Developments in UK Foreign Policy - Foreign Affairs Committee Contents

Examination of Witnesses (Questions 1-47)

Rt Hon William Hague MP, Mr Simon Fraser CMG

Wednesday 8 September 2010

  Chair: Foreign Secretary, it gives me great pleasure to see you here today. This is the first public hearing of the Committee in this Parliament, and it is right and proper that you should be our first witness. You are very welcome. I also extend a warm welcome on behalf of the Committee to your new Permanent Secretary, Simon Fraser. It is good to see him here. We have an informal meeting pencilled in with him in a few days' time.

  Mr Fraser: Tomorrow.

  Q1 Chair: Yes, tomorrow afternoon. We look forward to seeing you then. I shall open the batting, Foreign Secretary. Everyone has questions for you, and we are scheduled for a two-hour slot. In your speech of 1 July, you said that you returned to Front-Bench politics five years ago "expressly to shadow Foreign Affairs and obviously hoping to occupy the office I now hold". You were a long time waiting for that. Has anything surprised you since you arrived at the Foreign Office? Has anything caught you unawares?

  Mr Hague: I would not say that anything has been an astonishing surprise. Having shadowed the post for four and a half years, you think that you get to know the organisation to some extent from the outside. As you know, I think, from reading that speech, it is my determination that we place the Foreign Office back at the centre of Government; that the Foreign Office see itself not as a small, spending Department, but as a central, thinking Department of the Government; and that it should have a close relationship with the Prime Minister and should not be shut out of foreign policy decisions. That is how we are conducting ourselves.

  I suppose that, if there has been a surprise, it is that it requires something of a cultural change. The Foreign Office is full of brilliant people on the whole—sparing no blushes—including those who have been away and come back. There are a lot of well-informed people, but I think that the habits of years, or even decades—I am not just making a criticism of the last Government here—have induced something of a sense of institutional timidity. That might be over-stating it, but the Foreign Office has not been as used as I would like it to be to being prepared to lead on all occasions within Government and to say, "Here are the ideas. This is the expertise. This is the knowledge that is necessary to frame foreign policy. Here we can confidently set out what it is going to be and the internal discussions of Government."

  One of my objectives in the first few months in office has been to instil that confidence without arrogance. I suppose that the need to do that has been a bit of a surprise, but on the reassuring side, so far, every time that I have found it necessary to interview among officials in the Department to see who is going to take on a new role, a private office and so on, I have found that there are some really outstanding people in the Foreign Office. I think that should be of some reassurance for the future.

  Q2 Chair: Excellent. You are, of course, part of a coalition. To what extent have you had to modify your approach as a result of the coalition? Have any FCO issues been referred to the Coalition Committee, and if so, which ones?

  Mr Hague: There haven't been any FCO issues referred to the Coalition Committee, although there were, of course, FCO issues that had to be dealt with within our original coalition agreement, which I took part in negotiating. There were therefore some inevitable policy compromises. That was certainly true in European policy, but it was not as difficult a thing to bring about as might have been predicted a year or two ago, because both parties in the coalition readily agreed that there should be no further transfer of powers to the European Union and that we should have something like the referendum Bill that we intend to introduce later in this Session.

  On some areas, however, such as the question of trying to return powers from the EU to the UK, and whether a sovereignty clause or sovereignty Act should be passed, we had to say in the coalition agreement that we will return to those issues and examine them together, and that we would have to decide on the area of criminal justice and home affairs and the question whether to opt in to EU measures on a case-by-case basis. So clearly there are compromises there. On FCO-related matters, although the nuclear deterrent is also an MOD matter, we agreed in the coalition agreement that the Liberal Democrats should be able to differ.

  Those compromises were built from the beginning into the construction of the coalition. We haven't had to take FCO issues to the Coalition Committee, but bear it in mind, Mr Chairman, that a huge range of Foreign Office issues is being discussed in the National Security Council, the creation of which is a very important development in this Government. Senior Ministers in the coalition are therefore discussing international relations together on a very regular basis. Tomorrow will see the 16th meeting of the National Security Council, so the coalition is dealing with these issues together.

  In the Foreign Office, we have a working coalition: one of the Ministers of State is a Liberal Democrat Member, Jeremy Browne, who is doing an absolutely superb job. We regard ourselves as one team—the Conservative Ministers don't meet separately from the Liberal Democrat or anything like that. It is an integrated team. I think that the coalition, in the case of the Foreign Office, has so far worked very well.

  Q3 Sir John Stanley: Foreign Secretary, you have said that the UK's alliance with the US is our most important relationship. Last week, I was in northernmost Greenland with the NATO Parliamentary Assembly's Defence Committee at the US base at Thule. As you well know, the radar system there is linked with the radar system at RAF Fylingdales in your native Yorkshire. We were briefed there on the very important upgrading of the radar at Thule so that, in addition to carrying out its long-established intercontinental ballistic missile identification and tracking system function, it will be integrated with the existing operational anti-ballistic missile system in the United States at the two operational locations that the US has. Have the coalition Government, since their formation, had any approaches from the US Administration that a similar upgrading might take place at RAF Fylingdales so that it is integrated with an ABM capability in Europe, as well as performing its existing tracking system function for ballistic missiles? If so, what response have the coalition Government made?

  Mr Hague: I am not aware of any approach on that since the coalition Government came in. We haven't discussed it within the coalition Government. I can say that, of course, on such issues we will want to work very closely with the United States of America, as we always have. Many of these systems—as you say, Sir John—have been closely integrated, so we would listen carefully to any approach that the United States made on that, but I am not aware of such a discussion over the past few months.

  Q4 Sir John Stanley: If you have any supplementary information and if you choose to make any further inquiries, you will inform the Committee in a letter, perhaps.

  Mr Hague: Of course. Absolutely. It may well be something that we have to return to in the future. Absolutely.

  Sir John Stanley: Thank you.

  Chair: Foreign Secretary, we would like now to touch on the question of finances and how they affect the Department. I am going to ask Mike Gapes to open the batting on this one.

  Q5 Mike Gapes: Welcome, Foreign Secretary. Just before the general election, your predecessor, David Miliband, got some additional funding from the Treasury to cope with the crisis that the FCO was having in its budget in the past financial year and for this financial year. One of the first decisions of the coalition was to slash the additional funds that your predecessor had got and take £55 million out of the £6 billion cuts in-year for this year out of the FCO's budget. One of your other predecessors, Lord Howe, was quoted as saying that the FCO budget should be increased and a former Permanent Secretary, Lord Kerr, said you can't wield the knife again without losing global reach and influence. You made a speech at the Royal United Services Institute in March where you said that you hadn't waited thirteen years to return to office simply to oversee the management of Britain's decline in world affairs. Given that you are about to embark on a massive programme of spending cuts in the comprehensive spending review, isn't that inevitably going to have serious consequences for our footprint internationally and our role in world affairs?

  Mr Hague: I am hoping—I am not intending—to have a dramatic result on our role in world affairs. That is always something I would always fight very strongly to maintain, as you can see from those speeches I made in the past and would continue to make. It is true, of course, that we have a monumental fiscal problem in this country. We face now a £155 billion budget deficit that all Departments have to play their role in reducing. There is no escape from that. Every Department has to do its utmost to tackle that. But the background—just to go back a little further than Mr Gapes' question, Mr Chairman—is that really in the last two years the Foreign and Commonwealth Office had quite substantial reductions. In fact, members of this Committee, and certainly your predecessors in this Committee, are very familiar with this, because it produced a report about the removal of the—there it is—overseas price mechanism. This led, by the last financial year, to £140 million of unplanned reductions in FCO spending. That is quite a large proportion—£140 million may not sound a lot in terms of overall Government budget, but the FCO itself is only 0.3% of the entire budget, and you can't control about half of that, such as international subscriptions and peacekeeping contributions, and large parts of it go to the BBC World Service, the British Council and so on.

  Before we'd started, the inheritance was that the FCO's discretionary spending had already been cut by 17% in two years under the previous Government, which meant some serious things. It meant reductions under the previous Government in human rights and democracy projects in Iran, Sudan, Zambia, Russia and Central Asia. Counter-proliferation, counter-narcotics and counter-radicalisation programmes were reduced. Support for overseas territories was reduced, and some locally engaged staff in the United States were required to take unpaid leave. I maintained then, and I still maintain, that, whatever the level, it cannot make sense to fund a Foreign Ministry of a country represented in most countries of the world on the basis of how the exchange rate goes up and down. It is very important to put that right. Of course, how we put it right is wrapped up in the comprehensive spending review now under way.

  It was against that background that my predecessor faced an emergency. The package that was put together to deal with that was not very substantial; a lot of it involved selling the FCO's own assets, and some of it was rather imaginary. In the comprehensive spending review we are trying, while playing our part in bringing down Government spending, to bear in mind the big reduction that has already taken place and get FCO finances on to a more planned and sustainable footing, but we have had to find some reductions. I set out in a written ministerial statement a few months ago some of those reductions: £18 million of reductions in some programme areas for instance.

  Q6 Mike Gapes: But given that you've already taken £55 million on top of the context that you've described, are you now arguing with the Chancellor and in the comprehensive spending review process that the FCO should take a significantly smaller budget cut than other Departments?

