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

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

FOREIGN AFFAIRS COMMITTEE

THE ROLE OF THE FCO IN UK GOVERNMENT

MONDAY 7 FEBRUARY 2011

RT HON WILLIAM HAGUE MP, SIMON FRASER and ALEX ELLIS

Evidence heard in Public

Questions 249 - 331

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Oral Evidence

Taken before the Foreign Affairs Committee

on Monday 7 February 2011

Members present:

Richard Ottaway (Chair)

Mr Bob Ainsworth

Mr John Baron

Sir Menzies Campbell

Ann Clwyd

Mike Gapes

Andrew Rosindell

Sir John Stanley

Rory Stewart

Mr Dave Watts

Examination of Witnesses

Witnesses: Rt Hon William Hague MP, First Secretary of State and Secretary of State for Foreign and Commonwealth Affairs, Simon Fraser CMG, Permanent Under-Secretary of State, and Alex Ellis, Director, Strategy, Foreign and Commonwealth Office, gave evidence.

Q249 Chair: I welcome members of the public to this hearing of the Foreign Affairs Committee. It is the fifth evidence session for the Committee’s inquiry into the role of the Foreign and Commonwealth Office in the UK Government, and it is scheduled to be the last. It will allow us to question the Foreign Secretary about his conception and experience of the FCO’s role. He is accompanied by the Permanent Under-Secretary, Simon Fraser, and the new director of strategy, Alex Ellis.

Foreign Secretary, I welcome you here yet again. This is the third time in six months, and you are booked to come a fourth time in about six weeks’ time.

Mr Hague: It is a pleasure. I can’t keep away from you.

Q250 Chair: We cannot complain that you are ignoring us.

Is there anything that you would like to say by way of an opening remark?

Mr Hague: I am happy to go straight into the questions. I am sure that we can cover everything.

Q251 Chair: You have set out your thinking about the role of the Foreign Office in a series of speeches, which have attracted a lot of comment, interest and attention. You have said that you want to see the Foreign Office "at the heart of government." That seemed pretty obvious to all of us. Would it matter if it wasn’t?

Mr Hague: Yes, it would matter enormously, because the foreign relations of this country are vital to our security, of course, but also to our prosperity. It is important that foreign policy "runs through the veins" of all Departments, which is a phrase that you will have seen me use, if you have looked at those speeches, as you obviously have. In the modern world, foreign policy particularly requires connections between countries in education, culture and economic policy, and working together on development aid and climate change. It therefore requires Departments across the board to be engaged in its execution.

Unless there is a strong Foreign Office in the middle of all that, helping to lead the ideas, and helping with the execution of all those things and the analysis of each country-with that analysis being worked on and supporting the policy of Departments across the board-government as a whole is weaker for it. Unless there is a strong Foreign Office in its relationship with the Prime Minister, it is possible for Governments-one might argue that we have seen this at times in the past-to make important international decisions without full use of the expertise that a Foreign Office is meant to muster. So, it does really matter.

Q252 Chair: When you were the shadow Foreign Secretary, you accused the Foreign Office of institutional timidity and made other similar remarks in that vein. What have you done to change that culture inside the Foreign Office?

Mr Hague: As my colleagues will attest, I have underlined to the Foreign Office that it now has an opportunity that will not come around very often. The planets are in alignment for the Foreign Office in political terms. We have a new Government-always an opportunity for an institution or Department to establish itself strongly, whatever party makes up the new Government. That is not a partisan point. We have a Prime Minister well disposed to the Foreign Office being at the heart of government. We have a Foreign Secretary dedicated to that task and used to working closely with the Prime Minister to make sure that a wide range of foreign policy advice is listened to.

There is a real institutional opportunity for the Foreign Office at the beginning of this coalition Government, and I have urged everyone throughout the Foreign Office to respond to that opportunity. In daily terms, that means I am trying to ensure that our thinking and that which we transmit to other Departments through the National Security Council or in our bilateral working with those Departments is ambitious, gives a lead and shows what ideas the Foreign Office can come up with.

It was not only an accusation that I made when shadow Foreign Secretary, but I found on becoming Foreign Secretary that there was a habit in some respects of being too timid in the drafting of ideas for the whole Government. The Foreign Office was sometimes used to trying to find out the wishes of other Departments rather than saying, "Here is a concept from the Foreign Office to which everyone might like to work". Over the past eight months, I have therefore sent back a lot of papers for further work to make sure that the Foreign Office is not being timid. It is blessed-something that we might come on to-by some outstanding people, so all the raw material is there for the Foreign Office to be a confident, well-equipped, highly informed Department at the centre of government. I think that it had slightly got out of the habit of asserting itself, and I am trying to put that habit back into it.

