380. Could I just go on
to something slightly different arising from other questions.
Sir John, you have been very frank and I think you have got the
mood of the Committee as well. The Committee are with you and
are concerned about the question of our stretched representation
around the world and the very powerful point you make about some
of these places lacking critical mass with all the consequences
that flow from that. You presumably have put this to Ministers.
What do they say in response?
(Sir John Kerr) Foreign Office Ministers on the
whole put it to me. It is a point that strikes them very strongly.
It struck me very strongly, Mr Mackinlay, when I went to China
en route from Washington to becoming Permanent Secretary. I knew
about our post in Beijing of course, and I think our post in Beijing
is, of all Western Posts, the best equipped sinologically. It
has a wonderful corps of Mandarin speakers who really do have
a close watch on what is going on in China. It is a smaller Post
than that of the French and the Germans and the Americans, but
it is a very effective Post. I went to look at Shanghai, and I
went to look at Guangzhow, which I did not know. Down there, where
Shanghai is perhaps where the Chinese economic miracle has been
happening and will I am sure go on happening, we have a post of
six people, which I do not think really has a critical mass yet.
The French and Germans have 15 and 16 people. When you get down
to Guangzhow it is still smaller. I am sure it is right that we
should be there. The development of China is going to be very
exciting. I think Zhu Rongji's visit here showed that he really
does believe in privatisation. I think that what he wants to do
to the Chinese economy provides tremendous opportunities for British
business, British financial expertise. I think that in Beijing
we are very well equipped to give a political briefing to a company,
but I think we are not yet ideally equipped in Shanghai or Guangzhow
to help that company establish a presence on the ground. Ministers
would agree with what I have said and Ministers would hope that
the Treasury, whom we neither fear nor loathe, would agree with
us.
381. I am sure. You gave some comparative
figures to replies, which I thought were both interesting and
helpful. Are we comparing like with like because, for instance,
would the numbers of the Germans and the French in the delegations
you have referred to include what were basically trained people
who in our situation would be Department trained, or, if we were
to look at those from the best you know, would we find a disparity
there as well? Is the total presence, whether it is foreign ministry
or trade ministry, substantially greater?
(Sir John Kerr) It is total presence in all three
cases. In our case I am scoring our DTI people. We do have people
seconded from the DTI in the FCO, just as we have Diplomatic Service
people seconded in the DTI.
382. But you are comparing like with like,
are you?
(Sir John Kerr) Yes, I am.
383. With regard to locally engaged staff,
you have said what a very important contribution they make and
are good value for money. Can I put it to you that there are one
or two places where the degree of Britishness—and I do not
mean this in any jingoistic sense—is beginning to be diluted;
in other words there is a limit to the proportion of locally engaged
staff which is healthy both in terms of profile and, I would have
thought, in terms of longevity of service, continuity, communications,
and, if I use the word "intelligence" I do not mean
deep intelligence but that kind of thing which is the food and
drink of the Foreign Office, is there not a danger in some cases
of the proportions just becoming disproportionate?
(Sir John Kerr) Yes, there is that risk, I quite
agree, and I think we run that risk in a number of these small
posts. We have over a hundred posts where we have four or fewer
UK based staff. There is no general rule. Post by post you have
to assess what is an acceptable proportion. In my Seattle example
you have an extremely efficient post because the young Americans
who work for us there are very good. They are all on contract
terms. They are all rising stars who will pursue their own careers.
They are extremely good, and there is no problem about speaking
the language. If you go into another post—I will not name
one—I can imagine a lot of posts where the management of
locally engaged staff is a really very important task which requires
quite a considerable supervisory element of UK based staff. For
a number of reasons that could be the case. It is very important
if they are doing business at your front desk in another language
to know what it is they are doing. They are answering your telephones.
If they are the public face of the United Kingdom in a particular
country then you need to manage them very well. I think we are
getting better at managing our locally engaged staff. I think
we are integrating them better, we are planning their careers
better, their progression from one job to another. But I do think
that you are right: there are places where we have reached the
limit or perhaps are slightly beyond the limit of what makes sense
in localisation.
384. Compared with the French and the Germans,
the French have their French community and the tradition, particularly
in Africa and many other parts of the globe, as we do with our
former Empire and our Commonwealth commitments, but there is an
even starker contrast: the Germans simply do not have that historic
role/relationship/commitment to the extent that ex-pats do. If
we were to line up what you have described to us as our representation
around the world with the Germans, there is an enormous disparity,
is there not?
(Sir John Kerr) I entirely agree.
Mr Godman
385. Sir John, I have a brief question prompted
by your earlier comments on the emphasis on human rights and conflict
avoidance, and also your references to Washington. How far does
the parlous financial condition of the United Nations impinge
upon your Department's budget? May I say to you that I believe
that that organisation is suffering deeply in terms of its human
rights peacekeeping operations largely because of the stupid obduracy
of Congressmen and Congresswomen on Capitol Hill to sanctioning
payments of dues. Does that state of the purse impinge on your
Department?