  Mr Hague: Let me put it this way: the Chancellor and I don't argue; we discuss these things together. I've tried to ensure that the whole Government are conscious of the fact that the FCO had a large unplanned reduction in spending before we came to the comprehensive spending review. That doesn't mean that there is nothing that can be reduced; there will be efficiencies to be found, and I am not looking for and not planning the substantial reduction of this country's presence around the globe. I am sure that you, Mr Chairman, may wish to come on to the emphasis that we are placing on commercial relations and expanding our business and commerce around the world, but the FCO network is an essential part of the infrastructure of this country for economic recovery.

  Q7Mike Gapes: May I then put it to you: is the FCO overseas network ring-fenced?

  Mr Hague: No, it's not ring-fenced, and it shouldn't be, because there will always be arguments to close certain posts and, indeed, to open other posts. Of the, I think, 254 FCO posts, 140 are actual sovereign posts in the capitals of other countries. A case can sometimes be made in some countries to say, "Well, actually, we've got several posts and we don't need so many", or premises can be combined with the Department for International Development or the British Council. I think that it would be quite wrong to say, "Right, everything we've got now is set in stone", because there will be ways that we can do things more efficiently; there will be things that we want to open as well in the future. I don't know whether the Permanent Secretary wants to expand on that point about how there is scope for adjustment here and there.

  Mr Fraser: I agree that we need to maintain a degree of flexibility in how we represent ourselves overseas, but I think that the principle that the Foreign Secretary has established, which is quite a long-standing principle, that we should have global reach in the network and that we should have a network of sovereign posts, which enables us to represent our interests around the world, is a principle which we should uphold.

  Q8 Mike Gapes: May I put this to you? You mentioned DFID in your answer earlier. I take this from your written response to our questions that you sent to us, in which you said: "FCO and DFID are reviewing the FCO's ODA scoring methodology to ensure that this work is fully captured and consistent with the OECD's guidelines for ODA scoring." Put into non-jargon, that means that you're raiding the DFID budget to do things that have in the past been paid for out of the FCO budget. Is that true?

  Mr Hague: Not in terms of raiding anything. There is quite a proportion of FCO spending that is categorised as overseas development spending.

  Q9 Mike Gapes: How much?

  Mr Hague: In the last year, £137 million.

  Q10 Mike Gapes: And you're expecting DFID to pay that amount, which was previously paid for out of the FCO budget?

  Mr Hague: You will have to wait for the results of the comprehensive spending review. You're trying to anticipate, understandably and interestingly, those things, but we will have to wait for them. That spending can be provided for out of various different budgets. Of course, the important thing is that it is ODA-compliant. As we look to this country hitting the target—0.7% of gross national income being ODA spending—by 2013, which we are all strongly agreed on across parties, it is important to recognise that part of the spending of the Foreign Office contributes to that. Is it possible for the Department for International Development to contribute to that spending? Yes, it may be, and there would be nothing wrong with that; that is overseas development spending.

  Q11 Mike Gapes: So DFID is ring-fenced, and its ring-fenced spending will be used to fund things in the FCO budget. Is that what you're saying?

  Mr Hague: I'm saying that you have to wait for the outcome of the comprehensive spending review. What is ring-fenced is no Department's budget; it is spending 0.7% on overseas development that is the ring-fenced objective of the Government.

  Q12 Mike Gapes: But you would be tweaking the definitions.

  Mr Hague: There is no need to tweak any definition. Already, £137 million of FCO spending falls in that category. Clearly, we can go into all this in much more detail, and the Committee may want to hold a whole session on the outcome of the comprehensive spending review when we have it, but it would obviously be wrong or misleading of me to anticipate that now.

  Q13 Mike Gapes: I have one final question. You are not just the Foreign Secretary; you are the First Secretary of State, too. As such, you are on the star chamber. Presumably, given that you are the First Secretary of State, you have a first-among-equals status within your colleagues. Does that put you in a difficult position to simultaneously argue a very tough line with your colleagues and defend your Department's position, which clearly is concerned about the financial implications for the future of our country abroad?

  Mr Hague: I have never had any difficulty with being tough with my colleagues and defending my corners. The serious answer is that the FCO's spending is 0.3% of total spending. The Foreign Secretary, quite apart from the First Secretary of State, is in a good position to serve on that committee because the Foreign Office spending is such a tiny proportion of Government spending as a whole.

  Q14 Chair: I have one quick question, Foreign Secretary. I think you just about touched on this matter. You may well say that we have to wait until the review comes out, but you've made it quite clear that you're going to expand your effort in certain areas—trade and the focus on China, India, Brazil, Russia and the Gulf. Yet you face reductions, which means there has to be cuts elsewhere. Are you in a position at the moment to say exactly how you're going to square this circle?

  Mr Hague: No, not in that sense, but it is important to think of it not just in that sense, if I may say so. Part of this is the whole Government working together. One of my objectives is for foreign policy to run through the veins of all the Departments. The achievement of our foreign policy objectives, particularly in elevating key bilateral relationships with the emerging powers and economies of the world, must take place across the whole British Government, and therefore the achievement of that is not just down to the resources of the FCO. I have been to Japan, and, with the Prime Minister, to India and many of the Gulf states. But it was the Business Secretary who went to Brazil recently. This is to be pursued across the board; we want to elevate links in culture, health care and education with these countries.

  Quite a large proportion of the increased impact that we want to make in those elevated bilateral relations comes from the whole Government working together cohesively. So far, the best illustration of that has been in the Prime Minister's visit to India, on which he was joined by at least five Ministers and a planeload of business people, cultural leaders and sporting figures. That did not require the rearrangement of the Foreign Office budget, because it is the result of properly directing our national effort into those bilateral relationships. I cannot exclude the possibility that it might be necessary to move resources; if our relationship with countries such as India, Indonesia, or Malaysia, or other emerging economies in the east, meant that they should receive a greater share of our resources, then we would do that.

  Our prime effort is to get the whole Government working together, which requires a huge amount of ministerial and official energy. That is one of the reasons for the Foreign Office now having six Ministers, whereas there were four under the outgoing Government. We actually now have another half a Minister, because it was announced yesterday that we will share the Trade Minister with the Business Department. That means that Ministers are able to travel—Jeremy Browne is in the air on his way to Japan as we speak—and that means that we can do more, even without much of an enlargement of the budget for such things.

  Chair: That is clear and very helpful. Rory?

  Q15 Rory Stewart: Foreign Secretary, thank you very much for coming. As you say, the Foreign Office has, in a sense, been a victim, and not just of the exchange rate; over probably the past 30 or 40 years, it has been increasingly marginalised in comparison with other Government Departments and other agendas. Now, these hugely funded Departments, such as DFID, and the Foreign Office, looking smaller and smaller, and less and less well funded. It may be unfair to draw such comparisons, but the total core budget of the Foreign Office is now less than £1 billion, and this year, we are probably spending £5 billion in Afghanistan alone on exactly the kind of war that we employ the Foreign Office to try to prevent.

  A couple of issues arise from that, and I would love to hear your views on them. One is the effect on the morale and identity of the Department's staff, and the second is the effect on your estates and embassies. If you face cuts, there are two ways in which those cuts seem to hit most acutely. First, Foreign Office staff are already losing allowances. Their travel packages are being affected, and they feel that their educational packages are under threat. That will affect their morale. Secondly, in the fight over where the money goes, there is a danger that the embassy in Washington, for example, argues that it matters much more than an embassy somewhere else, and fights for its turf. We might end up closing an embassy in another capital. Not only would there be a ripple effect in the region, but it is difficult to re-open such embassies once we have closed it.

  Mr Hague: Yes. This country gets good value, and the spending reductions that I have spoken about have really intensified that. France, with a budget of nearly £4 billion, has 279 missions overseas. We have 261—I said 254 earlier—missions in total overseas. We have a little over half of France's budget with which to maintain almost the same number of missions. To put that in starker terms, the entire spending of the Foreign Office, including the World Service, the British Council, international subscriptions and everything else, is less than the spending of Kent county council. So this country gets pretty good value for money from our overseas operations.

  Linking this question to the question asked earlier by Mr Gapes, if you closed the 40 cheapest posts—we have 261 posts—you would save only £2.5 million. That is why, whatever we have to do with our budget, it is quite unlikely that one would choose the option of closing dozens of posts. We are not engaged in some large reduction of our international network. To save a lot of money from that, you would have to close the biggest posts, or the ones that require the most security and protection. Clearly, a post in Kabul or Baghdad is very expensive to run, as you in particular, Mr Stewart, will appreciate. We would have to close those to save a lot of money on the network, and that would be inconceivable.

  I hope that that trade-off between those large and small posts will not have to be made; it is certainly not one I am intending to make. Closing the small missions around the world is a false economy on the whole. That is not to say that they cannot sometimes be rationalised or that two countries cannot be well served together from one central point. I think in general, however, that the reduction and withdrawal of this country's diplomatic presence—something that we know has taken place in large parts of Africa—is a mistake. With all these budgetary restrictions, I cannot reverse what has happened in the past, but I am not looking at making serious further reductions in the size of that network, and I think that it would be a major national error to do so.

  Morale has varied in the Foreign Office recently. I cannot speak with authority about morale before the past few months. Surveys of morale have varied considerably over the past few years. It would be fair to say that in the Foreign Office, as across the whole of the public sector, until spending decisions are made there will be an anxiety about what they will entail. I hope that we are succeeding in communicating to all the staff of the Foreign and Commonwealth Office this sense of purpose—the sense of the central role in Government, of working with other Departments, of intensifying relationships with emerging powers, and of emphasising commercial aspects of diplomacy, but not at the expense of our other commitments around the world.