Q253 Chair: Do you think the problems were political? Were they institutional or were they cultural? What was the cause of the timidity and the lack of assertiveness?

Mr Hague: Primarily political. Again, I am not making a partisan point because it could be said about several Administrations. Prime Ministers have often got into the habit of not using the Foreign Office to the extent that it should be used. We now have a Prime Minister who is happy to break that slightly institutionalised habit. It is a political problem, I think.

Q254 Andrew Rosindell: Good afternoon, Foreign Secretary. One of the things you first said when you became Foreign Secretary was that you intended to put the "C" back into FCO. Could I ask you, therefore, to reflect on your recent visit to Australia and New Zealand?

Mr Hague: Thank you. I am not astonished that you ask about the Commonwealth. I am pleased that you do, because it is part of what we are doing in the Foreign Office. We have started by having a Minister with clear responsibility for the Commonwealth, who is passionate about it; that is Lord Howell, as you know. He has long championed a reinvigorated role for the Commonwealth. One of my predecessors, Sir Malcolm Rifkind, is serving on the eminent persons group, which is doing a good job-but we haven’t got its final report yet. From what I’ve heard it’s doing a very good job in producing ideas ahead of the CHOGM, which is at the end of October in Perth, Australia. The pleasing thing I found in Australia is that the Australian Government have real ambition for that meeting. They don’t want it just to be business as usual in the Commonwealth. They are looking for new ideas out of the eminent persons group that they can really push forward at that Heads of Government meeting.

There is a ready reciprocation of our enthusiasm to do more with the Commonwealth-to use it more. I took the opportunity to give a speech at the Lowy institute in Sydney, primarily about the Commonwealth and what a remarkable network it is, in a networked world, and how as it turns out-I was quite surprised to hear this to begin with-the members of the Commonwealth are doing more and more of their trade with each other, just because of the way the world economy is developing. Therefore the Commonwealth can become a greater centre of ideas and networking, and, perhaps, of setting higher standards and pushing them forward more energetically within the Commonwealth itself, on governance and so on. So the short answer is that that is a long way of saying there was a lot of enthusiasm in the Australian and New Zealand Governments, and more broadly, about our enthusiasm to see the Commonwealth do more.

Q255 Andrew Rosindell: Could I ask you, Foreign Secretary, what plans you have to translate that enthusiasm into positive steps to build closer co-operation with Australia and New Zealand, and, indeed, Canada? With the closure of many high commissions and embassies around the world, has the Foreign Office-or have you-considered the possibility of sharing facilities with countries with which we have so much in common and which are perhaps less foreign than many other countries that we have to deal with?

Mr Hague: Well, I won’t try to get into which countries are more or less foreign than others. We will deal with them all in the Foreign and Commonwealth Office, but there is an opportunity-exactly on the point that you make-in particular with the countries that you mention, because with those countries we have certain intelligence relationships and so on that make it easier to share facilities. I did discuss that with my Australian and New Zealand counterparts.

We are not planning on closing many embassies or high commissions, I can tell you; we might want to come on to that in the course of the discussion. In fact, I am planning on opening a few. But nevertheless it is true that as the shape of our deployments overseas changes we often end up with surplus space in our buildings, and so do some other countries, so there is certainly an opportunity to make ourselves more efficient over the next few years by, with countries like those, sharing embassy or high commission locations-and not just with those countries, because the same could be done with European countries. There are one or two sites that we share with Germany now. So there is scope to do this with other nations as well.

Q256 Andrew Rosindell: Before moving on, could I just ask one specific topical question? You would probably have been horrified, as we all were, to read in the newspapers over the weekend the case of Said Musa of Afghanistan, who is likely to be executed in the next couple of days for his conversion from Islam to Christianity. Can I ask what representations Her Majesty’s Government are making, to try to avoid that cruel execution that is being proposed by the Government of Afghanistan?

Mr Hague: We have already made strong representations about this. Alistair Burt has particularly taken this up. We of course don’t agree with the death penalty; it is British Government policy to oppose the death penalty in all circumstances overseas and that is certainly true in this case. It is unacceptable in this case. It will cause enormous offence in this country and many others, and I can certainly let the Committee have a more detailed description of everything we have done about it so far.

Q257 Chair: Thanks very much. Coming back to the main line of questioning, can I take you now to the role of the National Security Council? It is newly set up, and you have stated that you wish to use the influence of the Foreign Office very much channelled through the National Security Council. Would you like to give us an update on how you see it going so far, and whether you think it’s functioning in the way that you want it to?

