Session 2010-11
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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 665-iii

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

FOREIGN AFFAIRS COMMITTEE

THE ROLE OF THE FCO IN UK GOVERNMENT

WEDNESDAY 12 JANUARY 2011

ALEX EVANS and DAVID STEVEN

Evidence heard in Public

Questions 115 - 159

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Oral Evidence

Taken before the Foreign Affairs Committee

on Wednesday 12 January 2011

Members present:

Richard Ottaway (Chair)

Mr John Baron

Sir Menzies Campbell

Mike Gapes

Andrew Rosindell

Mr Frank Roy

Sir John Stanley

Rory Stewart

Examination of Witnesses

Witnesses: Alex Evans and David Steven, Senior Fellows, Center on International Cooperation, New York University, gave evidence.

Chair: May I welcome everybody to the Committee’s third evidence session on the role of the FCO in Government, which will allow the Committee to question two of the authors of the latest Chatham House paper on international policy making? Alex Evans and David Steven are both senior fellows at the Center on International Cooperation at New York University, and are the co-authors of Organizing for Influence: UK Foreign Policy in an Age of Uncertainty, which, I can assure you, some of the Committee have read. If you would both like to make an opening statement, that would be great.

Alex Evans: Thanks very much. We won’t make long opening statements, but perhaps it would be helpful at the outset if we just put our two central contentions on the table.

First, we think that the context for British foreign policy has changed utterly as a result of what David and I have called the "long crisis" of globalisation. We have just finished a decade that was book-ended by shocks-9/11 at the beginning of the decade and, at the end, the financial crisis and the combined food and fuel spike.

The new decade, 12 days in, shows every sign of being even more volatile than its predecessor, if the past two weeks are anything to go by-a food spike higher than 2008, the latest round in the financial crisis in the eurozone, extreme weather events in Australia and so on. We observe, in our Chatham House report, that this situation is in some ways comparable to the early 20th century, in which globalisation appeared, as Keynes put it at the time, "normal, certain, and permanent, except in the direction of further improvement". In fact, of course, the first globalisation crashed amid the first world war-and it may do so again, we think, if the mounting stresses facing globalisation are not addressed.

So our first contention today is that the worst metaphor we could possibly embrace for British foreign policy is Salisbury’s idea of floating lazily downstream and occasionally putting out a diplomatic boat hook to avoid collisions. Our preferred choice of boating metaphor would be shooting the rapids; it’s the river, not the paddler, that dictates the pace of events. Steering becomes harder in rough water, and, above all, the central requirement for shooting rapids successfully is for all the occupants of the boat to paddle together. So we think it’s collective action that is the core challenge for British foreign policy now, and that, we argue, must be the key goal of the Foreign Office’s work.

David Steven: Our second contention is that the way British foreign policy is made and implemented must be fundamentally reconfigured in order to deal with the challenges that Alex has just spoken about. The Prime Minister has yet to be tested by his first global crisis, but when it comes he will find that he has few levers that effectively manage risk to the UK’s prosperity and security. That is not a criticism of the UK system. It is just a fact that Governments are finding it increasingly difficult to respond to the complex challenges that globalisation is bringing.

We think that the coalition Government have taken many steps in the right direction since the election. The National Security Council has improved the UK’s ability to respond to immediate risks, and the Department for International Development has been directing its attention towards fragile states, where it clearly has the most important role.

The Foreign Office, too, has been restored to its rightful role at the heart of British foreign policy, something that wasn’t true for some time in the past, and it has a Foreign Secretary who has the stature to provide co-ordinated leadership across Government. But we think it is at the Foreign Office that most is still left to be done. We believe it would be a grave mistake to constrain the focus of the Foreign Office-to turn it back into some kind of Department for geography, although clearly geographical expertise is an important part of its role.

We think it’s somewhat ironic that the UK seems to be focusing back on trying to manage a broad set of bilateral relationships just as the United States is moving in exactly the opposite direction. In its recently published Quadrennial Diplomacy and Development Review, the State Department has set out its intention to focus its energy on working regionally and globally rather than bilaterally, and on building the coalitions that address global, political, economic and security problems that cannot be solved by the US alone.

The State Department is rethinking from the bottom up how it achieves influence in an increasingly complex world. It’s staffing up its foreign service rather than running it down, and it’s challenging all diplomats to work in fundamentally different ways. So our second contention is that the British Government urgently need to follow this example and ask our Foreign Office to do the same. We look forward to your questions.

Q115 Chair: Thank you. Reading your paper-if I am starting with a blank sheet of paper, I can see how you would do this-if all your ideas were to be adopted, there would be a massive transition. These are very radical proposals that you are putting forward, which I imagine met with gasps up the road. If your ideas of rejigging the whole thing-cross-cutting and focusing on certain areas-were done, how would you cope with a teenager caught drug smuggling in Thailand?

David Steven: Consular is core business for the FCO, and I think it’s something that it does rather well. What we are trying to focus on is what we see as the new frontiers, which are global issues. DFID gets steered towards fragile states-absolutely right. The NSC brings us this immediate focus on the risks facing the UK, but the Foreign Office, at the core of its policy making function, is looking ahead to how it manages globalisation more effectively.

Q116 Chair: Okay, but how would you make representations on human rights in Thailand?

Alex Evans: As David said, we regard the FCO’s regional network as one of the jewels in the crown of the Government. Nothing that we have written or said today should be taken to mean that we think that that should be pulled back or in any way deprioritised. It is more that we think that something is missing in British foreign policy and that the FCO is the natural home for it-this kind of synthesis or pulling together of what the Government do into a coherent overall whole.

The NSC is a welcome step forward towards coherence, but it will necessarily be focused on the urgent foreign policy challenges facing the Government. In terms of the longer-term synthesis, it is still unclear where that resides. In some ways, what we have done with the NSC is to import half of the American model.

We have the NSC, but we don’t have the National Intelligence Council function that there is in the US. Part of its function is delivered by the assessment staff, but we don’t have here an equivalent to the NIC’s role in red teaming, which provides a kind of challenge function in the policy process, and nor do we have the NIC’s function of pulling together a long-term view, which is a kind of horizon-scanning aspect. Those are two functions that we think are critical to an overall foreign policy strategy that the FCO could discharge, but which aren’t currently performed in our existing configuration.

