TUESDAY 16 JULY 2002

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Members present:

Mr David Chidgey
Sir Patrick Cormack
Mr Fabian Hamilton
Mr Eric Illsley
Andrew Mackinlay
Mr Bill Olner
Sir John Stanley

In the absence of the Chairman, Sir John Stanley was called to the Chair

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Memorandum submitted by the Foreign and Commonwealth Office

FOREIGN AND COMMONWEALTH OFFICE ANNUAL REPORT 2002

Examination of Witnesses

SIR MICHAEL JAY KCMG, Permanent Under-Secretary of State, MR PETER COLLECOTT, CMG, Chief Clerk, MR SIMON GASS, Director, Resources, MR ALAN CHARLTON, CMG, Director Personnel, Foreign and Commonwealth Office, examined.

Chairman

104. Sir Michael, welcome to you and your colleagues to this session on the Foreign and Commonwealth Office Annual Report 2002. Sir Michael, you may be delighted or disappointed that there is a rival attraction to yourself just down the corridor. The Chairman of the Committee is present at the Liaison Committee's meeting with the Prime Minister, and therefore I am chairing the session this morning. We welcome your colleagues also. Sir Michael, we are conscious that you have relatively recently taken up your post. I would like to start by asking you, when you eventually get to the end of your time as Permanent Under-Secretary to the Foreign and Commonwealth Office, what would you have hoped to have achieved within your department?

(Sir Michael Jay) Thank you for your words of welcome to my colleagues and to me. I am delighted to be in front of the Committee again. I would like to leave the Foreign and Commonwealth Office to be seen as a thoroughly professional service, engaged in promoting British interests and serving the British public around the world, maintaining its network of posts. I would also like to see it more closely engaged than it is at the present with other Whitehall departments because I see that foreign policy is increasingly indivisible from domestic policy. One of the tasks that I see for myself is having to work more closely both in our posts overseas and in the formulation of policy in London with other government departments. I think that I would place the emphasis on professionalism, and obviously I would also like to leave a service which has a high morale and self-confidence, which I believe it should have. The job that we do is hugely important for Britain. I do believe that we have a network of posts overseas which is very well designed to promote British interests.

105. How would you propose securing your objective of working more closely with other Whitehall departments?

(Sir Michael Jay) We have begun work on that already in the last few months. It is something to which the Foreign Secretary and I both attach great important. One of my Deputy Secretary colleagues, Michael Arthur, has been charged with establishing closer links with all the key government departments with whom we have contacts, talking to them about the services we can provide to them and being clearer about the common interest that we have. We are doing that, and I think that is becoming clear in key issues like links with the Home Office over asylum and immigration. That is a very good example of an area of policy which is shared, in a way, between the Home Office and the Foreign Office. It is clearly true also with the DTI over a wide range of commercial, investment, industrial and trade policy issues where the policy formation in London and the delivery of that policy and the negotiations are already shared between us.

106. Could I also ask you: as you see it now, Permanent Secretary, what would you regard as the biggest challenges and problems that you need to overcome at the present time?

(Sir Michael Jay) I put that in the context of a world which is changing quickly and presenting I think all of us, and certainly the diplomatic services, with greater challenges. We are facing a world in which there is one clear superpower, in which there is a risk of regional conflicts that are very difficult to predict and difficult to control, which require a network of international relationships, both with the United States, in our case, and within Europe, and indeed, as we have seen recently over India and Pakistan, others such as Russia and indeed China. So, it is finding what the role of the diplomatic service is in a rapidly-changing world. I think we need to become more flexible, and achieving a diplomatic service which can respond more flexibly to a world which is itself becoming less predictable is going to be one of the challenges we face. That means being able to be more flexible in our operations overseas; it means being able to be more flexible in our operations in London. The other challenge I see myself, and something which I have started doing since I took over this job a few months ago, is to try to change the corporate structure of the Foreign Office in London so that it does reflect these needs. For example, we have brought together what were two boards - the Policy Board and the Board of Management - so there is one Board now which looks at policy and the delivery of policy together because they are inseparable. We have created at the level below that a Committee of Directors, former Under-Secretaries, through whom papers come when they come up to the Board, and we have established a Directorate of Strategy and Innovation, which works very closely to the Board and to me. That is looking at the longer term perspectives of foreign policy and how we need to adjust our operations in order to reflect the change in circumstances. I hope all this will help us to look rather more strategically at the direction of foreign policy and our need to respond to it.

Chairman: We will return to some aspects of those points you have highlighted later on. What we would like to do is to spend a little time now on the Comprehensive Spending Review, and then we will go back to the Annual Report.

Mr Olner

107. Sir Michael, the Chairman has alluded to yesterday's Spending Review. The Foreign Office, the World Service and the British Council all received substantial uplifts to their budgets over the next three years. Obviously the extra money nowhere near matches the bid you made. Firstly, are you happy with the settlement that was made?

(Sir Michael Jay) We think it is a good settlement. I think it was described in the Financial Times as a respectable settlement. I think somewhere between respectable and good is how I would describe it but there are some very positive aspects to it, in particular the creation of the Global Opportunities Fund, which provides us with an opportunity to develop some programmed spending to support our network of posts overseas. I am pleased, too, that there were good increases for the BBC World Service and for the British Council because both of those are extremely important parts of the overall projection of British interests overseas.

108. As the settlement did not match the bid, what part is going to suffer? What part is not going to be able to proceed as you wish?

(Sir Michael Jay) We did not achieve all our bids in full, so we will have less money than we would have liked for our programmed expenditure, for example, but I do think that we have, through the Global Opportunities Fund in particular, an opportunity to do more. I should also say that we have an obligation to provide 2.5 per cent of efficiency savings during the three-year period. I see that as a stretching target but as something which we would in any case have wanted to do in order to increase our efficiency over the next two to three years. I think it is a good settlement, which we welcome and which the BBC World Service and the British Council have both welcomed.

109. Could I perhaps stretch you a bit more on the new Global Opportunities Fund? Could you, firstly, explain the purpose of that fund and describe the sorts of projects that it will sponsor?

(Sir Michael Jay) Its purpose is to enable us to spend a certain amount of money each year over the three years, starting next year, on programmes which support British interests overseas. The areas in which I see this focussing include: economic governance, human rights, promotion of democracy and the fight against drugs and crime. You will have seen that we have a specific PSA target on the reduction of drug production in Afghanistan. We will have to work out exactly how this operation is going to operate because this is a new concept, but I see it operating with our posts overseas, which are well placed to spot opportunities in these areas, bidding against a sort of challenge fund, bidding against a fund back in London, and then agreement being given to the allocation of targeted programmes in these areas.

110. So the opportunities will just be flagged up by diplomats abroad. The countries themselves will not make an independent bid for it?

(Sir Michael Jay) We have not worked out the details of how it would work. I would imagine that we would be asking our embassies in the countries concerned to look out for - and many of them already have very good ideas - ways in which more money could be spent. We have had to tell them in the past that there is not money to spend. They would be coming to us and saying, "We believe that there is an opportunity for spending X thousand or million pounds is this particular country over the next two or three years to achieve this particular objective, which will fit in with our PSA targets". That will be a bid back to London and a decision will be made because there are clearly going to be more priorities, and obviously there are going to be more bids than money to spend. There needs to be selection mechanism in London.

111. I gained the impression, rightly or wrongly, from that answer that you are looking to take forward human rights and such maters with other countries rather than, say, trade objectives.

(Sir Michael Jay) The trade objective will be the responsibility of British Trade International and they have their own programme funds for pushing forward commercial opportunities. Through the network of posts we have overseas, we have a delivery mechanism which is Trade International. We will be strongly supporting that but I see this particular fund as being more in the areas that I have described.

Mr Chidgey

112. Sir Michael, may I take you back to some of your opening remarks regarding the British Council, the new budgets and your award? Starting with the vehicles, and I understand you do not like to bite the hand that feeds you, nevertheless, it is a concern to myself, and no doubt to many of my colleagues who have seen the excellent work that the British Council is achieving in various parts of the world. I can give just two examples quickly. We found in Turkey, for example, that the work of the British Council was valued and scholarships were sought after. That struck us all very strongly. But, at the same time, we discovered that the scholarships are being reduced or the budget has been reduced relative to Russia. The reason I mention this, alongside, by the way, some of the experiences in Africa, Francophone Africa in particular, is because of the very high value of the British Council's work there. I am linking that in to your concept stated here about the importance of the British Council in spreading information and certainly the influence of Britain's standing, all of which is good for this country in terms of foreign policy. I am worried that, on the one hand, the British Council has not appeared to have been sought out: OK, that happens. I am equally worried that this is against a background where there is greater and greater demand for what the British Council offers to other countries, which is clearly to the direct benefit of this country. I would like some more information. I would like to know where we are cutting back in our aspirations, but most importantly, I would like to know what checks and monitoring you do on the equivalence of the British Council offered by other nations which are competing with Britain for influence in these middle-income, transitional, developing countries. That is a long question.