(Sir John Kerr) Yes, it does. It impinges on us
in two ways, both very direct. First, you are quite right, Mr
Godman, to point out that this is not an Administration policy.
386. I did say "Congressmen and Congresswomen".
(Sir John Kerr) Exactly. It is Congress that has
turned down the Administration several times on the Administration's
attempts to start the process of paying off the 1.1 billion dollars
which the United States is in arrears, owes, to the United Nations.
That is 270 million to the regular budget of the United Nations
and 870 million to peacekeeping, plus an additional 254 million
owing to specialised agencies. This is an extraordinary fact,
that the United States, famous for its generosity down the years,
is 1.1 billion dollars in arrears to the United Nations and another
quarter of a billion to specialised agencies. It is not Administration
policy. It is, as you say, Congressional obduracy. It impinges
on us very directly because how the UN makes ends meet is by borrowing
from the peacekeeping budget in order to fill the holes in the
regular budget. Borrowing from the peacekeeping budget means you
do not pay back people who have been carrying out peacekeeping
operations for you. They are entitled to be paid by the United
Nations for what they have done and they are not paid. In our
case that means that we are owed on the peacekeeping account by
the United Nations £65 million as of now. I am not saying
the United States is the only debtor. The debts owing to the United
Nations are 1.7 billion.
387. What was that figure?
(Sir John Kerr) Sixty five million pounds—dollars;
I beg your pardon—is owed to the United Kingdom from the
United Nations for peacekeeping operations.
388. A substantial sum of money.
(Sir John Kerr) Exactly. It will be paid but we
are in arrears. It will be paid somewhere down the line.
389. Who will pay? Who will sanction the
payments if the Americans are dodging the column?
(Sir John Kerr) It gets further and further into
arrears. These $65 million are payments that will have fallen
due last year and the year before. It will be paid but there will
be more debts that will have accumulated for more things we have
done as a peacekeeping force for the United Nations, and we will
have to sit and wait to be paid for that. It is, I think, a completely
unacceptable situation that this should have arisen. It is not
the United Nations' fault. The United Nations is struggling to
make ends meet by borrowing off the peacekeeping budget to keep
the regular budget going. We are not the only ones who suffer.
One of the saddest features of this is that a whole lot of the
world's poorest countries who do peacekeeping work for the United
Nations are, as a result of the US position, not being paid for
what they have done, countries like Bangladesh.
Mr Illsley
390. Do you have any comparative figures
for other countries in relation to the debts they are owed by
the UN?
(Sir John Kerr) I do not have them in my head,
I am afraid.
Chairman: Can you
provide those for the Committee?
Mr Illsley: Is it
$65 million and rising?
Mr Godman
391. I have obviously prompted something.
(Sir John Kerr) I think in logic it must be rising
because the US arrears to the United Nations are rising. I am
not sure, Mr Illsley, but I suspect it is rising.
Mr Illsley
392. What was it last year?
(Sir John Kerr) We can find out.
Chairman
393. You can provide the material asked
for by Mr Illsley?
(Sir John Kerr) Of course.
Mr Godman
394. Thank you, Chairman, for your courtesy.
I hope this problem of the failure of the United States and a
handful of other nations to pay—let me put it another way:
to honour—their obligations to this international organisation
does not expose in any way to danger officials of yours and our
soldiers who do such a fine job, a remarkably fine job, in peacekeeping
activities. Can you give me that assurance?
(Sir John Kerr) Yes, I can give you that assurance.
The only roundabout way by which it might, Mr Godman, would be
if the difficulties about being paid, the payment delays, were
to lead other countries to be deterred from taking on peacekeeping
tasks for the United Nations that we were not deterred from taking
on, and therefore we were exposed to particular dangers. This
has no direct effect on risk because the troops that we supply
to the United Nations serve under conditions that we determine
and they are not exposed to any greater risk because somebody
else is slow in paying bills.
395. When I was in Washington recently I
met a number of Congressmen and Congresswomen and I told them
that their conduct was disgraceful in what they were doing in
holding up this policy, linking it to abortion legislation I think.
What is your Embassy doing, what are Ministers doing, to persuade
President Clinton and his officials to help this legislation through
Congress? If nothing is done matters are going to worsen.
(Sir John Kerr) When Robin Cook paid his first
visit to America as Foreign Secretary, amongst others he called
on Jesse Helms, the Chairman of the Senate Foreign Relations Committee,
to raise precisely this issue and did so in a discussion which
was almost an argument. The Embassy is extremely active, but of
course our efforts on the whole are not just with the Administration
because they are on our side. I talked about this with every member
of the Senate Foreign Relations Committee and with most of the
key members of the House. You have to remember that both in the
House of Representatives and in the Senate the Administration,
the Democratic Party, do not have a majority. I would go further.
