The FCO and the Spending Review 2015

Crispin Blunt Excerpts

Tuesday 1st March 2016 Commons Chamber

[Crispin Blunt (Reigate) (Con)]

It is a pleasure to open the first estimates day debate of the new Parliament, and I thank the Liaison Committee for selecting the first report of the Foreign Affairs Committee for debate.

I pay tribute to the work of the Committee in the last Parliament and to my predecessor, Sir Richard Ottaway. I was lucky to have him as a parliamentary neighbour for 18 years and can well understand why he was so widely regarded across the panoply of the Foreign Office establishment and those interested in foreign and Commonwealth affairs for the way in which he led the Committee in the last Parliament.

One of the Committee’s final reports in the last Parliament, which was published in February 2015 only weeks before Parliament was dissolved, took a detailed look at the impact of cuts on the Foreign Office budget resulting from the 2010 spending review. It accepted that the Foreign Office needed to play its part in the general retrenchment instigated by the review and believed that Foreign Office Ministers and senior managers had, on the whole, played a difficult hand skilfully. However, it concluded:

“The cuts imposed on the FCO since 2010 have been severe and have gone beyond just trimming fat: capacity now appears to be being damaged. The next Government needs to protect future FCO budgets under the next Spending Review…If further cuts are imposed, the UK’s diplomatic imprint and influence would probably reduce, and the Government would need to roll back some of its foreign policy objectives.”

I remind the House that the reduction imposed on the Foreign Office in the four-year period ending in March 2015 amounted to 24% of its resource budget. However, the majority of the savings came from what amounted to a conjuring trick. Funding for the BBC World Service was transferred from the Foreign Office to the licence fee payer from 1 April 2014. At a stroke, the Foreign Office’s apparent budget was reduced by £240 million and the cuts that it had to make to its own budget through savings amounted to just 10%.

Even though the real reduction was just 10% over the four years, it is hard to find anyone who does not believe that the FCO’s capacity was damaged in the process. Our predecessors described the Foreign Office as a machine stretched to the limit, with key posts left unfilled because staff of the necessary calibre were needed for more immediate crises; overseas posts at junior levels lost, reducing the opportunity for staff to accumulate the experience that is essential for service at higher levels within the organisation; and reductions in UK-based staff at many overseas posts, denying those who remained time to leave the diplomatic bubble and gather a sense of the real currents in society around the country in which they served.

Overall, the headcount of UK-based staff has reduced by 10% between 2011 and now, which seems perverse at a time when the Department has been under such policy pressure and suffered such overstretch. To some degree, the reduction in UK-based staff was mitigated by the recruitment of locally engaged staff who, in many cases, have brought a depth of local knowledge that it would be difficult for a London-based employee ever to acquire. However, many of them happen to be British people who are based overseas and then formally become locally engaged staff. Although the average cost of such people is one third of UK-based staff, it is not a straight saving, because such replacements do not come at zero cost. I have already heard troubling reports of unintended consequences arising from such things as locally engaged staff not being cleared to the same security level as UK-based staff.

To use Tunisia as an example in advance of the Committee’s visit to Cairo and Tunis next week, I applaud the FCO’s swift consular response to the terrorist attack in Sousse in June 2015, but I have heard that the subsequent counter-terrorism analysis was complicated by a lack of UK-based staff who were cleared to the necessary level. That analysis was of great significance, because it will have played a role in the FCO’s decision to advise against all but essential travel to the entire country—a country where tourism contributes directly and indirectly to a large proportion of GDP and is a major source of foreign currency. Tunisia is a fragile country that has undergone its fair share of volatility since it sparked the Arab spring, and we all have an interest in nurturing its continued stability.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The hon. Gentleman is making a compelling case for investing in our diplomatic service. Does he share my concern that the cuts are not only leading to a lack of spread across the world and impacting on the standing of the United Kingdom globally, but affecting the expertise and analytical capabilities of the diplomatic service in respect of the information it feeds back to the United Kingdom?

[Crispin Blunt]

The hon. Gentleman is absolutely right. I have made that point before and will make it again in respect of the inquiry we are conducting into the intervention in Libya. Just how deep was the knowledge on the basis of which we decided to intervene? It is the depth of knowledge that has been lost.

Another price that is being paid is that locally engaged staff do not really understand the UK context. It has been put to me that the quality of the reports that are coming through is not quite what it was because they are not addressed to the needs of the Ministers at whom they are aimed. The difficulty is that very overstretched UK-based staff in a post are, in addition, having to oversee the work of the locally engaged employees.

Returning to the issue of Tunisia, I accept that the security of our citizens must be a Government priority and that they cannot commend travel unless they have confidence that our citizens will be reasonably safe, but this decision had serious consequences for Tunisia’s stability and the security of the region. We must therefore be completely confident that we can make informed decisions, rather than simply defensive decisions because of an absence of capability.

Reports are, of course, the standard mechanism by which Select Committees express their views. I believe that Committees can miss opportunities by not getting inside the decision making cycle, or by devoting our energies to conducting retrospective analyses after policy has been formed and executed. The Government should welcome input at an early stage from an informed, cross-party Committee that could make practical, forward-looking suggestions, rather than just telling the Government where they went wrong.

We published our report on the Budget in October last year, almost exactly a month before the spending review, and we made just one recommendation:

“We recommend that the Treasury protect the FCO budget for the period covered by the 2015 Spending Review, with a view to increasing rather than cutting the funds available to support the diplomatic work on which the country’s security and prosperity depend.”