(Sir Michael Jay) It is a long question. I share your basic premise. All of us in the Foreign Office, and this certainly goes for the Foreign Secretary, have a huge admiration for the British Council. I certain share in that. I have seen their operations both in Paris and in posts elsewhere. I was posted in India some time ago. I think we all share their disappointment, the World Service's disappointment and our own disappointment that we did not get our bid in full, but we got a pretty good proportion of our bid. As I understand it, from talking to Baroness Kennedy, the British Council are pleased with the money that they have received and this will enable them to focus on some of their key priorities, which include, for example the work they are doing on their programme Connecting Futures, which is linked with the Muslim world. They are themselves, I think, pleased. I think this will enable them to increase their work on scholarships. I hope that our settlement will also enable us to increase the amount of effort that we put into scholarships. The Chevening Scholarship Scheme is funded by the FCO and one of the good results of the settlement that we have today is that that will enable us to increase our Chevening Scholarships in countries which really matter. I do not think at the moment we could ever meet the full demand for scholarships here, either we or the British Council. I am enormously struck when I travel, and I was in China a little while ago, by the tremendous demand from high quality students to come to this country. I am absolutely convinced myself that it is hugely in our interests that we should be giving the next generation of leaders in China a year's experience or so of a British university in Britain.

113. If I may add to that, Sir Michael, you speak here of your aim with the Global Opportunities Fund to connect with Muslim communities. I deliberately mentioned Turkey and West Africa, Muslim communities where, from what I could tell from the figures available to me, and they may be anecdotal, we seem to be talking about a ten-fold reservoir of young people who meet the standards needed to qualify for achieving a scholarship but only, of course, one-tenth are being given a chance. That, to me, seems to be a tremendous opportunity to spread our influence in the interests of this country and also in the interests of international relations. I wondered whether there is enough priority being given in the overall scheme of things to just how important that is in terms of progressing Britain's influence.

(Sir Michael Jay) As I say, it is never going to get as much money as we would like. I believe it is getting a high priority for the Foreign Office and for the British Council but we have to accept that we have not got everything that we had wanted, and therefore there are going to be some things which we are not going to be able to do.

114. You are only meeting one-tenth of the demand. Let me move on with the question because I know colleagues want to come in. How do these new public service agreements reflect the direction in which the FCO is moving? How different are they in substance from the targets set for 2000? We are looking at 2002 now.

(Sir Michael Jay) The objective and that of the PSAs, in our view, are broadly consistent with the objectives and the PSAs that we have set for earlier years as part of SR 2000. You will have seen that we have reduced the number of objectives from nine to seven, and reduced the number of targets. This was because the Treasury's view was that there have been too many objectives and too many targets. I think actually that is right. I think there were a few too many. They have changed. As I say, some have been elided. There are some new points which have been added, and I mentioned one earlier where the emphasis is on drugs in Objective 1. I think that shows why objectives and targets change because over each two or three year period we succeed in meeting some of our objective. Therefore, there is a need to change, but also the world changes. Three years ago we would not have put in a specific one on Afghanistan. There is now a need to do that. There is inevitably going to be a shift in objectives and a shift in our aims with each spending round if they are going to be, as they should be, a real guide to us a department in deciding what we do.

115. Can you be more specific - and I am thinking of Mr Olner's questions earlier - about how the Foreign Office is actually going literally and physically to contribute to the reduction of opium production in Afghanistan? Clearly, with drugs it is not easy and it is not even easy to do that in this country. How can you be so specific that you are going to reduce the cultivation of poppies in Afghanistan by 70 per cent in five years?

(Sir Michael Jay) We are going to contribute to it. Those are two rather important words at the beginning of that sentence. Our view is that there is no point in having an objective which is unrealisable. I think we do have a chance, by focussing on that particular objective, of making a contribution. We have helped to make a contribution in the nine months or so since we started focussing on this. There have been really positive results in reducing the crop in Afghanistan this year. We need to build on that. I think we can contribute to that.

116. My final question is to do with the annual efficiency savings mentioned earlier, Sir Michael, that you now have a challenge or a target of reducing yours costs by 2.5 per cent per year. These are annual efficiency savings. I always find this fascinating. How many years does this go on for? When does the exponential curve, or whatever it is, come to zero? Is it 2.5 per cent a year, and on and on and on. Is it realistic to maintain that sort of saving? That is why I am really concerned to ask the question: do you have £100 million worth of assets? You talk about selling off and re-investing the assets in properties, for example. When does this 2.5 per cent annual saving grind to a halt?

(Sir Michael Jay) I think there are two separate points there: the 2.5 per cent efficiency saving, which we have to meet as part of this; and then there is the separate target for recycling assets.

117. Are they totally separate?

(Sir Michael Jay) They are separate things. On the efficiency savings, you are right, of course: it gets harder and harder as you go on, particularly as far as the asset recycling is concerned. As far as efficiency is concerned, it is not a question of giving up 2.5 per cent of our budget; it is finding ways of doing things more efficiently. To be honest, that is something that I would have wanted us to do anyway. I think it is incumbent on any organisation to be looking the whole time at where the lower priorities are, where are the things you are doing which maybe you do not need to do, so that you can shift your priorities towards the more important things. Are here better ways in which we can do things? Are there ways in which we can deploy our network of posts overseas more flexibly or more efficiently? We need to give some hard thinking to that. I actually regard this 2.5 per cent target as quite an encouragement to do that. If I can just give you one example: we are going to open a post in one of the Francophone countries in which we have not been present up to now, Niger, but it is going to be an embassy which will be two rooms in the French Embassy. That will be manned one week a month by somebody from our Embassy in Abidjan. That is not going to cost us very much but it is an extremely effective way, at a low cost, of getting influence in a country which may become increasingly important in Africa. I see that as an example, but there are ways in which we need to be thinking about the more flexible use of resources. On the question of asset recycling, we have an obligation to find £100 million in the triennium which is now under way. We have, I think I am right in saying, found about £41 million in the first year of that. We have two years to go and £59 million to find. It is going to be tough because there is a dwindling number of assets to sell. I think we can do it but it is going to be tough.

118. My concern is that this may be an arbitrary target set by the FCO and you have to find £100 million. The danger is that you may be forced to sell off value-for-money buildings simply to meet this Treasury-inspired target.

(Sir Michael Jay) No, we will not do that because we have our system. It is all based on the key performance indicators that we assess of each property we have against these indicators: are they providing value for money; is this the best use of an asset in that city at this particular time?

119. Why do you not start the other way round? Do you not feel it would be better if you had been asked to come up with a sum of what you could dispose of rather than setting a target of saving £100 million regardless?

(Sir Michael Jay) It is not a bad discipline to do it this way but there are constraints in going too far. We are not going to be selling off properties which really are providing good value to the taxpayer overseas.

120. You may not be able to find £100 million?

(Sir Michael Jay) We may not be able to do so. As I say, I think it is a stretching target. We are going to have a really good stab at it but I cannot promise you that if I am back before you in two years' time I will be saying we have achieved it but we are going to have a go. We will not have a go if it means selling properties which are a real asset to the taxpayer overseas.

Sir Patrick Cormack

121. I would like to pick up on one point, Sir Michael. I was astounded when you said that by taking two rooms in the French Embassy one week a month you could have effective influence in a Francophone country like Niger, working out of the French Embassy, which I am sure will be exceptionally helpful to you. Really, what are you going to pick up from that? If we should be represented in that country, surely we should have a small, independent, free-standing embassy or, at the very least, a premises which is ours to which a diplomat can go on a rather more frequent basis.

(Sir Michael Jay) It is a question of resources. We have to find the most effective way within limited resources to establish a worldwide network. We have to look at imaginative ways of doing this.

122. That is testing imagination more than somewhat. If the thing is worth doing, surely it is worth doing properly? It seems to me that that is an absurd situation.

(Sir Michael Jay) I do not agree. I think it is an imaginative proposal and a good example of working closely with the French in Africa, which is something which we want to do. It will enable us, by having somebody there one week in every month, to maintain contact with the authorities in the sense that we cannot now. I think it is worth doing.

123. The French will do a wonderful job for us.

(Sir Michael Jay) No, they will have their own objectives and we will have ours. I do think that sharing is important and to try to work more closely with our European counterparts in diplomatic effort overseas. I do think this is an imaginative way of doing that.

Chairman

124. May I ask you three quick question on the financial side before we come on to September 11^th and the implications of that. First of all, you refer to the changes in the number of your department's objectives. Personally, I was sorry to see the removal of objective 9, which is to improve the operational effectiveness of the FCO. I thought there were some very interesting targets that you were set in the spending review of 1998. I understand that much of those targets is now in the form of your service delivery agreement, which is available on the FCO website and we have brought it down. The question I would like to put is this: for future annual reports, would it not be a good idea to put your service delivery agreement and target under that in the annual report?

(Sir Michael Jay) Yes, I think it would. I may not be quite answering the question. If we are talking about this one, this was only agreed a few days ago.

125. But you have produced an analysis for us of what was in the early Spending Review and I refer to objective 9. It says that targets for the management of the FCO for the 2000 Annual Review period are included in the FCO service delivery agreement. That service delivery agreement is up on your website. It seems to me to be a very important component of your annual report. I am asking whether for future annual reports the service delivery agreement and the targets under that should not be included in the annual report?

(Sir Michael Jay) They should be and they will be.

126. The next question I wanted to put to you: you produce, in your answer to our 14 supplementary questions, the list of the posts overseas which were your top 20 spenders. I was very surprised by the degree of variation between the various years as to which posts appeared in the top 20. We have noted, for example, that as far as the 2001-02 financial year is concerned, Lima and Columbo appear in the top 20 spending posts. I would be grateful if you could explain to the Committee why there is such a degree of velocity as to which are the top 20 spenders because I, for one, am somewhat mystified by that.

(Mr Gass) We are now referring to specific posts and the sorts of thing which will change substantially the amount we spend on the post every year will include the amount of programme spending that we deliver in that country. For example, if we have a major drugs training programme in Colombo, which may be the reason why our spending increased in one particular year, that will score in one year and it may help score in the next year if we have then completed that programme. That is one of the elements which will mean there is quite a sharp difference frpm year to year in some posts.

