts to a relatively small budget that has a global impact, there is a need for particular care and clarity. The Foreign Secretary spent a great deal of time in his statement criticising Foreign Office expenditure decisions under the previous Government. Will he therefore confirm that it was under his leadership of the FCO that it was fined £20 million by the Treasury for its attitude to

“getting money out of the door”

before the end of the financial year?

The Foreign Secretary placed a great deal of emphasis on trade in his statement, but will he set out in greater detail the position on the headcount and resourcing of UKTI in the years ahead?

The Foreign Secretary briefly mentioned cuts in programme expenditure from the current level of £139 million to a figure, he said, that would be retained above £100 million. Perhaps, in the spirit of candour, he will share a little more of his thinking on which programmes he is contemplating cutting to make the reduction of which he spoke. He has already announced real-terms reductions in programme spending on counter-terrorism, and a £2 million cash reduction in spending on counter-narcotics and rule-of-law programmes in Afghanistan. Will he therefore confirm that the decisions announced today will mean no reduction in the levels of staffing dedicated to counter-terrorism and counter-narcotics, either in Afghanistan or across the whole diplomatic network?

The right hon. Gentleman is right to highlight the fact that as we draw down our forces from Afghanistan, greater resources will be freed up. However, given the repeated and urgent calls from both sides of the House for a diplomatic surge to match the military effort, will he set out precisely what will happen and when in relation to FCO staffing in Afghanistan for the remainder of this Parliament?

There is much to study in today’s announcement, and the Opposition will scrutinise in detail the specific changes in each country. I welcome the Foreign Secretary’s re-announcement of his commitment to ensuring that there is no strategic shrinkage of Britain’s influence under this Government, but such shrinkage cannot be prevented through diplomats alone. Many commentators saw the Government’s initial plan—to step back from foreign affairs and ensure that a quiet period on the world stage took place, reinforcing a domestic austerity agenda—as a profound error. Perhaps for the pre-Tahrir square era, such a plan seemed appropriate, but the Government’s passivity and lack of ambition for a bilateral, mercantilist approach to foreign policy has been found badly wanting by recent events in north Africa.

Will the Foreign Secretary therefore provide the House with more detail on Britain’s staffing of those multilateral institutions of which he spoke so warmly? Ours is the one country that can operate simultaneously through the EU, the Security Council, NATO and the Commonwealth. Will he therefore clarify what will happen to staffing in each of those institutions?

Is the Foreign Secretary really telling the House that, after the seismic political changes that have swept north Africa and the middle east in recent months, with protests from Morocco in the west to Iran in the east, the review makes no fundamental changes to the diplomatic distribution of assets in the region? That is what the Opposition heard him say, but many will think that that is unsustainable. I suggest that he commits now to a more fundamental review of diplomatic coverage in the region in the months ahead.

The review must not be a means by which the Government once again choose bilateralism over multilateralism, and trade over wider influence, and thereby, however inadvertently, sleepwalk into strategic shrinkage.

[Mr Hague]

I welcome some of the right hon. Gentleman’s comments, including his tribute to the diplomats who serve all Governments loyally and well, as, of course, they will continue to do in the future. I also welcome his welcome for the expansion of our presence in China; it is the largest of all these expansions of our diplomatic presence in the world. Relations with China have been built up and improved under successive Governments, and I welcome the fact that he is visiting it next week. This trend has been continued across parties.

I wish, however, that the right hon. Gentleman had felt able to welcome some of our changes to the previous Government’s policies, particularly the reopening of embassies they closed. The embassy in Côte d’Ivoire was closed not only under the previous Government, but while he was a Foreign Office Minister. Trade offices in Brazil were closed, which I hope Labour Members will now recognise was a short-sighted mistake given the expansion of the Brazilian economy, and posts were withdrawn from Latin America, which was a mistake he chose not to dwell on in his questions. Furthermore, consulates general were closed in Frankfurt, Stuttgart and elsewhere across Europe. Taken together, the closure of more than 30 posts under the previous Government was a fundamentally mistaken policy that we are now changing. The withdrawal of the overseas pricing mechanism, which led to so many unplanned and rather chaotic Foreign Office spending reductions, was also a mistake, and it is time that Opposition spokesmen acknowledged that and said, as I said when I was in opposition, that in the future there will be no changes to the Foreign Office budget according to exchange rate fluctuations.