Q117 Chair: And that-what you have just said-is the missing bit.

Alex Evans: That is one of them, yes.

Q118 Chair: And that summarises the problem. Would you say that you have just summarised the problem, as well as highlighting what the missing bit is?

Alex Evans: I think I summarised the problem in terms of the strategy part of the piece. The other half of the equation, as we see it, is the influence part of the piece. Influencing on the global issues agenda involves the FCO working in a different way here in London, internationally and in posts.

Q119 Chair: Just taking the example that I plucked out of the air-that of human rights in Thailand-do you think that the restructuring to do with influence could still cover diplomacy at a national level?

David Steven: I think it certainly could cover that at a national level. It is when that really has international implications that we see a need for change. That can be in countries. If you take the example of Pakistan, where I have been spending quite a lot of time recently, it is not really a matter of our bilateral relationship with Pakistan; it is a matter of how the whole international community can come together and finally have a long-term political strategy for the future of that country. That’s where we need to be exerting influence.

Alex Evans: If it is useful to provide an illustration of the kind of issues-based influencing we are talking about, a very good one is the case of the Stern review in the climate change context. That was an incredibly successful exercise in reframing the climate change debate-not just here, but internationally-and in putting the UK in the role of a thought leader.

Of course, that exercise was not driven from the Foreign Office; it came out of the Treasury. It was arguably our biggest public diplomacy success of the past 10 years, but in some ways it happened by accident-a role was needed for Nick Stern; he was the right candidate to do it; and then it turned into an absolutely runaway success. One question we are interested in is how we could systematise that success and repeat that success in other contexts.

David Steven: If I may, climate change is an issue where the Foreign Office has gone furthest in looking at new approaches. Going back a number of years, it has had teams looking at issues across the board. They have looked at the long-term issue of how you turn a high-carbon economy into a low-carbon economy, and what that will mean to countries of all states of development across the world.

The teams have reached beyond Governments to work with all sorts of non-state actors within both the business sector and the NGO sector. They have pioneered quite a different way of thinking about diplomacy. But it is not enough to have that just on climate change; we need it on food, resource-scarcity and a whole host of other cross-cutting issues that are dominant at the moment.

Chair: We are actually going to have a meeting with Mr Ashton on just that point.

Q120 Mr Baron: On the question of resources, I wonder whether our foreign policies around the globe are beefing up resources. We know what’s happening here. That must have an impact to a certain extent, but how does it affect your thinking? In a sense, having the ideas and the vision is one thing, but having the resources to carry them out is another-it becomes just a wish list-and the two are related, at the end of the day.

David Steven: Obviously, we have to understand the constraints on resources at the current time. But in the longer term, the international agenda is becoming more and more important and dominant. The game changes, if you are a British citizen, come from beyond our borders-Alex mentioned 9/11, the food and energy price spike, and the financial crisis having occurred in just 10 years. In the long term, we have to take this agenda more seriously and to put the resources into that.

We also-I think that this is something that the Americans have missed out in the Quadrennial Diplomacy and Development Review-have to try to influence other countries to start working in a compatible way on these key issues. We need all the G20 countries to take this agenda more seriously. We need them to be working in intra-operable ways and resourcing up.

Alex Evans: It is worth remembering that the reason we face such a tight spending environment now is because of a failure to manage global risks. It is harder to imagine a clearer spend-to-save case than scaling up the money that we expend internationally to prevent and mitigate global risks, rather than having to clean up after them.

Q121 Sir Menzies Campbell: I wonder whether I could just explore your reference to the United States, because the nature of its political system is such that there are-"lurch" is perhaps too strong a word-significant differences, potentially, once every four years. The Bush Administration pursued a quite different foreign policy from that of the Obama Administration, yet you say that the State Department is emphasising multilateral more than bilateral. A risk is that if there is a change in the presidency, that could be reversed.

When we compare that with the United Kingdom, we see that there are differences in the political approaches, but none the less, there is a rather greater degree of consensus. I wonder how far we can draw lessons from the United States and apply them to the United Kingdom, when you consider what I might describe as the more volatile nature of the political direction that the State Department receives.

Alex Evans: It is interesting that in her foreword to the QDDR, Secretary Clinton sets out that she sees this as the latest step in an evolutionary process, under way before the Obama Administration took office, when Condoleezza Rice developed this agenda of what she called "transformational diplomacy", which in some ways was asking some of the questions that the QDDR picks up. In a sense, foreign policy practitioners in the US have realised over a period of years that they are facing a different context and that they have to change the way they work. It is more evolutionary than it might look.

Q122 Sir Menzies Campbell: Condoleezza Rice didn’t have a great deal of influence towards the end of her time-we know that.

David Steven: I think that that is absolutely true. The intensely partisan nature of the United States at the moment is clearly making it hard for the US to be an effective international actor. Our much greater cross-party consensus on many of the key issues is enormously important. It is important to think about how we maintain that through difficult times. Is the leadership of this country going to be able to explain to the electorate what is happening out there in the world and why we are taking these steps, so that we continue to have that consensus that enables us to be a more consistent actor?

Q123 Sir Menzies Campbell: Do you reject the notion of forming close alliances with countries with which we have a particular affinity? One particular illustration recently was the defence arrangements between the United Kingdom and France, which have been, or will be, formalised in a treaty, relating not only to conventional but to nuclear elements. Do you see that as being contrary to the interests of the United Kingdom in the long term?

David Steven: Absolutely not. On every issue we need to see what the like-minded coalition is that we can build to tackle it. If the United States is saying, on all the important foreign policy issues, "We cannot get a positive solution on our own", that is even more true for a country that is so much smaller and so much more connected to the world.

Q124 Sir Menzies Campbell: So, it is the notion of coalition, rather than multilateral as compared with bilateral.

David Steven: Yes, absolutely. It is important to emphasise that when we say "international multilateral", we do not necessarily mean the formal multilateral international system, but the alliances that form.

Q125 Chair: How do you feel that the UK is doing, compared with the other countries, going down the road that you’re recommending?