Mr Hague: I think it’s going very well, and you have heard, of course, from Peter Ricketts in the course of your current inquiry, who has given you quite a bit of information about how it is working. It works well because its meetings are so frequent and regular-we normally meet every week, and sometimes more than once a week-and because it is treated by the Prime Minister and all of us as the true centre of decision making on all the matters that it deals with. As you know, Whitehall responds to where decisions are really made, and you can have all the committees and structures that you want, but if you make the real decisions outside those structures Whitehall will find that the actual channels of communication and decision making will lead to that informal place. The Prime Minister strongly believes that national security decisions are made at the Cabinet table-in this case, in the National Security Council.

It works, I think, and it brings the Cabinet Ministers, not just the Foreign and Defence Ministers but a wide range of Ministers, including the International Development Secretary and the Energy and Climate Change Secretary, together with the Chief of the Defence Staff and the heads of the intelligence agencies on this very regular basis, so that we become very familiar with each other’s views about the whole range of international and national security topics. I think that that has already helped to give greater cohesion to Government policy, particular on very difficult issues, for example on Afghanistan and on the detailed handling of relations with Pakistan, which needs our bilateral friendship and support in so many ways. With relationships such as those, which cut right across many different Departments, it has helped to give that cohesion.

The Foreign Office plays a crucial role; I think that about half the papers that have gone into the National Security Council so far have come out of the Foreign Office. We are responding to the need to play a, if not the, leading role among the Departments in the National Security Council. This is one of the areas that I was really referring to earlier. I don’t hesitate to send papers back if they’re not good enough to play that leading, formative role in Government thinking on the part of the Foreign Office. So, I think that the Foreign Office has already raised its game to be able to do that.

Q258 Chair: You say that major decisions are made there, and you have mentioned Afghanistan. From looking at the evidence you gave us the other day on Afghanistan, it would appear that although the decision to withdraw troops by 2015 at the latest might have been made by members of the National Security Council, it wasn’t made in the National Security Council. Could you confirm that it wasn’t made in it, and tell us why not?

Mr Hague: Members of the National Security Council have all discussed and debated that, and the Prime Minister will be familiar with all their views. He spoke about our intentions for 2015, with my, the Defence Secretary’s and the Deputy Prime Minister’s readiness to support and implement them; so, the decision was made in that way.

Q259 Chair: Fine, but you can confirm that the decision wasn’t actually made in the council.

Mr Hague: It wasn’t a formal item in the National Security Council.

Q260 Chair: Just going back to the more general theme, have you fine-tuned the Foreign Office thinking at all? Has it adapted to the fact that it now tries to make major decisions through the Foreign Office? Is there a change-

Mr Hague: Through the National Security Council.

Chair: Through the National Security Council.

Mr Hague: Yes. The Permanent Secretary might want to add to this, but yes, the Foreign Office has certainly responded to that. It means working closely with the National Security Adviser of course, and that’s a fairly easy thing for the Foreign Office to do because the adviser is the immediate past Foreign Office Permanent Secretary. But I take care, for instance, to have a weekly meeting of my own with Sir Peter Ricketts, including our Permanent Secretary, so that the work of the National Security Council and the Foreign Office is well integrated.

There’s one other aspect of the National Security Council that I should mention as of great importance to us, which is the creation of the National Security Council emerging powers sub-committee. It may sound like we are getting into details here, but for those who want to understand how decisions are being made-it is very important to us-that is a sub-committee of the National Security Council, which I chair and which looks at the management of our relations with up to 30 nations that one can put into the category of emerging economies and emerging powers, making sure that across Departments, we are giving them the appropriate level of energy and priority. That is working very well. For instance, it met last week, looking at the relationship with the Gulf states. It has helped to drive more than 40 ministerial contacts with Ministers of the Gulf states so far in the new Government. That is much broader than security, of course, because it is helping us to make sure foreign policy runs through the veins of all Government Departments-to use that phrase again-but from the point of view of the Foreign Secretary, that is an important part of the NSC machinery.

Mr Ainsworth: Forgive me for being late, Chairman. My train was late-I blame the Government, personally.

Mr Hague: Or the last Government.

Q261 Mr Ainsworth: No, not the last one; this one. I walked in just in time to hear you say how very important it is to take decisions in Cabinet or in the National Security Council and not off to the side, if you want the machine to work and if you want the machine to respond to the decisions that are taken. I don’t disagree with that at all, yet you then said in response to the Chairman that the decision about what could arguably be the biggest change of policy between this Government and the last Government with regard to Afghanistan, which has got to be the most important foreign policy issue, wasn’t actually taken in the National Security Council. Anybody who looks in detail at the statements that were made by the Prime Minister, yourself, the Defence Secretary and others over a period of time could be forgiven for believing that not everybody was consulted before that decision was taken and that indeed the decision was taken in a pretty haphazard fashion, with the language changing all the time, people slightly disagreeing with each other and then eventually the Government settling on a clear line and a clear form of words, but only after some time. That is a complete contradiction of what you have just said is the ideal-that the decision would be taken in the National Security Council. The Prime Minister actually talked about a deadline for the first time when he was in Canada, to Adam Boulton during an interview. Can we just and are we not entitled to know how that very, very important decision was taken-why it was taken, how it was taken and who was consulted before it was taken?