All those things were missing from the right hon. Gentleman’s response to my statement. He asked about various other details this year. The Treasury has not fined the Foreign Office, which now has a much better relationship with the Treasury than it did under the previous Government. Last night my right hon. Friend the Business Secretary and I launched the new UK Trade & Investment strategy and the FCO charter for business. Like all parts of government, UKTI has to manage with expenditure reductions and will have to produce more for its budget, which, like that of the Foreign Office over time, will fall by 17%. However, it will be able to do more with its budget by running it well.

Our programme spending decisions this year have already been set out in detail, but obviously what happens in future years will depend on how the situation develops. I am simply sounding a cautionary note today that some of those programmes may have to be reduced. However, it is far too early to make decisions about that. Furthermore, reductions in Afghanistan are not immediate. I am merely foreshadowing changes, given that we have said that by 2015, our troops will not be engaged in combat operations, or in anything like the numbers they are now. It follows that there will be diplomatic changes as well.

The strength of our diplomatic presence in multilateral institutions will not be affected. As I said in my statement, our diplomatic team have done a great job. However, it is also time for the right hon. Gentleman to recognise that success in multilateral institutions often comes from strong bilateral relations, as well as a great diplomatic team in those multilateral institutions, which is one reason why we place such emphasis on bilateral relations with many of the leading world powers. In many cases, those relations need to be restored. I do not know where he got the idea that the Government planned to step back from foreign affairs and think the world peaceful, or that we planned to be passive. After all, I keep finding myself going to countries that no Foreign Secretary visited during the entire 13 years of the previous Government, whether they be rather troublesome spots such as Yemen or old allies such as Australia. The passivity was in the previous Administration, rather than the current one.

[Chris Bryant (Rhondda) (Lab)]

I went to Australia!

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[Mr Hague]

Neither the Australians nor anyone here thought that the hon. Gentleman was the Foreign Secretary, even if he thought so.

Of course we will have to keep under review our diplomatic strength in the middle east, but our diplomats have done a great job. We often reinforce them, as we have done in recent months, and we will need to do so again in the coming months. However, we have sovereign posts in the key nations concerned, so it is not necessary to introduce new ones in the countries directly affected so far by the Arab spring. Ours is a real plan for engagement in the world, with the right level of resources and the right arrangements with the Treasury, and with a vision of where we need a diplomatic presence in the future. There was no evidence of any of those things under the previous Government.

[Richard Ottaway (Croydon South) (Con)]

May I give a warm welcome to every aspect of this statement? To be opening new embassies now is highly symbolic and sends an important signal to the rest of the world. Can my right hon. Friend assure me that in the focus on trade and consular activity, there will be equal emphasis on diplomatic skills, which many feel have shrunk in recent years, and which he seems to be addressing in the diplomatic excellence initiative? On a more practical note, what percentage of the extra overseas posts will be recruited locally?

[Mr Hague]

As my hon. Friend knows, some of what I announced reflected the work and opinions of him and his colleagues on the Foreign Affairs Committee, and concerns expressed by the Committee under his chairmanship and that of the hon. Member for Ilford South (Mike Gapes). Those have been well-founded concerns, such as over the loss of the exchange protection and so on. My hon. Friend is right that alongside and accompanying our emphasis on trade goes the important diplomatic skills that I feel have been undervalued in recent years in the Foreign Office. It is important for diplomats to have in-depth knowledge of their countries, geographic and historical expertise built up over time and the diplomatic skills of influencing events in other nations, not just of internal management. Those things are all being attended to in the diplomatic excellence initiative launched by the Foreign Office. I shall illustrate the proportion of UK-based and locally engaged staff: I envisage, for instance, that about one third of the additional staff in China will be UK-based, and that about half in the emerging powers outside China and India—in countries such as Brazil, Turkey, Mexico and Indonesia—will be UK-based.

[Mr Jack Straw (Blackburn) (Lab)]

In welcoming the Foreign Secretary’s statement, may I say that it would have been all the stronger had he not found it necessary to parody and seek comprehensively to trash the record of the previous Government? I accept that the budget under the previous Government was insufficient. I also accept, and thought at the time, that the Treasury’s decision in 2007 to impose this foreign exchange regulator was utterly irrational, verging on the mad—[Interruption.]