127. Can you shed any light on why Lima, for example, has come up in the top 20?

(Mr Gass) I cannot immediately, Mr Chairman.

(Sir Michael Jay) We will send you a note about that.

128. The last question I wanted to put to you is: Sir Michael, as you know, the Committee over quite a considerable period, including in the last Parliament, has been encouraging your department not to hide its light under a bushel as far as the value which the taxpayer gets for his money which he is expending on your department. We have been pressing you to set out, as best you can, what are the costs and the benefit relationships for the expenditure going through the Foreign and Commonwealth Office. I simply would like to register that I, and I am sure other members of the Committee, are very pleased that in various points in the report you have set out, under the various chapter heads, illustrations of the various cost benefit results that you are achieving. I hope you would confirm to the Committee that you will continue to pay close attention to this and be similarly ready to be setting out your stall in terms of what you are achieving for the taxpayer.

(Sir Michael Jay) The answer to those questions is "yes", Mr Chairman. May I say that we have found it extremely helpful to have been asked by you to do this because it has focussed our attention more on the cost-benefit analysis activities. I think we do need to continue to look at ways in which we can measure our output and demonstrate the value which we do add. We have found that in some cases this was easier than others. In cases like, for example, the consular activities and new passports system and so on, there was a fairly clear and I think demonstrable cost-benefit analysis. For some others, it was a little bit more experimental in tyring to draw the costs and benefits, but we will continue to do that. I am glad that has helped the Committee. We will certainly continue with that for next year.

129. Can you also pay attention to the other side of that coin, which I think the Committee and therefore the wider public should be aware of, namely, that if the Department feels that tasks are being imposed on it which are resulting in substantial expenditure, for which only very limited benefit is being derived, I hope you would feel it is appropriate to draw that to the attention of the Committee in future annual reports.

(Sir Michael Jay) Thank you. If I may, on that point, going back to a point we were making earlier on, one of the purposes of our discussion with other government department here in London is to ensure that we have a proper sense of their priorities and the things which are really important for them, so that our posts can concentrate on the things which are our priorities and the priorities of other government departments, and that we encourage other government departments too to prioritise and only ask our posts to do the things which really do have value added.

Chairman: I want now to turn to the impact on your Department's activities since September 11^th.

Sir Patrick Cormack

130. Sir Michael, would you like to say a little to the Committee about how those dreadful events have affected your day-to-day operations and your resource requirements and even perhaps your longer-term aims?

(Sir Michael Jay) When we look back, there was an immediate response on our operations, both at home and abroad. At home, we had to set up consular emergency units straight away, and we did the same in New York. I think that showed that we were able to operate swiftly and effectively, faced with a completely unpredictable event. I think our response there was positive. Developing that theme a little bit, the one lesson we have learnt is that our immediate response was very positive; we were also one of the first countries to set up an embassy in Kabul. Looking back on it, we would like to have been able to set that up a little bit more quickly and a bit more fully than we did. One of the lesson there again goes back to the flexibility of the diplomatic response. Can we find ways in which we can have almost a rapid-reaction embassy, rather as the Department for International Development respond very quickly to disasters abroad? Can we work out ways in which we have the communications, the people and the linguists ready at very short notice to deploy a diplomatic presence overseas when faced with a situation like Afghanistan? We are working on that at the moment.

131. Are you reasonably happy with the progress you are making?

(Sir Michael Jay) We are happy with the progress we are making but we are not there yet.

132. I would just say, in parentheses, that the Committee did go to New York and we were very impressed by what Sir Thomas Harris and his colleagues have done there. We have put that on record. So you are not there yet as far as rapid reaction is concerned. When will you be there?

(Sir Michael Jay) I will ask Mr Collecott, who is leading the team that is working on that, to say where we have reached. It is an important part of our activities.

(Mr Collecott) It is a very important part. There are various more imaginative ways in which we can look at providing the kit and the physical presence that we need. One of the constraints we found in Kabul was actually the question of premises. Our premises were rather small; they had deteriorated over the time. Frankly, we had colleagues of ours living and working in extremely cramped circumstances with very serous security risks surrounding them for much longer than we would have liked. Obviously the physical nature of the compound there imposed restraints on the degree, the timing and the speed with which we could put in place the communications and other equipment that we would want to operate normally. As I say, we are actively looking at possibilities such as: is it possible for us in a situation like that to put on the ground pretty rapidly the equivalent of 20 ft. containers which are fitted out as offices and which would provide some secure, rather quick alternative to the long process of finding new buildings and making them secure. Clearly, on the personnel side, we are also - and this is where some of the new systems which we are going to be introducing next year help dramatically - refining our ability to pinpoint those people who have the right skills, background and language and to be able to move them very rapidly. We did it post 11 September, but I think we would all agree that was somewhat more ad hoc than we would wish.

133. May I ask a couple of matters on that? First of all, do you have a sufficiently flexible contingency fund to develop these things? Secondly, do you have the equivalent of a reserve list so that you can call upon perhaps recently retired diplomats to come and help out in these situations if they have a special expertise?

(Mr Collecott) We have both of those in part, but I think both of those we can develop a little bit more. One of the challenges which we had immediately post 11 September, for this and other reasons, was actually to re-prioritise the resources we have because we did not have an immediate pot to which we could go to fund this new activity. We had to take rather hard decisions on what was going to be lower priority and not be done. In the future, we are intending to have some kind of unallocated provision, which should be used for real emergencies rather than just being drawn down willy-nilly. Secondly, yes, we do have lists through an organisation which we fund within the Foreign Office of retired people who are willing to come back.  We can draw on them. We have tended to draw on their expertise to fill requirements in London, occasionally to send people abroad, but that is one of the resources on which we can draw to be more flexible in our department.

134. Could you develop this? You will build up the figures.

(Mr Collecott) Yes.

135. I do not want to be alarmist, but something like September 11^th could happen again. If it did, would you be better prepared, in the light of September 11^th, to cope with it?

(Mr Collecott) I think we would, yes, in two ways: firstly, I think we would be better able to react quickly overseas in strengthening our operations where we need to; we have also learnt lessons from the operations of the emergency unit back in London on how it can best be staffed, how it can best operate. Indeed, we put some of those lessons into practice when we opened the emergency unit again during the time of recent high tension between India and Pakistan over Kashmir, which suggested that we had learnt some of those lessons. I would not want for a moment to be complacent about this because these matters put any organisation under huge strain, but I think we will be better able than we were before.

136. What about the Counter-Terrorism Committee operating out of the UN: do you think that has adequate resources? How do you assess the success of the so-called Islamic Media Unit?

(Mr Collecott) On the first point, if I may say so, I think that Sir Jeremy Greenstock has done an extremely good job as Chairman of that. It is a tribute to him and his diplomacy that he was chosen to do that job. That Committee's work is acting as a very good discipline on Member States around the world and I am sure they do come up with their anti-terrorism or counter-terrorism plan. On the second point, I think one of the other main lessons that we have learnt from September 11^th is that the nature of diplomacy is less state-to-state or government-to-government and as much public opinion-to-public opinion. What the Islamic Media Unit has shown is that it is possible to have an effect on public opinion overseas and that that is crucially important. I think this will become a lasting part of our machinery. We realised quite early on that we needed to get people speaking fluent Arabic and in the press in the Muslim and Arab world just to put across our point of view.

137. Have you enough Arabists?

(Mr Collecott) We have not yet had difficulty in finding people either from within the Service or from outside to meet the demands that we are putting on them.

138. Are you specifically seeking to recruit from the universities?

(Mr Collecott) The Islamic Unit is establishing contacts with the key people in universities so that we have a pool of people to draw on. It will not necessarily be a question of recruiting them to the Foreign Office but making the best use of the resources that are there to promote British interests.

139. Again, do you have enough resources to develop this?

(Mr Collecott) I hope so. It is a very high priority. Going back to the earlier question about efficiency savings and the need to be looking for the lower priorities to release funds for the higher priorities, I think that this is, without any question at all, one of the higher priorities and will remain so.

Chairman

140. Sir Michael, there are a couple of other questions I would like to aks you on the security side. As you will have been briefed, one of the security issues that arose out of the Committee's extended inquiry into arms to Sierra Leone in the last Parliament was the very, very serious lack of ability by the Foreign Office to deploy secure communications rapidly to a high commission or an ambassador when the high commissioner or ambassador was obliged by the security situation to move to a different location. I was slightly concerned by what you and your colleague, Mr Collecott, has said so far. Certainly you gave the impression that this was still all under consideration. I wonder whether you could tell us whether you have, as of today, satisfactory systems and back-up in place, particularly in relation to portable secure communications, whereby at literally no notice you would be able to ensure that a senior member of the diplomatic staff who had to move instantly was able to be joined up with secure communications at that new location?

(Mr Collecott) I think the answer is "yes" and there are two facets to that. Firstly, we have invested and are in the process just this month of rolling out 250 secure mobile telephones as a first tranche for precisely these reasons. We are sending one or two to each of our posts abroad and distributing them to senior officials and Ministers in London precisely to meet the need for secure communications in all types of circumstances and, frankly, to avoid the difficulties that one has with an increasing use of mobile phones which are not secure. That is one immediate answer. The second answer is: yes, we also have a small, portable satellite dish which we deploy extremely rapidly wherever we need it, which can be used either for secure telephone contact, secure data transmission, sending e-mails, which was, for instance, the first thing which the people we sent in to Kabul took with them. It was the development beyond that which unfortunately took a little time.

