Examination of Witnesses (Questions 60-79)
24 JUNE 2003
SIR MICHAEL
JAY KCMG, MR
PETER COLLECOTT
CMG, MR SIMON
GASS CMG CVO AND
MR ALAN
CHARLTON CMG
Q60 Mr Chidgey: The point that really
troubles me, Sir Michael, is that what seems to be happening is
that money is being diverted from existing projects, for example,
as you mentioned, the Human Rights Project Fund, and, of course,
the Westminster Foundation for Democracy (WFD). That comes down
to the fact that, for example, in the year 2003-04, while £6
million is being allocated to the promotion of democracy and good
governance, which obviously is a fundamental aim, you might argue
that £6 million is hardly going to make any difference worldwide,
formerly it was actually coming from the WFD. So there is only
£2 million of new money, £2 million worldwide for the
promotion of democracy and good governance, when you have the
whole continent of Africa which the Prime Minister tells us, in
his support for NePAD, is our first priority[6]I
would not want to be in your shoes, quite frankly, I would feel
somewhat frustrated about that.
Sir Michael Jay: Can I ask Mr
Gass, Mr Chairman, just to explain a little bit about the philosophy
underlying it; he has been very much involved in it.
Mr Gass: I would like to add a
little bit to that, yes, thank you. There is the new money, to
which you have rightly referred, Mr Chidgey; in addition, of course,
there are the existing FCO programmes, and you referred to the
Westminster Foundation, which is funded partially by the Foreign
Office, and our Human Rights Project Fund. If you put all of that
together, which we have done, into the Global Opportunities Fund,
you end up with a sum of £27 million, £43 million and
£61 million; so, if you look at the total, it certainly is
not large in comparison with a development agency, but then clearly
that is not our role in life. What we can do with that money is
that we can fund small, high-value, low-cost interventions; and
if I could give you just a couple of examples from my own experience,
which was most recently in South Africa. The ability to fund,
for example, a Treasury official to be seconded to the Minister
of Finance, to help him with fiscal policy, is a tremendously
useful tool; our ability to help some of the South African policy
in combatting crime, by funding Metropolitan Police training.
These are not, in themselves, hugely expensive things to do, but
they do give very high-value returns, we believe. Certainly, we
are not, in any sense, in competition with our colleagues in DFID
in this business, and, for that reason, the large-scale interventions
which they would be able to mobilise just are not really the purpose
of the Global Opportunities Fund. Of course, the ability to which
you can change the world in a major sense with this sort of money
has to be limited, but individual interventions can be very important.
Q61 Mr Chidgey: I do not doubt the
worthiness of the projects that you are able to undertake, Sir
Michael, no question, obviously I have seen some of them in action,
but DFID is spending nearly a billion pounds a year, we are talking
about £87 million over three years, there is no comparison.
My concern, frankly, is that, whilst these individual, small-scale
projects no doubt are highly valuable and give you a very good
return for the minimum investment that is being made, it hardly
seems to me to support the Government's policy of addressing the
issues of good governance, human rights, never mind worldwide,
just in the one continent which is giving us so much concern at
the moment. Surely, it is a question of putting your money where
your mouth is, is it not, £2 million for good governance
for the world, extra money?
Sir Michael Jay: As Mr Gass said,
small sums of money, well targeted, can make a difference.
Q62 Mr Chidgey: But bigger sums of
money, well targeted, can make an awful lot bigger difference?
Sir Michael Jay: We have not got
the bigger sums of money.
Q63 Mr Chidgey: I am on your side,
Sir Michael, I am trying to give you a boost here. I will not
delay my colleagues any longer, I will move on. I have made the
point, and I think you understand where I am coming from. Can
I go on to pick up where Mr Mackinlay left off, on establishment
of FCO posts. There is a particular question I would like to ask
you regarding how the mechanics work, when you make a decision
to close a post; what discussions would you have, under normal
circumstances, with the country in question's Government?
Sir Michael Jay: Normally, we
would make a decision ourselves, when I say "we" I mean
officials and Ministers, on the basis of how best we should allocate
our priorities, given the resources we have available, and then
as soon as we had reached a decision we would communicate that
to the country concerned.
Q64 Mr Chidgey: It appears those
procedures were not carried out when the decision was announced
to rearrange the UK's diplomatic representation to Nicaragua;
is that right, was it altered subsequently at the request of the
Nicaraguan Government?
Sir Michael Jay: No, we discussed
it with the Nicaraguan Government. I think what changed was from
where Nicaragua was going to be represented; originally, there
was a suggestion that it should be represented, the original proposal
as to where, as it were, the hub should be was changed after discussions
with the Government.
Q65 Mr Chidgey: You mentioned earlier,
in response to Mr Mackinlay, that you work from a finite pot,
we understand that, of course, but inevitably that meant when
you opened a post you had to close one, in general terms.