[Mr Straw]

No, I was Leader of the House—just so that we are clear.

I am delighted, therefore, that the Foreign Secretary has restored that protection. However, I hope that on reflection he thinks about some of his other criticisms, which were wholly misplaced, including the suggestion that we—I and other previous Labour Foreign Secretaries, and my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander)—were not as committed as him to the quality of traditional diplomacy, which is of fundamental importance. On that I hope that there is a bipartisan approach. What more is he doing to ensure that the posts and the work of the Department for International Development are brought under the broad umbrella of our overall diplomatic effort? Will he also comment on reports of a request to increase the budget of the European External Action Service, which, at a time of spending restraint across Europe, is unlikely to be justified?

[Mr Hague]

Some interesting confessions are being produced by this statement. I am delighted to hear that the right hon. Gentleman objected to the previous Government’s withdrawal of the Foreign Office exchange rate protection—although he might have wanted to say that at the time. However, I am grateful that he is now well ahead of his Front-Bench team in agreeing with me that it was a mistake. It is time for the right hon. Member for Paisley and Renfrewshire South (Mr Alexander) to say the same and dissociate himself from this foolish policy of the previous Government.

That has got me back on to that partisan theme again that the right hon. Member for Blackburn (Mr Straw) does not like—he must forgive me. I am not a very partisan—in the party sense—Foreign Secretary, but on this issue I think that the previous Government made some serious mistakes, so I make no apology for going on about it. The closure of embassies and the chaotic state in which Foreign Office finances were left were mistakes—they were messed up by the previous Government—and I want to make it clear that under the coalition there is a very different approach. Today, therefore, I will be a little partisan, although of course I always have great respect for him.

On the right hon. Gentleman’s other questions, the EAS should not get the proposed budget increase. We are all having to manage within budgetary constraints, and so should it, which is why the proposal in recent days is unacceptable, as the United Kingdom will make clear.



We are working closely with the Department for International Development. Together with my right hon. Friend the Secretary of State for International Development we are bringing about a cultural change in relations between the FCO and DFID, which has always been difficult in the past. We are co-locating more and the teams in each country are working together well. My right hon. Friend and I are in daily consultation about the policies that we are pursuing—an approach that is working much better.

[Mr Brian Binley (Northampton South) (Con)]

The Secretary of State put emphasis on UKTI, saying that, in effect, it would be able to do more with less. May I suggest that he could achieve that outcome by ensuring that more people with genuine business experience are involved with UKTI? If he agrees with that premise, will he tell us how he might proceed towards achieving that objective?

--- Later in debate ---

[Mr Hague]

My hon. Friend is quite right that we need people with good business experience working for and with UKTI, but in a way we have gone above and beyond that. The Prime Minister has appointed Lord Green—Stephen Green—as the new Minister for Trade and Investment working in both the Foreign Office and the Department for Business, Innovation and Skills. He comes with enormous business experience and has put together the new strategy for UKTI, which is very impressive and will set many new and demanding targets. Right at the head of that strategy will be somebody who is steeped in business experience and the private sector.

[Chris Bryant]

Just for the avoidance of doubt, I am thoroughly aware that I was not the Foreign Secretary, because nobody ever listened to a word I ever said. I am sure that people listen to everything that the Foreign Secretary says, and act upon it.

May I ask the right hon. Gentleman about an omission in his statement? There may be others, but one country that he made no mention of at all was Russia. We closed a post in Russia, but that was because the Russian Government insisted that we do so, because of the relations between our two Governments and, I believe, the harassment and corruption in the Russian system. I wonder whether he can update us on relations with Russia. I believe that he will be visiting soon, so will he ensure that he always underlines human rights and the need for doing away with corruption in the Russian system?

[Mr Hague]

We are much reassured to know that the hon. Gentleman did not think that he was the Foreign Secretary. We are also reassured to know that nobody took any notice of what he was saying. That is an enormous relief to us.

As the hon. Gentleman knows, we have a strong diplomatic presence in Russia, with one of our major embassies in the world in Moscow. I do not think that it is necessary either to increase the size of that embassy from the current level of activity or to reduce it. That is why the embassy did not feature in the statement. Given that we have 260 posts altogether, there are many nations around the world that I did not mention in the statement. I am highlighting changes today.