Sir Patrick Cormack

141. You only have one?

(Mr Collecott) No, we have several of them which sit in shrink-wrap packs and are sent extremely rapidly to wherever they are needed round the world, sometimes to places where the local telephone system for other reasons is not as good as we would wish. We are a long way down that track. We also try, as you might imagine, to anticipate difficulties, such as the ones you mention about maybe needing to move the seat of the high commissioner or ambassador. In one or two cases recently we have installed permanent secure communications and secure automation systems in other posts so that we have a back-up and somewhere to move the high commissioner or the ambassador, should we need to in certain circumstances.

Chairman

142. The next question I want to put to you, Sir Michael is this: as you are aware, this Committee has taken a very close interest in the follow-up to the tragic murder of Brigadier Saunders in Athens. I would like to ask you whether or not you are satisfied that your Department's requests for close protection of personnel that you judge are needed in your posts overseas will be met adequately by the Ministry of Defence in particular?

(Sir Michael Jay) I will ask Peter Collecott again as he has been handling that particular issue.

(Mr Collecott) In the particular case of Brigadier Saunders, as you will know, the Ministry of Defence inquiry has now produced a report which, from our point of view, was very satisfactory. No report like that is entirely satisfactory because it is dealing with a very unsatisfactory event but it gave us the reassurance that the security measures which had been put in place were entirely the right ones in the situation and gave assurance that for the future, in trying to protect people, we are doing the right things. You ask specifically about close protection teams. We still have a close protection team in Athens and in many other places. Money is, of course, an issue. We have to fund the close protection teams in all but the very shortest timescale. Finding the funds for the close protection teams that we believe we need is a high priority. Although at times it looked as if the boundaries were being rather squeezed, I do not believe we have been in a situation where we have had to turn round and say, "We really believe close protection is needed in this place but we cannot find the resources to do it".

(Sir Michael Jay) We would never put ourselves in the position in which we believed that close protection was needed and we did not provide it.

143. I am very glad to hear you say that, Sir Michael, because that can be the only proper and responsible stance for all your diplomatic and service personnel for whom you are responsible in overseas posts. I hope you can assure the Committee that if a situation arose in which you had very rapidly to expand the amount of expenditure you were carrying out on close protection, and I wholly understand myself the cost of that, you would, if necessary, go to the Treasury and seek a supplementary expenditure contribution to make certain that crucial requirement was met.

(Sir Michael Jay) One way or another, Mr Chairman, we would ensure that we had the money so that our staff had the close protection we judge necessary. After September 11^th, there was, as you can imagine, a tremendous increase in security requirements worldwide. I do not have the figures in front of me but we increased our security spending quite markedly in order to meet that. That was an absolute requirement. That will continue to be so.

Chairman: Thank you. I am very glad to hear that and I know the whole Committee will be. Can we now turn to some human rights issues.

Mr Illsley

144. Sir Michael, according to the Annual Report, all Foreign Office staff are now required to take a one-day course in human rights. How would you evaluate the effectiveness of that human rights training for your staff?

(Sir Michael Jay) I would be better able to answer that after the next course, on which I am going to go myself. I have not yet been on it but will be on it. I do feel that there is a much greater understanding of human rights issues in the Foreign Office than there was, let us say, five years ago, partly because human rights has become a more important part of our policy and partly because we have been providing the training necessary to ensure that works and the Human Rights Department is staffed by some extremely able people. I do not know if any of my colleagues have a more specific answer but I am struck, having come back to the Foreign Office after six years away, by the greater emphasis that we are giving, and the greater professionalism of our staff, to handling human rights issues and in managing our Human Rights Project Fund.

145. Just moving that along, you have appointed human rights advisers to certain embassies abroad. How has that impacted on the work of the posts abroad by having those advisers in place? Following on, how was it decided which embassies should have a human rights adviser?

(Mr Collecott) Mr Illsey, I cannot maintain that I am very close to the detailed question of how the choices were made between posts. I have had experience of a couple of the advisers that we have had: one in the Philippines and the other in Moscow, I believe. Both the posts and the individuals concerned believe that both of those appointments in particular have been a great success. It has actually opened the horizons and enabled us to do things which otherwise we might have been able to do but less well, less professionally, and has broadened the range of contacts which we, as an embassy, have been able to have with local NGOs and given them a degree of extra credibility because we are putting in place human rights professionals. My balance sheet would be wholly positive about that.

146. Does it create any tension between the country in which the post is located with human rights advisers attached to the British Embassy? Does that reflect on the country? Obviously it must, in view of the fact that human rights advisers are there. Is there any feedback?

(Mr Collecott) One has to be sensitive in the way that these posts are projected and sensitive in terms of the project which the human rights advisers are trying to work on. Obviously our intention is to work, as far as we can, with the trends within the country, whether they are NGOs or, quite often, with governments in the country and government departments who realise that there are issues which needed to be tackled in the human rights area per se or in the broader field of good governance, setting in place proper judicial systems, the rule of law et cetera.

(Sir Michael Jay) It is not always easy, Mr Illsley. I was in Angola a few months ago and there needed to and wanted to talk to NGOs and others about the human rights situation. Now, that is not always welcome to governments but I think it is accepted that that is a proper role for diplomacy and a proper role for embassies. It has to be done with a certain sensitivity.

Chairman: We are going to couple with human rights some issues in relation to the protection of British citizens abroad.

Mr Hamilton

147. Sir Michael, you may think it is a strange jump but I wanted to jump to the protection of our own citizens abroad, and in particular to an article written in The Times on 18 June entitled, "Why has the Government let these people down?" The article is written by Stephen Jakobi, not obviously somebody who has not an axe to grind, but somebody who has drawn attention consistently to the plight of people languishing in foreign jails. He draws attention in particular to the celebrated and well-known case of Ian Stillman. I know that Baroness Amos has been working very hard as the Government Minister responsible. I know that you have staff in the Foreign Office who are working hard to try and resolve the case for the release of Ian Stillman. I have to declare an interest in that his sister lives in my constituency. However, I want to know how you respond to the accusation contained in that article, particularly that we are not doing enough when people are tried, or mis-tired as we often think, and imprisoned. I think Ian Stillman's case is a particularly good example because of his profound deafness and disability.

(Sir Michael Jay) It is a tragic case and one which is very much at the top of the list of priorities for our Ministers, and indeed our High Commission in Delhi. We continue to make representations at the highest level and take the advice of our High Commission about the best way in which to try to ensure Ian Stillman's release. All I can say in response is that in that case, and in others, I can assure the Committee that we regard this as a very high priority indeed. We cannot, alas, always achieve what we want, which is getting another sovereign government to release somebody from prison, even when we may be convinced ourselves that the case is just. It is a very important part of our task overseas. As I say, it is not just our embassies and high commissions but something which is constantly on the minds of our Ministers, particularly Valerie Amos, but not just Valerie Amos. The Foreign Secretary has taken a personal interest also in the case of Ian Stillman, and continues to do so.

148. Is it easier to deal with governments within the European Union than governments outside? I am thinking, for example of the case of Andrew Beaumont, the lorry driver currently in jail in France, who is again a constituent of mine, and drugs were found in the back of his lorry. Is it easier to deal with the French Government because we have a much closer contact with them and we know their legal systems perhaps better?

(Sir Michael Jay) Yes, I think it probably is easier to work with governments whose systems we are closer to and working with day by day. Certainly from my time in France, I know that we had very close co-operation from the French authorities over, sadly, the very large number of British citizens that there are in jails in France, particularly in Lille. It is more difficult elsewhere but that does not mean it is less important or that we give it less priority, rather the reverse; I think the more difficult the relationship, the harder we try.

149. The annual report says that we do not try and make judgements as to the guilt or innocence of the British citizen abroad, but surely in some cases where there is a clear miscarriage of justice do we not make that point to the government involved?

(Sir Michael Jay) We would certainly make the point if we believed that there had been a miscarriage of justice. If we believed that the process was in some way flawed or unfair we would certainly make that point and we would work through the lawyers of the person concerned to try and do our best to ensure that justice was done.

150. So do you think that Stephen Jakobi was wrong in saying that we have let down the people that are languishing in jails abroad?

(Sir Michael Jay) I can understand why he says that and I can understand why the people themselves feel that we are not doing enough. They will always feel that we are not doing enough as long as they remain in prison; I understand that. All I can say is that from my point of view and that of ministers and that of my colleagues overseas, this is something which is really very high up our list of priorities and that will continue to be so. That are very tragic cases and Ian Stillman is in some ways one of the most difficult and one of the most tragic we face.

Mr Illsley

151. I also have a constituent who is currently in jail but in Australia on a drugs charge which seems to have been a slightly difficult case which I have raised with the Foreign Office. It brings to mind that there is also the case of the young back-packer murdered in Australia, the disappearance of Peter Falconio. A lot of these are related to the back-packing route through places like Thailand with the drugs influences there. It just occurred to me whether the Foreign Office is doing anything to try and draw people's attention to the dangers of that back-packing/drugs route, the back-packing adventurers who go to Australia because of the obvious attractions there. Does the Foreign office do anything to try and educate these people or try and keep them away from this obvious temptation to smuggle drugs?

(Sir Michael Jay) It does that through the travel advice which is put out through our web site on every country in the world which gives quite full advice on where to go, where not to go, what precautions to take, what risks you are running. I do not know whether there is anything specific about the back-packing trail; I would like to look into that, but it is precisely this sort of risk that people are running that we are trying to warn them off beforehand and the programme that we have got, "Know Before You Go", which is a consular public diplomacy effort which we launched a little while ago, is designed to make people to think before they go about the risks that they are running and, in so far as they can, to minimise those. I think this is going to become probably more rather than less an issue for us because more and more people have a spirit of adventure, they want to go to places where the tours are not going, they are going on their own or sometimes in small groups, they are more likely to get into trouble, and they are more likely to call on our services. We have identified this as one of the management and policy issues for the future and it is something which is high up on our list of priorities.

