Examination of Witnesses (Questions 240
- 259)
WEDNESDAY 29 OCTOBER 2008
SIR PETER
RICKETTS KCMG, JAMES
BEVAN AND
KEITH LUCK
Q240 Mr. Horam: You were explaining,
Peter, that you kept all the proceeds from asset sales.
Sir Peter Ricketts: That is correct.
Q241 Mr. Horam: So, what is the
point of the Treasury giving you an annual target for that?
Sir Peter Ricketts: I think that
it wants to encourage all Government Departments to look at their
asset registers.
Q242 Mr. Horam: Surely they do
that anyway.
Sir Peter Ricketts: We would do
it anyway. I suppose that it is good practice to ensure that you
look to see what is the least performing asset, then sell that
to reinvest in your high priorities. As you say, we would do that
anyway.
Q243 Mr. Horam: So, you have your
assets. Until recently there were huge increases in property prices,
and if you wanted to buy new offices, for example in Bombay, you
might have had to pay a lot more than you expected. Has that been
a problem?
Sir Peter Ricketts: The new offices
in Bombay, which the Committee encouraged us to invest in, opened
today—[Interruption.] Mumbai—I have been corrected;
it is the same place. Yes, it is very expensive, particularly
if you buy in a downtown financial district such as in Mumbai,
but we regard this as an investment for the long term. In addition
to our asset recycling, we have a capital budget from the Treasury
for our overseas estate and we have to prioritise.
Q244 Mr. Horam: You negotiate
the capital budget with the Treasury, and that is in addition
to your resources.
Sir Peter Ricketts: That is right.
Every year we have a capital budget and, in addition, whatever
we can make from asset recycling. We can spend all of that on
new buildings, security work on existing buildings or refurbishments.
Q245 Mr. Horam: The Committee
was in Israel last year. We are interested in the situation in
Tel Aviv. There has been a problem there with getting new offices.
Are you aware of that?
Sir Peter Ricketts: I am certainly
aware of it. The problem in Tel Aviv, as the Committee will be
aware, is that the embassy has no stand-off and so it is very
hard to protect it against a bomb attack. We have been looking
for an appropriate new site for the embassy, but we have not yet
made any decision; we are still looking at the possibilities.
Q246 Chairman: I am conscious
of the time, so we may well write to you with some other questions
on these areas and on some of the financial issues.[5]
On the subject of your assessment of risk management, you have
produced a top risk register and we have corresponded with the
Department about that. Has the position changed? Are you still
not willing to share that register with us?
Sir Peter Ricketts: As you say,
you have had correspondence, including with the Foreign Secretary.
The position has not changed and I will explain why. I thought
again about it before appearing before you. I hope that you agree
that we have made a real effort this year to be more transparent
with the Committee, to disclose as much as we can, and, in particular,
if we run into a problem to be absolutely open with the Committee
about that problem and about what we are doing. We want to maintain
that relationship. We have thought again about the top risk register,
and the Foreign Secretary and I agree that we have concerns about
releasing the document to the Committee. As you will understand,
the top risk register is designed as an internal management tool
for staff to be as frank as possible about the vulnerabilities
and the risks that we are running in the organisation, both in
our policy and as an organisation, such as the safety of our staff,
the safety of our buildings and our resilience against terrorist
attack. There are a lot of very sensitive issues. Although we
recognise that the Committee would keep any document very secure,
the Foreign Secretary and I are both worried that it would none
the less have a chilling effect on our staff and their willingness
to be frank in the top risk register about our vulnerabilities
and risks if they felt that it was going outside the FCO. As far
as I know, other Departments do not release their risk registers
to their departmental Select Committees, so I do not think that
we are being more restrictive than others. We really believe that
it is an internal document and that it is up to us to have the
space to manage the business, using such tools, and for you to
hold us to account, of course, on our running of the organisation.
The Foreign Secretary and I have concluded that our position on
the matter is right, although I assure you that we have thought
again about it.
Chairman: No doubt, we shall pursue the
matter again at some point, but not now. I ask Eric Illsley to
come in on the passport issues.
Q247 Mr. Illsley: Sir Peter, what
progress are you making on the merger of the FCO overseas passport
operations with the Identity and Passport Service?
Sir Peter Ricketts: We have looked
at it very carefully in the board at the FCO, and we are all convinced
that the right long-term solution is to have a single passport-issuing
function in the UK combining the very large Identity and Passport
Service operation with issuing passports for overseas, and using
embassies and high commissions to receive the applications and
then to deliver passports. I ask Mr. Bevan to fill you in on where
we stand in our negotiations with the Home Office on that.