I am delighted that our recommendations were accepted, and that the settlement reflected our central recommendation.

We spent much of our first few evidence sessions looking at how the Foreign Office was preparing for the spending review, and at what scope there was for it to absorb further cuts of the scale already imposed over the previous four years. The Foreign Secretary gave oral evidence twice, and we tried to get a sense of his priorities and what he would seek to preserve. We then took evidence from Sir Simon McDonald, the new permanent under-secretary, and his senior management team, to try to understand the grit and detail of what might be achieved and how if—God forbid—savings of 25% or even 40% were required. That gloomy environment perhaps reflected our rather defensive recommendation, which was obviously designed to hold the current position, but the Committee clearly believes that more resources are needed to support our diplomacy.

[Mr John Baron (Basildon and Billericay) (Con)]

As a member of the previous Foreign Affairs Committee, may I suggest that trying to make unnecessary savings can prove to be a false economy in the longer term? If we do not invest in expertise and analytical skills, we could end up making errors that can cost a lot more than if we had a proper view of things in the first place. The extreme example of that is avoiding conflict, which is much cheaper than conflict itself.

[Crispin Blunt]

My hon. Friend makes an entirely valid point. He sat on the Committee in the last Parliament and in this one, and he will know about the diminution of our expertise, for example on Russia. When he and I were soldiers back in the 1980s there was a wealth of expertise about the Soviet Union, but that has simply been stripped away. When faced with a crisis in Crimea and Ukraine, the level and depth of our knowledge were certainly a handicap.

When looking at future Committee reports and how we might influence future events, I hope that we will be able to report with authority and fulfil a much requested public need about Brexit. The Committee is conducting an inquiry into the costs and benefits of European Union membership for Britain’s role in the world—whether we stay in the EU or whether we leave. Hon. Members will already have found that people are asking where they can turn for independent analysis and who will give them the facts. Unhappily, the Government have placed themselves in a position where they are unable to give an independent view, since the entire institution is placed firmly on one side of the campaign. Happily, however, I preside over a Committee of 11, and the publicly expressed views of my Committee are balanced at five each on either side of the question.

[Sir Edward Leigh (Gainsborough) (Con)]

If my hon. Friend is seeking a cure for insomnia, may I refer him to my speech on Friday when I spoke on this subject for an hour in support of the Bill sponsored by my hon. Friend the Member for Christchurch (Mr Chope), which would set up an independent audit of the pros and cons of leaving the EU? That is what we need. Perhaps the Office for Budget Responsibility should be given that job. We accused the Labour Government of fiddling the figures before the Budget, so why not ask an independent body to give a genuine audit?

[Crispin Blunt]

My hon. Friend will be delighted to hear that that is precisely what my Committee will try to do. Given the way that we are exquisitely balanced, my aim, which is informally supported in discussion by members of the Committee—they cannot be formally bound until the Committee reports, but we all share the objective—is to produce as balanced a piece of work as possible, identifying the factors that the electorate should consider on both sides of the question, but without advising the electorate what weight they should attach to those factors. I hope to complete that work about two months before the referendum, and for the Committee to do a service to the wider public of exactly the type that my hon. Friend identifies, as well as to this House and the reputation of its Committees.

[Tom Brake (Carshalton and Wallington) (LD)]

Does the hon. Gentleman agree that the public are keen that his Committee, and others, re-establish the Committees on Arms Exports Controls? Will he explain why that has not happened yet?

[Crispin Blunt]

It has, and I have already attended that Committee’s first meeting. It is being excellently chaired by the hon. Gentleman—I forget his constituency, which will not help me much, but I have every confidence in the new Chair of that Committee, and when I recall his constituency, I will inform the House.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I will get my hon. Friend out of that hole by intervening on him. I pay tribute to his chairmanship of the Foreign Affairs Committee, and he is correct to say that we are split five-five on whether we want the United Kingdom to pull out of or remain in the European Union. He is right to ensure that the report is balanced and that we do not come out for either side. A lot of my constituents want more impartial information so that they can make their own critical assessment on this matter.

[Crispin Blunt]

My hon. Friend is absolutely right, and I recall that it is my hon. Friend the Member for Warwick and Leamington (Chris White), who served on the previous Committees on Arms Export Controls under the Stakhanovite chairmanship of Sir John Stanley, who is taking up that role. I am confident that he will do it extremely well.

Hon. Members will know that if I can chair a Committee that produces a unanimous report and has the hon. Member for Ilford North (Wes Streeting) and my hon. Friend the Member for Basildon and Billericay (Mr Baron) agreeing on factors around our European Union membership, we will have done a singular service in producing a piece of analysis that everyone can have confidence in.

[Stephen Gethins (North East Fife) (SNP)]

The hon. Gentleman raises a good point, and I look forward to working with him in trying to bring the five of us on either side of the argument together to produce that report. Does he agree that one of our primary goals is to ensure that people in the House, and beyond, are as well informed as they possibly can be about the European Union referendum ahead of 23 June?

[Crispin Blunt]

I absolutely agree with the hon. Gentleman, and we look forward with interest to the motivation of the Scottish National party, and how it will vote, given its differing attitudes to the differing Unions in which Scotland finds itself.