Alex Evans: It is starting to ask some of the right questions. With the QDDR, the Americans have clearly put themselves in a leadership position on this debate. Some of the other European Governments are also undertaking the review aspects of this. For example, the Germans are looking at how they configure their Foreign Office. The US is in the lead in shifting from thought to delivery.

Q126 Mike Gapes: Can I take you back to something that you said about Pakistan that I disagree with? I put it to you that we cannot deal with Pakistan just in the context of the international community. We have more than a million British citizens of Pakistani origin. We have national interests in Pakistan and if the Americans decide to up and away, we will still have those national interests in Pakistan. How do you react to that?

David Steven: It is absolutely clear that we have very powerful national interests, but I think it is also clear that we are not going to protect those national interests if we operate on our own. Whether we can influence our partners to develop policies that are compatible with our interests is one of the big challenges.

Take a practical example. I am not sure whether the spending has been announced yet, but through DFID we are planning to spend a really considerable sum of money on the education system in Pakistan. The Government have made it clear that they regard the education emergency in Pakistan as one of their main priorities. The figures vary, but 35 million or so kids are out of school; that is half the population of the UK.

Just spending that money, however much it is-and it is a lot of money-is not going to achieve the results that we want. We need other countries to be doing the same thing and we need a political strategy. We need to work to try and change the way that the elite in that country thinks about its challenges in the social sector.

Q127 Mike Gapes: You’re missing my point. My point was that you said that basically our priorities should be international co-operation to deal with problems in Pakistan. I think we need the international co-operation, but what I’m arguing is that we have national interests, even if there isn’t that international co-operation, which are overriding. What you are putting forward as a model seems to be based on a view that somehow we can only work at this global level, when in fact we will have national interests-and Pakistan is an example.

Can I take that to the National Security Strategy, which is the essence of this? Your report warns against what you called the "stretching" of the definition of national security to encompass all aspects of foreign policy. Clearly, the National Security Council has only recently been established. How do you assess the priorities and the way in which that has been set up by the Government?

Alex Evans: Can I come back to your first question before we turn to that? I agree with you about the national interest. All we are saying is that international co-operation is not some alternative objective that we might choose to pursue instead of the national interest. I think we are stressing that it is increasingly going to be the pre-eminent means for all countries to pursue their national interest because, faced with the kind of cross-cutting challenges we’re talking about, countries’ national interests will increasingly depend on working together to manage these shared risks. So international co-operation here is a means, not an end.

Q128 Mike Gapes: And on the National Security Council?

David Steven: I feel a little bit out of date on that because I have been overseas a lot. We ran a seminar with Peter Ricketts and his team in the early days. I think that they had a sense that they needed to focus on the short-term and urgent issues. That is absolutely the right decision, otherwise we are going to find that some risk comes over the horizon very, very suddenly and people will be going, "Why was the National Security Council thinking 10, 15, 20 years ahead when something was coming up tomorrow?"

What we are asking, though, is where does the long term sit if it doesn’t sit in the NSC? We think that’s what the Foreign Office in London should be very much about. Foreign policy making is getting very complicated because domestic Departments have so many stakes in the different issues. Where is the platform for the long-term strategic synthesis on those issues? That has to be the Foreign Office-it just has to be.

Q129 Mike Gapes: Is there not a danger, though, that if you want something addressed you just basically say: climate change, terrorism, people trafficking, drugs. You just bring it into the national security ambit and then somebody takes notice of it, whereas otherwise it is sort of off and a secondary issue?

Alex Evans: I think there is, yes.

Q130 Mike Gapes: So would you say that the National Security Council is taking in too many areas and not focusing sufficiently on the real threats, or would you say that it’s doing the job in the right way at this stage?

Alex Evans: I think it’s getting the balance broadly right. It has taken a fairly broad conception of a fairly tightly defined security agenda. For instance, it looked at climate change, but at the security aspects of climate change. The NSC is not attempting to be the co-ordinating body across Whitehall for what we want from the next UNFCCC climate summit. What it is doing is taking a broad idea of what security is and looking at different aspects of that. I think that’s a useful step forward. It builds on what NSID did under the last Government; it is, in some ways, a more frequent version of NSID, I think. But as David said, what it isn’t at this stage is the long-term engine for synthesis across global issues.

Q131 Mike Gapes: Can the National Security Council be that, or do we need another body?

Alex Evans: I think this is where it comes to the Foreign Office, because I think doing that kind of synthesis requires you to have enough people. The national security staff only have 45 people working on foreign policy, and as we understand it, it is likely to see that head count reduced. That is not enough people to drive synthesis across Whitehall. That’s where we think the Foreign Office can have an incredibly valuable role to play. That is why we think, to play that role, the FCO in London, as opposed to embassies, needs to be staffed 50% by secondees from other Whitehall Departments, so that it becomes the place where the cross-governmental conversation happens about joining up the dots on global policy.

Q132 Rory Stewart: Let’s follow on from that. The Foreign Office, over the last 15 years, has gone closer and closer to your kind of model, starting with Michael Jay. This was the whole idea-more and more global issues pushing through. You want it to go even further-50% of people in Whitehall working for the Foreign Office, but not to be from the Foreign Office. You see failed states as being driven by DFID’s agenda.

Now obviously you want to say, "This is not going to be at the expense of country expertise, and it’s not either/or". But it will be either/or; you have to make choices, and you’re pushing towards the global. I would have thought that the exact risks you’re trying to mitigate are not going to be mitigated by doing that. In fact, all that we’ve learnt from the Balkans, Iraq and Afghanistan suggests that the way to mitigate the risks is deeper country expertise, more linguistic knowledge and more focus on specific geographical areas, and that it is exactly these kinds of generic global skills that got us in this mess in the first place.

Alex Evans: You raise two points there. The first is how we do UK engagement in fragile states, and the other is how we do strategy on the global issues. Maybe it is helpful to separate them out in our answer.

On the first one-how we deal with fragile states-the central issue is how we pull together a coherent cross-HMG approach, in particular how FCO and DFID can work effectively together. What has often been missing in our engagement with some fragile states is a marriage of the two Departments’ work into a really effective political strategy.