James Bevan: We are making progress
with the Home Office. Both the Foreign Office and Home Office
boards have discussed the merger, and have blessed it in principle.
The last time that I checked with the Home Office a day or so
ago, it was going through its internal procedure on the financial
numbers, but I have no reason to believe that that will change
our course, which we hope is leading us to a fusion of operations
by 2011.
Q248 Mr. Illsley: Are you happy
that all the risks have been minimised and that the reputation
of the Foreign Office will be preserved as a consequence?
James Bevan: We are very keen
to minimise the risk, because it is reputational for us and operational
for our customers—British citizens at home and abroad. I
am confident that we are managing the risks in the right way.
We are doing so by doing it gradually, and are on course for a
convergence in 2011. We are doing it in very close consultation
with IPS. We are doing it through well-run programmes and with
some of our best people on the case, and we are doing it under
the active supervision of both the Home Office and the Foreign
Office boards.
Q249 Chairman: May I ask you about
the change with regard to the UK Border Agency taking over responsibility
for UKvisas? You will be aware that we wrote to the Foreign Secretary
saying that, even though the FCO was no longer the Department
responsible, we felt an obligation to keep scrutiny of those matters.
As a constituency Member of Parliament, I wish to say that the
system worked better when UKvisas came under the FCO than it does
now. What input do you have on such matters? Where are the lines
of responsibility between the UK Border Agency and the FCO?
Sir Peter Ricketts: As you will
recall, UKvisas used to be a child with two parents. It used to
be owned jointly by the FCO and the Home Office, but it has moved
across to be fully owned by the Home Office and the UK Border
Agency. However, we have given you an opportunity to maintain
scrutiny of the issue by ensuring that one of our departmental
strategic objectives is on migration. We agree that migration
is a very important aspect of international policy, and we are
therefore involved in the policy making on migration. We are also
closely involved with UKBA in the management of UKvisas, not least
because a significant proportion of our staff, and our embassy
and high commission space, is devoted to the UKvisas operation.
Mr. Bevan and his counterpart in UKBA meet regularly to maintain
joint oversight of the activity, and I think that that is working
very well. I invite Mr. Bevan to continue.
James Bevan: I think that it is
working well. I meet Lin Homer, the chief executive of UKBA, regularly,
and I am a member of the UKBA board, which meets regularly to
oversee progress. At a work level, our respective staff are in
close touch.
Q250 Sir John Stanley: Sir Peter,
as you know, at the end of July, the Foreign Office suffered the
very worrying, and for you deeply embarrassing, theft of thousands
of blank passports and visas from the back of a van near Oldham.
We are aware of the correspondence between the Committee and your
Department, and indeed with the Home Office, following that incident.
Your replies to us are classified, so I am not going to refer
to them. I am going to put some questions to you, but we fully
accept that the security arrangements for the transportation of
items must remain classified. Do you acknowledge that this serious
theft has exposed some significant weaknesses in your internal
security arrangements for transportation?
Sir Peter Ricketts: We certainly
take it extremely seriously. As you say, we were the victim of
criminal action, which is now the subject of a police investigation.
We need to see the outcome of that police investigation to know
the full details of how the crime was carried out. I accept that
the arrangements that we made for secure transmission of our documents
did not prevent the crime.
Q251 Sir John Stanley: That being
the case, do you consider that your Department now has adequate
and different arrangements in place so that, as far as you can
be reasonably certain, this sort of theft will not happen again?
Sir Peter Ricketts: Yes, Sir John,
I do believe that. We have sent the documents to the Committee,
in the spirit that I was referring to earlier of total transparency
with you, and with confidence about both the problems that arose
and what we are doing about them. As you know, we set in motion
immediately after the crisis an end-to-end review of our arrangements
to make sure that by tightening up one area, we did not simply
transpose the problem to another part of our delivery. We have
had that review, I have sent it to the Committee and we are now
implementing its findings. I am confident that our security arrangements
are now much more robust.
Q252 Sir John Stanley: The security
of your people is ultimately even more important than the security
of documents. We, as a Committee, have seen any number of your
premises overseas—embassies and high commissions—and
we are under no illusions at all about the scale of the security
problem that you face and about the scale of the security measures
that will, over time, have to be taken. You have a formidable
undertaking and we recognise the scale of that. Given the extent
of the expenditure that is going to be required for the foreseeable
future to provide proper and sufficient security for your people,
do you consider that you have the funding to discharge your security
responsibilities to your Foreign Office staff?