Relations with Russia have improved in recent months, and we have made an effort to improve them. I visited Russia last October and my counterpart, Sergei Lavrov, came here in February. The Prime Minister intends to visit Russia later in the year. Both sides have been working at improvements in relations, but I do not think that we are at the point yet where we can reverse decisions that were taken under the previous Government about this. I make no criticism of the previous Administration on this issue, because the difficult relations with Russia were not their fault. [Interruption.] Yes, that is very generous of me, isn’t it? We will always continue to raise the difficult issues that the hon. Gentleman mentioned.

[Martin Horwood (Cheltenham) (LD)]

I welcome the statement’s much needed strategic vision of a diplomatic network that is stronger in a changed world, and the Foreign Secretary’s commitment to working closely with the European External Action Service. Does he agree that working in close collaboration with the External Action Service and supporting it offers a cost-effective and efficient way to strengthen our diplomatic connections, to protect more Britons abroad and to increase Britain’s voice in world affairs?

[Mr Hague]

I very much welcome the hon. Gentleman’s warm welcome for the statement and the input from him and his colleagues among Liberal Democrat Back Benchers, which has been valuable. We must work with the European External Action Service and have good people going into it. I am afraid that I am going to offend the Opposition again, but that will be part of rectifying something else that went awry under the last Government, which is that the number of British people going into European institutions was too low. We are putting that right, including in the External Action Service. It is right that it can be an extension of our influence in the world, but it is not a substitute for it, as I made clear in my statement. The External Action Service does not mean that we do not need British diplomatic posts or a British diplomatic presence, which are the only way to be sure of advancing the interests of the United Kingdom.

[Keith Vaz (Leicester East) (Lab)]

I warmly welcome the Foreign Secretary’s statement, especially the increase in diplomatic activity in India and Pakistan. I am on record as being delighted that the right hon. Gentleman was the first Foreign Secretary ever to visit Yemen—although he did not manage to get to the city of my birth. As he knows, the embassy in Sana’a has been closed since 2010. There is limited consular access, visas are not really being granted, and unfortunately the previous Government closed our consulate in Aden. Does he have the flexibility where necessary to increase diplomatic staff in areas that need attention, and will he be able to reopen the consulate in Aden once matters are resolved?

[Mr Hague]

The right hon. Gentleman has been a long-standing champion of the interests of this House in Yemen. I am sorry that I did not get to the place of his birth—where I presume there is a statue and all kinds of other tributes to him; I look forward to seeing that one day. I might have misheard him, but I think he said that the embassy in Sana’a had closed. I can assure him that it has not closed; it is functioning. I visited it in February and it was working, albeit in difficult security conditions—there is no doubt about that. As he knows, two attempts were made last year on the lives of our diplomatic staff in Sana’a. The embassy works in the most difficult security conditions of any of our embassies abroad, but it is still functioning and has an important influence on events in Yemen. In the current security situation it is not possible to open additional diplomatic posts in Yemen. However, we have the flexibility in our plans to open further consulates and reinforce our presence in the middle east. That remains a live issue for the future.

[Margot James (Stourbridge) (Con)]

I congratulate the Foreign Secretary on strengthening our diplomatic network at a time of such economic austerity. I strongly agree with his view that embassies play a vital role in world trade. In that context, I congratulate our embassy in Japan on its sterling work on behalf of British business, which I observed on a recent visit to Tokyo last November. Could he advise the House on the workings of his Department with the Department for Business, Innovation and Skills, which is essential to our country’s ability to maximise trade opportunities in the newer markets that he mentioned?

[Mr Hague]

I am grateful for my hon. Friend’s reference to the great work of our embassy in Japan. At the UKTI strategy launch last night I met someone from a very innovative new business who was immensely enthusiastic about the support that it had received from our embassy in Japan, so I can absolutely confirm what my hon. Friend says—[Interruption]—although I have slightly forgotten her other point.

[Margot James]

About relations with BIS.

[Mr Hague]

Relations are very good. As I have said, the Business Secretary and I launched our UKTI strategy together last night. Lord Green works equally—half and half—in the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office, to ensure that we are absolutely in step on pursuing the strategy, and he is already doing a great job.

[Angus Robertson (Moray) (SNP)]

The Secretary of State has announced that an embassy will open in South Sudan when it becomes an independent state shortly, joining the international community of nations in the United Nations and the African Union. Will he confirm that Whitehall has the most experience of any capital in the world when dealing with independence issues? The normal procedure is: recognition of the right of self-determination; the acceptance of independence referendum results; the establishment of diplomatic relations; and the maintenance of close co-operation between friendly sovereign nations.