Anyone attending this debate might ask why, if the Foreign Office was one of the winners from the spending review—or at least not a loser—we have sought this debate. My reply is that no one should underestimate the scale of the challenges that the UK and its allies are facing in the world today. Even with a protected budget, the Foreign Office will struggle to address those challenges. Of course we have a range of capabilities to deal with direct threats to our national security, including armed forces, diplomacy, economic policy, cyber-operations, and covert means, but in terms of sheer value for money, it is diplomacy, and the capacity to bring crises to a peaceful resolution in partnership with others, that must be the preferred solution. A diplomatic solution to a crisis, rather than one that descends into the use of armed force saves an absolute fortune, as well as avoiding the huge humanitarian cost that accompanies a failure to preserve the peace. It is my view that we should increase the Foreign Office budget to enhance that capacity and help to head off crises before they flare up.

The threats to the UK’s security and wellbeing are at an unprecedented level. As we said in our report, we cannot recall a more complex and challenging policy-making environment in recent decades—an environment that includes Syria, Daesh, Libya, Russia, the South China sea, Israel, Palestine, North Korea, Iran and Turkey, to name but a few.

That is before we take into account the requirements of the other two pillars of the Foreign and Commonwealth Office: the agenda for prosperity and consular services. In its response to our report, the Office acknowledges that there will be

“new work, including increasing spending on the Overseas Territories and hosting the presidency of the EU in 2017.”

That might be an interesting presidency if we are on the way out after 23 June.

Inexplicably, however, the Government’s response says nothing about potentially the greatest call on its resources: a British exit from the European Union. If the country votes out on 23 June, a huge effort will be needed to disentangle the United Kingdom from its existing commitments and to work on new trade arrangements, to name but one element of the work that will need to be undertaken. A very large part of that effort will fall on the Foreign Office, yet the Committee has found little or no evidence that the British civil service is making any sort of contingency plan in the event of a Brexit. We now have a date for the referendum, and Brexit is not a remote possibility but a very real prospect in the hands of the electorate and the competing campaigns. I therefore urge Ministers and their officials to begin planning, and not just in outline, for the consequences of a decision by the British people to leave the European Union. It would not just be a question of drafting in a few extra people to prepare new treaties. We will need to strengthen our bilateral relationships by increasing our presence in larger EU member states, reopening subordinate posts that have been closed or downgraded over the last five years, and picking up capabilities, particularly trade capabilities, that are currently the competence of the European Union. We should at least understand what the bill will be and prepare to address it if it happens.

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

On the hon. Gentleman’s point about increasing the number of personnel to deal with Brexit, the Committee recently said that about a quarter of staff in the middle east, eastern Europe and central Asia do not have the requisite language skills, and that the number of people who have those language skills is decreasing. That is another way in which the strength of the Foreign Office to deal with international issues is being reduced.

[Crispin Blunt]

The hon. Lady is absolutely right—she understands those issues extremely well from her work on the Foreign Affairs Committee and more widely before joining it. That loss of language skills is partly a reflection of just how stretched the FCO is in getting people to the right place, and getting the best people into vacancies to cover the policy challenges we face. An office that is not stretched so tautly has the capacity to get the language skills of its staff up to the necessary standard. Until now, those skills have been the envy of every other diplomatic service in the world. In the last Parliament, it was the priority of William Hague as Foreign Secretary to address that. Serious measures were put in place to try to do so, but the evidence the Committee is taking shows that if it is getting better, it is doing so in a minute way that does not reflect the need for real improvement. That reflects just how tautly the office is being managed under the current budget conditions.

There will be more pressure on the capital budget than usual. The Government response to our report points out that the Foreign Office capital budget will remain “flat”. It says that the FCO will need to fund requirements that cannot be met from the capital budget by disposing of assets, and warns that it may need to call on the Treasury reserve for some large projects. The Foreign Office quite rightly is expected to achieve value for money when disposing of assets, but the ability to do so will partly depend on market forces. As we know from the FCO supplementary estimate, it has already had to call on the Treasury reserve to cover a shortfall that it says is

“due to adverse market conditions in the Far East”.

The FCO IT system, Firecrest, is failing and presents a serious operational risk. Major investment is needed, but that has been stalled during the spending review process. The FCO is going to have to fund its tech overhaul programme from its existing budget: difficult choices will have to be made on procurement, bearing in mind the need for resilience and the particular security requirements of the Department. Careful project management will be needed, and I can only point out that the whole of the public service does not exactly have a shining record in that field. I hope the Foreign Office can help to redress that.

My second key point concerns official development assistance expenditure and the need to rationalise resource allocation. The Committee highlights in the report our uneasiness at the consequences of depending ever more on expenditure that qualifies as official development assistance, and which therefore scores against the Government’s commitment to invest at least 0.7% of gross national income in international development. That risks, and indeed is, skewing the Department’s expenditure away from countries that are not eligible for ODA spending, regardless of where our foreign policy interests lie. For instance, 97% of the funds available under the new human rights funding programme, the Magna Carta fund, are for spending in ODA-eligible countries. When we queried that in oral evidence with the Minister and her officials, we were given the impression that there was some flexibility to divert funding towards non-ODA countries, but we need clear answers. Trying to replace the significant sums the Government have put forward for human rights in the Magna Carta fund with very constrained bilateral funds will not wash. It would be quite unacceptable and counterproductive for human rights programme funding to be virtually denied in non-ODA-eligible countries such as Russia and Israel, and Saudi Arabia and other Gulf states. I hope the Minister can give me some reassurance on that point.