Sir Patrick Cormack

152. I try in my own constituency to encourage people to let me know if they are going abroad and then I in turn inform the Foreign Office and even supply constituents with a letter, "To Whom It May Concern", which they can give to an embassy official and so on. What you have just said about "Know Before You Go" makes me wonder whether you should not be even more proactive. What steps do you take to ensure that posters and information of this sort are on university campuses, in public libraries and so on around the country, because the aim ought to be to try and reach out to wherever these frequently very intelligent as well as adventurous young people tend to go?

(Sir Michael Jay) The judgement we have reached is that the best way of getting through to the largest number of people is through our web site and that is very widely looked at. It gets an extraordinary number of hits each day. There is one new feature which has started recently which is called "Travellers' Tips" which is a country advice page. Let us consider whether we can do more through universities. Even if universities say, "Before you go look at the web site", that is one way through, but I think that that generation does tend to look pretty automatically now, much more automatically than in the past, at web sites where there is information available.

153. I accept that, but I am a member of St Anthony's Oxford, and the notice boards are still plastered with things and I think that you probably ought not to neglect slightly more ancient forms of communication as well as the more advanced forms.

(Mr Collecott) May I make one additional point, which is that the "Know Before You Go" campaign is not just something we are doing on our own. It is actually a joint venture between us and the travel industry. They have very large numbers of outlets through which we are disseminating that kind of material but we will take on board your suggestion.

Mr Hamilton

154. You launched a new web site I think in June.

(Mr Collecott) Yes.

155. There is a link on the home page marked "FCO e-Services". Last time I looked it produced a blank page saying, "Sorry: this page cannot be displayed". I just wondered whether you had sorted that out yet and what the e-services will comprise and when you will begin to deliver them.

(Mr Collecott) I do not know the answer to the first of your questions, whether it is now still a blank page.

Mr Hamilton: I will check when I leave here.

Sir John Stanley

156. Could we have an answer as to why it was blank, a note afterwards, please?

(Mr Collecott) I suspect that the reason it was blank is that, as you know, the going live of the new web page was somewhat delayed and was some months later than we had hoped. I will give you a written note on that. The e-services that we are intending to deliver are set out in the e-governance strategy which is a public document and is also on the web site. I might just draw your attention to the particular things that we are doing at the moment, in particular in the big public service areas of consulate protection and of the visa operation. Just taking an example from the latter, we are at the moment in the first few months of pioneering a web based system of applying for visas in the US and just yesterday I was told that something like 40 per cent of applicants are now using that. There are still issues over quite how far one can go and we still are not yet at the stage of being able to have identification on the web. One needs a certain amount of iris recognition or some kind of technology which we are already looking at, but this is very much the direction in which we are going. We wish to go relatively quickly but in a measured way to make sure that we get it right in a country like the US, where access to the web is very ubiquitous, before spreading it much more widely.

(Sir Michael Jay) I sent a note round to all heads of departments in the Foreign Office last week stressing the importance of keeping the web site for which they are responsible absolutely up to date because it does seem to me that there is nothing more frustrating than a web site with a blank page or a web site which is out of date. We will continue to put particular emphasis on that.

157. Can I move on to your "Bricks to Bytes" policy, in other words, move from real estate to information and technology? I think one of the concerns that many of us might have is that obviously estates, buildings, are appreciating assets in most countries in the world. However, information technology is not and therefore are we using a appreciating asset, or often appreciating asset, to fund something that depreciates pretty rapidly? Would you like to comment on that?

(Sir Michael Jay) I have two comments and I would like to ask one of my colleagues to say a bit more. First, our experience is that our bricks overseas are not appreciating; they are depreciating, which is hence one of our problems with impairment and so on. Secondly, I do not think we have any choice but to work increasingly electronically and to continue with our IT modernisation programme. If I can just say a word about the IT modernisation programme, we describe that in the report. It is very important. It is using up a lot of our funds, but I think that the aim of being a global on-line organisation and not just a hub and spoke organisation is hugely important. Mentally we are still too hub and spoke and we need to become much more lateral in sharing best practice with posts who are doing a good thing in one country teaching others and sharing knowledge more laterally as well as back to London. I think that the combination of IT programmes that we are putting in place, the FTN, the worldwide communications electronic network, the standard IT system, Fireprest(?), which is extremely popular, the knowledge management system which we call Focus, which will provide a single global registry and an FCO intranet which will link into the Whitehall Government secure intranet, will enable us to be far more effectively joined up than we have been in the past. I do myself attach a great deal of importance to this programme of IT modernisation.

158. Is there any risk that you will feel obliged to sell valuable real estate to fund the continuing development of what sounds like a very exciting IT project?

(Sir Michael Jay) We are, as we discussed earlier on, obliged to look for and want to look for properties that are not performing well, and I think it makes sense to use some of the proceeds of that for funding IT, which is essential if we are going to become a modern 21^st century diplomatic service. I wish it were true that all our properties overseas were appreciating.

159. One final thing is on page 143 of the annual report regarding the Prism programme, basically the integrated processes and management information systems that you are introducing. How crucial is the success of Prism do you think in meeting the Foreign and Commonwealth Office's objectives?

(Sir Michael Jay) Absolutely fundamental. We do not yet have the management information system which enables us to meet all our objectives and when the Prism system comes on line in the first half of next year it is going to make it possible for us, I believe for the first time, to meet many of our objectives fully. I am conscious myself, having spent a certain amount of time talking about Prism and talking to the people who are designing it now, that we must not think of this as just a piece of kit that comes into operation on 1 April and then everything is fine. We are going to need to have quite a mental adaptation in the office, at home and abroad, to ensure that we do make full use of it when it comes on stream. I think it is a very important programme indeed. It lies at the heart of a lot of what we want to do in the next few years.

160. As you become more reliant on ICT systems what back-up have you got in the event of any failure, because clearly with written systems you have the back-up there and with IT it is absolutely crucial, as I have found to my cost.

(Mr Collecott) Could I say a word about that, which I would like to link also to the discussion we had previously about the question from the Chairman about whether we were better prepared for any kind of disaster in the future, whether that be a natural disaster or a technical disaster or some kind of terrorist incident? Even before 11 September we started putting a considerable effort into what is known in the jargon as business continuity planning in the middle of last year. Obviously, that was given a considerable boost by the events of last September. In particular then we began to focus very clearly on the resilience and the degree to which we could build in extra resilience into our IT systems. We have spent considerable time, effort and money in designing a certain redundancy into the systems, into using the full capabilities of the global telecommunications network which we now have to ensure, for instance, that if, for any particular reason, we were not able to use one of our buildings in London or the building we have in Milton Keynes where most of our IT equipment is, we would still be able to operate worldwide from within about an hour or two of some disaster, natural or otherwise, striking. There has been a considerable intellectual and physical effort to make sure we are much more resilient. Some of the systems we are introducing, in particular the knowledge system, which, as Michael Jay said, will have a global registry, means that inherently we will be much more resilient. If something were to happen in a particular post, a technical disaster, which meant that it lost the information which it had, then that would be available from the global registry to any other location around the world. There is an inherent resilience which is being built into these new systems.

161. Individual posts' crucial data then is backed up automatically presumably, across the globe?

(Mr Collecott) Yes, very quickly it will get backed up into the global registry, and that will be duplicated here.

Sir John Stanley: Sir Michael, we will now turn to your immigration and visa issuing functions.

Mr Illsley

162. It was in fact an IT failure in Islamabad which prompted a sub-committee from this Committee to visit that post and Delhi in relation to immigration. Since that time the Committee has taken a close interest in immigration matters. The first question is to ask what progress you are making towards the targets of dealing with 90 per cent of Members of Parliament's letters within 15 working days, bearing in mind that in the annual report last year the target met was 78 per cent. Are you making progress towards achieving that? The second question, while you are thinking about that one, would be, again Pakistan's visa issuing post I seem to recall was closed earlier this year because of the problems between India and Pakistan. Could I ask whether that embassy now is fully functioning in terms of visa issuing, bearing in mind that this is perhaps the busiest time of the year for posts such as Islamabad and Delhi?

(Sir Michael Jay) Perhaps I could answer on the second point on Pakistan. Staff was drawn down, as you know, a few weeks ago in response not just to the increase in tension between India and Pakistan over Kashmir, but because of specific threats of security against our staff in Pakistan. The judgement was that it was right to draw them down. The resumption of a full service across the board in Pakistan is unlikely in the near future. What we hope to do is to increase the level of staffing in Islamabad while looking into alternative visa accommodation in Lahore, but there are at the moment no plans to re-open the mission in Karachi. This is something which is kept constantly under review and the Foreign Secretary is very conscious of the need to find the right balance between the security threats to our staff and the need to provide a visa service to people who have every right to want to come here. It is not an easy balance to draw.

163. Presumably that then is leading to a backlog in visa applications in either Lahore or Islamabad.

(Sir Michael Jay) Yes. Islamabad is at the moment offering a reduced service which is accepting via courier only applications from certain specific categories of people. There are two entry clearance managers and ten entry clearance officers at the moment as opposed to six and 46 in Pakistan before the draw-down. Inevitably the service is not what it was before and not what we would want it to be.