  We have got things humming again. That is good for morale, and the feedback about it in the FCO is good. Wherever possible, I speak to all the staff wherever I go—Washington, Kabul, the European capitals—and that includes small embassies such as that in Finland, where I was the other day. I try to get all the staff together who work in our missions overseas, and address them all, and I explain what we are doing, because I think that they should hear from the top of the organisation how we are setting about it. Hopefully, that is good for morale as well.

  Q16 Rory Stewart: Finally, on staff morale, one of the things that you said in your opening speeches as Foreign Secretary was that you were committed to investing in area expertise and linguistic expertise. That is a change, to some extent, in the culture of the Foreign Office. Some people have felt over the last 10 years that you do better in the Foreign Office if you tick certain boxes in terms of management theory and jargon, and that the old strengths of a more academic, area-based, language-based expertise did not help you. Are you managing to shift that culture? Are you managing to create a culture in which young diplomats feel that it is worth their while becoming great experts on the politics, language and cultures of a society, rather than becoming great management gurus?

  Mr Hague: That is the objective. We need the good management as well, by the way. It is important not to lose the good management, and the good practice in looking after people in a human resources sense, while trying to re-create that geographic expertise and that deep knowledge of certain parts of the world. Certainly, it is my objective to tilt things in that direction—to accentuate in a diplomat's career the value of serving in a difficult place, of knowing a region of the world with great intimacy and of the language expertise that comes from that. Those things have to be re-accentuated, so that the people who get to the top of the organisation 20 to 30 years from now have come through that background.

  When I was in Islamabad, I was asked by the staff magazine a version of what you asked me earlier, Mr Chairman, which was: what had surprised me about the Foreign Office? At the end of a long day, I said that not everyone can spell, but I think that that may be true across the nation. I also said that not enough people apply for the difficult postings. We have to allow for the fact that many people are serving difficult postings in Kabul, or Lashkar Gah or Baghdad. Nevertheless, I would like to see a greater readiness to apply for the other hardship postings to build up the necessary expertise.

  I should add one rider to the whole discussion about staff morale in the Foreign Office. One reason why we get more network for our money than France or other countries is that 67% of FCO staff are locally employed. They are not sent out from London to work in our embassies and consulates; they are actually local staff. This country owes an enormous amount to the local staff, who are absolutely indispensable to our diplomatic effort. All of us engaged in conducting our foreign affairs should always recognise that.

  Q17 Sir Menzies Campbell: Foreign Secretary, I am encouraged by what you have said about not taking an axe to existing missions. I very much hope that, in your approach to spending considerations, we will not find ourselves forced into asking locally engaged staff to work for a week for nothing. That happened in our US embassy during the past 12 months, which was a gross embarrassment to the ambassador and was certainly of no advantage to our reputation in Washington.

  So far we have talked about global reach and influence, and there has always been an implication for value for money. There is an institution for which you have responsibility that demonstrates all three of those principles: it is, of course, the World Service. By comparison with other news operations, it has a greater reach at a lower per capita price, and some would argue that it has a greater effect than just about any other that might be suggested. As you know, the BBC, particularly the World Service, understands that it has to be more prudent and to run a tighter ship. None the less, there is some anxiety about the consequences of that for the World Service.

  Allied with that, what do you think the consequences might be for that global reach, which you have mentioned, if the World Service were to find itself subject to a substantial reduction in the resources available to it?

  Mr Hague: It is very important that the World Service maintains that global reach. In opposition, I argued that the BBC World Service and the British Council are fundamentally important parts of Britain's presence in the world. That is not as an arm of the state—although some countries critical of us would depict them as that—because they have complete editorial and managerial independence. But they are a very important part of Britain's presence in the world—of our soft influence, as it is sometimes described, or our smart power, as the Americans sometimes describe it. So I attach huge importance to the World Service.

  Again, we are engaged in a spending review. As with my replies to the questions from Mr Gapes, I cannot anticipate the outcome of the spending review now, although officials and I will be pleased to explain that outcome in detail after it. The review will undoubtedly affect the World Service. I don't think that any parts of the administration of the public sector will be completely immune from the spending review. But I stress—there have been reports on this in one newspaper this morning—that no decisions have been made about this. I will shortly be putting to the World Service what I think it might achieve in contributing to the spending review. This morning, for instance, I read that the Burma office is to be closed. Well, there is no such thing as the Burma office of the BBC; there is a service that is broadcast into Burma, but that does not cost very much. As I argued about diplomatic posts closing, that would probably not be a very good way of saving money.

  In opposition, I appeared on platforms with Burmese human rights activists and launched books with them about their experiences. I have been on the World Service to talk about Burma and the importance of communicating to it. The chances that I will sit in my office and say, "Let's close the World Service into Burma," are correspondingly small. Any opening or closing of a language service by the BBC World Service requires ministerial approval. No such request has been received or considered or granted, so I hope that is of some reassurance about the stories that are going around at the moment about the BBC World Service.

  Can the World Service make itself more efficient and therefore contribute to the spending round? Yes I think it can, and it thinks it can. Can we find a settlement with the World Service that allows it to become more efficient without actually reducing those essential services that you and I care about so much? Let us hope that we can.

  Q18 Sir Menzies Campbell: Am I entitled to infer from that answer that if any question came up as to whether the service to a particular country might be curtailed or closed, you would unquestionably take account of the contribution that service made to the understanding and the preservation of human rights in that country?

  Mr Hague: Yes, absolutely.

  Q19 Sir Menzies Campbell: You have laid great store by the advantages of what I might rather triflingly call "economic diplomacy," and I think you have emphasised the Commonwealth, where of course English is spoken by and large, so perhaps the significance of the World Service is slightly different, but what I think would concern people like myself, and I suspect yourself to some extent, would be if the economic ambitions were somehow to supplant the human rights responsibilities.

  Mr Hague: I do not see those as contradictory. In fact, you have heard me speak about those other issues, and you will be glad to know, Sir Ming, that you have only a week to wait for me to speak about the human rights issues as well. I will give a speech a week today about how we reconcile idealism and realism in foreign policy—which, as we know, has always been a challenge in foreign policy throughout the ages—while avoiding the pitfalls of giving a single-word description of an ethical foreign policy, which then creates so many issues in how you apply it.

  It is very important that we support our values. Britain is not a nation that can ever have a foreign policy without a conscience. It is part of our identity as a nation. In the late 18th century—the period of history that I am most conversant with—it was British people who fought so hard to abolish the slave trade, including in other countries. I hope we will always be true to those values in Britain. Yes, we stress the action that the Foreign Office must take to improve the security of the nation and to advance the prosperity of the nation, but unless we do those things, we are in no position to advance human rights in the rest of the world.

  I will be talking about that at greater length next week, and I am sure that you have noticed that in the new Government—the coalition Government—we have taken important decisions about setting up an inquiry into allegations of complicity in torture, and we have completed and published the guidance on the treatment of detainees. I argue that as our share of world economic output shrinks and as so many other economies grow, and as it becomes harder and harder to impose our values on other countries, we have to be a particularly good example of our values to other countries. I hope that that is something that people across all political parties in Britain can readily agree on.

  There is no reduction in the attachment of this country to human rights issues; we are very, very busy on those issues on a daily basis. The BBC World Service will remain of fundamental importance to this country's presence in the world.

  Sir Menzies Campbell: If I may be presumptuous, I offer you the phrase "foreign policy with an ethical dimension" for the speech next week, if it is not already written.

  Mr Hague: I think we will try to come up with something new.

  Q20 Sir Menzies Campbell: Just one last point: there has been some discussion about the publication of the annual report on human rights by your Department, which began under Robin Cook, who was, of course, the author of the expression "foreign policy with an ethical dimension", but which is also something that the Committee has previously set great store by. Can we take it from your Department's response, and your article in, I think, The Daily Telegraph, that there will be a publication—I heard that it will appear annually—which may not have as many glossy pictures, but which will still fulfil the same responsibility as it has in the past?

  Mr Hague: Yes is the short answer to that. There is a longer answer, if you would like it, which is that we are obviously looking at how to do this most cost-effectively. We are working on something like a Command Paper to be laid before Parliament, which will be a comprehensive look at the FCO's human rights work each year. It will identify countries where the human rights record is a cause of particular concern, and so it will still fulfil the same role as the report with which we are familiar. We will also ensure extensive reporting of our human rights activity online, to give a more up-to-date report of what is going on around the world. It will have both those elements, and we are looking at the timing—indeed, we would welcome the Committee's views on the timing of the human rights report to Parliament. One option is to present it in March from next year, covering the period up to December each year. Any views you have on that will be gratefully received.

  Q21 Mike Gapes: I want to come in on this issue. The last human rights report was published in March this year by the previous Government. Personally, I hope you do not delay whatever you are going to publish or we will have a big gap.

  I have a specific question. You wrote an article in The Daily Telegraph on 31 August on human rights, and you listed a number of countries which, under the previous Government, were called "countries of concern". Your article, however, did not mention one that our Committee was keen for the previous Government to add to their list of countries of concern, which they did in the last report—that country was Sri Lanka. Given the new emphasis on trade and the new emphasis on business connections, have you made any representations about the fact that 30,000 people are still detained in camps in Sri Lanka, following the end of the conflict in 2009? What representations have you made to the Sri Lankan Government recently?