What you often find, I think, is that the ambassador and the FCO staff have excellent knowledge of the political dynamics in a country in a relatively short-term sense; they can understand what the political issues are this year. But DFID has a very good understanding of long-term drivers of economic change, institutions and the sort of dry end of the governance agenda, if you like.

But it is at the political economy level, where those things mesh together, that I think we don’t always have the joined-up strategy. Things have improved a little bit now, with the FCO having a formal role in drafting DFID’s country assistance plans, but there’s often still a gap between the ambassador doing day-to-day political engagement and DFID pursuing its long-term assistance programme, without the two necessarily becoming more than the sum of their parts. Does that help on the first question, before we turn to the one about strategy?

Rory Stewart: You can go on to answer that question.

Alex Evans: On the question about strategy, the observation that we make in the report is that there are obviously lots of different bits of Whitehall doing lots of different bits of foreign policy: you have DECC leading international climate and international energy policy, DEFRA doing international food policy, and HMT doing international economy.

One of the things that struck us powerfully when we were researching this was that nowhere do we actually track across Whitehall the resources that we’re expending on these different priorities: how many people are allocated to them and how much money we’re spending on them. We tried to pull some of that data together when we were doing the report, but it was very difficult to compile, even from Departments’ annual reports. I think that that showed us that we can’t have a joined-up international strategy until we know at least what our de facto priorities are today, in terms of staff and money. Tracking that is the first thing.

Then the question for Cabinet would be: are these the priorities you actually want? I think that the idea we have outlined of an FCO staffed heavily by secondees is trying to bring those disparate pieces of the jigsaw puzzle together in one place, so that we can actually start to bring those pieces together.

Q133 Rory Stewart: Let me push you a bit harder on this. You are avoiding the basic question, which is about how you manage risk. You seem to think that the answer is some sort of consultancy-style, strategic approach to generic departmental co-ordination, whereas the way to manage this in fragile states-in fact, the weakest part of your report may be around fragile states, precisely because of this-is a longer time in the country, more language knowledge, more area expertise, more immersion and more expertise in London. All that is lacking-bringing in more and more other Departments, giving more weight to DFID and co-ordinating are not likely to deal with the risks from fragile states.

David Steven: I take your point about trade-offs, and it is clear that we need geographic expertise and to shift resources to countries that are more fragile. Even in the past four or five years, we have seen that the sense of the key places to get posted to-that notion of what is important-is changing quite rapidly. Europe is going down, basically, and places like Pakistan and Nigeria are going up in the world, and that is clearly important. We need people who stay there longer-the circulation in a country like Pakistan is enormously rapid, and I think that loses continuity. There are things that you can do, and that are being done, to shore that up.

I do not quite get where you are coming from on the issue of DFID. Focusing DFID’s energies on these most troubled places, using multilateral institutions where money can simply be transferred and expected to buy development result, and focusing what is really most rare in DFID-its people, because it does not have very many people-on countries like Pakistan and Nigeria boosts our ability to cope with fragile states and doesn’t undermine it.

Q134 Sir Menzies Campbell: What follows now is, I hope, a natural consequence of Rory Stewart’s question. Mr Evans, at one stage I thought you were making the case for DFID to be subsumed, as it were, back into the Foreign Office. When I first came to Parliament in 1987, Lynda Chalker, I think, was the relevant Minister-a Minister of State in the Foreign Office. International development was dealt with by the Foreign Office. It seems to me that some of the characteristics that you have described as being desirable might well have been met in those days by that particular arrangement. Do you share that view, or do you have some contrary opinion?

Alex Evans: I certainly would not advocate bringing DFID back within the Foreign Office now. I think that it has a useful function around the Cabinet table, but I do think that coherence in country matters is needed, and that there is room for improvement.

I think that now the UK model of having a separate Cabinet Ministry for international development looks like the exception rather than the rule internationally-other countries that have tried this have brought development issues back within the Foreign Office ambit. But I think it’s a functional issue, not a question of organisational form. I think that the main thing is to make sure that whatever configuration that we have works coherently, and I don’t think that it’s necessary to re-merge the two Departments in order to do that.

Q135 Sir Menzies Campbell: How is that co-operation to be encouraged? The fact that both Ministers sit around the table at the National Security Council of itself represents what one might say is a marginal improvement, but it does not actually create the context or the success which you argued for. How is that then to be facilitated?

Alex Evans: By and large, to create this kind of interoperability is not about redrawing the organogram here in Whitehall or in the countries; I think it is partly about the incentives for individual officials. I would like to see civil servants in both Departments appraised on the extent to which they work effectively with other Departments, seeing it as an absolutely standard feature of every civil servant’s career to spend a good portion of it outside their home Department-preferably outside their home Government.

The real holy grail, beyond the incentives, is to develop a culture of jointness, as it is sometimes called, where it just comes naturally to participants in different parts of the Government to work with each other to understand each other’s perspectives. That can’t be legislated for; it has to happen through ongoing collaboration. That is part of the reason why we called for scaled-up work on areas such as war gaming, for example.

Q136 Sir Menzies Campbell: Are there any lessons to be learned from what they call "jointery" in the armed services-creators of the Permanent Joint Headquarters? Can any lessons derived from that experience be applied to your argument for the relationship between the Foreign Office and DFID?

Alex Evans: Yes, absolutely. I think the military have been a real cockpit of innovation on a lot of this. PJHQ, as you say, is a very interesting model. When I worked at DFID, I always felt that the Department could have engaged much more with PJHQ and that there would have been mutual benefits to doing so.

That is also why I mentioned the instance of war gaming. I have taken part in an MOD war game that was simulating post-war reconstruction in a fragile state. That kind of collaboration in, as it were, a safe environment is how you get this culture of jointness that I just referred to. It’s absolutely second nature to the military to do that kind of rehearsing the whole time. It’s not standard at all in DFID or in the Foreign Office, and I think that’s a kind of practice where civilians could learn a lot from the military.

David Steven: There is a convergence in-country as well, and I think that’s very helpful. In 1997, when DFID was formed, we saw this period where it was-"regressive" is maybe too strong a word, but it was very intent on establishing its individual identity.