164. One other, sadly, related issue is the question of forced marriages. What progress is the Foreign Offie making in relation to discouraging forced marriages and protecting British citizens abroad, usually young girls who are taken to the sub-continent and married against their will?

(Sir Michael Jay) There is now a unit in the Foreign Office which works full time on forced marriage issues. I visited it the other day and I was extremely impressed by the professionalism of the people there and by the work that they are doing.

(Mr Collecott) I can only add that my impression is exactly the same. The feedback that we have been getting from some of the people that we have been helping has been extremely positive. If I remember the figures, I think there are something like 200 people who have been in this situation whom we have managed to help in a sense from a standing start a year or two ago. I am afraid I cannot delve too much more into the detail. Perhaps I can say a word about your earlier question about correspondence. Whereas we report in last year's departmental report that we managed to do 78 per cent, as you said, within the 15-day limit, if I remember, the year before we were reporting a figure which was considerably less than that. It was somewhere in the sixties, I think.

Mr Hamilton

165. It was 50 per cent.

(Mr Collecott) It was pretty bad the year before. We did put more staff in, trying to improve the procedures. We have got some better ways of handling and some new technology but I fear that this is an issue which we are going to have to continue to work at in those same old ways to, if you like, grind down the problem and make ourselves more effective and more efficient and get the number up from 78 to as near 90 as we possibly can.

166. Can I pick you up on that, Mr Collecott? It has improved considerably, I have to say. When I was first elected in 1997 one particular letter, which will remain nameless, took 18 months to elicit a response. There were good reasons behind that, but it is a lot better than it was; there is no doubt about that. My concern is this, that within the constraints of UK immigration law - and obviously our staff are constrained because there are certain things they have to do in order to ensure that people are genuine applications - in a constituency like mine and many others up and down the country, where we have a high level of people from a Pakistani or Indian background, where people are applying through Delhi and Islamabad and the other posts, and obviously it is difficult at the moment as you pointed out, for visitors' visas for weddings, sometimes for funerals, in a small percentage of cases some of our constituents' relatives are treated in a way that I do not find acceptable. I have often complained about that. What are we doing? I know you are constrained for staff and I know you have improved it considerably. How much more quickly can we go to ensure that, even with locally engaged staff, we treat some of those applicants more humanely because sometimes they are treated quite rudely (only sometimes) and also that we cut down the number of visits people have to make, which often take 12 or 15 hours from where they live to the post itself, and then we send them away again and they come back and we send them away again. Again, there could be good reasons for that, but I want to know how quickly we are going to be able to cut down on the bureaucracy behind that and ensure that we have a much quicker and more efficient service.

(Mr Collecott) I do believe that the standards of service we have offered have increased remarkably over the last two or three years, both in terms of the way people are treated and certainly our entry clearance officers are under clear instructions about that, but also in the degree to which we have been able to reduce the queues which are sometimes part of the problem of not being able to process on one day and therefore having to send people away to come back a few days later. Certainly in a few posts that I visited recently there had been dramatic reductions in this. I agree: we have not done as much but we are extremely conscious of the problem and we are extremely conscious from our ministers downwards of the need to continue that effort to improve the quality of service we are offering.

(Sir Michael Jay) And which we have to do by good management in post and by training, and we are trying to do both. Any case is unacceptable if people are not treated well.

Mr Chidgey

167. Sir Michael, I want to turn briefly to the question of forced marriages and ask you a bit more about the applicants to come to Britain on visitors' visas, and then the situation arises where in some cases they apply to remain indefinitely at the end of the six months. Both questions relate to the liaison you have with the Home Office. On the first one, of forced marriages, you say that you have helped 200 people approximately. I would like to know what research has been done to find out what the scale of the problem is. It is all very well to say that you have helped 200. Is that 200 out of 2,000 or is it 200 out of 250? Can you give us any information on the research you have done to assess what resources you need to put into your special unit to eradicate this particular issue? Again, what liaison is there with the Home Office. On the second one, is there a process of liaison between the Foreign and Commonwealth Office and the Home Office where a person who is granted a visitor's visa then decides, when the visa comes to an end, that they would like to apply for indefinitely to remain? Do the Home Office talk to your entry clearance officers at the post to check what was said in the interview to substantiate or otherwise this change of mind of the person who is now looking for residency here?

(Sir Michael Jay) I have to take notice of those two questions.

(Mr Collecott) I think I might add one point on the second one. I do not know the answer to the first one. It is a question of research.

168. A note would help us with that.

(Sir Michael Jay) We will send a note.

(Mr Collecott) On the second, one of the efforts we are putting in, and again IT comes into it, is to be able to link up the databases of cases which are held currently in I&D in the Home Office and that held by the FCO at posts abroad or here, so that the process of consultation, if there is such consultation, between the Home Office and the FCO will be much better in the future.

169. Sir John, I would be very grateful if we could have a note on this. It is anecdotal, I know, but I know of one case where there seemed to be no liaison at all between the Home Office who were looking at the application for indefinitely to remain quite separately from the fact that the original application for a holiday visa clearly had different statements on it.

(Sir Michael Jay) I will look into that.

Sir John Stanley: Sir Michael, we would be grateful for a note on that please. Can we now turn to the chapter of your report on the security and prosperity of our overseas territories.

Andrew Mackinlay

170. Sir Michael, on page 12, formally but correctly it sets down the fact that you are the principal adviser to the ministers and the manager of the Foreign and Commonwealth Office, and then on page 16 you have got the command directors, and I looked there for Overseas Territories and I see that there is a gentleman called Fry who has responsibility for Overseas Territories, except for Gibraltar. I look down a little further and I find a man call Ricketts who, amongst his duties, has Quality of Life, which probably is appropriate when it comes to Gibraltar, and then a move sideways and I look then to see who has got Gibraltar and I happen to know that it used to be Mr MacGregor who is Wider Europe, I think. I am told he is not now, although he was down in Gibraltar with the Polish Ambassador recently and I am still awaiting a reply from the Foreign Secretary about that matter. Let that pass. Mr MacGregor has not got responsibility for Gibraltar. It is with Mr Bevan who is South East Europe. Gibraltar - the next land you reach is Virginia Beach. It is certainly not South East Europe. Why is Gibraltar with South East Europe, Mr Bevan?

(Sir Michael Jay) It is with Mr Bevan rather than with South East Europe and Mr Bevan. When the work on Gibraltar began to increase, as the discussions under the Brussels process got going, it was decided that there needed to be an Under-Secretary, a Director, who had sufficient time to spend on Gibraltar. The conclusion was that Mr MacGregor, because of his other responsibilities, would not have enough time to spend on that issue and Mr Bevan, who had just been promoted into Director of South East Europe, would have more time and then formed a team in the Foreign Office which dealt with the Gibraltar issue. In a sense it is not so much where he fits into the organogram but that he was chosen by the Foreign Secretary to lead the team on Gibraltar.

171. When did that change happen approximately?

(Sir Michael Jay) That must have happened towards the end of last year or the very beginning of this year.

172. When we visited NATO, I remember Mr Emir Jones-Parry hosting us, a very busy man at NATO. He told us he still had some responsibility for Gibraltar.

(Sir Michael Jay) Because he had that responsibility as Political Director. When he left as Political Director and went to NATO it was decided that since he had the experience it would be best for him to maintain that experience working with James Bevan.

173. The logic of that is not plainly obvious to me.

(Sir Michael Jay) The idea was to create a team.

174. The whole western world is collapsing around us. He is looking after NATO and he has still got Gibraltar?

(Sir Michael Jay) The idea is to ensure that there was an experienced team with the time to address to Gibraltar. The decision was at the level of a Deputy Under-Secretary that should stay with Emir Jones-Parry who had been handling it and who had the expertise, and that he should be supported by James Bevan who was promoted a Director and had the time to spend to focus on that issue, and around them form a team which has been working closely with Mr Hain and with the Foreign Secretary on Gibraltar.

175. On page 134 there is a piece here about the cost/benefit, financial regulation, money laundering and the Caribbean Overseas Territories and Bermuda. Funnily enough, it does mention Gibraltar. I read it three times this morning and it seems to me that what it is saying is that there have been problems which we, the Foreign Office, have very sensibly had to buttress and with some of the Overseas Territories with regard to financial regulation, but if I read it again and again it seems to me that that criticism does not apply to Gibraltar, which I think is very good news, but I just want to clarify: you are happy, are you not, about the financial regulation in Gibraltar? Before you answer that, if you say no I shall be putting down a written parliamentary question to say why. This is your chance. Gibraltar is okay, is it not, with regard to financial regulation, in the broad sweep of things?

(Sir Michael Jay) I think, Mr Mackinlay, since you have given me that warning, I should like to consult the experts in Gibraltar. I am not an expert on Gibraltar.

176. What, in NATO?

(Sir Michael Jay) No. I am not an expert on Gibraltar.

177. Now, come on, Sir Michael. You know, and I have put it to you, that in fact Gibraltar is signed up in every respect to financial regulation. You can be generous enough to grant that this morning despite the fact that it is highly political. Is that right, from your point of view as the custodian of good administration and governance and bearing in mind that people in financial regulation in Gibraltar are answerable to you ultimately, and the Government.

(Sir Michael Jay) They are answerable to the Government, I think. This is a highly sensitive issue.

178. Too right.

(Sir Michael Jay) I have not been following the details of it in the last few weeks and I think it would be unwise of me to get into this particular issue without taking advice.

179. Could we have the response with some despatch?

(Sir Michael Jay) Of course.