[Mr Hague]

Of course Whitehall has experience in all those matters, but the hon. Gentleman will also see from my statement that running the necessary network of sovereign posts and consulates around the world is very expensive for any Government. Any newly independent nation with any hope of maintaining its diplomatic strength in the world would have to come up with the several hundred million pounds in additional costs that would be necessary.

[Mr William Cash (Stone) (Con)]

The Foreign Secretary makes an excellent case for bilateral relations. I am sure he will understand if I point out that under the Lisbon treaty, the External Action Service creates circumstances in which there could be conflict between our own national interests and those promoted by the European Union. Does he therefore accept that it would be far better if we were to retrench, and abolish the External Action Service by renegotiating the Lisbon treaty?

[Mr Hague]

I think that if my hon. Friend had his way, all our relations in Europe would be bilateral. He and I both opposed the Lisbon treaty and the creation of the External Action Service, but we have to work with what we have. As we are in this situation, and as we respect the fact that we are a coalition Government, our approach is to make the best of this and to ensure that there are British people working in the External Action Service. I hope that we shall not reach a point of conflict, as my hon. Friend puts it, between the External Action Service and the United Kingdom’s approach to foreign affairs, because decisions on foreign policy are taken by unanimity in the European Union, and in the event of a direct conflict arising, the British Foreign Secretary would be able to veto any such proposal in the EU.

[Ann Clwyd (Cynon Valley) (Lab)]

May I ask the Foreign Secretary to look carefully at any proposals to reduce the number of staff at our embassy in Iraq, because I believe that we have a certain responsibility towards Iraq? There is no dedicated human rights officer at the embassy. A human rights report was recently produced by Amnesty International about conditions in detention there. I always said that we should not hand over the detained prisoners until the Iraqis had the capacity to deal with them, which they do not have. It is therefore vital that we continue to have a considerable presence in Iraq, possibly with a dedicated human rights officer.

[Mr Hague]

I will look at the point that the right hon. Lady raises about a human rights officer. I can certainly reassure her that we will retain a very considerable presence in Iraq; there is no doubt about that. I should point out that it is one of our most expensive diplomatic operations, partly because of the security that is still required. The embassy in Baghdad and its associated posts amount to one of our five most expensive embassies in the world. At the moment, that is out of proportion with the strategic and economic importance of Iraq, although that remains considerable. That is why we have to look for savings there, but I fully take the right hon. Lady’s point and we will retain a very considerable presence.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I am delighted to hear that our growing diplomatic network is committed to playing such an important part in promoting UK business. Can my right hon. Friend advise me on how small and medium-sized enterprises, especially those in my constituency, can make the best of that commitment?

[Mr Hague]

The new strategy of UKTI, which Lord Green has taken the leading role in putting together, places the greatest emphasis on small and medium-sized enterprises. Only one in five of the SMEs in this country are exporters on any significant scale. If we could raise that to one in four, which is the European average, the extra exports from Britain would more than cancel out the trade deficits that we have experienced in recent years. This is a central goal, and UKTI’s work in the United Kingdom will reach out to those businesses in particular over the coming months and years. I will write to my hon. Friend with the details of what we announced last night.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Foreign Secretary has already referred to the reports produced by the Foreign Affairs Committee in the last Parliament and in this one. He will be aware that just before the general election the Committee made a number of serious recommendations. I congratulate him on announcing the implementation of several of them in the statement today, particularly those relating to the embassy in Kyrgyzstan and to the scrapping of the overseas price mechanism to bring back some form of stability. Will he take a similar attitude to the Select Committee reports produced during this Parliament, and particularly to our recommendation that he reverse the cuts in the BBC World Service?

[Mr Hague]

As the hon. Gentleman can see from the statement, I always attach great importance to the Foreign Affairs Committee’s reports and to its work. I thank him for his support for some of the decisions that I have announced today. We have discussed the World Service on other occasions, and we will be able to discuss it further. I will just point out that the reduction in the World Service’s funding over the period from 2007 to 2014 is roughly the same as the reduction that will have taken place in the Foreign and Commonwealth Office as a whole, yet the Foreign and Commonwealth Office, through administrative savings and the changes that I have set out, is able to expand its network. That is not to make a direct analogy with what can be done with the World Service, but it is necessary for all public sector organisations to work out how to do more with less funding.