Q137 Sir Menzies Campbell: It was being led by a very intent individual in the shape of the Secretary of State.

David Steven: It had this very clear and absolute focus on poverty, and it was less interested at that time in the institutional and political agenda. As DFID increasingly sees that change only happens when you get the politics right, that has moved it towards Foreign Office territory, while in fragile states the Foreign Office is having to look longer term at the kind of institutional changes that you need to stabilise a country.

I remember going from an embassy to a DFID office just across a compound-50 yards-and the head of the DFID office said, "You have come from the enemy." I think those days are long gone. You see in a country such as Pakistan, under the leadership of the high commissioner there, a real intent to get some cross-UK working in the country.

Q138 Sir Menzies Campbell: One last observation, really, rather than a question. I wholeheartedly agree with your view that we send people to difficult parts of the world and just at the moment at which they are at last getting their heads around what their responsibilities are, and understanding the nature of the task, we move them on. It doesn’t seem to me that that’s the best use of expertise or experience.

Alex Evans: That’s exactly where Rory Stewart was right in his question about length of posting to countries. This is where head count matters too, because although DFID’s budget has soared, its head count has reduced rather dramatically over the past few years. One consequence of that is that it’s very difficult for staff to get out of capitals. It’s very easy for them to spend all their time talking to opposite numbers in other donor organisations or in the Ministry of Finance, but getting out on the ground and seeing what’s happening-you need enough people to be able to do that.

Q139 Rory Stewart: Just to follow up on what you told Sir Menzies, there is a contradiction in what you’re saying. On the one hand you’re saying you want people to get more out of their embassies, spend less time in co-ordination meetings and spend longer in Pakistan. At the same time, you’re saying that career paths, the way that you get promoted and the way that you get honoured within the Department will depend on your ability to show your ability to work multilaterally, co-ordinate and work with other Government Departments, and that should be put in operation.

An ambitious person is going to take the message that you’re pushing across, which is that you don’t make it to the top of the Foreign Office of Evans and Steven by spending 10 years on the ground in Pakistan in rural areas; you make it to the top by showing yourself a fancy manipulator of international systems and working a wide game.

Alex Evans: That is a completely false dichotomy, and the examples that you see of that are the best SRSGs in the UN system. These are, at their best, people who combine deep regional knowledge with an ability to be interoperable-to talk military with the UN peacekeeping force commander, to talk aid with the donor community and to talk political mediation with the people doing that.

Q140 Rory Stewart: Can I just push back a little bit more on that? I know you’re going to want to say that we can have all these things together and that there are these wonderful people who combine it all. The reality is that how promotion is determined chooses certain things to prioritise. You can’t do it all; these are real choices.

The Foreign Office of 20 years ago, where you were promoted by speaking Arabic fluently and spending 20 years in the region, is completely different from the new US review, which you are holding up as a model, and the whole way that people’s careers will operate. That’s the trade-off.

David Steven: It is a complex world. If you are in Pakistan, it is not a country which is isolated. It is having a food and energy crisis, and that is one of the key determinants of what is happening in that country today. It is a global issue.

Alex Evans: I do not see why you can’t have both. I think we would echo what you have heard from some previous witnesses, who worry about the potential diminution of the role of research analysts in the Foreign Office. Some people here in London will have that real depth of knowledge about either an issue or a country. However, it is with interoperability where we most consistently fall down; we fail to see the linkages between issues. If we want to get on the front foot and move to a preventive stance, we have no option but to engage with that.

Q141 Rory Stewart: Let me try one last time, then I’ll drop this entirely. You say here, "the Government has to be sensitive to weak signals that warn of an impending crisis, embrace the complexity of both problems and solutions, and be committed to learning from failure." These skills are not going to be achieved by the kind of things that the American review is pushing. Such skills in a fragile or a failed state come from an entire culture that rewards and reinforces deep specific cultural knowledge.

If you take the contrast back, it actually operated better when 95% of the Foreign Office staff in London came from the foreign offices and those kinds of backgrounds. It operated better when the way that you were promoted was not through your performance on global issues, but through your specific immersion. The weakness of the past 15 years has been the absence of those things-not that we haven’t gone as far in your direction, but we have gone too far.

David Steven: We had this debate when we were writing the report. You could strip a lot of what happens in London and a lot of the global issues out. You could focus the FCO into a Department for geography, but then you need to put this other stuff somewhere else. You would effectively end up reinventing a Foreign Office or bits of the Foreign Office somewhere else in Whitehall, and that would seem stupid at a time when we need to take the Foreign Office up the Whitehall agenda. We need to turn it back into a core driver of policy making across Government.

Q142 Rory Stewart: What do you mean by "Department for geography"? That seems a little patronising as a way of describing area and linguistic expertise. Does that not actually reveal the whole attitude?

David Steven: I do not agree-I mean, a Department for geographical expertise. It sounds a lot like the point you have just articulated.

Alex Evans: David is right. We are not here to have a fight with you about what the Foreign Office is for. If we are in a zero-sum equation, where we only have half a dozen staff, of course we can have an argument about where to allocate those staff. What we are trying to say more is that there is a functional gap in the configuration of HMG overall.

We think, given its skills, that the FCO is a natural home for this. We also emphasise absolutely that we have got to get the head count right, which is where I agree with you that if we get into this zero-sum game of trade-offs, it gets much more difficult. However, this is what it will take to manage these global risks. It’s not at all to dispute anything you say about regional expertise being essential to deal with fragile states effectively, but we think that there is another thing that’s important here, which you haven’t yet acknowledged in your line of questioning.

Sir John Stanley: Of all areas of Government activity, diplomacy is probably more personnel-related than any other. As members of the Committee have seen, in country after country, the extent to which diplomacy is successful depends absolutely critically on the ability of our top diplomatic representatives to win the confidence, trust and respect of the key players in the country concerned. That requires people of considerable intellectual ability and a huge commitment to becoming knowledgeable about and commanding the language and customs, as well as having the knowledge of the detail of the way that the country in which they are serving operates.