Mr Hague: There’s no contradiction or complete contradiction here. Afghanistan was discussed in detail quite exhaustively in the early weeks of the new Government. In fact, we held, if I remember rightly-

Q262 Mr Ainsworth: At Chequers.

Mr Hague: A National Security Council meeting at Chequers, yes, within the first few weeks. There were outside visitors to that meeting. We spent pretty much a whole day on it, and then there was a whole series of other meetings. We normally discuss Afghanistan every two weeks in the National Security Council, given the importance of the situation and the extent of the British deployment there. So the Prime Minister is intimately familiar with the views of people in the National Security Council about all the major aspects of the campaign in Afghanistan. It would be wrong to think that such things as the length of-

Q263 Mr Ainsworth: Forgive me. So he will have known whether or not they were opposed to deadlines, will he not?

Mr Hague: The Prime Minister will certainly know whether there is a degree of enthusiasm about such a thing. So I would not want you to run away with the idea that the whole shape and length of the Afghanistan campaign had not been discussed in the National Security Council and that somehow it was all discussed in some other place. That would be an inaccurate understanding of the situation. But in terms of actually announcing that this was to be our policy, the Prime Minister-bearing in mind all the views expressed in successive meetings of the National Security Council, and in close consultation with some of the members of the National Security Council, including me-made his statement about 2015. So I think that certainly counts as collective government and Cabinet government.

Q264 Mr Watts: Following the same point, Foreign Secretary, do I take it from what you have said that you believe that informal discussions are a replacement or as good as a formal decision? It seems that conversations did take place between different members of the National Security Council, but the decision itself was not taken by that body. If so, when we publish our report, you will see that we believe that that deadline has implications that have not been spelt out by the Government. Is that because this decision was not taken properly?

Mr Hague: No, not at all. As you can gather, the National Security Council ensures that a far greater range of national security and foreign policy decisions are taken in quite a formal way-in a more formal way than would have been the case under most Administrations in recent years. That does not mean that everything will be signed off in a formal way. Some things are also the subject of discussion between the coalition parties. That is not always within the formal structure of such committees. Some things are decided because it is necessary to make an announcement rather than have another meeting of the National Security Council, or whatever relevant committee, based on discussions that have already taken place in those committees. It would be unrealistic to expect that every decision in government is based around the exact timetable of the meetings of Cabinet Committees, but they should certainly be based on having explored all the expertise of those committees. That would be true in the case of everything we have decided so far about the Afghanistan campaign.

Q265 Mr Watts: I think we would accept, Foreign Secretary, that not every decision can be taken like this, but if it is a fundamental-the biggest-shift in policy, surely that is part of a formal decision making process rather than something that is done ad hoc? What criteria will be used for the subject of an official decision by the National Security Council versus an informal decision? It seems to me that this is one of the most important decisions to be made, and it should have been made through the proper channels, which you actually believe in, set up and support, yet when you come to a real, main decision, you decide to do it informally.

Mr Hague: As you can gather from what I have been saying, it is a much more complex picture than that. Afghanistan is the subject that has been the most discussed in the formal structures of government designed for international relations and security. Anything and everything that we have announced about Afghanistan has been based on those discussions in the formal machinery of government, so I do not accept that this is a major departure from that.

Q266 Sir John Stanley: Foreign Secretary, I think we would agree that, historically, the Foreign Office has a patchy record in arriving at correct judgments, particularly those involving security issues. Sometimes it has correctly warned, and at other times it has very seriously misjudged the degree of threat facing this country. Do you have confidence that the creation of the National Security Council will significantly improve the quality of judgment on security issues that the Government as a whole are going to make and you as Foreign Secretary are going to make? I think we are all rather conscious that the British Government, like Governments around the world, have all been more or less caught cold by Tunisia and the potential domino effects of that.

Mr Hague: I suppose only time will tell whether it helps with judgments. That is an analysis that we will have to do in a few years’ time. Certainly, the National Security Council helps to make sure that the information and expertise is in front of the right people. It makes sure that we are used to discussing matters-in the case of early warning about what happens-not just between the Foreign Secretary and the head of SIS and GCHQ, and the Home Secretary and the head of the Security Service. We are all used to discussing these things together, so we can all see the cross-fertilisation of ideas and intelligence. We can hear different streams of reporting and thinking. That should help Government and ministerial leaders to bring their judgment to bear properly. So it ensures that we can all see the relevant information and discuss it together.