[Joseph Johnson (Orpington) (Con)]

I echo the right hon. Member for Leicester East (Keith Vaz) in welcoming the announcement of an additional 30 diplomats for the network in India. They will play a valuable part in creating the enhanced partnership that the two countries are seeking, and in reversing the decline in our trading relationships that we witnessed under the previous Government. In 1999 the UK was India’s fourth most important source of imports, but by 2009 we were its 22nd most important. I urge my right hon. Friend to ensure that the 30 new diplomats put trade representation at the top of their priorities.

[Mr Hague]

As my hon. Friend knows, we already afford great importance to the links with India. In July last year the Prime Minister led our largest ever ministerial and trade delegation to India, and we are continuing to build up those links. I am grateful to my hon. Friend for his welcome for the additional staff in India. I hope that that addition will allow us to open new consulates general at various locations, although we have to discuss that matter with the Indian Government to ensure that they are happy with the locations.

[John Cryer (Leyton and Wanstead) (Lab)]

May I press the Foreign Secretary further on the question asked by my hon. Friend the Member for Ilford South (Mike Gapes)? The arguments that the Foreign Secretary has presented for the expansion and maintenance of the diplomatic network seem pretty sound, but do not many of the same arguments apply to the BBC World Service, especially in the light of the events in the various Arab nations? Will he look at that matter again?

[Mr Hague]

The argument is that all parts of the public sector have to make the best possible use of reduced resources. I hope that the way in which we are now running the Foreign Office budget is a good example of that, and that it can be used as an example to other organisations, including the World Service. None of us enjoys making reductions anywhere, but it would clearly be impossible to do all the other things that we are committed to doing if we had maintained the World Service’s budget at exactly the level that it was before. We are putting the World Service on a long-term sustainable footing by moving it so that its funding comes from the BBC licence fee and enabling it to work together with the development of BBC World television. For the medium to long-term future, the World Service is on a much sounder, more sustainable footing.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

The Foreign Secretary’s statement is very welcome, and I particularly welcome the expansion of our missions in countries whose citizens are represented in large numbers here as students, residents and business people. Those include China, India, Turkey and the countries of Latin America. Will he also assure us that in parts of the world where there are tensions and conflicts—where he also wants us to be properly represented—the work of conflict prevention and the upholding of human rights is a key priority in all our missions, just as it is in the United Nations, where we have international responsibilities?

[Mr Hague]

My right hon. Friend makes an important point. The work that we are doing in Yemen is conflict prevention. In particular, the very active work undertaken by the Foreign Office and the Department for International Development in Sudan during the referendum there earlier this year has so far made a material difference in preventing new conflict. That is part of the rationale for establishing a new embassy promptly in South Sudan. Conflict prevention saves many lives, and it is much cheaper and much more effective than having to intervene in conflicts when they arise. That will remain an important plank of our policies.

[Yasmin Qureshi (Bolton South East) (Lab)]

I welcome the Foreign Secretary’s statement about additional diplomatic staff. I have visited a few British embassies around the world, and I recently visited our embassy in Pakistan and met the staff there, including the high commissioner, Adam Thomson. I was incredibly impressed by the work that they, and our diplomatic service in general, do. In extending the number of posts and members of staff, will the Foreign Secretary consider sending people from different backgrounds out to those missions? There is still a tendency for many of the people who work for the Foreign Office and the diplomatic service to come from certain backgrounds and certain universities. Is it perhaps time to open this up and to allow a much wider variety of people to serve as our diplomats?

[Mr Hague]

The hon. Lady is right about the outstanding work of our high commissioner and his staff in Pakistan, and I will relay what she said to him. I agree that our staff should come from many backgrounds, speaking as a Foreign Secretary who went to a comprehensive school—and there have not been many of those before.

[Chris Bryant]

The one before you did!

[Mr Hague]

I did not say that there were not any; I said that there had not been that many before. If the hon. Lady had met the new intake of graduates into the Foreign Office, as I did a few months ago, she would have seen a great diversity, and been completely reassured. I think we are set on the right course for the future, but we are always ready to do more.