I would say that we are not seeing just a temporary phenomenon,
because the people who are being elected to the House of Representatives
and the Senate of the United States are in my view fairly representative
of United States opinion. There is across the United States a
turning-away from the outside world. I think that Mrs Albright
as Secretary of State has made very serious efforts to counteract
this. She makes more speeches in America than out of America.
She travels more in America than out of America. I think she sees
her function as trying to remind America that although the Cold
War is over that does not mean that America should withdraw into
itself. There still is an American role in the world which requires
for example increasing the resources of the international financial
institutions, another problem blocked on the Hill, paying the
United States debt to the United Nations, and maintaining US aid
programmes. Development aid statistics now show the Americans
as in relative terms last in the league of aid donors.
396. One last question. Does Robin Cook
go along to that charming Scot, Gordon Brown, and say, "Here,
look: we are going to get this money, the $65 million." What
is that in sterling? You are a better mathematician than I am
given your education. Do you borrow against this collateral from
the Treasury? How do you make that money good?
(Sir John Kerr) We have access to the reserves.
Mr Heath
397. May I ask you, Sir John, about the
integration that you have already touched on both within the Department
and beyond the Department. How is the need for the mix of skills
between the diplomatic staff, the military attachés, the
environment attachés, the British Council of Trade at home,
assessed for each mission? How do you assure yourself or how do
Ministers assure themselves that the right mix is there? Is it
purely departmental or is there someone who stands back and says,
"No, we have got to alter that"?
(Sir John Kerr) It is an inspection system which
works to the Chief Clerk and to me, which regularly reviews and
goes out and has a look on the ground. Would you like to describe
the system, Rob?
(Mr Young) The inspection system has been in place
for a very long time. It used to be a process which was almost
mandatory. Inspectors would go out from the centre and decide
in relation to available resources and to worldwide standards
and norms what they thought individual Posts required in terms
of staffing for the various functions undertaken by the Post.
398. And covering all Departments, if I
may interject here, not just the FCO staff?
(Mr Young) Yes. The inspectors would consult with
all other relevant Departments in Whitehall before going to a
given Post overseas and indeed sometimes they would be accompanied
by somebody from the Ministry of Defence or from the Treasury
on those inspections. They would come back and make recommendations
which were pretty well mandatory. Ambassadors would argue strongly
if those inspection recommendations could result in large cuts
to their missions, but the centre in the end took the decision.
We now have a somewhat more flexible, devolved process. Since
1992 we have been operating in the Foreign Office a devolved budgetary
system which has got progressively greater. We have now devolved
from the centre to our geographical and functional Commands in
the Foreign Office over £300 million worth of budgets. Those
Commands now play a much more direct role in the management of
Posts than they used to. When the inspectors, who still operate
on a cyclical system, come back and make their recommendations,
they are now advisory to the Commands who have to decide whether
or not to accept the proposals either for cuts or enhancement
and it is those Commands who now have to make judgements about
relative priorities within their area of responsibility and decide
whether, for example, if it is in the Middle East, to reinforce
Cairo at the expense of Rabat. Those inspection reports are also
the subject of discussion with the other Government Departments
concerned who, as I say, will have been consulted at the outset
of the process. They are consulted at the end as well and our
hope is that through the FCO co-ordination process we will actually
achieve a rounded view of the requirements of the Posts that have
been inspected.
399. Does that deal with the capital assets
as well so that we ensure both integration and cost effectiveness
of that service? Could you, in answering that, also describe what
I from a local government background would call the recharging
system—no doubt there is a different term in use in the
Treasury—for other Departments for stationing officers of
any kind in an Embassy? As I understand it, it is a pro rata assessment
of the overall running costs of the Embassy that is then charged
to the Department in question. That has proved a deterrent in
some instances, for instance in the case of liaison officers employed
by Embassies who were priced out of the market in some of the
more expensive locations.
(Mr Young) On your first question, Mr Heath, the
inspectors do indeed make recommendations about accommodation
but these are handled in a slightly different way because on the
whole major estate funding decisions are still taken by the central
administration in London. We have devolved to Commands a certain
amount of the estate budget for small works and for maintenance
and so forth, but for the big issues, about whether an Embassy
should sell up in one location and go somewhere else for example,
are taken by the centre. While inspectors can make recommendations
it is not a Command decision finally. It is a decision taken with
a very heavy input from the centre which holds most of the funds.
On your second question, the process of charging other Government
Departments for the support services that we provide on their
behalf has grown up in a rather haphazard way over the years.
You can see the logic of the arrangements for individual Departments
but the arrangements between Departments vary enormously. For
example, for Defence Attachés the Ministry of Defence pays
salaries and allowances and the Foreign Office pays local costs
such as accommodation. For the newcomers on the Embassy scene,
such as Drugs Liaison Officers, Airline Liaison Officers, then
the originating Department pays full costs. We are trying to move
to a system, and this is one of the results of the Comprehensive
Spending Review that we are already putting into practice, towards
a full cost charging regime for all other Government Departments
who lodge with us if you like and under us in overseas Posts.