180. I will tell you why: because I have got an axe to grind. I put down a parliamentary question, and so I think has Mr Chidgey, to Mr Straw. You will recall that Mr Straw came here and he told us that his bedtime reading was The Statesman Year Book, though he had not got to Andorra fully because he had noticed that that was a fully independent state in the United Nations, but his second thing was that he looked at national income extracts of the Overseas Territories. If you remember, there was the controversy about whether or not Gib should have been able to provide it. It is a matter of history. Now they have provided it. This is very interesting. I asked him to put in the library of the House of Commons the equivalent accounts or income statistics which he felt Gibraltar should have applied in relation to all the other Overseas Territories. That was on 3 July and on 10 July he replied, "I will write to my Honourable Friend as soon as possible". I put it to you, Sir Michael, that in fact when they received that question the blood drained from people's faces because in fact the Overseas Territories elsewhere than Gibraltar have not supplied those, have they, not completely? They are not available. If I am wrong, why are they not in the House of Commons library this afternoon?

(Sir Michael Jay) I will need to look into that too, Mr Mackinlay. I do not know the answer to those questions. I will look into them as soon as I get back to the office.

181. So I can expect by this evening to have the Overseas Territories' accounts or statistics appropriate and equivalent to what Jack Straw criticised Gibraltar for not making available? They will be in the House of Commons library this afternoon, will they?

(Sir Michael Jay) I cannot promise you that.

182. But you will promise me if they are not you will tell me why, will you not?

(Sir Michael Jay) I promise you that we will be in back in touch with you this afternoon on these issues.

Sir John Stanley

183. Sir Michael, any response to the Committee, please, the Committee Clerk.

(Sir Michael Jay) Indeed.

Mr Mackinlay

184. I think that I am almost finished on the Overseas Territories but I just want for the record to say that although the question is to a politician it is presumably some of your folk who advise him on this. Why cannot I get a response to this?

(Sir Michael Jay) I will look into it when I get back to the office, Mr Mackinlay. I have not myself been following these particular questions in detail and I will look into it and, as the Chairman suggested, write to the Committee.

185. I am happy about that but what I do not want is anybody to think that they have got the safety of the harbour of the parliamentary recess, because I am telling you: I want to know the position by the end of the day, bearing in mind that the reply should have been on 10 July. I would now like to turn to asset management. Page 136 refers to our flagship embassy in Berlin. I am correct in saying that this is a PFI, I think, and certainly there is a little picture, I think, of our Berlin embassy. I have two questions because I have to say to you that when I visited it I thought it was a very unattractive building, although I am not an expert on architecture. In the ambassador's office you look out of the window and there is a thing which looks like a water tower which you face. My first question is, who in hell looks at the design and the science and marketing and says, "This is a wonderful thing"? What advice do you get on buildings which are not only expensive but are intended to be flagship? Secondly, I think I am fair in saying that your predecessors have boasted in their reports how it is a wonderful place for holding exhibitions because there is a big area, and your colleague is nodding, but there is no air conditioning. I found that quite extraordinary. As I say, personally I found it an unattractive building but my judgement might be wrong, although I would like to know who the hell assesses these things. Second, it is quite extraordinary to me to have this lovely exhibition here and no air conditioning. What do you say to that?

(Sir Michael Jay) I was there at a time of year when the absence of air conditioning did not matter.

186. The reverse was true for me.

(Sir Michael Jay) On the question of how a decision is taken, I think I am right in saying that there is an architectural competition to design our flagship embassies. There was an architectural competition to design the embassy in Berlin.

187. Yes, but we are still on architecture. Who judges the architectural design?

(Mr Collecott) The competition in Berlin was certainly judged by outside experts from the architectural world. I cannot remember who it was. In the case of less prominent buildings then clearly we contract architects to produce designs for us and we also have quite a cadre of in-house architects who will provide advice on which architecturally is the best solution or which of the possible solutions will work architecturally as part of the feed into the decision which has to be taken internally on what kind of building to build, but we do have in-house architects.

188. After we have structured and built the building is that when it goes to the PFI management company, because there is a management company there, is there not?

(Sir Michael Jay) It is owned by a company. We lease it back.

189. Would the decision on things like the air conditioning be a matter for us as the commissioning people or is it for their stewardship?

(Mr Collecott) It would have been part of the original specification whether or not a particular part of the building should or should not have air conditioning, so it was our responsibility.

190. Finally, on page 144, it says "Corporate sponsorship". There is a nice table there, and I do not want to be disrespectful but it does not tell me the foggiest idea really what these sponsorships are for. It tells me the value of them. The Haj delegation, there is a project of £30,000 on that and other sponsors are British Airways and Noon Products. Consular publicity, I suppose I understand, but what are the conditions of these sponsorships? What is that Haj delegation and the money from British Airways?

(Sir Michael Jay) The Haj delegation is a delegation which goes every year from the Foreign office to help Muslims from Britain who are making their Haj pilgrimage and the Foreign Office for the last few years has sent a delegation which consists of Muslim staff from the Foreign Office, plus some doctors who give their services voluntarily and led by prominent Muslims, in order to ensure that they provide the consular help which very large numbers of British Muslims going to the Haj each year need and that has been hugely welcomed by the Muslim community here and it is something which I think is a very good thing.

191. What does British Airways get in return?

(Sir Michael Jay) I do not think they get anything in particular in return. What they have done is to offer help with the air fares, as I understand it, to the Haj delegation and that is what the sponsorship consists of.

192. Are you comfortable with that sort of thing?

(Sir Michael Jay) That would fit into the guidance that is selling into the wider markets initiative which enables us, subject to the criteria in the guidelines, to make our budget go further by getting support from others for certain activities.

193. What was the VIP suite transport, Lexus GB? What is that?

(Mr Collecott) I do not know. We would have to come back to you on that on detail. It may well be cars which are provided.

194. You put it in the report. I did not write it.

(Mr Collecott) I do not know the specifics of that.

Sir John Stanley

195. Sir Michael, we will have a note on that too. Thank you very much. Last but, I am sure you will agree, most important of all, your people.

(Sir Michael Jay) Yes.

Mr Hamilton

196. To the Committee on Standards in Public Life on 6 July, Sir Michael, you said, "We have 15,500 people, of whom 9,500 are nationals of foreign countries employed abroad, ..." You also said, "... in order simply to manage 5,500 people in 240 places around the world, we need a degree of flexibility, a degree of acceptance of a diversity of gender, ..." You also said, "So I think there are a number of forces which are pressing for change in the way in which the civil service as a whole, and certainly we in the diplomatic service, manage our people." You have acknowledged that there are forces pressing for change in the way in which the Diplomatic Service manages its people. How are you going to respond to these forces?

(Sir Michael Jay) Perhaps I could take the diversity agenda first. I think it is one of the most important things we face. We have targets which are set for us for gender and ethnic diversity which we are working towards. If we take first of all the gender issues, we have a target, for example, which we have not quite met although we are not all that far off, of having 13 per cent of the senior management structure at the Foreign Office as women by 2002. I think we are at 10.6 per cent at the moment and we hope to be able to reach the target of 20 per cent in 2005. Those are targets and we meet those targets by a variety of methods, partly by our recruitment policies but also by the way in which we are changing some of our management arrangements, for example, to encourage family friendly policies in the Foreign Office, more job sharing, flexi-time working. We have recently opened a nursery in the Foreign Office in order to encourage women who might otherwise want to stay at home to continue working either full or part time. There is a very conscious effort to try to develop the sort of policies which will enable the women whom we have recruited and whom we have trained and who might otherwise want to leave us to stay with us so that we can meet diversity targets. That is something which we are doing both at home and overseas. Our targets are less than those of the Cabinet Office as a whole and the Civil Service as a whole because the global mobility requirement which we have, just the fact of managing 5,500 people through 240 posts, makes it a lot more complicated than if everybody was in London. That is what we are attempting to do in order to increase the number of women recruited to and staying in the Foreign Office. I myself, and each member of the Foreign Office board, take certain responsibilities on him or herself and I have myself responsibility for pushing forward the gender agenda, if I can put it that way, because I attach a very great deal of importance to that.

197. Yet you have no people from ethnic minorities in any senior management post as yet.

(Sir Michael Jay) We have now. We did not when the annual report was produced. Since then we have got two members of ethnic minorities who are now members of the senior management structure, and we are therefore beginning to move in the right direction. I hope this will improve. I am confident this will improve over time. The recruitment figures are good in the sense of the policy level recruitment figures for 2001/2002 and Alan might like to say what the ethnic minority proportion was.

(Mr Charlton) Yes. We recruit every year about 35 people at the policy entrant level and of the people we have offered jobs to this year 14 per cent are ethnic minority.

198. That is quite good.

(Sir Michael Jay) I am not satisfied with these figures yet but we really are determined and committed to working to meet our targets and to ensuring that the Foreign Office at home and abroad is a better reflection of the diversity of Britain than it is at present.

199. Obviously we travel a fair bit and we go to a number of posts, and I have to say that the staff in those posts are always excellent. I think we have all been very impressed. One thing which did impress me was that when we went to Madrid there was a young woman from an Asian background there, and also in Ankara; very impressive. Do you think it will be a long time before we have an ambassador from an ethnic minority background?

(Sir Michael Jay) I hope not. I hope it will certainly be while I am in this job.

Mr Illsley

200. The Foreign and Commonwealth Office have devised a Charter for the Management of Staff Overseas, which has been disseminated to all posts. Have overseas posts received training on the implications of the Charter, and how do you ensure that posts are treating locally engaged staff in accordance with the Charter?