Human rights expenditure is not the only example of how ODA eligibility can determine the Foreign Office’s activities. The current chief operating officer, Deborah Bronnert, told us that the Foreign Office’s non-ODA budget was under particular pressure, and that if there were to be cutbacks in the overseas network, it would have to look first at cutbacks in subordinate posts in developed countries. It hardly plays well with our prosperity agenda if that is where we need to go in terms of our trade and economic relations.

The British Council, which plays a unique role in promoting an understanding by different peoples and nations of what the UK can offer, faces the possibility of losing all grant in aid for work in countries that are not ODA-eligible. It is looking to cross-subsidise to some extent from other areas of its operation, but the net effect is a decline of our soft power and influence in several growing economies and countries, not least where there are political and human rights concerns.

I have similar concerns about the move within the Government to more pooled funding between Departments. The conflict, stability and security fund, which is currently worth £1.033 billion per year, will increase to £1.33 billion by 2019-20, and a new prosperity fund is being created, worth £1.3 billion. Substantial sums of money have been allocated following a process of negotiation between Departments, and I welcome the concept of a more holistic and integrated approach to funding where Departments are working in different ways towards the same ultimate aims, but the Committee should look carefully at how the FCO fares, for instance when sharing the conflict, stability and security fund with two Departments whose budgets as a proportion of total Government expenditure are both protected.

Finally, the Foreign Office delayed its response to our report until it had received its settlement letter from the Treasury, but I was disappointed that the FCO did not supply the settlement letter, which I understand sets out more detail of the sums available to the Foreign Office from year to year within the period covered by the spending review. In fact, none of the departmental settlement letters has been published. At the moment, we just have rounded figures for budgets for 2015-16 to 2019-20, without any lower-level detail. Will the Minister therefore undertake to supply the Foreign Office settlement letter to the Committee, so that we may publish it and place that essential information in the public domain?

My conclusion relates to the shape of the Foreign Office in the years to come. In his letter responding to our report, the Foreign Secretary said:

“There is more that can be done to strengthen the FCO and build up its world class capabilities. To help achieve this, I have commissioned an internal review of the FCO exploring how we can be more expert, agile and focused on our key priorities. The review will set out a vision of the organisation the FCO should be by 2020.”

I invite the Minister to tell us a little more about that review. Will it be a fundamental review of how the Foreign Office is structured, how priorities are ordered and how staff are deployed; or will it be a motherhood and apple pie statement of vision and aims, full of things no one could disagree with?

In conclusion, the Office remains overstretched and underfunded for the tasks it faces. Its actual funding base is dysfunctional, and if it does not actually distort policy decisions, it certainly means that resource allocation is no longer aligned with actual British interests.

--- Later in debate ---

[Tom Brake]

I am happy to translate it. I simply said that if President Putin wants to talk to us, we will be very happy to talk to him. The hon. Member for Newbury talked about language skills, which is an important matter, as without them it is difficult to engage effectively with others.

It is a pity that the hon. Member for Basildon and Billericay (Mr Baron) is no longer in his place, because if he had he been, I would have disagreed with him on the subject of Syria. What we know about the situation in Syria is that since the UK Parliament decided not to take action some years ago, a quarter of a million people have died, more than 4 million people have become refugees in neighbouring countries and 7 million people or more have become refugees within Syria. Although we cannot know for certain what the impact of limited UK military involvement might have been, we know and can see in concrete terms the consequences of the failure to take any action.

[Crispin Blunt]

Will the right hon. Gentleman remind the House of what we were being asked to take action for?

[Tom Brake]

I will come back to that—

--- Later in debate ---

[Tom Brake]

Indeed. To respond to the earlier point, we were being asked to leave open the opportunity of military action being taken in the future. That is what the debate and the vote were about; it was not a vote about whether we should take military action at that point. It would have left open that opportunity, but because the vote went against leaving open that opportunity, the chance to take military action in Syria was closed down at that point. I agree entirely with the hon. Member for North East Fife (Stephen Gethins) that the whole purpose of this debate is to highlight the importance of funding the Foreign and Commonwealth Office adequately.

[Crispin Blunt]

I think I can help the right hon. Gentleman. We were being invited to take military action in order to deprive President Assad’s regime of its chemical weapons—that was what we were being asked to do. If there was a proposition to do something much wider, that is the one that should have been put to the House.

[Tom Brake]

My recollection may be slightly different from that of the hon. Gentleman, but if I recall it correctly the vote was about leaving open the option of the UK Parliament taking military action at a point in the future, which would have required another vote. The UK Parliament decided at that point to say that it did not want to leave open the option of that future action, and I regret the fact that that decision was taken.

On the European Union, I hope we will be able to engage in a positive campaign on this matter. This is not entirely related to the estimates, but I wonder whether the Minister for Europe has a view about whether the GO—Grassroots Out—campaign is the one that should be pushed forward as the campaign for Brexit, on the basis that it is a good cross-party campaign and is perhaps best placed to represent the Brexit campaign.

I have a suggestion that will cost the FCO absolutely nothing. Once, hopefully, the EU referendum campaign is over and we have convinced the country that we are better off in, I hope to see the Ministers who have quite recently come out in favour of our membership of the European Union occasionally talking about the benefits of our being in the EU. The difficulty over the next four months is that many of those Ministers who have now rightly stated that, on balance, we are better off in the European Union, have previously not highlighted some of the positives involved. This suggestion that Ministers should speak more positively about the EU will have no cost to the FCO.