[James Morris (Halesowen and Rowley Regis) (Con)]

I welcome the Foreign Secretary’s statement, particularly his emphasis on upgrading and developing diplomatic skills. Does he agree that Britain’s national interest in the future will be highly dependent on our ability to build relationships with emerging economies, so that we need to develop the appropriate diplomatic skills to achieve that?

[Mr Hague]

I absolutely agree. That is what the diplomatic excellence initiative is all about. It is the main subject we discussed at the FCO leadership conference taking place this week for all our ambassadors and high commissioners from around the world. It is necessary to know countries in detail—to know them geographically, to know personally their leaders and potential leaders, to know their languages and to understand their history—in order to be able to influence events. Those skills now need accentuating again. That is the clear and constant signal that I am sending out from the Foreign Office.

[Sarah Newton (Truro and Falmouth) (Con)]

I very much welcome today’s announcement, particularly the comments about Russia. I would like to move on to other European countries and our representation in them, and ask my right hon. Friend to reflect on the fact that not all capital cities in Europe are the centres of commerce and industry. When he is thinking about our representation, will he consult British businesses—our trade with Europe will remain vital in the years to come—to ensure that we have the right representation in the right places?

[Mr Hague]

Yes, my hon. Friend makes a very important point. One commitment in the FCO charter for business that I published last night is to consult business about the work of UK Trade & Investment. That will, of course, continue. Let me reassure her that the changes I am announcing for Europe do not necessarily mean changes to UKTI deployments and consular work around Europe. We believe that it is possible for diplomatic work in European countries to be centred on those nations’ capitals, but it will also be important in many cases to retain our commercial functions and presence in many other parts of those countries.

[Mr Robin Walker (Worcester) (Con)]

I congratulate the Foreign Secretary on this truly internationalist statement, especially on the significant expansion of the UK’s diplomatic presence in Latin America—a region of great potential, where we have many friends. Will my right hon. Friend comment a little more on the opportunities for UK business in that region and the extent to which any expansion of our presence will be focused on promoting trade?

[Mr Hague]

Trade is an important part of it. We need to be aware that the whole of Latin America is an economy bigger than China, and that it is growing at very substantial rates. That is why it is important to strengthen our diplomatic presence. In many Latin American countries the trading opportunities are, as my hon. Friend says, enormous. Making the most of the trading opportunities is important not just for economic reasons, because in the long term this also bolsters our relations with those countries and helps to improve our security and our influence in the world. I do not view it as a choice between trade and other aspects of our foreign policy goals, as advancing trade helps us to advance our other goals as well.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I welcome the Foreign Secretary’s statement and ask him for clarification. Where countries have shown high levels of brutality and oppression—this applies to Syria, and not just now, because in the 1980s President Assad senior killed thousands during a similar uprising—will our diplomatic relations be kept to the bare minimum?

[Mr Hague]

Our views on such outrages will be very clear across the House. This country stands for human rights, for respect for minorities and for democratic developments, and we have made our views about Syria very clear in recent days. I would, however, depart from the thrust of my hon. Friend’s question in one respect, in that it is sometimes necessary to have an enhanced diplomatic presence even for countries with which we have difficult relations—in order to do more work with them, to try to influence them more effectively and to understand what is going on more fully. Diplomacy is about talking to people with whom we disagree, as well as about developing good relations with friends. That is why North Korea appeared in the list of countries for which I announced an increase in the number of our diplomats. Despite the difficulties of our relationship with that country—in fact, because of those difficulties—we need to do more in order to influence what is happening there.

[Jonathan Evans (Cardiff North) (Con)]

I am very impressed by the approach my right hon. Friend has articulated today to the European External Action Service and the need to encourage British candidates not only to participate in that service but to get more widely involved in European institutions. Apart from simply promoting British applications, could he do more, for example, by expanding the number of time-limited secondments as a special initiative? It is very important that the skills acquired are then brought back to bear on the bilateral relations about which he has said so much today.

[Mr Hague]

Yes, we are reintroducing the European fast stream for UK civil servants so that they can experience working in European institutions and then bring that experience back with them. The fast stream was discontinued—for about 10 years, I believe—after eastern and central European countries joined the European Union and the opportunities were reduced. Now that there can be more of an equilibrium in the intake into the EU, it is time to encourage the fast stream again. We are restarting it, and British civil servants will be able to spend part of their careers in European institutions.