Sir Peter Ricketts: I could never
say that we were doing enough or had done enough. I will also
have an appetite to do more. I think that the funding that we
have allows us to deal with the highest risks as we identify them.
We have a careful matrix to establish which posts are most vulnerable
and where our staff will be most vulnerable, and we tackle those
first. The more funds we had, the more works we could undertake,
and the better that would be. I recognise that resources are finite,
but I believe that we have the resources that we need to tackle
the highest risks.
Q253 Sir John Stanley: You refer
to the highest risks. You will know, as I most certainly know,
and the rest of the Committee knows, that in this particular world—the
terrorist world—when terrorists cannot successfully attack
the hard target, they go for the softer ones. There cannot necessarily
be any comfort in providing protection for what at any one time
you assess to be the targets of highest risk. Given that reality,
do you consider that, to prevent your having to cut mainstream
and extremely important FCO activities, you need to have better
access to the Government's Contingencies Fund for the supplementary
funding that you need to provide your staff with adequate protection?
Sir Peter Ricketts: I accept your
premise, Sir John, that we are dealing with risk management here.
There is no absolute standard of security and staff are potentially
at risk anywhere in the world, including of course in the UK.
We can approach security only on the basis of managing the risk,
paying close attention to the intelligence—there are now
better arrangements in Whitehall for co-ordinating the intelligence
of threats against British staff and people abroad—and prioritising
the risks that we see. As I said, the more money we had, the more
we would be able to do, but I believe that we have adequate funds
for the programme of security works that we regard as priorities.
That is the best answer that I can give you in these circumstances.
As an anecdote, I was in Islamabad two weeks
ago, in the aftermath of the Marriott hotel bombing. In the light
of that bombing, we concluded that even the compound that we thought
was as secure as we could make it was at risk from bombs of that
size. We have therefore concluded that we must ask families to
return their children to the UK, because we are not confident
that we could ensure complete security and safety for the children
of families there. That is an example of our risk-management process
in function.
Q254 Sir John Stanley: So, Sir
Peter, you are saying to us—this is an important policy
point—that you are not seeking any special access to the
Contingencies Fund and that you are content to discharge your
security responsibilities within the departmental funding allocated
by the Treasury.
Sir Peter Ricketts: I would never
say that I am content, but I accept that, given all the other
pressures on Government spending, we have got adequate funds for
the high-priority security works that we need to carry out. I
invite my colleagues to correct me if they think that I am wrong,
but that would be my conclusion.
Keith Luck: We have a significant
programme of investment, which is driven, as Sir Peter says, by
security considerations, and a record level of spending in the
forthcoming comprehensive spending review period, which in itself
comes on the back of a significant increase of funds in the past
CSR period. Our challenge is to spend those moneys wisely. We
also have a cadre of overseas security managers and other security
arrangements, and we keep security constantly under review. Indeed,
there has been an increase in that cadre and the number of security
visits that have been undertaken at post.
Q255 Andrew Mackinlay: There is
a finance question that we ask you every year—we have some
sympathy with this. You cannot control the subscriptions to the
United Nations, the Organisation for Security and Co-operation
and so on, yet you have to take that hit in your budget. It would
seem remiss if we did not give you an opportunity to allow us
to flag this up, particularly as we are in concord. Is the situation
as normal, or have you had to take any big hits on subs?
Sir Peter Ricketts: The hit we
are taking is the fall in the value of sterling, because all these
subscriptions are in dollars or euros and, therefore, they are
costing us more in pounds. So, we are going to be under increased
pressure to pay our bills overseas—not just the subscriptions,
but the running costs of places around the world. We are not exempt
from the pressures that everyone is under as a result of the reduction
in the value of sterling. The answer is, yes, we have taken a
hit, along with many other people in the UK.
Q256 Andrew Mackinlay: There is
another matter that I asked the Chairman if I could raise with
you, although I realise that it is probably a matter for ministerial
as well as diplomatic staff. There was serious disappointment
not only in Northern Ireland but throughout the UK when over the
summer the United States reached an agreement on compensation
claims with Libya—we fully welcome and recognise the rapprochement
with Libya—that excluded UK victims of Libyan Semtex and
other terrorist equipment from getting any substantial compensation.
There was a civil case in the United States courts in which the
Administration settled, but the ex gratia payments given by Libya
were exclusive to United States citizens.
