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May I ask the Minister why he did not include the information that there would be a real-terms cut in spending because of the exchange rate problem?

Chris Bryant: I think that the hon. Gentleman is confusing himself. He refers to a real-terms cut, but there will not be a real-terms cut.

Kelvin Hopkins (Luton, North) (Lab): I applaud my hon. Friend's robust answers to the hon. Member for Aylesbury (Mr. Lidington).

It is obvious that when our currency depreciates overseas costs go up, but does my hon. Friend agree that we must retain that degree of flexibility in our currency for broader economic reasons? Had we been stuck in the euro, we would now be in a disastrous situation, rather like that of Ireland. The Prime Minister must be congratulated on keeping us out of the euro all those years ago.

Chris Bryant: I had a sneaking suspicion that my hon. Friend might refer to this matter. I know from conversations with my counterparts in other Ministries of Foreign Affairs that they are experiencing similar difficult circumstances, because their currencies also vary in relation to other currencies in the world. The exchange rate between the US dollar and the euro has fluctuated significantly over the last two years, which has made things difficult for foreign affairs departments in other countries as well.

Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): Is not this matter another example of the Prime Minister's lack of candour? Yesterday he said:

He went on to detail what he was seeking to do, but what he omitted to say was that projected spending-anticipated and desired spending-on that very matter was to be cut, as Lady Kinnock has now made plain. Why did the Prime Minister fail to give the House that information?

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Chris Bryant: I reject that charge. We have been very open throughout the process. The Foreign Secretary answered questions before the Foreign Affairs Committee, and the permanent under-secretary answered specifically on the issue of the overseas pricing mechanism.

No final decisions have yet been made about next year's budget, but we are engaged in discussions with the Treasury, which has been immensely helpful in trying to examine the issues with us. We want to ensure not only that we meet our absolute priorities, but that all our spending is clearly devoted to those priorities. That is what we are focusing on.

Mr. Tony McNulty (Harrow, East) (Lab): I thank my hon. Friend for confirming that the counter-terrorism spending of the Foreign and Commonwealth Office has risen and will continue to do so, especially its spending on Pakistan. Does he agree that the current events are occurring in the context of the largest ever spend by this country-domestic and foreign-on the intelligence and security services, and the largest ever significant spend on developmental and military activities in both Pakistan and Afghanistan, at a time when the Pakistan Government are themselves finally getting to grips with counter-terrorism? In the narrow field of counter-terrorism, at least, the Opposition's charges are irresponsible partisan drivel.

Chris Bryant: My right hon. Friend is right. Elements of the work we have done have not been as effective as we would have liked, and of course we constantly review the question of which are the right things to do. However, it is worth bearing in mind the fact that much of DFID's work in its overall £665 million spend in Pakistan has been focused on education programmes and support for better economic management in Governments, which, I would argue, has had an effect on counter-terrorism as well.

Stewart Hosie (Dundee, East) (SNP): I am sure the Minister would agree that anxiety has been caused by the apparent contradictions between Baroness Kinnock's statement, his statement today on rising budgets, and the reported shortfall of £110 million. However, he did say that he wishes to be open, so can he arrange for a root-and-branch review to be carried out of the FCO's foreign currency exchange operations, including a very close look at how-and, indeed, whether-they hedge against losses? It seems ridiculous to me that a Government the size of this one cannot take the necessary simple steps to minimise the losses from foreign exchange movements.

Chris Bryant: Significant elements of Government spend have, in fact, been assisted by the fluctuation in the value of the pound-my hon. Friend the Member for Luton, North (Kelvin Hopkins) referred to that. It has also made it much cheaper for foreign visitors to come to the UK. The hon. Gentleman is right, however, to suggest that we have to keep this process under constant review. We must also make sure we get the best value for money around the world by balancing how many UK staff we have in different overseas posts, and how many locally employed staff we have, while still maintaining a core team effort across the whole of our presence.

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Mr. Shailesh Vara (North-West Cambridgeshire) (Con): I appreciate that there are sensitivities in providing detailed information on the impact of exchange rate fluctuations on British expenditure on counter-intelligence and security measures. However, will the Minister undertake to provide a full list of other areas where exchange rates have an impact, such as staffing? Will he place such a list in the Library for everybody to look at, detailing which countries, embassies and high commissions will be affected?