On Syria, it would be helpful to know exactly what is being built in the budget for what we hope will happen after the ceasefire. If the ceasefire holds, and we get to a position in which there is a degree of stabilisation in Syria, there will clearly be a need for the FCO to make quite a substantial financial commitment to greater involvement in the stabilisation process that should then follow. I hope that we have budgeted for that.

Let me turn now to human rights and the importance of having an FCO policy that promotes human rights. The hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) rightly referred to what the permanent under-secretary had said, which was that human rights

“is one of the things we follow, it is not one of our top priorities.”

He then went on to say in response to a subsequent question that

“right now the prosperity agenda is further up the list”.

I wrote to the permanent under-secretary to get some clarity over what he was saying about human rights and the prosperity agenda. I wanted to know how the two things worked together and whether one had a greater priority than the other. He replied, for which I was very grateful, but he did not comment on his quote, but what he did provide was a useful breakdown of how many people within the FCO, in full-time equivalent terms, work on human rights versus the number of people who work principally on prosperity. The figures are that 240 people work on human rights, against 2,900 people on prosperity. I do not know what is in the estimates from a budgetary point of view, but will the Minister tell us whether there is some sort of forward vision about how that balance might change?

Clearly, there are many, many human rights issues around the world—the Minister will be pleased to know that I will refer to but a few of the things in the thick sheaf I have here—and I want to know the FCO will be fully engaged in that. Let me run through them very quickly. First, on Burma, it is very pleasing that there are developments there, but I know that some of the Burma campaign groups are very worried that, even with the important role that Aung San Suu Kyi is playing, some minority groups are at a greater risk now than they were before. That requires FCO attention.

In Bahrain, we know that the UK Government are working with the prison authorities and the police to improve the regard for human rights, but there are concerns that the policy is not yet delivering the goods. I want to be certain that the FCO is sufficiently resourced to deal with such matters. I could say the same about China as well.

Perhaps the most worrying development—this is where the FCO really does need to invest very heavily to ensure that it has the right number of people in place—is with regard to Saudi Arabia and Yemen. I am really concerned that, at some point in the near future, it will be confirmed that there have been breaches of international humanitarian law. There are enough organisations that have produced evidence to suggest that that is likely to be the case. The FCO will be in a very difficult position. Although the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Bournemouth East (Mr Ellwood) has repeatedly said that there have been discussions with the Saudis and that assurances have been given, it seems that the evidence points in the other direction. The FCO needs to monitor very carefully the activities of the Ministry of Defence, which is responsible for assessing whether IHL has been broken. It would be in no one’s interests to find out subsequently that, in fact, IHL had been broken in relation to the activities of the Saudis in Yemen.

I am pleased to hear that, perhaps without great fanfare, the Committees on Arms Export Controls has been re-established. I hope that, at its first inquiry, it will look at the question of UK arms sales to Saudi Arabia, because that is the most pressing problem.

I could also mention human rights issues in Sri Lanka, which remain a priority for the Tamil community. There is also the matter of the human rights of the Ahmadi Muslim community in various countries around the world where they are often put under pressure.

I will finish by saying that the investment that we make in the FCO, whether it is hard investment in terms of our presence around the world or the soft power to which many Members referred, must be a priority for us. It helps us to punch above our weight and to ensure that the UK, whether it is through the British Council or our embassy presences around the world, is a major player on the world stage. I would like to ensure that that continues.

[Patrick Grady (Glasgow North) (SNP)]

I congratulate the Chair of the Foreign Affairs Committee, the hon. Member for Reigate (Crispin Blunt), and all his colleagues, including my hon. Friend the Member for North East Fife (Stephen Gethins), on the important job they have done in producing the report and the quite considerable success that they have achieved in persuading the Chancellor at least to maintain the Foreign Office budget more or less at what it was in the face of very great pressure. I will come back to some of those points as we go on.

As my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) pointed out, this is a debate on the estimates. Madam Deputy Speaker, you were only doing your job when you called my hon. Friend to order, because of the rules and conventions of this House by which you are bound. None the less, it does serve to demonstrate the complete inadequacy of the estimates process. The motion in front of us today authorises, in clauses 2 and 3, the expenditure of more than £50 million of public money, yet the Chamber is almost empty. There has not even been a single contribution from the Back Benches of the Official Opposition party. The broader estimates are contained in the mighty tome, House of Commons paper 747, which was no doubt named after a jumbo jet owing to its not inconsiderable size. Yet here we are, barely an hour and 20 minutes after starting this debate, moving to the wind-up speeches.

All kinds of important Government expenditure will have no kind of real in-depth scrutiny. Page 407 includes a payment from the resources reserves (programme) budget in respect of the battle of New Orleans commemoration—an increase of £142,000. Page 410 contains a transfer to the Cabinet Office (capital) budget in respect of the Foxhound Project—perhaps the Minister can tell us what that is. There is a decrease of £3 million to that Government budget. Also on page 410 is a cost-neutral transfer of the old Admiralty building, which is much appreciated by FCO officials, I am sure, to the Department for Education.

[Crispin Blunt]

I have some sympathy with the hon. Gentleman and with the arguments, which were almost in order, about the quality of the estimates. As he has raised this question, perhaps when the Minister replies to the debate he can explain why we have given that money to celebrate a British defeat that happened after the peace treaty was concluded on the war in which it took place. Perhaps we can also have an explanation of the biggest number of all in the Foreign Office estimates, which is the budget-neutral increase in programming expenditure fully offset by an increase in receipts in respect of revised intergovernmental charging, which appears to be a sum of £220 million. If the Minister could explain that, we might at least have had some focus on the estimates themselves.