Q267 Sir John Stanley: Are you satisfied, Foreign Secretary, that under the new arrangements intelligence coming before Ministers will never again be glossed and that if intelligence is subject to necessary qualifications and uncertainties those will always be disclosed to Ministers?

Mr Hague: Yes, I am satisfied about that. I see intelligence reports every day. As you will know, in the light of reforms made after the Butler report those reports include any necessary qualifications about the reliability of the sources involved, as far as they are known, and about whether information comes from a single source or multiple sources. So I think that those qualifications are very transparent to Ministers as we read through our boxes at night.

The additional advantage of the National Security Council is that the varying perspectives of our three intelligence agencies are brought to the same table on a regular basis-a weekly basis-as well as through the Joint Intelligence Committee, of course. The JIC is there as well, but we do not have to rely solely on its summary. We can hear more of the raw material from the heads of the agencies themselves and form our own view, in addition to the JIC being able to have its view. So, from what I have seen so far, I am confident. The answer to your question is yes.

Q268 Mike Gapes: Foreign Secretary, when you came into government this time the Conservative-led Government decided not to merge the Department for International Development with the Foreign and Commonwealth Office, whereas on the two previous occasions DFID or its equivalent had been abolished. Why did you decide this time that you wanted to keep a separate DFID?

Mr Hague: First, both the coalition parties have been committed to that arrangement for some time, so we were honouring that commitment that we would not change that arrangement again. Secondly, I have to say personally that I am not a great fan of reorganising the machinery of Government, in terms of Government Departments themselves, on a regular basis. I think that that reorganisation takes up a vast amount of time and resource, and it should only be done when absolutely necessary. Thirdly, I think that DFID has developed a good, strong reputation in the world and in Britain, and it is entitled to be able to carry on its work. Fourthly, the International Development Secretary, Andrew Mitchell, and I resolved to create a far better working relationship between the FCO and DFID, and I think that we are succeeding in doing that. That working relationship has not always been great. It has even been absent altogether at times in the past, possibly in the run-up to the Iraq invasion. It is dramatically better now. I have drilled it into our officials that DFID are our best friends and Andrew Mitchell has the same message for his officials in DFID.

For instance on Sudan, on which we have done so much work in recent months, DFID Ministers and FCO Ministers and officials have worked seamlessly together in trying to ensure that there is no resurgence of conflict in Sudan. The relationship works well, despite there being two Departments.

Q269 Mike Gapes: Can I press you on that relationship? The strategic defence and security review referred to "a mandate to improve coordination of all UK work overseas under the leadership of the Ambassador or High Commissioner".

Does that mean that in practice DFID officials in a particular country are working directly under our ambassador or high commissioner?

Mr Hague: It means they are working with the ambassador or high commissioner.

Q270 Mike Gapes: But it says "under" in the SDSR.

Mr Hague: That depends on whether it is for operational or policy reasons. In fact, the Permanent Secretary is doing a body of work on this at the moment, so perhaps he should expand on that.

Simon Fraser: Yes, I am happy to. I have been discussing with my colleagues in other Departments and in agencies overseas exactly how we can give expression to that commitment in the review. We are in the process of agreeing a set of common principles that we will send to our people in the field. Those will clarify the responsibilities of the representatives of different Departments in countries and make it clear that they are co-ordinated under the overall leadership of the Foreign Office representative in that country, who is there representing not only the FCO, but HMG as a whole. I am confident that we will reach agreement on that shortly.

Q271 Mike Gapes: What happens in a country where we do not have a resident ambassador or high commissioner, where there is a senior DFID operation spending several million pounds, but the ambassador is somewhere else in the region, or even where we do not have a post at all in that country? What happens there?

Simon Fraser: I do not think that there are many such cases. There are some cases where, for example, there is a DFID programme in a country where there is not an embassy. In those cases, DFID sets its own objectives for its responsibilities on the delivery of its programmes in that country. There is co-ordination and discussion on the policy and the purposes of those programmes with the Foreign Office.

Q272 Mike Gapes: Is there a possibility that a senior person from DFID could take on the role in such a country that might otherwise have been taken by a high commissioner or ambassador?

Simon Fraser: It is certainly clear that if they are not a Foreign Office representative, there will not be an FCO head of mission as such, but they can have a role in representing the country through their work.

Q273 Mike Gapes: But you get my point-that you can have an ambassador or a high commissioner who is covering several small islands in the Pacific or the Caribbean, or some countries in francophone Africa, or former Soviet Union countries, who is 500 or 1,000 miles away.