  Mr Hague: The Sri Lankan Foreign Minister will be visiting in the not-too-distant future, and that will be a meeting where we have to discuss all these things. The new Government's position on this is very much the same as the last Government's, where there was cross-party agreement on the issue. Never mind anything we have been doing in government; in opposition before the election, I also stressed our strong concerns to the Sri Lankan Government and, to go directly to your point on how you strike the balance between human rights and trade, the impact that this has on potential trade agreements between the European Union and Sri Lanka. There is no change in policy. The Government continue to make strong representations, and I will raise the issue you have mentioned and others with the Sri Lankan Foreign Minister when he comes to London.

  Q22 Sir John Stanley: Foreign Secretary, in your response to one of the questions from Sir Ming, you referred to the coalition Government's welcome decision to carry out an inquiry as to whether there has been any complicit involvement by British officials in torture. Will you tell the Committee whether the scope for this inquiry will extend to the allegations that those who were subject to torture took US flights through the British Indian Ocean Territory at Diego Garcia?

  Mr Hague: The inquiry can look at any issue it wishes to, and I do not think it is barred from doing so. The previous Government made some frank disclosures to Parliament about those flights through Diego Garcia. I have not seen anything that would lead us to need to add to that in any way. As far as I am aware, what was declared by the previous Government is the current position, which I questioned them about—as did members of the Committee. The work of the inquiry is primarily focused on allegations of complicity in torture, but I do not think we prohibit it from taking its work more widely, if it wishes to do so.

  Chair: Now we move on from finance and human rights to Afghanistan.

  Q23 Mr Baron: Foreign Secretary, thank you for joining us today. Perhaps, in all fairness, I should declare an interest; as the Foreign Secretary is probably aware, I have been a sceptic from the start about our involvement in Afghanistan. I feel that we underestimated the mission, and certainly, it was under-resourced. We have had a series of errors since, including over-optimistic scenarios. My chief concern at the moment is over what still appear to be mixed messages with regard to the purpose, and I wonder if I could just question you on that a little bit. For example—we have seen this quite recently—last year, the then Prime Minister was saying on the one hand that our troops were in Afghanistan to keep the streets of London or of the UK safe from terrorism, or to reduce the threat of terrorism, yet in almost the next sentence he was threatening President Karzai with troop withdrawal if he did not clean up his act. Those two statements do not stand well next to each other. I would suggest that if the purpose is to deny al-Qaeda a base from which to operate and pose a threat to the streets not only of this country but of our allies, it seems a little bit incoherent that we have set a deadline of 2015. If the objective is as stated, surely we should stay there until we have achieved that objective rather than putting in an arbitrary timetable. Do you see any contradiction in that position?

  Mr Hague: No, I think that what the Prime Minister said about 2015 is absolutely right. Let me just say in passing, while coming back to that, that what I agree with in Mr Baron's question is that it is important to set expectations correctly—not to raise false hopes of progress so rapid that it cannot be fulfilled. That mistake has been made quite often in the past.

  I think really the right tone here, which I tried to set in the statement that I made to the House at the end of July after the Kabul conference, is that this remains a phenomenally difficult challenge. The British people, the troops, the soldiers, the marines, the other members of the services, the aid workers and the diplomats are doing an extraordinary job, but it remains a phenomenally difficult assignment. One is reminded of that every time we visit there, and so it is very important to guard against over-optimism. It discredits our efforts if we make predictions that do not come true. As you can probably see from the way we have conducted this over the last few months, we have tried to avoid predictions that so many provinces will be handed over by such and such a date. We have not got into that kind of language, and we will have to look at all that with the NATO summit coming up this autumn with the other NATO nations.

  Equally, it is very important not to listen only to the bad news. We tend to see Afghanistan through the prism of Helmand in this country—understandably, because that is where our forces are deployed, and normally that is where we visit as Ministers. A few weeks ago, however, I went to Herat in the west of Afghanistan near the border with Iran, and saw a completely different picture. It was not a universally rosy picture, but it was a very different one from Helmand. I was able to talk to students in the university, and there were 400 factories near the airfield turning out goods that are the normal goods of a developing country—making motorbikes or whatever it was they may have been making. Then you see a different perspective on Afghanistan.

  I think some genuine progress is being made in the capability of Afghans to govern themselves—we saw that at the Kabul conference. The military efforts now under way are certainly making progress, and we have seen that as Ministers visiting. We have been to places in which you could not have walked around safely a year or so ago. It is now very important, as the Prime Minister has often stressed, that a political process takes place as well—that it is possible for it to take place as well—because nobody thinks that there is a military-only solution to the situation in Afghanistan.

  That brings us—by a roundabout route, I admit—to your question, Mr Baron. That is the background, as I see it; is it right, then, to say that by 2015 our forces will not be engaged in military operations or will not be there in the same numbers? I think it is, because by then—if we are still there then—we will have been engaged there for a much longer period than the whole of the Second World War. It is consistent with the internationally agreed position, reinforced at the Kabul conference, that the Afghan National Security Forces should lead and conduct military operations in all provinces by the end of 2014. On the current trajectory, the building up of the Afghan National Army is even slightly ahead of schedule—at least in numbers.

On the current trajectory, the building up of the Afghan National Army is even slightly ahead of schedule, at least in numbers. Of course, it still requires the training, the quality, the equipment and so on. What we and the Prime Minister have said is consistent with that.

  It is important for Afghans to know that while we are making this immense effort, which has cost so many British lives already, there will come a point when they have to be able to look after their own affairs. What we have said about 2015 is consistent with that and can therefore contribute to improving the situation and making sure that Afghans take responsibility. But that time is sufficiently distant—it is still five years from now. It in no way undermines the military effort that is taking place today.

  Q24 Mr Baron: You have to understand my scepticism, Foreign Secretary, because as you rightly pointed out, we have had a series of over-optimistic scenarios painted. I do not know whether the Afghan forces are going to be ready to take on the fight or the situation that they have been asked to take on by 2014. Therefore, that brings us back to whether the main priority is, as is stated, to deny al-Qaeda its training camps, or to deny it the use of Afghanistan as a base. If that is the case, perhaps there is an inconsistency in having a timetable, because we simply do not know whether we will have succeeded by 2014 or 2015. Let me put it another way: are you absolutely clear and will you stand by the statement that if we do not achieve our objective by 2015, we will withdraw regardless?

  Mr Hague: I do not want anyone to be in any doubt about this: we will be fulfilling the Prime Minister's commitment by 2015. The Prime Minister is very clear that by 2015 British troops will not be in Afghanistan in a combat role, nor in the numbers that are there now.

  Mr Baron: Regardless of whether we have achieved the objective?

  Mr Hague: Unless we are clear about it, we are not credible about it. We are very clear about it. Of course there could be some troops in a training role and as part of wider diplomatic relations in the longer term, as we have in other countries, but we do not want to be fighting in Afghanistan for a day longer than is necessary.

  I fully understand the scepticism and it is a wholly legitimate question. On Afghanistan, there have been so many difficult judgments for our predecessors to make, as well as for us, that we should never deride any different point of view. It is entirely understandable that there is some scepticism, but we think that it is right to say that by that time we will have been applying ourselves to this for 50% longer than we applied ourselves to the Second World War.

  The whole effort of British forces in Afghanistan will be in partnership with Afghan forces. The allies whom we have been working alongside, who will be closely partnered with our forces over the next few months and years, are entitled to expect that they will be able to take on that burden themselves by that time.

  Q25 Mr Baron: May I move us on to the military situation? The conflict is described in counter-insurgency terms, probably quite rightly, but I suggest that the victory against the Taliban is as far off as ever. We have had problems in the past about troop density levels in Helmand, which was illustrated by the American surge of marines, with tens of thousand of troops going in. We have had equipment issues such as lack of helicopters, but history suggests that if you are going to fight a successful counter-insurgency war or campaign, you need certain preconditions in place: control of your borders; a broadly sympathetic population standing behind you, helped by a credible Government; and a good ratio of troops to the local population. I suggest—I am being devil's advocate—that we do not have those in Afghanistan, so what makes you think that we are going to win this counter-insurgency campaign?

  Mr Hague: I must stress that I do not think that any of us in the Government would argue that there is a purely military solution to our problems in Afghanistan. There is no moment when we will say, "Right, we've won everything," in the sense of winning the Second World War. At some point, the military effort produces a country where the writ of the Afghan Government runs in the vast majority of that country or where that effort is superseded by partial or substantial political settlement, as a result of a political process.

  What makes us think that we can make some progress now, was the thrust of your question. It is only very recently that all the necessary elements of the campaign have come together. Despite the fact that western forces have been there since 2001, it is only really now that the necessary number of forces are deployed in Afghanistan—as General Petraeus has recently been making clear—and that we have the necessary proportion and amounts of development aid.

  As you know, one of the announcements of the new Government has been a 40% increase in development aid going to Afghanistan. It is only now that we have an economic process that is owned and thought out by the Afghans themselves and the Afghan Government in Kabul. All these things have come together in recent times. I am not being starry-eyed about it, because I maintain the tone that I was talking about a few moments ago. This remains a phenomenally difficult problem. It is the single most difficult problem—the most preoccupying problem—that we face in international affairs, but we now have the finest military minds, the good military plan, the necessary quantities of development aid, the experience of provincial reconstruction and the motivated Ministers and key Ministers in Afghanistan to have the best chance for success that it is possible to put together.