[Patrick Grady]

The hon. Gentleman makes my point for me. It demonstrates the complete lack of scrutiny. Madam Deputy Speaker, you did, of course, say that there are other mechanisms—such as Select Committees, statements, Question Times and Westminster Hall—through which we can discuss different aspects of expenditure. The estimates process itself is clearly inadequate, particularly for those Members from Scotland who were told during the debates on English votes for English laws that this was the opportunity for us to discuss Barnett consequentials and the impact of legislation on which we cannot vote because of the EVEL procedures. It seems that that opportunity is being denied to us. As a member of the Procedure Committee, I look forward to our inquiry into the estimates procedure and to questioning Ministers, particularly Treasury Ministers, and Members from all parties about how we can make this procedure fair. As I am at risk of deviating too far from the motion and being ruled out of order myself, I will now turn to the more general themes of the debate in the Foreign Affairs Committee’s report, and the broader issue of the FCO’s role and function.

It seems from the tone of the debate that the FCO is in a somewhat precarious situation. It is a victim, like so many other Departments, people and communities across the country, of the Government’s ideological commitment to swingeing public service cuts, no matter what the cost. In the SNP manifesto, we showed that it was possible modestly to increase public services, while over the long term still balancing the books and paying down the public debt. This estimate is one of the more unforeseen and probably slightly less concerning aspects of that commitment, as it does not impinge on people’s day-to-day lives in the way that so many other cuts are. Nevertheless, it is the impact of an ideological drive from the Government.

At the same time, that approach is leading to an increasingly ideological and almost isolationist narrowing of focus and interest, with a divergence away from what should be priority areas—the protection of human rights and the promotion of peaceful and sustainable development. Some of that was alluded to in the discussion about the role of the FCO and its expenditure on overseas and official development assistance. The SNP has long welcomed the Government’s commitment to 0.7% of GNI to be spent on ODA, but meeting the target is not a blank cheque to spend that on whatever the Government can cram into the definition of ODA. I have several times raised on the Floor of the House the increasing overlap between expenditure for that target and that for the 2% NATO target, which might be allowed in principle but I do not think is what people expected in practice when the Government made those commitments.

The hon. Member for Basildon and Billericay (Mr Baron) mentioned ODA and the funding of the World Service, and I share a number of his concerns. My hon. Friend the Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) talked about the importance of effective co-operation across Government, and it would be interesting to hear the Minister’s responses to her points.

The headline FCO budget is one of the smallest in government, but that does not mean that it is necessarily the most effective or efficient. The discussion, as I have said, is in the context of the pressure being felt across public spending, so if the FCO’s budget is to be protected it must be used efficiently. From the right hon. Member for Carshalton and Wallington (Tom Brake) we heard some statistics about the number of people employed. Over my lifetime I have, for various reasons, visited three of Her Majesty’s embassies and high commissions around the world. I was in Malawi, where, despite 2 million people in that country not having access to clean water, the high commissioner has a swimming pool at his disposal in his residence. In Zambia, a tennis court is provided in a country in which most children probably play football without shoes. Just the week before last I was in Berlin, where I found that the embassy takes up an entire street block and practically stops the traffic through one of the main thoroughfares right next door to it.

There are undoubtedly efficiencies to be found. We were told during the independence referendum that Scotland could never afford a network of global embassies, outposts and so on—that this would be one of the crippling costs of independence. To be fair, if we were to try to replicate what the FCO has, that might well be true. However, I think that a country such as Scotland could probably manage much more modestly. Indeed, considering the role that we play in the world today, so could the United States—I mean the United Kingdom, although the United States probably could too, for that matter.

Other issues that the FCO needs to consider have been mentioned in other debates. There was a useful debate in Westminster Hall a while back about consular assistance, especially for bereaved families following the loss of loved ones overseas. I wrote to the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Bournemouth East (Mr Ellwood), about concerns that one of my constituents raised about support for people who are victims of terrorist attacks—or, more accurately in her case, who witness terrorist attacks, as she did in Tunisia. She feels very concerned about the lack of information and communication, which I have mentioned in parliamentary questions and in a letter to the Under-Secretary.

Finally, we have also heard about the downgrading of human rights in the FCO’s priority areas. The director of Amnesty International has said:

“The UK is setting a dangerous precedent to the world on human rights. There’s no doubt that the downgrading of human rights by this government is a gift to dictators the world over and fatally undermines our ability to call on other countries to uphold rights and laws.”

This is a serious concern about which I have heard from a number of civil society organisations, and it is important that it is addressed. Nowhere else is that more true than with the situation in Yemen and Saudi Arabia, where UK planes with pilots trained in the UK and bombs made in the UK, co-ordinated in the presence of UK military advisers, are being used in the war in Yemen. At some point, the Government must tell us when that adds up to complicity in that war.

In conclusion, these next two days ought to be taken up by a debate on the estimates process, but we have shown in this debate the inadequacy of the House’s processes and procedures for dealing with estimates and expenditure. We have also touched on the important role of the FCO, the pressures it faces as a result of the Government’s ideological budget cuts and the challenges that that presents for more effective use of taxpayers’ money and co-ordination across Departments.

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[The Minister for Europe (Mr David Lidington)]

I thank my hon. Friend the Member for Reigate (Crispin Blunt) and the members of the Foreign Affairs Committee for bringing their report to the debate this afternoon.