That raises the question, "What did
we do in Washington DC to make representations on the Hill?"
The question on the other side of the coin is why we have not
pursued a comparable agreement with Libya, given our improved
relations—I understand that Colonel Gaddafi is coming here
soon—to see whether we could get some ex gratia payments
for our victims. As I said—and I have lost a constituent—this
is relevant in not only Northern Ireland, but other parts of the
UK, such as Warrington. I do not know whether you can help me
on that.
Sir Peter Ricketts: I am not briefed
on that, Mr. Mackinlay, but I will certainly undertake to write
to you about it.[6]
Andrew Mackinlay: Thank you.
Q257 Chairman: We will write to
you on some other areas, including UK trade and industry relationships
and public diplomacy, but there is one question that we really
need to ask because we have received some strong representations
on it. In March, you took the decision to cease the funding of
the Commonwealth scholarship and fellowship programme, on which
you had formerly been spending £10 million. What impact has
that had, and what has been the reaction of Commonwealth countries
to the fact that those scholarships are no longer available or
funded through the FCO?
Sir Peter Ricketts: On a point
of fact, my information is that we spent around £2 million
on Commonwealth scholarships, not £10 million. The context
of that decision was our wish to prioritise FCO spending towards
our highest policy priorities as part of our strategy refresh.
Since prioritising means choosing and since money is limited,
we could only spend more on the highest priorities by reducing
our spend in some other areas. The Foreign Secretary decided that
part of that contribution would come from the scholarship funding.
We are still spending a very significant sum of money on scholarships.
Our budget for that is £27 million this year and will be
£25.5 million in the next two years, so we are still major
scholarship funders.
When we looked at the scholarship programmes,
we thought that the most effective way to spend our money was
on Chevening scholarships, which have a strong British brand.
British high commissions and embassies are responsible for choosing
the scholars. They can choose those whom they think are future
leaders who will benefit from the very expensive scholarship that
we offer for studying in this country. We want to reinvigorate
the Chevening brand and develop alumni relations so that the money
we invest in those people will be good for Britain as well as
for their countries. For that reason, we decided to concentrate
our scholarship funding on the Chevening scholarship programme.
The Commonwealth programme, although excellent,
is not run by the UK. People do not see the scholarships as coming
from the UK and we are not involved in the same way in choosing
the people, so we took a policy decision that the right way was
to concentrate our money in the Chevening scholarships and the
Marshall scholarships, which we have maintained. Of course, the
Commonwealth scholarship people were not happy with that, which
we perfectly understand. They made representations to us and I
think that the Foreign Secretary has sent you a copy of the letter
he wrote to them. One Commonwealth country made it clear that
it was not happy with that decision either, but I do not think
that there is any prioritising decision you can take in government
that would not leave someone feeling that they should have been
given a higher priority.
However, the good news is that as a result
of increases from DIFD and a new contribution from DIUS the net
HMG contribution to Commonwealth scholarships has not decreased.
This is an interesting example of where the FCO has chosen to
reduce its funding by a certain amount and other Departments have
come forward and filled the gap. I do not believe that Commonwealth
scholarships are net worse off. We have the benefit of having
concentrated our available money on what we think is a very strong
British success, which is the Chevening scholarships.
Q258 Sir John Stanley: Sir Peter,
the new information you have given us today makes the original
decision look even more crackers. No account seems to have been
taken of the incredible amount of damage done in terms of perception,
as far as this country is concerned, to the original decision.
You now tell us that it was originally going to save only £2
million in the FCO's budget and that that amount has now been
made up by DFID—at least, I understand that it has been
made up by DFID.
Sir Peter Ricketts: Yes.
Q259 Sir John Stanley: So, in
public expenditure terms, it is now neutral. However, out there
a huge perception has been radiated around the world that this
is yet again another sign of the British Government placing a
low priority on the Commonwealth. It is the 50th anniversary—[Interruption.]
Chairman: We have lost our quorum because
there is a Division in the House.
Sir Peter Ricketts: May I write
to clarify that last point? There was a slight misunderstanding
that I would like to clarify in writing if I may.[7]
Chairman: Thank you, gentlemen, for coming.
5 Ev 174 Back
6
Ev 172, See previously unpublished memoranda submitted to the
Foreign Affairs Committee, MISC 78 MISC 80, published at www.parliament.uk/parliamentary-commit-tees/foreign-affairs-committee.cfm Back
7
Ev 173 Back
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