Chris Bryant: To be honest, I think that would be very burdensome to produce, and it would be a constantly changing document anyway. I am more than happy to be open with the hon. Gentleman, but I am not sure that what he suggests would be helpful. A lot of the British Council's spend is also overseas, so it has faced a difficult time in relation to currency fluctuation as well, whereas the World Service, the vast majority of whose spending is in this country, has not met these problems.

Mr. Greg Hands (Hammersmith and Fulham) (Con): There is also the important question of the hedging of the risk. Can the Minister tell us whether any hedging has taken place since the abolition of the mechanism in 2007, and if so, how much of the 50 per cent. foreign exchange expenditure has indeed been hedged and how it has been hedged? If it has been hedged properly, the gains on the hedge should offset the losses outlined by Baroness Kinnock yesterday.

Chris Bryant: The process of hedging happens within financial years, and I am very happy to write to the hon. Gentleman about it. My right hon. Friend the Foreign Secretary wrote to the shadow Foreign Secretary about this before Christmas.

Mr. Paul Goodman (Wycombe) (Con): As the Minister knows, some of the programmes in Pakistan are anti-radicalisation programmes; they are essentially extensions of the Prevent programme here. Has an assessment been made of the effectiveness of these programmes, and whether or not that is the case, will they be cut?

Chris Bryant: We always have to review the success of such projects. One of the difficulties is that some of the elements of them deliver outcomes only over a sustained period. Consequently, it is difficult at one snapshot moment to assess the precise value and the impact they are having, but the hon. Gentleman is absolutely right to say that that is one of the things we need to do, and if elements of the programme do not work, we should cut them back and find other ways of engaging that are more effective.

Mr. Andrew Pelling (Croydon, Central) (Ind): Will the Minister respond to his Front-Bench counterpart in respect of the description of the exchange policy as a debacle? It is, in fact, especially well timed to have a devaluation when there is excess capacity, as we get low
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inflation. Also, if there has indeed been hedging, as the Minister said in response to the hon. Member for Hammersmith and Fulham (Mr. Hands), does he not accept that it is his responsibility to ensure that money is recouped into this budget and is fully protected?

Chris Bryant: In the Foreign Office, we also have to do a bit of good housekeeping. We are reviewing, and discussing with trade unions, the allowances paid to UK staff based abroad and those working for the Foreign Office in the UK. Where savings can be made that are consonant with ensuring there is a high level of morale in the Foreign Office and we deliver value for money, we will make them.

Mr. William Cash (Stone) (Con): As the Minister will know, the debates on fiscal responsibility that took place in the last few days have demonstrated the fiscal irresponsibility of what he describes as a great nation. He and his Government have brought this country to its knees.

In the context of the issue before us now, the results of setting up European embassies, and also Europol, in Afghanistan, which were discussed in the European Scrutiny Committee only a couple of days ago, are part of this problem. There has been a failure there because we are putting money in the wrong places. We should be using British money for British purposes, and not spending money on completely pointless operations that are not working effectively.

Chris Bryant: As much as I like the hon. Gentleman, I completely and utterly disagree with him. I believe that if we had not taken the necessary financial steps that we took over the last 18 months, and instead had taken his advice and that of his political party, this country and others that have followed similar routes would have ended up in a slump or a depression. I believe the decisions we have made have put us in a stronger position for the future, and I think we will be seeing precisely that over the coming days. I should just say, too, that across the whole of Government, spending on counter-terrorism in Pakistan increased by 50 per cent. from the last financial year to this one.

Mr. Philip Hollobone (Kettering) (Con): Can the Minister confirm whether in times past, when exchange rates were the other way round, the Treasury clawed back any surplus? If it did so, does that not go straight to the heart of the argument and suggest that the Treasury should come to the rescue this time?

Chris Bryant: Well, it does not quite work like that, but the way it does work was set out by my right hon. Friend the Foreign Secretary in a letter to the right hon. Member for Richmond, Yorks, and I think it would help the whole House if I were to lay a copy of that letter in the Library of the House.

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Business of the House

11.57 am

Sir George Young (North-West Hampshire) (Con): May I ask the Leader of the House to give us next week's business?

The Leader of the House of Commons (Ms Harriet Harman): The provisional business for next week is as follows:

Monday 25 January-Remaining stages of the Financial Services Bill.

Tuesday 26 January-Consideration in Committee of the Constitutional Reform and Governance Bill (day 4).