From both sides of the House, there was a common theme: the importance of an effective diplomatic service and Foreign Office in advancing and defending the interests of the United Kingdom in the face of multiple challenges in different parts of the world. I thank in particular those hon. Members who paid tribute to the work of individual members of Her Majesty’s diplomatic service. That gives me the opportunity not only to thank those individuals myself, but to put on the record my own thanks and those of the ministerial team for the professionalism and commitment that members of the diplomatic service have shown to us, as they have to previous Governments. They continue to work day in, day out on behalf of the people of this country.

I want to move on to the spending review and the settlement for the FCO, but I cannot quite let the remarks of the hon. Member for Hornsey and Wood Green (Catherine West) go without comment. I completely understand that it is the job of an Opposition spokesman to try to find criticisms to make of the Government—I remember doing that myself some years back—but the degree of amnesia that infected her judgment on this occasion was astounding. It was as if the years from 1997 to 2010 had been airbrushed out of the historical record.

It is worth reminding the House that under the Governments of Tony Blair and Gordon Brown, the Foreign Office’s budget was cut, posts were closed, the language school was axed altogether, the library was scrapped, and we got to the craziest situation of all. After the Treasury had removed the traditional protection arrangement that it had offered against the Foreign Office’s exposure to foreign exchange movements, as a result of the payment of salaries and bills by overseas posts, the hon. Lady’s former colleague, Mr David Miliband, was reduced to having to draft in members of the diplomatic service to establish a hedge fund unit inside the Foreign Office so that the Foreign Office could try and run a hedging operation of its own. I do not want to hear too many lectures from the Labour party about Foreign Office expenditure and sensible budgeting.

The Foreign Affairs Committee and the House as a whole are entitled to ensure that the Government are held properly to account for delivery of their responsibilities in the field of foreign and security affairs. My hon. Friend the Member for Reigate and, I think, the hon. Member for Glasgow North (Patrick Grady) asked about two or three specific items in the estimates. I am going to have to write to them about two of those, but I can give them some satisfaction on the question of the battle of New Orleans, because I have been passed some additional advice. The purpose of the occasion was to commemorate the British dead in that battle and celebrate the 200 years of peace that have followed between the United Kingdom and the United States. The Foreign Office has contributed $215,000; other contributors have included the state of Louisiana and Boeing, and there has also been a significant personal contribution from our honorary consul in New Orleans.

[Crispin Blunt]

While my right hon. Friend is on that issue, can we see how adroit he and his team are? Will he explain what the Foxhound Project is? Is this a welcome addition to the leisure activities of Her Majesty’s Government, or is it expenditure in respect of something else?

[Mr Lidington]

If my hon. Friend is expecting to reopen the debate on field sports, I will definitely disappoint him. That is one of the subjects on which I will write to him and the hon. Member for Glasgow North.

The Foreign Affairs Committee report, published on 20 October last year, came before the publication of the spending review, the national security strategy and the new development strategy in November last year. The report was important, because it contributed to an extremely vigorous public debate about the importance of continuing to invest in our diplomatic resources.

As a number of hon. Members noted, the Chancellor responded in his spending review. He noted in his statement in this place the crucial role of what he described as “our outstanding diplomatic service”, and he announced that the Government would protect the budget of the Foreign and Commonwealth Office in real terms. That is important because, as right hon. and hon. Members across the House have said, an effective and expert diplomatic service is an important element in allowing this country to respond to the international challenges that we face to our interests.

Now, there is no avoiding the fact that, despite that commitment to protect the FCO’s budget in real terms, my right hon. Friend the Foreign Secretary will still have difficult decisions to take about relative priorities in the Department, but that is no more than the challenge that would confront any Secretary of State. We would all like to feel that the budgets available to us were unlimited; in the real world, however, those budgets are finite, and they are constrained by the Government’s overall need to bring down the deficit and address this country’s long history of living beyond its means in terms of the public finances.

The Future FCO review, about which my hon. Friend the Member for Reigate asked me, is designed in part to find ways in which we can secure our objectives as a Department by doing things differently. I have talked briefly to the reviewer, who is also speaking to other Ministers and senior officials, and the purpose of the review is to advise Ministers and senior officials on how the FCO can be more expert, more agile and more focused on its key priorities than it is at the moment.

I expect the review to be in a position to set out its conclusions later this year—by the end of the spring, I hope. We intend there to be a clear vision of how the FCO should look by 2020, so that we can implement changes in the Department to enable us, within the priorities and resources we have, to secure our objectives more effectively and more efficiently than in the past. We also hope that the review will ensure that, where efficiencies can be made, the savings can be channelled straight back into serving the core objectives that the Foreign Secretary has set.

My hon. Friend asked about the spending review letter. The Government’s policy in respect of all Departments is not to publish settlement letters. There is plenty of public information in the spending review documentation and the Chancellor’s speech and answers. The letters are part of ongoing policy discussions, so it is not appropriate that they should be in the public domain at this time.

The overall resource departmental expenditure limit for the FCO will rise in line with inflation in each of the four years covered by the spending review, increasing our funding from £1.1 billion in 2015-16 to £1.24 billion by 2019-20. We believe that this settlement will enable the Department to maintain our world-class diplomatic service, including our network of posts around the world, which host not only the FCO but 32 other Government Departments and agencies. That global presence and continued foreign policy leadership in Whitehall by the FCO will serve to protect our national security, promote our prosperity and project the UK’s values overseas.