  It is right to maintain the effort to succeed because the consequences of abandoning that effort now would be extremely serious for Afghanistan, for Pakistan and ultimately for our own national security.

  Q26 Mr Baron: May we put the military situation briefly to one side? I agree 100% with what you say; there cannot just be a military solution. The military buy time, and it has to be politicians who try to get to the solution. I put it to the Foreign Secretary that I doubt whether we are winning the hearts and minds or the campaign. The US Department of Defence submission to Congress clearly said that the most lethal weapon the Taliban have is their propaganda machine. There is a discredited Government, and economically it pays to sign up to the Taliban. If you look at the latest pay scales and so forth, you can earn more money in the Taliban than is earned from the average salary across the country—so the figures tell us.

  Recent surveys have suggested that increasing numbers of Afghans are becoming disillusioned with the direction that Afghanistan is taking. What is your assessment of the hearts-and-minds situation, Foreign Secretary? It does not feel on the ground that we are winning that either. That is an essential component if we are to achieve any sort of success in the country.

  Mr Hague: It is very hard to generalise. There are surveys, although opinion surveys in a country like Afghanistan are quite difficult to conduct on a scientific basis. Among the other things you have mentioned, they have shown that the majority of people do not want ISAF to leave Afghanistan, so surveys can lead to a contradictory conclusion. That certainly does not suggest that they want us to end our campaign.

  My experience of meeting people in Afghanistan was in some of the most difficult areas in parts of Helmand. I walked around, meeting people in the bazaar in Nad Ali a couple of months ago. Those areas have been made more secure and, while local people can see roads being built and health care being improved, their hearts and minds are certainly behind the effort that we are putting into Afghanistan.

  We are coming up to parliamentary elections in Afghanistan on 18 September. I do not want to raise any hopes or expectations given what has happened in previous elections, but we will undoubtedly see vast numbers of people wanting to take part in a process about the future of their country, which they would not be able to do in a Taliban country. It would be wrong to leap to the conclusion that the local population do not want us there. Do we still have many problems, such as too many people working with the Taliban? Of course we do, but I think that quite a bit of progress has been made in recent times. I do not think that the people of Afghanistan want us to leave.

  Chair: I say to colleagues that we have a lot of work to get through, so will they keep the questions short?

  Q27 Rory Stewart: Very quickly, Foreign Secretary. A lot of the time we have been talking about a political strategy, which has been the sort of holy grail in Afghanistan. Obviously, there have been a lot of obstacles to it: sometimes, the Afghan Government do not seem to be fully behind it; the Taliban are fragmented and elusive; and sometimes the Government of the United States do not seem to be very interested. But if we could get those things on side and if we could push ahead with this thing, what is it? What does a political strategy look like? Who do you talk to? What do you talk to them about? How do you talk to them? What are you offering?

  Mr Hague: This has to be an Afghan-led process, of course. A process of reconciliation must be Afghan-led, and President Karzai received the support of the peace jirga at the beginning of June to undertake that process. I don't think it would be right to sit here in London and lay down, "Here are the people we have to talk to and this is the deal that you have to talk about with those who you can deal with, and clearly, there will be others who you can't possibly deal with." I don't think that it is possible for us to do that, and even if we could, it would certainly not be possible to announce it all in public to any forum.

  It has to be an Afghan-led political reconciliation process. That is something that the Prime Minister and other Ministers and I have discussed several times with President Karzai. I think that he is committed to such a process. He has Ministers around him who are also committed to it. They have gone to great lengths in the politics of their own country over the past few months to make sure that they have the authority to do that. They reaffirmed that at the Kabul conference at the end of July. They have to be in the driving seat of that process.

  Q28 Sir Menzies Campbell: Foreign Secretary, you gave a very clear answer to Mr Baron's question about 2015. Do I take it that the position you have outlined is the position of the coalition Government and that it will be the position at that date irrespective of the position of the United States Government?

  Mr Hague: This is the United Kingdom position, yes. It is our sovereign right to set out our position, and we will maintain it.

  Sir Menzies Campbell: So the answer is yes?

  Mr Hague: The answer is the one that I gave, yes.

  Sir Menzies Campbell: For the avoidance of doubt.

  Q29 Mr Watts: Foreign Secretary, what is the benefit of the 2015 figure? Bearing in mind that there is cross-party general support for the concept that, as soon as the Afghan nation is able to look after itself, we will withdraw, what's the advantage that you see of 2015? It seems to some people that that tells the Taliban and so on that, if they stay until 2015, the West will have lost its will to defend itself and they will be able to go back to normal business.

  Mr Hague: Well, remember that 2015 is still some way away. It is very important to have that sense of perspective about it. It is further away than the initial deployment of our troops in Helmand is back, so we are still talking about a very long military commitment. Let's not minimise that in any way.

  What is the benefit of it? The benefit is that we must be clear with the leaders and the people of Afghanistan that it is absolutely crucial for their future that they are able to look after their own affairs and security, and that it is not possible for the United Kingdom or, I think, other countries to take on ourselves the burden of their security indefinitely. We are there until it is possible for them to manage their own security and affairs without presenting a danger to the rest of the world. Of course, we have every right to expect it to be in that period, so I think it intensifies the pressure for the targets for the Afghan National Security Forces to be met by 2014 and to be met along the way. We don't want anyone to think that, for decades, it is possible for British forces to be deployed in this way.

  Q30 Sir John Stanley: Foreign Secretary, I am sure that you would agree that, to achieve success in Afghanistan, we have to provide a reasonable degree of security across the whole of that country. I am sure that you would also agree that an absolutely fundamental aspect of that is effective cross-border security co-operation between Afghanistan and Pakistan. Do you agree that that critical cross-border security co-operation still has a long way to go? Do you see any prospects of achieving the sort of ultimately intense and successful cross-border co-operation, which we achieved across the border between Northern Ireland and the Republic of Ireland before we got a final settlement there? Do you see any chance of achieving that degree of cross-border security co-operation between Afghanistan and Pakistan?

  Mr Hague: Well, I see a good chance of that improving. It is a very, very difficult border to police, as you know. Geographically, it could not have been designed to be more difficult; it's much more difficult than the border between Northern Ireland and the Republic of Ireland. But I think the good sign here—again, I don't want to exaggerate anything or raise any expectations too far—is that the co-operation between the Governments and the militaries of Afghanistan and Pakistan has improved in recent times. Certainly, that is the feedback we have had from both sides of the border; I have heard that from General Kayani himself, the head of the Pakistani armed forces. So there is an improvement taking place in those relationships, which facilitates the co-operation. But let us be frank: to effectively police that particular frontier is in itself one of the most difficult tasks in the world.

  Chair: That completes the questions on Afghanistan. Andrew Rosindell is going to ask you about the overseas territories.

  Mr Hague: What a surprise!

  Q31 Andrew Rosindell: Good afternoon, Foreign Secretary. It is a pleasure to see you here today. You will of course be aware that the United Kingdom retains sovereignty over up to 16 territories spanning the globe, from the Rock of Gibraltar down to the Pitcairn Islands in the South Pacific; from the British Indian Ocean Territory all the way down to the South Atlantic Falkland Islands. These are 16 Territories for which we have responsibility, the people of which have shown tremendous loyalty to the Crown over many, many years. I believe, in recent years, that they have felt disappointed and let down by the apparent neglect by our own Government here in London.

  I would like to make three points. First, would you tell us what the new Government's position is regarding the British overseas territories? Will there be a new, more positive approach that will bring the territories closer to Britain and make them feel British? At the moment, many of them wonder why they remain under Britain. Secondly, if they are British Overseas Territories, why are they under the Foreign Office? Finally, will you give us a reassurance that under this coalition Government, there will never again be a return to the colonial attitude of the Government of Mr Blair in 2002? They sought to impose a joint sovereignty deal on the people of Gibraltar without even consulting the people of that territory, even though the people there had previously voted 99% against being annexed by Spain.

  Mr Hague: I also feel strongly about the three points—it is hard to feel more strongly than Mr Rosindell does, but I feel very strongly about them. I think there should be a clear strategy in this country for the Overseas Territories. I think we should be able to assist them in their economic development. You can see the evidence of a change in approach under the new Government. For instance, the Department for International Development has made its announcement about the airport at St Helena.

  I think we have a responsibility to ensure the security and good governance of the Overseas Territories, as well as to support their economic well-being. They can create substantial challenges for the United Kingdom in many different ways, and we must recognise that. The predecessor to this Committee has looked in detail at some of those challenges. We need to manage those risks quite carefully, but I think we've moved quickly in the past few months to tackle certain problems. I have mentioned St Helena. There have been fiscal crises in some of the Caribbean territories, and a very severe problem in the Turks and Caicos Islands, as we know. Again, the Department for International Development has made a £10 million loan to help them through the past few months. Our Governor there is working very hard on those problems.