The FCO today is under unprecedented financial pressure. I want to put this question to you: the Foreign Secretary has said, as a matter of policy, that he wants to preserve the global network of posts. Against the financial pressures, which must impact on the calibre of the people whom you can attract and retain and on the amount of resources that you will be able to devote to language training and so on, do you think that the Foreign Secretary’s wish and commitment to having a continuing global network for the FCO is realistic or illusionary?

David Steven: The network is too diffuse and diverse, and it is very difficult to decide what to do with that. You could end up having posts that are so small that they are not viable to deliver results. Some kind of move towards a regional structure, having clusters of posts working across issues, might allow you to do more with less, but this is a real problem. It is not a popular view in the Foreign Office, but I think that we should be prepared to prune if that is going to strengthen the places that are the highest priority for us.

Alex Evans: The FCO’s financial settlement is not all that bad compared with some other Departments at this point. It is interesting talking to diplomats within the Foreign Office. One view that I have heard from several of them is that if more resources are available than they might have expected a year or nine months ago, it would be preferable to spend those on strengthening some of the mid-sized missions rather than, necessarily, reopening some of the posts that have been closed down. The view is that there is a risk of being spread too thinly and, as David has said, beefing up capacity in some of the priority places might be preferable.

Q143 Sir John Stanley: A further question I want to put to you is that one of the classic ways of trying to square the resources circle with global coverage is by changing the balance between your UK-deployed personnel, who are much more expensive, and increasing the number of those who are locally engaged. Will you tell us whether you think that that is a sensible way to go? Clearly, in some respects, if you are employing local people, you get a second advantage-they are much less expensive. In addition, of course, they come from the country concerned, and so they bring with them a great deal of local knowledge. On the other hand, they are coming from outside the national FCO system. How do you see the FCO’s approach? Do you think that it is desirable to increase the proportion of locally employed personnel to expatriate personnel?

David Steven: It is particularly difficult when you end up with a strong separation in the post, because you have a large core of locally engaged staff, but they do not have the security clearance to be involved in many of the key policy discussions. That is a real problem. The best locally engaged staff, at quite senior levels, are often fantastic. In countries where the elite is small, they can be enormously well plugged in and provide extraordinary access. They have the depth of knowledge, and are often in post for much longer than the UK staff. So, it is not an unqualified "yes", but it is something that we are wise to do. We are very different from the French in moving down that route.

Alex Evans: I do not have anything to add.

Q144 Mr Baron: May I return to staffing arrangements? You have made it clear that you believe that the FCO should be more permeable-bringing in external civil servants, experts and so forth. You cite the US as one example. One of the advantages that you cite is that it would bring fresher ideas. Taking us back to basics, can you give us any concrete examples of where the FCO has fared badly with regard to how it operated in the past? How would your changing the staffing arrangements improve things?

Alex Evans: It’s more based on a sense that we’re allowing opportunities to pass by not having that permeability. One of the things that we call for in the report is a scaling up of the FCO’s capacity to do thought leadership to set global agendas.

An example of a success is the way that the Canadian Government set a global agenda on the idea of "The Responsibility to Protect". They pushed the International Commission on Intervention and State Sovereignty and then pursued it all the way through to the 2005 UN summit, where it was enshrined in the summit outcome document. That is a classic instance of a Government doing thought leadership very effectively. To be able to do that, it goes back to the theme of interoperability and working in coalitions with think-tanks, NGOs, other Governments, sympathetic international organisations and even the private sector. The more your diplomats bring that plurality, perspective and experience to bear, the easier it is to have such interoperability.

I think that’s the opportunity that is there for the taking. We could do thought leadership better, if we had more people with experience outside the diplomatic service. Does that answer the question? Basically, you are talking about missed opportunities, and that is a valid answer.

Mr Baron: Yes.

David Steven: This might be something that you’ll look into, but I’d be interested to look at the role of the FCO in global economic issues, not commercial, but economic. My sense is that there isn’t enough economic expertise in the Department as it’s currently configured. If we look at what might happen over the next few years, we might possibly see some sovereign debt defaults, and we might see some realignment of global currency imbalances. Clearly, that is one of the key drivers of our future, and I am not convinced that the Foreign Office has the expertise to navigate those issues.

Similarly, you need to understand how the resource agenda is likely to drive geopolitics as we begin to see countries competing for resources in what are often fragile states. That is another area where you need to bring in external expertise in order to understand the issues.

Q145 Mr Baron: May I play devil’s advocate for a second? I suppose that in some respects that goes to the heart of it. What I want from the Foreign Office is expertise on the ground, versed in the history, the language and the culture, so that it can be an advance radar warning screen, among other things. If there are any issues of which we need to be made aware as a country, we can deal with them accordingly and be proactive, rather than just reactive.

Being devil’s advocate, we want our Foreign Office to take on those extra functions, and I am slightly wary of the view that we can train our diplomats in economic and commercial issues. We don’t have a great track record on that. There is no shortage of diplomats who will say that it cannot be done successfully, but you obviously think that it can. In many respects, that goes to the heart of the role of the FCO in the sense that you think it lacks expertise, but I question-as I have said, I am playing devil’s advocate-whether we can actually achieve that. Surely it would be better to train civil servants in other Departments, such as the Department for Business, Innovation and Skills and the Treasury, in languages and send them off, rather than asking the FCO to take on extra tasks at a time when resources are being cut and there are question marks as to whether it’s achieving its core function anyway.

David Steven: I divide the commercial from the economic. Personally, I am not a supporter of the focus on commercial diplomacy. I hope that you will look into that, but I am not sure what evidence there is that diplomats can make that happen in country.

Clearly, when you talk about early warning systems, we don’t have the early warning systems to spot big events coming: it is obvious that we didn’t spot the food crisis coming; we didn’t see the economic crisis coming; we didn’t see 9/11 coming; and we didn’t predict what was going to happen in Iraq and Afghanistan. So something is clearly not working.

Q146 Mr Baron: Is that a function of the fact that we don’t have what I would call the traditional arts of the FCO in place in those countries-a deep understanding of what’s going on in those countries-as opposed to our trying to bring in extra expertise? Are we failing on the core function of the FCO in many of those areas? I think of Afghanistan and Iraq, at least in the early days, as one example of that.