Simon Fraser: Absolutely. The objective of this whole exercise, Mr Gapes, is to try to get away from the concept that different people are representing different Departments and should do so without reference to the interests of the Government as a whole or other Departments. That applies to all Departments.

Mr Hague: To be clear on what it says in the SDSR: it is a mandate to improve co-ordination of all work overseas, under the leadership of the ambassador, representing the UK Government as a whole. We are talking about effective co-ordination. It does not mean that ambassadors are deciding on DFID policy priorities.

Q274 Mike Gapes: Final point on this. You are publishing this cross-Government strategy paper. On my brief it says that that will happen in the spring. When will it be published?

Simon Fraser: Sorry?

Q275 Mike Gapes: There is a cross-Government strategy that is supposed to be published in the spring, on the co-operation between the FCO and DFID. I thought that was what you were referring to.

Simon Fraser: I was referring to the specific agreement, which is being discussed now, to elaborate the commitment on page 667 of the review.

Mr Hague: And that will go into the paper. It is part of the work of that paper, which we will publish.

Q276 Mike Gapes: I am trying to tease out when in the spring we will see that paper.

Mr Hague: It is too early to say; we are only halfway through the winter. The paper will emerge.

Q277 Mike Gapes: Will it be before the Budget or after?

Mr Hague: Probably after the Budget. We have not set a date for it yet, but it will come.

Q278 Ann Clwyd: As someone who in opposition worked on splitting up the FCO and creating DFID, I am particularly interested in the way it has developed. There are still continuing frictions between the two Departments, as to who takes the lead in certain circumstances. It was a difficult relationship in Iraq, for instance, when DFID published certain things in the run-up to the election, which were unsuitable for the electorate they were addressed to. I saw a lot of waste of money. In budgetary terms, how much discussion is there on whether certain information leaflets should be published, or whether certain PR exercises should be undertaken? Has that improved in any way?

Mr Hague: I hope those things are improving. We have established excellent relationships at the top between the FCO and DFID. That makes itself felt in Sudan, on which we work closely together, and in Yemen, where Ministers and officials work intimately together. Alan Duncan in DFID and Alistair Burt in our Department work together very closely on the problems of Yemen-the Friends of Yemen process. That means that DFID is able more easily to allow for security and foreign policy considerations in the decisions it makes, while still of course making its own decisions.

We have established all that; you are going down to the next level-making sure that the Departments work productively together-on which some work has been done. Certainly, there will be scope for co-location, where previously that has not been brought about, and hopefully for other economies between the two Departments. Simon, do you want to add to that point?

Simon Fraser: The record of working together closely in-country has improved very much recently. In addition to co-location, we have been working to ensure that there is equivalence in the terms of conditions that we are offering our staff, for example, which has been an issue in the past. In those ways, we are coming together effectively to combine our presence in-country.

Q279 Ann Clwyd: There was a curious piece in the paper last week about the decision to spend £1.85 million of overseas aid on the Pope’s UK visit. Were you involved in that? Did you, as well as DFID, have to pay for the Pope’s visit? Why would either Department be called upon to pay for that visit?

Mr Hague: We certainly contributed towards the Pope’s visit. Again, Simon, do you want to tackle this one?

Simon Fraser: The costs of the visit were divided between Departments on an agreed basis, and the Foreign Office made a considerable contribution.

Q280 Ann Clwyd: What was the rationale? If another overseas cleric decided to have a tour of the UK, would you also be required to pay for that?

Mr Hague: If they were a guest of the Government, yes, we would help to pay. But remember, the Pope is a head of state too, and that was the equivalent of a state visit, so it is not surprising that Departments were involved in financing it. It is certainly not surprising that the Foreign Office was involved, and that was an entirely appropriate use of its resources.

Q281 Ann Clwyd: Although someone from DFID said, "Our contribution recognised the…church’s role as a major provider of health and education services in developing countries." The role of the Catholic Church in developing countries is, of course, a moot point, particularly when it comes to population and the Church’s attitudes towards it.

Mr Hague: We could have a huge discussion about the merits of the policies of the Catholic Church. On the Pope’s visit to the UK, we found that there was a great deal of common ground about development aid objectives and climate change issues. DFID got a lot out of that visit in terms of co-operation with what is-whether you like it or not-one of the most influential organisations in the world. It is right that this country makes the most of that.

Q282 Andrew Rosindell: Foreign Secretary, while I completely accept the decision that DFID and the Foreign Office should remain separate, there is one area where there is an argument that DFID funding should be administered by the Foreign Office: territories that we govern. How can it be justified that DFID controls money that goes to British territories when, ultimately, your Department has the final say? We have seen the months of to-ing and fro-ing between the two Departments in achieving the necessary finances for the Turks and Caicos Islands, and, similarly, with St Helena and the airport. Shouldn’t that all be under one Department-the Foreign Office?