Wednesday 27 January-Opposition day [3rd allotted day]. There will be a debate on dementia services and care of the elderly, followed by a debate on out-of-hours care. Both debates will arise on an Opposition motion.

Thursday 28 January-Topical debate: Subject to be announced; to follow, the Chairman of Ways and Means will name opposed private business for consideration.

Friday 29 January-Private Members' Bills.

The provisional business for the week commencing 1 February will include:

Monday 1 February-Remaining stages of the Flood and Water Management Bill.

Tuesday 2 February-Consideration in Committee of the Constitutional Reform and Governance Bill (day 5).

Wednesday 3 February-Motions relating to the police grant and local government finance reports.

Thursday 4 February-Remaining stages of the Corporation Tax Bill, followed by remaining stages of the Taxation (International and Other Provisions) Bill.

Friday 5 February-Private Members' Bills.

I should also like to inform the House that the business in Westminster Hall for 4 February will be:

Thursday 4 February-A debate from the Joint Committee on Human Rights entitled "Demonstrating Respect for Rights? A Human Rights Approach to Policing Protest".

Sir George Young: I am grateful to the right hon. and learned Lady for giving us the forthcoming business. Further to the exchanges that have just taken place, which she might have heard, it struck me that a number of issues were left hanging in the air, so I think it might be helpful to have a debate in Government time on the Foreign and Commonwealth Office budget.

May I repeat my request for a debate on Haiti? The tragic events there have been the most terrifying humanitarian disaster witnessed in recent years, and apart from a very short exchange at Department for International Development questions yesterday, the House has not had an opportunity properly to debate it, so will she take this as a suggestion, yet again, for next week's topical debate?

Further to the exchange of a few moments ago about the Wright report, may I say that I am delighted that at long last the Government have belatedly accepted some of our arguments for strengthening and reforming
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Parliament, and that we welcome them to the table? The Leader of the House announced that there would be a debate on 23 February, but what really matters is not what the Government have decided-she told us what that was-but what the House decides. She has denied the House an opportunity to debate this until 23 February, some three months after the Wright Committee reported, and there is no good reason for that delay.

May I again press the Leader of the House for a clear commitment on the question that I asked a few moments ago? If, for the sake of argument, the House agrees on 23 February to the setting up of a Back-Bench business committee-I hope that it will agree to such a committee-can she assure the House that all the necessary changes to Standing Orders will be made before Dissolution, so that at the beginning of the next Parliament, irrespective of who has won, we can establish a Back-Bench business committee? I hope that she can give me and the House that clear commitment.

Mr. Speaker, may we play another round of the popular panel game that the Leader of the House hosts each week, "Guess the date of the Easter recess", which still awaits a winner? I have asked seven times why she has been unable to supply the date in the usual way and, although she does not pause and she does not hesitate, she is extremely repetitive. Can she give us the Easter countdown today? Can she also tell the House when the Chancellor will present his Budget?

Can the right hon. and learned Lady clarify what is going on with the Constitutional Reform and Governance Bill? She has announced two more days for consideration, but there is confusion about whether one of those days will be wasted on debating the alternative vote, when we might be debating the Wright report. Yesterday, the Prime Minister appeared to embrace voting reform, but only three days ago it was reported that the parliamentary Labour party was split down the middle, with the Schools Secretary lobbying against any amendment to the Bill. What is going on? Are we going to debate it? On what side of that dividing line does she lie?

May we have a statement on the Government's nutrition action plan? This was promised by December 2008, but we are now in 2010 and that report has still not been published. All the evidence shows that the incidence of malnutrition in our hospitals is getting worse, not better, so when can the House expect to debate that report? May we also have a debate on the performance of Her Majesty's Revenue and Customs? According to the National Audit Office, the department failed to answer 44 million calls last year, with just one in three inquiries being responded to at busy times, such as when tax credits need to be renewed. Vulnerable people cannot afford to be put on hold, so when can we have a debate about that?

Finally, may we have a debate on the speech on inequality that the right hon. and learned Lady is due to make tomorrow? The whole country will be bewildered by the total confusion in the Government's strategy on this. One week we are told that the Prime Minister wants to soak the rich, the next week, following a conversation with Lord Mandelson, he is promising support for middle Britain and now the right hon. and learned Lady is promising to open up a new front in the class war. Is this confusion due to the Labour party manifesto being dreamt up on the hockey fields of St. Paul's?

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