David Steven: Again, you have to divide up your thinking about what happens in London, where I think you need a platform for synthesis, and what happens in country. I come back to the example of food and energy prices, because it’s on our minds at the moment. The oil price is going up, and food prices are higher than they were in 2008. This same force is playing out in very different ways across a number of different geographies. It has a very different impact in Nigeria than it does in Ethiopia or in Pakistan, but it is the same series of underlying forces. We need that country-specific expertise, but we need people who are able to see the broader interconnections.

Q147 Mr Roy: I want to ask about budget resources. In your experience, has the FCO’s ability to work properly been constrained by a lack of resources in the past?

David Steven: Yes, I think it has.

Alex Evans: Yes, it has.

Mr Roy: That was an easy starter.

David Steven: I think that some things are happening. It’s becoming more expensive to operate in many of the key countries. Security considerations mean that a lot of money goes into security, so, effectively, your productivity will inevitably fall, because you have to take on these expenses. The agenda is just growing. The world is becoming more complex and interlinked, and the international agenda is growing. The game changers for British citizens come from outside the borders. Once we get over this particular resource crunch within our own system, we have to be prepared to invest more. We have to try and find ways of doing both the cross-cutting stuff and the deep expertise in country. If we don’t do that, we are not going to be prepared for the world that we’re going to face.

Q148 Mr Roy: But in the short-term future, in relation to the FCO, do you see the strategic defence review having an adverse effect on the workings of the FCO?

Alex Evans: As I have said, I think the FCO, in some ways, got a better financial settlement than the one that it was expecting, but, as we have said, we think there is a case for really scaling-up the resources spent on this, and that, of course, hasn’t happened yet.

Q149 Mr Roy: Can I take you to the budget organisation in relation to what concrete difficulties you see being caused by the UK’s current departmentally based system for allocating international policy spending, as against a cross-departmental objective on programs that you touched on? Where do you see the happy medium?

Alex Evans: We would like to see a shift towards budgets being allocated to strategies rather than Departments. We think that would be a really powerful engine for coherence. Conversely, unless we are prepared to back efforts to improve policy coherence with resources, we are just talking. In some ways, the experience of the conflict prevention pool-now singular, but formerly plural-is a useful example of that. It has never really had an overarching strategy that sets out what its priorities are, and so it has instead become a bottom-up bidding-in process where everyone keeps off everyone else’s turf. It has never really been what I think it could have been.

The point, however, holds at the next level up. As I mentioned earlier, we don’t currently track across Government where we spend our resources, whether that is people or money or other resources, across global issues. We ought to do so, and, once we do so, that will be the first step towards then being able to take whole-of-Cabinet decisions about what our priorities, as the UK internationally, actually are.

Q150 Mr Roy: On a totally separate issue, in relation to your paper and the work of Members of Parliament, I was interested to see that you thought that there should be fewer Members of Parliament and that it would be better if there were mandarins speaking and that we should give up our local role. How do you think that sits with the Great British public?

David Steven: Badly. This is really difficult. The political incentives on many of these issues are very, very poor. The public do not understand what the drivers are, and they do not support further investment. That is something that we really have to confront, but we need parliamentarians who spend as much of their time as possible on national and increasingly international issues.

Q151 Mr Roy: Do you not think that the public would understand and forgive us even less if we started turning our backs on local work and making the bigger picture our priority?

David Steven: I think that it is a real problem. If you avert the risk, you get no credit. Look at the troubled asset relief programme in America. TARP has probably been the most cost-effective policy that the American people have had in a generation. It is costing almost nothing. It has subverted what could have been a terrible economic meltdown with political consequences that would have been disastrous.

Alex Evans: There is a clear example here, too, of swine flu. The Government did everything right. They pursued a very effective preventive strategy on swine flu and consequently were widely criticised for overreacting. That tells you everything you need to know about political incentives on global risk management-unfortunately.

Q152 Chair: On the final point, you are saying that Select Committees should also rejig themselves to go cross-departmental. I, as Chair of the Committee, sit on the National Security Strategy Committee. It is actually already happening.

It is a bit unrealistic to say that we should have more mandarin-speaking MPs. People vote for a political policy rather than the linguistic skills of the MPs. Do you not agree that it is just a touch unrealistic to ask the public to put aside what the manifestos of the party might say and vote for someone who can speak mandarin?

Alex Evans: We were illustrating a point playfully, rather than necessarily coming up with a recommendation.

Mike Gapes: Would you like to withdraw it?

Alex Evans: Much as I would like to go to my local CLP and tell the GC that they ought to be rejigging their selection criteria rather fundamentally, what we were trying to convey-and the point that we were just discussing-is that there is a problem with the fact that the public are much more interested in local issues on their doorsteps. It is easy to criticise politicians for spending too much time abroad-we say it the whole time. But our argument is that the international landscape is increasingly fundamental in shaping individual citizens’ prospects here in the UK, hence the issue that we all face of trying to engage publics in foreign policy. The legitimacy issues that came up with Iraq, particularly, mean that there is a remedial aspect, too.

Q153 Chair: I do not seek to criticise you. In fact, it is quite an effective way of making your point about cross-cutting issues.

How do you think the Treasury will feel if the Foreign Office were invited to take the lead on budgetary control of a certain area, which includes the Treasury?

Alex Evans: Our vision is of the FCO as a driver of synthesis, in some ways functioning as part of the centre of the Government, not as a line Department that has managed to wrest control of its budget from HMT. There is a vibrant debate in domestic public service reform about how to use budgets to drive improved policy coherence. The whole move towards public service agreements under the previous Administration was part of that, and lots of the work in places such as the Institute for Government is about taking that forward.

One of the perceptions that prompted us to start on this was that, in Labour’s first term, there was a great push towards joined-up government and a lot was learned through that experience. But the joined-up government discourse largely bypassed global issues. When we look back at the original British Academy publication that set that agenda in motion, it was very much about public service delivery here in the UK. We talked to some of the architects of that agenda: people such as Geoff Mulgan and Vernon Bogdanor, and said we felt that there was unfinished business on the international front. I think that, by and large, they were sympathetic to that view and felt that useful things could be done by applying some of that agenda to the global context.