Mr Hague: I don’t think it would bring about any great improvement if we put it under one roof. I don’t think these decisions have been slow or held up. In fact, the decisions have been made very quickly about the airport for St Helena. There have been difficult decisions about the financial support for Turks and Caicos, but they have been made in a timely way. I don’t think it has complicated that relationship.

It is DFID that has the budget to do these things on a substantial scale. We have, in the Foreign Office, a smaller amount of money to support the administration of overseas territories, which I have just increased in the programme spending decisions that I announced last week to £7 million a year. The kinds of things that you are talking about require much larger sums, and those things therefore have to be drawn from the DFID budget, not the Foreign Office budget.

Q283 Andrew Rosindell: But isn’t there potentially a conflict of interest, when the overseas territories department in the Foreign Office is ultimately responsible for governing these territories, compared with other countries that DFID is funding that we don’t govern and are not responsible for? We are simply aiding those countries. Isn’t there a clear difference? Surely it is right that we treat British territories differently from foreign countries.

Mr Hague: Where DFID contributes resources, it must be associated with the economic development of those places. We treat them differently to some extent; the arrangements for Turks and Caicos are not ones that you would normally find in an independent nation supported by the Department for International Development. I think we treat them differently, but where resources are given on a large scale, such as for the airport in St Helena, that is for the economic development of an underdeveloped part of the world. I think it is wholly appropriate that it comes from the DFID budget. You can argue in different directions how this should be organised, but I haven’t encountered any serious problem in its being organised as it is now.

Chair: Menzies, did you want to come in? I cut Menzies Campbell off when he wanted to ask a question on the National Security Council.

Q284 Sir Menzies Campbell: I don’t want to labour this point too much. With the recent evidence of Chilcot ringing in our ears, I take it that the approach now is to provide a proper paper trail of decision making, particularly minutes when important decisions are taken. Is there a minuted decision about Afghanistan and the date of withdrawal?

Mr Hague: There will be many minuted decisions about Afghanistan.

Q285 Sir Menzies Campbell: What about the date of withdrawal? Is there a minuted decision?

Mr Hague: I do not look back at the minutes; you may have to ask the Cabinet Secretary about that at some stage. But the decision making process is the one I described to Mr Watts and Mr Ainsworth earlier. I think you will find, whenever Committees or inquiries look back in the future at what we have done, vastly more of a paper trail than has been the case in the past, in general.

On the question of the NSC, can we supplement that? Simon can speak about what we’re doing within the Foreign Office to support the NSC process. I think we could have answered that more fully when I talked about it 20 minutes ago.

Simon Fraser: Chairman, I wanted to come back to your question about how the Foreign Office was adjusting its performance in order to serve the NSC, because I think that is quite important. We have made a number of changes to meet that requirement. I myself am leading the policy input from the Foreign Office into the NSC process quite actively, and I represent the Foreign Office at official level in the preparatory discussions.

We have established a new strategic policy group within the Foreign Office, in which all leading officials at director general level meet every fortnight to discuss specific policy issues together, bringing all the different angles to bear. We have established, under Alex Ellis, a new policy unit, which is a successor to the old policy planning staff, which I think Jeremy Greenstock talked about in his evidence to the Committee, to try to ensure that we are focusing policy inputs from across the Department together to give the highest possible quality input to the papers for the NSC. I have just established, alongside that, a new economics unit to give economic thinking greater central salience in the policy making of the Foreign Office. In a number of ways, I hope that we are, as the Foreign Secretary said, raising the game of the Foreign Office to meet the challenge that the NSC poses to us.

Q286 Mr Baron: Foreign Secretary, global themes-whether climate change, energy security or, I suppose, health-are being raised up the Foreign policy agenda. We have heard evidence to suggest that the UK Government suffer from the lack of an organisation that can conduct strategic policy analysis across a series of global policy issues. Do you share that concern? Some of the evidence that we’ve heard would also suggest that the Foreign and Commonwealth Office likes to sit in its comfort zones of bilateral agreements and overseas networks and would have trouble shifting in this direction generally. Do you share that fundamental concern?

Mr Hague: No, not really. I’m not one of those who think that all strategy is sorted out if you have some all-singing, all-dancing strategy unit for the Government. In fact, this has been tried, of course, under some previous Administrations, without any spectacular success: think back to the central policy review staff of the 1970s and that kind of structure. However, the challenges you described do require Government to work well across Departments through the National Security Council structure, which addresses those cross-cutting themes, as well as bilateral relations. The National Security Council emerging powers structure also addresses those themes.