In line with the Government’s commitment to spend 0.7% of gross national income on development assistance, the FCO will be allocated additional ODA-eligible resources, more than doubling our spending from £273 million to £560 million in 2019-20. That will enable us to pursue our key foreign policies and to deliver the ambitions set out in the national security strategy and the development strategy.

The hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) asked, very reasonably, how we reconciled the priorities of different Departments and ensured that, as far as possible, they incorporated within an overall agreed Government approach. The answer, in part, is that there are frequent conversations between Ministers in the different Departments dealing with external affairs and between their officials. However, in the broadest sense, the strategic direction on the key elements of the United Kingdom’s external policy is set after discussion by the National Security Council, chaired by the Prime Minister. The NSC brings together the Prime Minister, the Foreign Secretary, the Chancellor, the International Development Secretary, the Defence Secretary and other interested Ministers precisely so that we can agree on an approach that harnesses the different skills of all Government Departments and, at the same time, establishes which Departments are to contribute which resources to that common objective.

The settlement includes increased spending to support the UK’s overseas territories. In order to meet our long-standing commitment to address their reasonable needs, the FCO will co-ordinate a new strategy for the overseas territories and chair a new director-level board to co-ordinate cross-Government activity. Furthermore, as announced by the Prime Minister during the Commonwealth Heads of Government meeting in Malta in November last year, the United Kingdom will host the next such Heads of Government gathering in 2018, and the FCO will co-ordinate that event.

The spending review settlement provides the same budget for Chevening scholarships as in 2015-16 of £46 million per year. Over its 32-year history, that scholarship scheme has built up a large and influential alumni network aligned with the interests of the United Kingdom, and this funding will ensure that that continues.

A number of hon. Members asked about language training and language skills. The FCO language centre was reopened in September 2013 to renew the focus on and investment in languages as a core diplomatic skill, and ensure that we get the right people with the right skills in the right jobs to deliver our objectives. As a priority, we will allocate new funds to improve Mandarin, Russian and Arabic language skills. In 2015, we trained 34 staff in Arabic, 14 in Mandarin and 24 in Russian, as well as 35 in French and 28 in Spanish. I completely accept that more needs to be done, but we are making progress, and there is a very clear commitment to continuing to develop language skills.

In addition, the Foreign and Commonwealth Office will spend up to £24 million over the next four years to increase the presence of its counter-terrorism and extremism experts overseas. In sum, our budget will allow us to focus on our key foreign policy objectives, including tackling Daesh and ensuring security in Europe. It will also allow us to do even more to prevent conflict and encourage stability in fragile states. My right hon. Friend the Foreign Secretary has made it clear that the Department will need to become leaner and build on its core strengths, and reinvest and refocus resources on new priorities. That is the reason for the review, about which I have already spoken, and it is also what lies behind the creation of a new digital transformation unit, the purpose of which is to ensure that FCO officials have access to the latest techniques for using modern technology in their work. After a year in operation, the diplomatic academy is already boosting both broader policy capability and specialist skills.

My hon. Friend the Member for Reigate (Crispin Blunt) asked about the tech overhaul programme. We are planning for its global deployment from 2016 to 2018, and a headline figure of £105 million has been agreed by the FCO board. We believe that the overhaul will provide greater speed, stability and reliability, and, partly by reducing the time currently lost because of inadequate IT systems, increase the productivity of staff members. We are using our IT partner, BAE Systems, to help deliver the tech overhaul to industry best practice standards.

A number of hon. Members asked about human rights. We have taken action to mainstream human rights across the FCO network. The issue remains a priority, but we believe that, rather than it being ring-fenced for a few specialist staff, it should be the responsibility of all British diplomats. More detail of our approach has been provided in our written evidence to the Foreign Affairs Committee’s human rights inquiry, to which my right hon. and noble Friend Baroness Anelay gave evidence on 24 February.

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[Crispin Blunt]

With the leave of the House, I will briefly thank hon. and right hon. Members for taking part in this estimates debate on the Foreign Affairs Committee report. I agreed somewhat with the point made during the debate that our ability, as an institution, to oversee the estimates properly is historically woeful and needs to be addressed.

I am grateful for the support that I received for my arguments from my hon. Friends the Member for Newbury (Richard Benyon) and for Basildon and Billericay (Mr Baron). The hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) made a point about diversity, which the Minister addressed. That point has power, because clearly we will be better off if our service properly reflects the country in which we live. The organisation was found in 1997 not to reflect that diversity; as it moves away from that position, one wants to be careful about getting there in too much of a hurry, because we might lose some of the talent and ability already in the institution.

There is an issue about how the Foreign and Commonwealth Office has made that change, and that goes across the piece to its budget. In his response, my right hon. Friend the Minister said that it would not be appropriate at this time to place in the public domain the public expenditure settlement letters. Someone of his experience will recognise a piece of “Yes Minister” speak at the Dispatch Box as well as anyone else. He is, of course, inviting a blizzard of further inquiries if we do not get that detail.

I welcome the Minister’s acceptance of the fact that there is a real need for more progress in language skills. The concern is that he said the Department must become leaner. It is already starving and cannot allocate its resources effectively. What he said about the conflict, stability and security fund being 60:40 in favour of non-ODA countries illustrates the challenges that the Foreign and Commonwealth Office faces. The Committee will continue to examine those challenges during this Parliament.

Question deferred (Standing Order No. 54).