David Steven: Getting the relationship between the Treasury and the Foreign Office right, given that it is not right at the moment, is a real priority. It seems to be very difficult for those Departments to work together effectively, and I think it’s important that they do so. We have lived through an era in which the Treasury has become increasingly dominant over domestic policy. I am not an expert on domestic policy, but that seems to have driven some coherence. We need the FCO to have a similarly clear role internationally, and we need those two Departments to work together more effectively.

Q154 Mike Gapes: David, you and I met many years ago and, in the context of this subject, you have just triggered something in my mind. You were doing the review of the Westminster Foundation for Democracy, and I was fighting hard to save it from the effect of your review. I remember that, at that time, one of our big criticisms was of this Treasury tick-box mentality and the fact that the Treasury put an accountant in the Foreign Office whose job was to fit into the Treasury model of how an organisation should function, but that doesn’t in any way take account of the realities of foreign policy. Given your experience now and your history-you know a little bit about these things-how would you assess that Treasury domination of the Foreign Office at that time?

David Steven: I have a slightly different historic interpretation of the Westminster Foundation for Democracy review.

Mike Gapes: I’m sure you do.

Sir Menzies Campbell: History is like that.

David Steven: Yes. For me, it was very much about the institutional arrangements and where the money came from and where it was funnelled through, rather than the Treasury tick-box mentality. It’s clearly important to find a way of evaluating results across these complex areas. You can’t not do that-it is a recipe for complacency. I think that nothing the Treasury has yet suggested has proved effective in the foreign policy arena.

Q155 Mike Gapes: Do you mean the public service agreement model?

David Steven: Yes, absolutely. I think that, in evaluation terms, we often end up asking the wrong question. On many of these issues, you need to do a smaller number of things-10 or 12 things, rather than 20 or 30. You need to therefore put more investment into them, and you need to expect maybe only one or two of them to demonstrate success but for that success to be dramatic enough to justify the rest of the portfolio. We may be going a bit off track here, but some of the current emphasis on value for money is looking for a 6% return on every single investment you make, which is an absolutely impossible way of measuring foreign policy.

Mike Gapes: We agree on that.

Q156 Andrew Rosindell: Will you say something about the non-state sector? NGOs are increasingly important in the work that Governments do. Many things are, effectively, devolved to them, but, often, Government funding is there somewhere. Could you assess how effective we are in working with them and how the Foreign Office engages with them? How should we improve that relationship with the NGOs?

Alex Evans: There is quite a lot of room for improvement on that front. I absolutely agree with the premise of your question that non-state actors are increasingly central to foreign policy. David and I have mentioned the idea of coalitions, which is central to our report-the idea that you need diverse coalitions to push for the kind of global frameworks we want to see. Non-state actors, be they NGOs, faith communities, the private sector or whoever, are essential in that.

In the Foreign Office specifically, it’s not always clear where that’s supposed to happen. In the US model, the policy planning staff have a very clear mandate to bring, as it were, news from elsewhere. Here in London, policy planning oscillates a little bit on this, depending on who runs the team at any particular time. Sometimes it’s very open, runs a lot of seminars and really does bring a lot of perspectives from outside, and at other times it doesn’t. I think that recently it has probably been towards the latter end of the spectrum, but we absolutely argue that the more the FCO engages with civil society actors, the more opportunities there are.

David Steven: We have written quite a lot on public diplomacy. We have seen some quite interesting developments in public diplomacy over recent years. First, we have seen an end to the idea that public diplomacy is effectively about selling the reputation of the country as a branding exercise. I think that’s gone, which is all to the good. We have begun to see within the FCO a much broader, innovative and creative approach to public diplomacy, but it is still seen as an end-of-the-line function. The core policy making gets done within the traditional diplomatic sphere, and then there are these other chaps who sit down the corridor and work on public diplomacy. I think we are moving towards a world where it is recognised that what is currently seen as public diplomacy is the diplomatic agenda and state-to-state diplomacy is just one element of that. You see that very much in country.

To give a concrete example-back to Pakistan, I’m afraid-the UK is currently very engaged in the debate in Pakistan over the general sales tax, a VAT-like tax, which is seen as the key way of widening the tax base in Pakistan, propping up the public finances and providing some social sector spending. In order to be influential in that debate it is not enough to talk to the Government. The Government are won over on that issue. You have talk to the media. You have to talk to parliamentarians. You have to create a whole atmosphere around that debate. If you talk to the high commissioner, that is what he sees his role as doing. That is what he is out there trying to do. So he is working in a fairly seamless way across Government and non-Government audiences of all kinds, clustered around that and trying to achieve a result on that particular issue.

Q157 Andrew Rosindell: Do you think NGOs are the best way to achieve our objectives? Do you think we should do more with the NGOs, engage with them more and give them more projects to work on via HMG, or do you think that we have gone as far as we should go and perhaps NGOs have become too powerful and too influential?

Alex Evans: It depends on which objective we are talking about. Clearly, if we were talking about non-proliferation, for example, the role for NGOs might be relatively limited. If we are talking about climate change, the ability to shape opinion and set agendas makes them natural partners for us.

Q158 Chair: On public branding, we have been looking at this in the context of the opportunities posed by the Olympics to rebrand Britain. Would you agree that that is an exception to the point you are making?

David Steven: Yes. Some of these very big events, such as the Expo in Shanghai, may provide an opportunity for a brief uplift. I am a bit out of date on this but I think even for these big sporting events the evidence is that the effect can be quite transitory. I think the Germans got a big uplift after the World Cup, but then they ended up back where they were. I am sure you have talked to Simon Anholt. He uses the idea of a big truck on which the wheels have been taken off. You just cannot push these brands that are already very fixed in people’s minds that easily. How important is it when you are talking about prioritisation and you have so many other crucial issues to deal with?

Q159 Chair: Great. I thank you both very much. If your object was to make us think, you have succeeded. You cut across conventional thinking as well as proposing cross-cutting issues. It is very much appreciated that you have taken the time to come to see us.