  I have commissioned a review of our overall approach to the Overseas Territories. That review is not yet complete, but we look forward to discussing it with the Committee in future months. I've put in charge of that policy Henry Bellingham—you've had discussions with him—who is a Minister with great enthusiasm for putting some real purpose into our policy towards the Overseas Territories. That is the overall position. Why are they in the Foreign and Commonwealth Office? Well, I think it might be a diversion of your effort to campaign to put them in the Home Office. We are clearly doing our best in the Foreign Office to give leadership on this, and remember, we're not the same as France; we don't regard our overseas territories as parts of the home state. They do not have representatives in our national legislature, so they are in a different position. I think that the Foreign and Commonwealth Office is the appropriate home, but we'll try to show over the coming years that we deserve that role.

  On Gibraltar, as I'm sure you will have heard me say in the past, there will be no change in the position of Gibraltar and the people of Gibraltar without the consent of the people of Gibraltar.

  Q32 Andrew Rosindell: If I could make one remark, Foreign Secretary, the Crown Dependencies have a different constitutional status; they are under the Ministry of Justice. Maybe you would like to look at why they are treated differently, because that may help to assess why the Overseas Territories remain under the Foreign Office, yet the Crown dependencies remain under a domestic Department.

  May I ask two very brief questions specifically on two particular Territories? I recently visited the Turks and Caicos Islands and there is a near state of emergency in the eyes of the public there. Will the British Government look at the situation there, which is on the brink, and take urgent and, I hope, immediate action to support the Governor and to work with the people over there to restore law and order, deal with the illegal immigration and bring back democracy as fast as is practicable?

  Secondly, referring to human rights, could you tell us what your view is on the human rights of the people of the Chagos Islands, who were ejected from their homeland in the 1960s? Would it not be an enormously significant gesture if the new Conservative Government were to reverse the decision of the then Labour Government and allow those people to return, in a limited way, to their homeland, which is what they rightly deserve?

  Mr Hague: Two huge issues there. Let me try to deal with them as briefly as possible. In the case of the Turks and Caicos Islands, a lot of work is going on. The Governor, as you know, is working very hard. The FCO has committed about £3 million over two years to supporting the Governor to implement the recommendations of the Commission of Inquiry. There are some UK-recruited advisers in place, and we will keep under review whether we need to add to those. When the ministerial Government were suspended—and suspended quite rightly—by the previous Government, the UK said that it would be for two years but the period could be shortened or lengthened, so that has to be kept under review.

  You mentioned democracy, and it is important to allow the Turks and Caicos islanders to express their views. We have a constitutional electoral reform adviser there, who has held a series of public meetings, following which she published her report for further comment. She is now conducting further public meetings in the islands, and all of them are broadcast live on TV and radio. She will meet the Advisory Council on the Consultative Forum later this month. We are doing what we can to ensure that there is genuine consultation with the people of the Turks and Caicos Islands.

  Will it be necessary to give additional assistance? It may well be. As I mentioned, the Department for International Development has already provided a loan of £10 million released to them in three tranches in June, July and August. They are now facing another shortfall at the end of September, so we'll have to decide with DFID, or DFID will have to decide, how to deal with that. To add to the point I made about the timetable on this: we have the flexibility to hold elections later, if necessary. I think that this Committee in the previous Parliament—Mr Gapes has the report there—expressed concerns that the necessary reforms will not be well embedded by July 2011 and that former Ministers could be re-elected and resume allegedly corrupt activities, so we will be on our guard for that and ready to change the timetable if necessary. I am not sure if that answers all the questions about the Turks and Caicos Islands. Did the permanent secretary want to add anything about them?

  Mr Fraser: No.  

  Mr Hague: On the question of the Chagos Islands—this question could of course take up several hours, which we clearly don't have—I am looking at this in great detail. It is one of those long-standing, frustrating issues—a great parliamentary cause. I feel that it is necessary, if I am going to be absolutely confident of our policy on the British Indian Ocean Territory, that I have looked into it personally, in detail. I was holding a meeting in the Foreign Office earlier this week about this. I have to say that, when you go into it in detail, it is quite hard to hold out the prospect of a fundamental change of policy, so I do not want to raise any hopes of that. Of course, on the question of human rights there is a European Court of Human Rights case going on at the moment, so it would be wrong of me to get into the details of that now. But it is important to recognise that we have a treaty with the United States. Yes, it was entered into by a previous Government, a Labour Government, but it nevertheless was entered into. That lasts for 50 years, renewable for 20 years.

  The outer islands of the Chagos Archipelago are really what is under discussion—whether people could return to those. There was a feasibility study in 2002 that concluded that it wasn't really feasible. It is important to recognise that those are atolls. Very little of that land is more than 1 metre above sea level. It is hundreds of miles—I think they are knocking on for 1,000 miles—from any other settlements, so making settlements viable in such a place, particularly given the possible pressures of climate change on sea levels, is a very daunting prospect. An initial detailed look on my part has really brought that sobering realisation to me that, however much it is nice to have an almost romanticised idea that it would be possible for islanders to return to where they were removed from decades ago, in practical terms that is a really difficult proposition. However, we continue to look at this policy. I am continuing to examine it in detail, as is, again, the responsible Minister, Henry Bellingham. But in the light of what I have seen so far, we will be maintaining the position that we have taken on proceedings in the European Court.

  Chair: Thank you very much. Can I move on now, Foreign Secretary? Later this year we are doing a report entitled, "The Role of the FCO". We are waiting for the spending review to come out and the strategic defence review. There is a NATO summit coming as well. However, as you will hear, we want to get some questions in early. These are a bit more thematic now, and Emma is going to lead off.

  Q33 Emma Reynolds: Foreign Secretary, over the past few months you have made several major foreign policy speeches, which I have read with great interest. In one such speech you said, "although the world has become more and more multilateral…it has also become more bilateral". However, you have also said recently that you were determined to "give due weight to Britain's membership of…multilateral institutions". How do you assess the risk that strong but uncoordinated bilateral relationships between member states and countries outside of the European Union might, in fact, weaken multilateral frameworks, such as the European Union. In a multi-polar world, where the role of the European Union is surely a way of increasing our weight rather than decreasing it, are you in danger of underestimating the impact that our role in the European Union can have?

  Mr Hague: Well, I hope not. We have made it very clear that we want to see the European Union use its collective weight in the world effectively. Indeed, a lot of my time so far as Foreign Secretary has been spent doing that. I think one of the most important things we have done in the EU in the past few months was the sanctions package that we agreed at the end of July at the Foreign Affairs Council on Iran, which went beyond what was passed at the UN Security Council in resolution 1929, and which has made quite an impact. It has been quite a surprise to the Iranian leadership. It has certainly delighted our allies around the world that Europe was able to agree a strong sanction, a really meaningful sanctions package. We, and I personally, put a lot of effort into that.

  Another example would be the Western Balkans. Most of my time in recent days, in a diplomatic sense, has been spent on Western Balkans issues. We are trying to ensure that we are able to facilitate a process in which Serbia and Kosovo are able to speak together. We have been trying, in common with my colleagues in France and Germany and with Cathy Ashton, to make sure that there is an agreed EU approach to the whole of that, because when all 27 countries of the EU come together and say, "This is the way to have a process of dialogue between Serbia and Kosovo," that maximises the chances of Serbia agreeing to that. So I don't want you to think in any way that we're not playing our role in the EU using its collective weight in the world.

  However, I think it's very important to point out that that cannot deal with all of our requirements around the world. The European Union doesn't agree on every subject of foreign policy, and European nations all have their own commercial and economic priorities. It's important for Britain to retain our own capability to advance those on our own behalf. It may be that the European Union can work together collectively on strengthening our relationships with China, India, Brazil and so on, and that is one of the things we think the EU should do, but it's vital that Britain is able to make those bilateral links.

  As I argued in the speech I made at the beginning of July, we are in a networked world. It's not just relations between states; it's not just that it's become a multi-polar world where you must have good working relations with countries that are not in any particular bloc. They have to be good bilateral relations, and they're not just government-to-government relations. They are relations of civil society, of education, culture, sport etcetera. That's why, on top of participating fully and enthusiastically in multilateral organisations, playing a big role in the G20 and so on, it's also crucial for Britain to be intensifying our links with the fastest-growing economies of the world. If we don't do so, others will. France and Germany will not shrink from doing so; it's very important that Britain is able to do so in our own right, as well as working on so many international issues with our European partners.

  Sorry, this is another long explanation of things. This means that our multilateral and our bilateral priorities are not in conflict, but relying solely on thinking that the world is simply progressing to a more multilateral structure would be a mistake. No one is going to protect us to a greater extent if we don't protect ourselves, and no one is going to secure our prosperity for us unless we actually go out and secure the jobs and contracts for British firms. So it's crucial to have that bilateral commitment and that intensification of relations with the emerging powers as well as to do all that multilateral work.

  Q34 Emma Reynolds: Can I ask you about competing bilateral relations, especially in areas of the world that are particularly sensitive? The Prime Minister recently stated in India that Pakistan was facing both ways on terrorism, and in Turkey he stated that Gaza was a prison camp. Isn't there a risk? In some areas, he was greeted with plaudits by saying it was a frank and open diplomacy. My view is that the main point of diplomacy is the consequences and what you achieve, and the objectives that you are pursuing. Which were the positive objectives that the Prime Minister was pursuing in these cases, or were they simply off-the-cuff remarks? What are the risks of pronouncing about another country when you're in a neighbouring country which is quite sensitive?

  Mr Hague: In the modern world, it's very hard to be so rigid that as you go around the world, you never say anything about any other countries in the world.