Sir Michael Jay: It is a constant
shifting of priorities.
Q66 Mr Chidgey: In fact, the Annual
Report points out that in the last five years you opened 32 new
posts across the world and closed eight, which seems to me that
there is a demand for new offices continuing. My concern is how
you are going to cope with that, if you are working from a finite
pot; surely, if it is the policy of this Government, which we
understand it is, to engage far more directly in the world than
we did in the previous decades then you are at the front edge
of this, you are literally the front line, and, above all, clearly,
you need the resources to be able to follow through that policy?
Sir Michael Jay: Well, we do;
and the answer to your question is, we are going to do it with
great difficulty, because, as we get increasing demands for opening
new posts or strengthening posts in some parts of the world then
we are going to have to think of imaginative ways of ensuring
that we have the global reach we need.
Q67 Mr Chidgey: You cannot clone
people, can you, you need actually to have new people in post
to do the job?
Sir Michael Jay: It is a constant
judging of priorities. There are going to be some, and I can give
no guarantee that we are not going to have to come up and say,
in the next two or three years, "This post has now become
just so much more that we don't think we should be keeping it
open, given the demands to open elsewhere or to strengthen elsewhere."
I think that is a reality of life, we are shifting priorities
the whole time.
Q68 Mr Chidgey: I do not want to
dwell on this point too long, but just one final comment on this
point, before I move on to my last point. I cannot conceive of
a situation where it is automatic that if our interests grow in
one area of the world then we have to reduce our representation
in another; that does not smack of sound foreign policy to me?
Sir Michael Jay: It is a necessary
consequence of operating within finite budgetary constraints,
that if you have demands to spend more on one part of the world
and your budget is finite you have got to find something which
is classified as a lower priority, which you do not do, it does
not mean to say it is not important but it is a lower priority.
And that is something which we are having to do all the time.
Q69 Mr Chidgey: A final question,
and it is related to this. We were informed a while ago, I think
by the FCO, of changes in West Africa, you have referred already
to the closure of our post in Bamako, in Mali, and that is a consequence
of the upgrading of our post in Conakry to Ambassador level, which
I welcome, by the way, I think it is a very important move to
make and it shows an engagement with Francophone Africa and western
Africa that was not there before. But it comes back to this point,
is Mali suddenly a country where we have less concern about developments,
in terms of terrorism, in terms of good governance, in terms of
human rights; how are we going to represent British interests,
not just British citizens, without a presence in that country,
which is right at the heart of political developments in the sub-Sahara?
Sir Michael Jay: We would have
preferred to keep it open. The judgment was that having an Embassy
in Conakry, or raising the status of the Embassy in Conakry was
more important, perhaps not a question of one being more important
than the other but the rational look at our representation in
West Africa as a whole led us to conclude that the right thing
to do was to upgrade our Embassy in Conakry to a full Embassy
and scale down our Embassy in Bamako. And also, depending clearly
on the way in which the situation goes in Liberia, we are hoping
to attach a political officer to the US Embassy in Liberia, which
is another example of flexible representation. Also, I mentioned
to the Committee last year, we are working with the French to
enable us to have representation in their Embassy in Niamey, in
Niger, and, in return, they have space in our High Commission
in Freetown, which is a way, again, of extending our range but
in a cost-efficient way.
Q70 Mr Chidgey: Can you tell us when
the Ambassador to Conakry is likely to be appointed?
Sir Michael Jay: I cannot tell
you, but I can write to you and let you know, certainly[7]
Mr Chidgey: I would be very grateful.
Q71 Sir John Stanley: Sir Michael,
can I just follow the points that have been made by both Mr Mackinlay
and Mr Chidgey. I fully understand that you have got to operate
within finite budgets where you have got a steady-state situation,
but we all know that there is provision in the public expenditure
mechanism that where government departments face exceptional requirements
that essentially are unforeseen there is the ability to bid to
the contingency fund. And, I must say, I was dismayed, in your
reply to Mr Mackinlay, when you said that you were having to look
to make economies elsewhere in the diplomatic representation simply
because we have needed to establish, absolutely rightly, our Embassy
in Baghdad, and possibly a base in Basra as well. And I do not
understand why the Foreign Office is not doing what I am absolutely
certain will have been done by the Ministry of Defence and also
by DfID, to make a bid to the contingency fund to meet the quite
exceptional needs that you are having to face. On a straightforward
level, it seems to me absolutely ridiculous that the Foreign Office
is having to pay a price of closing down some of its overseas
representation because we have successfully managed to overthrow
a tyranny in Iraq?