(Mr Charlton) The importance of local staff is obvious when you look at our numbers and all our posts would agree with that. Where they will need training they will certainly ask for it. I think they are well experienced in dealing with local staff and well understand the importance from London. We do offer now more and more training courses for local staff. Some of those are for managers too. In fact, I went to one ten days ago which was a regional course for local staff and managers of people, so the idea of management of local staff is becoming more and more important.

201. One case came to our attention after the Committee had visited St Petersburg a few years ago and a couple of years down the line led to an expatriate member of staff in the St Petersburg post trying to seek redress for what he believed was unfair dismissal. Because he was an expatriate grade he could not access the legal system in Russia to pursue his case, and his application to go before a tribunal in this country was dismissed on the basis that he was not resident in this country, presumably. It just occurred to me that it must be a small percentage of locally engaged staff who are expatriates. Is there any employment protection for staff in that position who are living abroad?

(Sir Michael Jay) There are in fact quite a lot of local staff who are expatriate in some parts of the world. In the United States, for example, a large number of local staff are expatriate. The general principle on which we operate is that they are governed by the terms and conditions of service of the employment law in the country in which they are serving, but I take notice of the question. I do not know the answer to the question as to whether a member of staff is as it were falling in between two judicial systems and cannot seek redress. It is a position we should look at maybe.

(Mr Collecott) I think we should look at that. I am familiar with the case. I had forgotten that he was actually not able to seek redress in Russia and I cannot remember therefore what the circumstances precisely of that were. Maybe we should look into it and let you know.

Sir John Stanley

202. You will be letting us have a note on that? Thank you.

(Sir Michael Jay) Yes. One or two other points on local staff, if I may, going back to what I said before the Committee on Standards in Public Life. I may not have got the figure completely right, but the latest one I see is 8,800, I think. The substantial number of local staff that we have around the world are in the front line of almost everything we do - our consular work, our visa work, our commercial work, our public diplomacy work, and increasingly in one or two places around the world some political work as well. I do not think in the past that we have paid enough attention to their management. We are now trying to pay more attention to their management. We have set up a local staff unit within the Personnel Directorate in London which I think is a good development. A member of the local staff that I met recently in The Hague suggested that it would be a good idea if a locally engaged member of staff were part of that unit. I think that is an excellent idea and we are trying to put that into place now. We are also trying to break down the barriers between local staff and home based staff which have been too pronounced in some parts of the world. It is easier in some parts of the world than in others. I also, if I can say this in a tiny moment of self-flagellation, do not think there is enough in the report about our local staff and I would like to offer more about the importance and numbers of our local staff in the report next year. I think there needs to be more.

203. Sir Michael, I would like to ask you personally on a question which bears particularly on you as the Permanent Under-Secretary. As you will recall, earlier this year our ambassador in Romania was placed in a very invidious position, having submitted a letter for the Prime Minister's signature in support of a contract which was being sought by a British company, and the British company in question happened to be a company that had given funds to the government party of the day. Such letters written by ministers have been written under successive governments and I myself regard it as a perfectly proper and indeed a necessary part of any government's determination to try to strengthen the hand of British exporters round the world. It will inescapably from time to time follow that when such letters are written it turns out that the company on whose behalf the letter has been written will have given a financial contribution to the governing party of the day. I hope you will agree that the position in which our ambassador in Romania was placed was really quite unacceptable in terms of the comment that was made in the media and comments that were made casting doubts as to his party political impartiality and there were a number of, I thought, clearly unnecessary and intrusive comments in relation to his personal life. Would like to ask you as the Permanent Secretary what steps you have taken to ensure that our ambassadors and high commissioners round the world are not in the future placed in the same position as our ambassador was in Romania, when they are perfectly properly asked by the government of the day to provide a draft of a letter in support of a British export contract to a company which may or may not be one that is supporting financially the government of the day.

(Sir Michael Jay) I agree with what you say about the ambassador in question, Chairman, and I spoke to him over that period and told him that in my judgement he had behaved entirely properly in supporting British interests in the way that he did. What I then did afterwards was to send a note round to all our ambassadors outlining some of the lessons from that particular episode and drawing attention in particular to the question of what is a British company and so on, which is one of the issues which was at the heart of this. The short answer to your question is that I see it as my duty to support any ambassador who finds himself in a difficult position of that kind and that is certainly what I did and what the Foreign Secretary did in this case.

204. I would like to ask you whether that is actually sufficient because unless you as Permanent Secretary issue some clear statement of guidelines to your ambassadors and high commissioners to cover this eventuality, guidelines which of themselves would then enable any ambassador or high commissioner placed in this position to say, "I was simply following the established guidelines laid down by the Permanent Secretary", then it is I fear only a matter of time before another ambassador or another high commissioner is going to be placed in the same invidious position. I would suggest to you that it is not good enough to say, "The Permanent Secretary will be behind you if you get into the same sort of position that our Ambassador in Romania got into through no fault of his own".

(Sir Michael Jay) In the immediate aftermath of that we did send guidelines to our ambassadors on this question of the support that they should be giving to British companies and since then we have been in touch with David Wright, the head of British Trade International, to ensure that there are clear guidelines to be issued to people.

205. I would be grateful if you could provide the Committee with a copy of your guidance telegram. You referred to guidelines that are to be issued. Have those guidelines been issued to date?

(Sir Michael Jay) I will have to check on whether they have been issued or not. I will look into this question when I get back.

206. We would certainly wish to have a copy of those guidelines, if they have been issued or as and when they are issued, please.

(Sir Michael Jay) I will look into the question of whether they have been issued.

Sir John Stanley: And the Committee would wish to have a copy of those guidelines when they are issued.

Mr Chidgey: I have one more question on the Overseas Territories. This relates again, Sir Michael, to the speed of response to written questions which obviously fall to you and your staff to provide the information on. I put down a series for answer at the beginning of July on the Overseas Territories regarding the preparation of annual financial abstracts. I asked very simple questions: which of our Overseas Territories prepare annual financial abstracts and which do not; has the Foreign Office been in discussion or correspondence with any of our Overseas Territories in regard to their financial abstracts and, if so, which of our Overseas Territories has the Foreign and Commonwealth Office had a reply from and which is it still awaiting a satisfactory reply from. They are very straightforward questions, nothing particularly difficult. I have been given the holding answer of, "We will reply as soon possible", but I do not see what the problem is. There are only so many Overseas Territories. The correspondence that you have with them must be fairly up front. You know there is no great file of information. I do not understand why it is difficult to answer the questions.

Mr Mackinlay: And you are more or less -----

Sir John Stanley: Sorry; let Sir Michael answer Mr Chidgey and then you can come in.

Mr Chidgey

207. My adviser here is working very well. We hunt in pairs.

(Sir Michael Jay) I will need to look into the question, Chairman.

Mr Chidgey

208. Do you take my point? This is not exactly rocket science.

(Sir Michael Jay) I will look into it.

209. Can I say finally, Sir John, can I have some lead from you because, as you were discussing with my colleague here earlier, I think the Committee has an interest in this difficulty we are having in getting responses to questions which are germane to the work of the Committee. Again, as you have suggested with Mr Mackinlay to have some sort of response today, I think it would be appropriate if I could have some sort of response for the Committee in the same sort of timescale.

(Sir Michael Jay) I can promise you a follow-up of some sort during the course of the afternoon. I am afraid I cannot without looking into the details promise you a substantial reply. If the request was for a substantive reply to the points today, I cannot promise you that because I will have to look into where we have got to and how complicated it is. I can certainly promise you as it were an update or a sitrep by the end of the day.

210. But not a holding answer on a holding answer, Sir Michael.

(Sir Michael Jay) I will have to look into the substance of it all.

Sir John Stanley: Sir Michael, we would be grateful for any help you can give, but also we are conscious that when it comes to individual questions which Members have tabled, then it is for Members to pursue the relevant ministerial office.

Mr Mackinlay

211. Yes, but if I had not asked those questions we could be asking you this morning and it is a matter on the record that Mr Straw said these should be available. In fact, he said he was gobsmacked that these were not available. The $64,000 question today is, are these documents in existence in London? That is something we need to know and I cannot for the life of me find out why that cannot be established. The spin-off of this issue is in fact a response to some questions on advice to ministers because presumably, when somebody - Jones, Carter-Brown or someone or other - says, "Minister, I have put in your Red Box the statistics but we cannot find Gibraltar's", that must have happened, and he says, "Thanks very much". Where did Mr Straw get this from, about Gibraltar not having these statistics? Presumably the person who put him up to this might be in Brussels, and presumably then did not advise him that the other Overseas Territories, for which you have greater responsibility when it comes to some of the territories where there is not devolved self-government --- it really is a cover-up, I have got to say to you, a shocking cover-up. And there is a parliamentary recess coming up and I am not going to tolerate it.

(Sir Michael Jay) I undertake, as I did earlier on, Chairman, to look into this when I get back to the office.

Sir John Stanley

212. Sir Michael, we are very grateful to you and to your colleagues, and we would also be grateful if you would convey the thanks of the Committee to the very considerable number of your staff who must have devoted a great deal of time to producing the latest annual version of your report which has been of great value to this Committee and I am sure to the wider public. We hope it has also been of value to your Department in compiling it. Thank you very much.

(Sir Michael Jay) Thank you, Chairman. May I say that it is a pleasure to be before the Committee in the more formal capacity than has been the case in the past but I do see it as very important during my present job to work very closely with your Committee. You travel widely. You see many of our posts at first hand and have a perspective on the operation which is very valuable to us and I look forward to developing that relationship while I am in this job.

Sir John Stanley: Thank you, Sir Michael.