  Emma Reynolds: I'm not suggesting that, but—

  Mr Hague: You're asked about these things all the time. Our view on Gaza, which I think is a cross-party view in our Parliament, is that it's vital to open up more for larger quantities of goods to be able to get in there, and indeed out of there. I think that is well known and the Prime Minister was stating that view.

  On India and Pakistan, let me put it in this context: we have clearly set out the ambition of an "enhanced partnership" with India—those were the words in the Queen's Speech. What necessarily goes along with that is a strategic relationship with Pakistan. Those two things go naturally together; otherwise, we make the position of Pakistan more difficult. I think that Pakistan understands that very well. Yes, it is true that one or two people in Pakistan did not react well to what the Prime Minister said. But it is also true—let me underline this—that, after the Prime Minister met President Zardari and they had a discussion about those remarks, and after the immense UK contribution to the disastrous floods we have just seen in Pakistan, the co-operation between the Government of Pakistan and our Government is very, very strong. And the appreciation in Pakistan for Britain's friendship and commitment to Pakistan is very strong, and that is how it must be.

  Q35 Emma Reynolds: But didn't his previous comments make that relationship and that meeting when President Zardari was in the UK more difficult? Did the Prime Minister seek your advice before using those words? My interpretation of the situation is that one of the effects was that he may well have weakened President Zardari's hand in his own country, which is the last thing we want to do.

  Mr Hague: No, not at all. I wouldn't give that interpretation to it—you won't be surprised to hear that. Do we all talk to each other and advise each other? Yes, indeed, it is a characteristic of this Government that the principal adviser to the Prime Minister on foreign policy is the Foreign Secretary. That has not always been the case in Governments of various complexions over the years. The Prime Minister was making the point that there is more work to be done on tackling terrorism, including in Pakistan, which is absolutely true. There is no ongoing interruption of the work and the co-operation that we have with the Pakistani intelligence services. There were one or two dramatic headlines at the time.

  Q36 Emma Reynolds: A delegation was supposed to come to the UK.

  Mr Hague: A delegation has been to the UK. Relations are in good shape between the UK and Pakistan. You give me the opportunity to re-emphasise that we must communicate to the people of Pakistan, not just the Government, that we are interested in Pakistan not just because there are threats to our national security that emanate from Pakistan—although clearly, there have been—but that we need that long-term relationship with the people of Pakistan; that we regard the role that more than 1 million British Pakistanis play in that relationship as a positive thing; and that we are there for the long term to work with them. That is why we have substantially increased the development budget for Pakistan.

  We have really led the way on the reaction to the floods. Hillary Clinton told me on the telephone last week that she really recognised British leadership in the response to the floods in Pakistan. We are second only to the United States in the contribution that we have made, and British people—never mind the Government—have made a great contribution. It is very important that that is followed up. I went to Pakistan for three days at the end of June and spent a lot of time doing television programmes and radio interviews in Pakistan to try to communicate to the people of Pakistan, not just to Ministers, the commitment of Britain.

  Emma Reynolds: Thank you.

  Q37 Mr Roy: Can I go back to that? Wouldn't it have been more effective for the Prime Minister to speak about the Pakistan security services in Pakistan, rather than wait until he was in India? Wouldn't it have been better and more effective if he had spoken about the prison camp that is Gaza when he was in Israel, as opposed to in some other country?

  Mr Hague: He will be going to those places, too, so stand by for him addressing the issues in those countries. As I say, I think it would be wrong to be critical of talking about international affairs in general when travelling the world. Inevitably, in interviews, you do that. I think that what the Prime Minister said on those occasions was absolutely right. Let me put both things that you raise in perspective. I have mentioned how closely we are working with Pakistan on the floods and in many other ways and also with Israel. In the run-up to the direct talks that started last week between Israel and the Palestinians, our Prime Minister played an important role, talking to Mr Netanyahu and urging President Abbas to enter the talks. We are able to have those discussions with Israel notwithstanding anything we may have said about Gaza. I think countries understand that we will not always agree on every topic. Sometimes they say things about the United Kingdom and sometimes we say things about them. Actually what we have in the case of Israel and Pakistan, despite there being, for obvious reasons, tensions in both relationships, is close co-operation when it counts.

  Q38 Mr Roy: I want to move on, Foreign Secretary, to your earlier remarks in relation to the National Security Council. You said that it had met 16 times. What has been achieved so far?

  Mr Hague: A good deal. First, we have clarified our position on Afghanistan, and you have been asking me about some of that clarity today. We have made sure that Ministers work cohesively together where we have our troops deployed to such an extent in Afghanistan. I think that on that and on many other subjects, Departments of State are working together more successfully than has sometimes been the case in the past. The purpose of the National Security Council is not to create a new Department. It is to make existing Departments work well together.

  On the issue of the Pakistan floods, DFID has done a terrific job. At the same time, the Deputy Prime Minister has been there and added to our diplomatic effort and seen for himself the situation on the ground. I have been playing my role and asking other European countries to contribute more. It is a cohesive effort on all issues of international relations. I think that the National Security Council makes that much, much easier to achieve.

  Perhaps I will mention a couple of other attributes. It means that we have a common sense of our ambition in the world. I have been talking about intensifying the relations with emerging powers and economies in the world. Having the National Security Council helps to make sure that we have that same sense of what we are achieving together, but foreign policy runs through the veins of the other Departments of State. Foreign policy is not just something for the Foreign Office; it is something for the whole Government to pursue. The National Security Council really helps to achieve that. It means that the advice coming to the Prime Minister about foreign affairs issues comes through the national security adviser—in this case Sir Peter Ricketts who was the Permanent Secretary at the Foreign Office—and it comes to the Foreign Secretary and the Defence Secretary as well, so we are thinking about these things together.

  Finally, it means that in one of the most important pieces of work that we are undertaking as a Government, at the strategic defence and security review that is under way at the moment, we have at the National Security Council the key members of the Government, the heads of the intelligence agencies and the Chief of the Defence Staff able to work together and used to working together in making these really important decisions together. So it provides a framework for all of those things, and so far, it has been a success.

  Q39 Mr Roy: Maybe I'm wrong, but is there not a kind of dilution of responsibility moving from the Foreign Office towards No.10 and the Cabinet Office by its very existence?

  Mr Hague: No, not at all. We have a Prime Minister who strongly believes, thankfully, that the Foreign Office should have its proper role in Government. It does mean that the Foreign Office has to step up to the mark. If we say that we are going to lead the thinking and that foreign policy is going to flow through the veins of the whole Government, it means that the ideas and expertise have to flow from the Foreign Office into the National Security Council. I am confident that that is what is happening, or what is beginning to happen. If anything, there has been an entirely proper move the other way. For instance, we have formed not just the National Security Council but the European Affairs Committee of the Cabinet, which I chair. So it is the Foreign Secretary who now chairs the decisions across Government about European policy and the trade-offs between one Department or negotiation with another. We have a joint secretariat of the Foreign Office and the Cabinet Office servicing that committee. The Foreign Office is institutionally much more back in its proper place in government as a result of the changes we've made so far.

  Q40 Mr Roy: For those 16 meetings, they are all advantages that you have just explained. What disadvantages have you come across? What are the teething problems, because obviously it is a whole new concept?

  Mr Hague: I wouldn't go so far as to say that there aren't disadvantages. It means that there are a lot of meetings, and we all have lots of meetings to go to, but they couldn't be more important meetings. I'm going to end up giving you another advantage because I can't think of a disadvantage. It means that the senior members of the Government concerned with development, energy, home security, foreign affairs and defence, and the Prime Minister and the Deputy Prime Minister, think together about the huge challenges we face in security and international relations. For instance, we held one of our meetings, which lasted almost a whole day at Chequers, at the end of May about Afghanistan. We could really go into all the arguments, explore the options, have people in from outside to talk to us and so on. It means that we're not just ticking boxes or agreeing a paper that we haven't really discussed. We are spending the time thinking together about national security and international relations more broadly. I'm sorry, however many times you ask me for a disadvantage, I'll come up with an advantage.

  Mr Roy: We'll find one at some point.

  Mr Hague: So far, it has worked well. That is the honest truth.

  Q41 Mike Gapes: I have a very short question. Foreign Secretary, you mentioned Sir Peter Ricketts as the key official. It has been reported that he is not going to be on the National Security Council very long. Could you comment on that?

  Mr Hague: No. It was this morning. Any comment on that will have to come later. We are very grateful to him for taking it on, on the first day the Government took office. I don't think it would be right for me to go into any more detail on that now.

  Chair: We are going to move on to trade and commercial issues now.

  Q42 Mr Watts: Foreign Secretary, I think you said that you expect to have less resources and staff available to you after the spending review. Can you say a few words about the pronouncements on the focus on commerce? What particularly will you or your diplomats stop doing if they are going to do something different? Are they going to be promoters of British business? Can you tell me whether you think your diplomats will have the skills required to do that change of job? Following on from Mr Stewart's comments, what changes will you make in your recruitment policy that will make sure you've got people and diplomats who have the skills and background to be able to be of some assistance to business?

  Mr Hague: That is a very important question. You can see our commitment to have the necessary skills from the fact that the new permanent secretary has come from the Business Department. I think I'll ask him to say a word in a moment about the skills, on which we already have quite a number of things in train; perhaps he could expand on those.