Sir Michael Jay: I will ask Simon
Gass to comment on exactly where we are in our discussions with
the Treasury. We did make a successful bid on the contingency
fund to finance some of the preparations for conflict, before
the conflict in Iraq, and we are considering a further bid and,
indeed, I think discussing with the Treasury the possibility of
a further bid in order to cope with at least some of the extra
expenditure that we will incur as a result of our operations in
Iraq. But, irrespective of Iraq, I think we have to recognise
that we are entering a kind of period in which we are going to
have to be looking constantly at high priorities and low priorities
and looking at ways of doing things more efficiently.
Q72 Sir John Stanley: But why are
you only considering making a bid to the contingency fund? I would
have thought that, the day the war ended, or possibly before the
war ended, if one was going to forecast the outcome, you would
have been there and you would have your bid on Gordon Brown's
desk the day after the war ended?
Mr Gass: Indeed, we did make a
claim on the reserve in respect of the last financial year for
the expenses which we had then incurred in respect of Iraq. The
Treasury met the claim in part but not in full, and therefore
we were left with a sum which was unfunded. We will enter a further
claim on the reserve this year, undoubtedly, but part of our aim
is to make sure that we have a full understanding of what all
our costs are going to be this year. What I think it would be
wrong to do would be to enter a series of sequential reserve claims
with the Treasury, we would rather make sure that we have got
a clear fix on our costs before we did that. If I may take one
step back, I think that the linkage that because we have to do
more in Iraq we close a post, or because we open a post we have
to close another post, is more mechanical than actually it is.
Of course, there are many areas in which we can make savings in
the Foreign Office, and that indeed is what we are trying to do
through our Efficiencies Programme, and, for example, the reorganisation
of our services organisation, where we hope to save a substantial
sum through smarter procurement over the next few years. So it
is a question of the Foreign Office operating against a tight
budget and really trying to do the best that it can with that.
Q73 Sir John Stanley: Could we have
a note from you, Sir Michael, as to what are your estimates of
what the capital costs that are going to be involved in creating
a proper, long-term Embassy, on a permanent basis, in Baghdad,
are going to be, and certainly you are going to want to establish
a Consulate, I imagine, in Basra, and the costs of that, what
your estimate is? And can you give this Committee a decision as
to how much you are going for, in terms of a bid to the Treasury,
before we conclude our report, please?
Sir Michael Jay: Certainly[8]
Q74 Chairman: Sir Michael, creative
and innovative representation, you have given some examples, a
political officer of the UK in the US Embassy in Monrovia, you
have mentioned the linkage, France, Niamey and Accra; you did
not mention any possible such initiatives in Central America.
When we closed our posts in Tegucigalpa, in Managua and in San
Salvador, did we then try to have similar, innovative, creative
solutions in dealing with the US there, for example?
Sir Michael Jay: What we have
done, I must get this right, we have reorganised our representation
in three Central American countries; one of them we have closed
and left with the local representation.
Q75 Chairman: That is Managua, I
think?
Sir Michael Jay: I will just check;
in Tegucigalpa and Managua, where there are DFID people, where
there is a DFID office, we are going to appoint the head of the
DFID office as a Charge d'Affaires in a British Development
Office, and then we will be represented from one of the other
regional capitals. In the case of San Salvador, we will have an
Honorary Consul, who will be our own in-country representative.
Now, we have not discussed, I think, in those cases, the possibility
of co-location or joint representation with others, so that is
something we do on other occasions.
Q76 Chairman: When we have the joint
operation with the French in Niamey, and in Freetown, what are
the financial implications for the French and ourselves?
Sir Michael Jay: I think I will
need to send you a little note on that, if I may, Mr Chairman[9]
Q77 Chairman: Thank you. A final
point on this representation, before I pass to Mr Hamilton. There
strikes out from this group in Central America the fact that we
are keeping our High Commission in Belize; now is it still the
view of the Foreign Office that all posts in the Commonwealth,
effectively, should be kept open?
Sir Michael Jay: No. It is not
a rule that all should be, Mr Chairman, there are one or two countries,
certainly, Commonwealth countries, in the Pacific.
Q78 Chairman: Apart from the Pitcairn
Islands and St Helena, and so on?
Sir Michael Jay: They are Overseas
Territories.
Andrew Mackinlay: They are Overseas Territories;
without representation, out of sight, out of mind. Sorry about
that.
Q79 Chairman: Clearly, when you looked
at Central America and the representation, the fact of there being
one Commonwealth country, namely Belize, presumably was a factor
in your keeping open that one?
Sir Michael Jay: Yes, it was a
factor, because our interests there remain considerable. But this
is not an absolute, because there are one or two Territories in
the Pacific, I think I am right in saying, Kiribati is one, where
we do not have full-time representation. So we do not have a policy
that we should always have a High Commission operating in all
Commonwealth countries.
Chairman: Thank you.
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