  Let me be clear. This, in many ways, requires some additional energy. It is not so much that people are taken off other things—although we will have to assess all the priorities as we go along—but building it into everything that we do. When I leave your Committee, whenever we finish, the Foreign Minister of Vietnam will be coming to the Foreign Office. Much of our meeting will be about trade issues. My decision is that an increased proportion of all the time that I spend with my counterparts around the world will be about trade and commercial issues. I will bring up with him five or six different areas in which Britain can do more business in Vietnam.

  It's really that sense of building into everything we do. Wherever the Prime Minister, the Chancellor, the Business Secretary or I go, we should have a clear sense of what is at stake in that country for British business. That then should run through the work of the whole Foreign Office, as well as other Departments. The Prime Minister appointed yesterday Stephen Green, someone who I think will be an excellent Trade Minister. He is very well respected in the business world and, indeed, around the world. So it is being done in that spirit. It requires some organisational changes and re-emphasis. Perhaps Simon can talk about that.

  Mr Fraser: I am very happy to do so. First, I very much endorse the point that it is not that we have not done this in the past. It is just that it is entirely appropriate at the current moment in particular, given the world economic situation and the national economic situation, that there should be a focus on what we do in the Foreign Office, as indeed in other Government Departments, on what we can do to support economic recovery in this country and more generally. So it is not necessarily the case that we will be doing that instead of doing other things, but I agree very much with the point that it is the mindset of the organisation and how we approach our bilateral and multilateral relationships and the issues that we should prioritise.

  In that sense, looking across the organisation now, of course we have the very welcome appointment of a new Trade Minister. Of course, we have UK Trade & Investment. That is an organisation that is jointly parented, if you like, by the Foreign Office and the Department for Business, Innovation and Skills. I think that UKTI is an effective organisation, and I certainly do not think that we should seek to duplicate or replace it, but I think that it is now considering a new strategy for promoting trade and inward investment, and that is one thing that we want to log into.

  Within the Foreign Office, we have set up a taskforce to ensure that, across the organisation, people are taking those opportunities and thinking about economics and commercial opportunity, in the way that the Foreign Secretary has described, in all aspects of our work.

  We are just about to launch a new business planning process, which will be the basis for our activity and our resource allocation once we know the outcome of the spending round. Within that business planning process, one of the big strands will be promoting British prosperity through our economic and commercial activity in the network. So, in all those ways, I think that we can achieve a greater focus and a clearer understanding of where the priorities lie in our diplomatic activity, both in London and around the network.

  Q43 Mr Watts: May I just push you on a point that concerns some people? I am well aware that diplomats act as both diplomats and promoters of trade. But if those diplomats believe that you have set such a high priority on trade, is it not likely that, for example, if they were speaking to their counterparts in China, they would be less likely to raise issues of human rights than they would have been previously, if they believe that your Department is solely set about or is giving its highest priority to trade? I wonder if you could say a few things about how you will ensure that your diplomats understand that they have still two major roles to perform within their duties.

  Mr Fraser: If I may just pick up on that—it's a very important point—of course all our embassies in all countries around the world have a set of priorities for that country, and of course, in the case of China, there will be priorities relating to developing the political relationship, and ensuring that we apply the appropriate pressure or raise the appropriate issues relating to human rights, just as there will be priorities relating to pursuing climate change objectives and commercial opportunities. I think that one must have confidence that our representatives in those countries will see the broad perspective, and of course that is what they are tasked to do by the Foreign Office here in London. So I hope that we can avoid, if you like, a disproportionate shift of focus of the sort that you are describing.

  Mr Hague: To add to that, since I criticised the previous Government over funding the Foreign Office, let me be nice to them about one thing. I think that they did a good job on handling relations with China, and building up the economic dialogue with it. They then added to that—in the closing weeks, actually, of the last Government—strategic dialogue with China, which I then commenced. I went to Beijing in the middle of July to commence that. We are the only country other than the United States and Japan with that level of formalised dialogue with China.

  We will continue all of that work. It is fundamentally in the interests of this country to encourage a good economic and trading relationship with China. But at no stage did the last Government—nor will this Government—say, "Well, we are not raising human rights in China any more." I think that they understand that in China. We will continue to raise our human rights concerns. We have the balance right.

  Q44 Mr Watts: Can you answer about the recruitment side? Does a change mean that there will be a difference in the recruitment procedures? Are you looking for different qualities and different skills than you have done in the past?

  Mr Hague: Again, Simon might want to answer this, but more experience of business would certainly benefit the FCO. That can be done in all sorts of ways, including through secondments to business, including for heads of mission before they are posted, plus by training people in different ways. We can use private sector expertise to embed a strong sense of commercial diplomacy in the FCO. Simon, do you want to answer Mr Watts' specific point about recruitment?

  Mr Fraser: On recruitment in general, we have had a principle of recruiting people with a broad range of abilities and potential. Then, of course, we train them through their careers. The training that we offer in the Foreign Office should be tailored to the priorities that we have. Indeed, as the Foreign Secretary has mentioned, there are new programmes in place, focused particularly on economic and commercial ability.

  There is another thing. Recently we have been pursuing a policy of secondment of people to business, particularly some of our people who are going to important head-of-mission posts in countries where the economic relationship is very significant. A good case in point is our current ambassador in China, who spent nearly a year on secondment to Rolls-Royce. There are a number of ways in which we can address the question of expertise and commercial knowledge.

  Q45 Sir John Stanley: Foreign Secretary, my question leads on from those of Dave Watts. The British Foreign Office has undoubtedly a great many very major achievements to its credit but, being brutally frank, it has had some very serious moments of failure—and moments of failure when it has failed to recognise and grapple with the security realities. The British Foreign Office was, as we know, the arch-exponent of appeasement in the run-up to the second world war. It is in the memory of many of us still in the House that the British Foreign Office, in the run-up to the Falklands war, could not have given a clearer indication to the Argentine military junta that it wanted to get shot of the Falkland Islands.

  Against that background, and against the calls from the Prime Minister for the British Foreign Office to be apparently "messianic" in its pursuit of business interests, can you assure this Committee that the ultimate responsibility and priority of the British Foreign Office during this coalition Government will be the security of the British people, the security of the countries with which we are in military alliance and the security of our overseas territories?

  Mr Hague: Yes is the broad answer to that question, with the Ministry of Defence and the rest of the Government. In the priorities that we have promulgated in the Foreign Office, within pursuing an active foreign policy and strengthening a rules-based international system in support of our values, the three key priorities that we have listed start with safeguarding Britain's national security by countering terrorism and weapons proliferation, and working to reduce conflict. Of course, working to reduce conflict includes being vigilant about conflicts. As you say, that has not always been the case.

  The second is to build Britain's prosperity by increasing exports, investments and so on, and the third is to support British nationals around the world through modern and efficient consular services—something that we have not touched on today. Again, that is a vast subject in itself. People do not always realise that, at any one time, 2 million British people are overseas and many of them turn for help to the Foreign Office. So yes is the answer to Sir John's question.

  Chair: John Baron has the final question.

  Q46 Mr Baron: Foreign Secretary, you said yourself that, increasingly, international affairs are being conducted through more informal, ad hoc forums. That is in contrast to what we have been used to in organisations like the UN, where there is a fixed membership and an agreed agenda or remit, etcetera. To what extent is the Foreign Office adapting to that? How influential will Britain be in trying to reform and address that issue on a more global scale?

    Mr Hague: I think that the Foreign Office is well placed to adapt to that. You can gather from what I've been saying about the networked world and the importance of networks of bilateral relationships that the central thrust of our approach is exactly on this point of ensuring that we have patterns of influence in the world, rather than thinking that one or another organisation is the key to influencing world events. I think we have the strategy right on that. The Foreign Office has the adaptability and it's had—we may have to reinforce it over time—the language skills and knowledge. That goes back to Mr Stewart's questions earlier. Those things need accentuating more in the future to give us the flexibility and the knowledge of different parts of the world, to be able to cope with that shifting pattern of world economic and political influence.

  We may have to be adaptable in where we deploy people and in where we spend our ministerial/diplomatic effort. There is an intensified effort to be made in the Far East and South America; it is quite a long time since a British Foreign Secretary did a full-scale visit to South America, but I am intending to do that in the spring. Funnily enough, while I am on that theme, there are countries that get forgotten. No British Foreign Secretary has been to Australia for 20 years. We mustn't neglect those important relationships. It can be economically important. We will have to adapt, and I think that we're prepared to do so and have the strategy.

  Q47 Mr Baron: One very quick question because I am conscious that we need to get you away. May I briefly return to Afghanistan? To what extent do you foresee the final solution, whatever it is, involving negotiations with the Taliban?

  Mr Hague: That goes back to the issue of reconciliation, which I've stressed must be Afghan-led. Here we get into the question of what is the Taliban, because it is not a single organisation. Many different factions and shifting alliances make up the Taliban. It's for that Afghan-led process to determine and to discover which of those people, based on what President Karzai and the rest of us set out at the Kabul conference about respect for the constitution of Afghanistan and the readiness to forswear violence, are willing to be part of a reconciliation process. It depends on that; it depends on them whether they are prepared to be reconciled on such a basis.

  Chair: Foreign Secretary, thank you very much indeed. You've got our relationship off to a flying start, and I look forward to seeing you regularly, as and when we can arrange it, and likewise, Mr Fraser.

  Mr Hague: Thank you very much.

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