I would say, to take climate change as an example, that British diplomats and those who work with them have done a very good job in the last year through a mixture of performing well multilaterally-the Energy and Climate Change Secretary went to Cancun and did a very good job in the negotiations-and bilaterally, with British work in some of the developing countries helping to change attitudes, and British work with China over the last couple of years helping to push certain countries in what we would regard as a more positive direction on climate change. The Foreign Office seconded people into the actual Mexican chairmanship of Cancun, where they worked with the Mexicans for several months.

A good, healthy mixture of bilateral working, focused on a major multilateral event at Cancun helped to produce desirable results; they were solid results, and although they weren’t everything we wanted, there were definitely some major steps in the right direction. That is the way to approach it. I don’t think that setting up an additional special unit across Government on climate change would have enhanced that, provided that all the Departments worked together well.

Q287 Mr Baron: Can I pursue that in respect of climate change? My understanding is that, under the SDSR, the FCO leads for the Government on the security implications of climate change. Where does the FCO get its information? What specific role does the FCO’s chief scientific adviser have in that process?

Mr Hague: We have a special representative on climate change, John Ashton, whom I think you may be meeting tomorrow.

Mr Baron: We are.

Mr Hague: He, of course, has access to the expertise of Government across the board. He works very closely with the Department of Energy and Climate Change, so the Foreign Office can draw on the full expertise of that Department and outside expertise; there’s no difficulty doing that. We don’t have to have our own parallel expertise. What the Foreign Office really brings to the table are the connections in other countries and the analysis of decision making in other countries about climate change-that’s where the Foreign Office comes in. In this case, these two Departments have so far worked successfully together.

Q288 Mr Baron: Briefly and finally, can I turn to the issue of budgetary organisation? Richard Teuten and Daniel Korski gave evidence in the 2010 Royal United Services Institute paper that the departmental nature of budgets and budgetary accountability inhibits cross-departmental working. The Committee has heard other evidence to suggest that the UK’s international budget should be organised by strategy, not Departments. What scope, if any, do you see for the further development of interdepartmental budgeting for international policy issues?

Mr Hague: There is a good deal of scope. Again, my colleagues may wish to comment on this. The conflict pool is a good example of interdepartmental budgeting, and of the FCO and DFID working together. Several hundred million pounds a year goes into the conflict pool. Through the National Security Council we are able to take a broader view across Government of where our resources are being directed.

Pakistan is a very important country in terms of our diplomatic relations. It is also a country in which DFID has announced a sharp increase in development aid for the next few years. There is clear coherence in the policies of Government towards Pakistan and to the importance that we attribute to its economic development and political stability. That does not require us to hold a budget for relations with Pakistan. It requires the Foreign Office and DFID to be working successfully together.

It is important, in seeking co-ordination, not to lose accountability, because Parliament will always want to be able to interrogate the accounting officers about how money is spent. It is important not to lose sight of the importance of not only good strategies but of really solid bilateral relationships that help us to deliver those strategies. It is the Foreign Office that has to have control of the resources that control those relationships.

We did look at this idea-in opposition, too-of a single budget for everything under the NSC, but the difficulty you then come up with is that you would still have to divide it into at least as many divisions as we have now. It wouldn’t really bring about greater simplicity.

I can turn to the accounting officer, on my left, to expound further.

Simon Fraser: I think I agree with that. The budgets have to be linked to organisations. If you were to pool them, you would inevitably go through some organisational change to ensure that accountability followed the budget. It would probably be more complicated to do that than to pursue a policy, as the Foreign Secretary described, of driving for closer co-operation between Departments which, as I said in discussion with Mr Gapes, I think we are achieving.

Q289 Mr Baron: I suggest somewhat glibly-I address this to Mr Fraser-that there could be a temptation to ease the FCO’s budget by taking an organisation like the UN and splitting the budget accordingly, given that it is very international in the many policy areas that it covers. Dividing the budget would help the FCO’s budget. But, obviously, that would be far too radical.

Mr Hague: Obviously, we regard that as a splendid idea.

Q290 Mr Baron: We are trying to be helpful here, you understand-it would certainly ease your budget somewhat, wouldn’t it?

Mr Hague: But it still has to come from the taxpayer.

I am happy overall with how the Foreign Office is provided for. I think we have the right spending settlement, which is essentially a flat cash settlement for the next few years. Of course, we bear the brunt of international subscriptions.

Q291 Mike Gapes: May I take you further on that? Isn’t it strange that the Foreign Office pays the affiliations not just for the UN but for the OECD, the OSCE, NATO and the Council of Europe-all come out of the FCO budget-yet international subscriptions, as you know very well, are subject to currency fluctuations? If we, as the UK, are playing a big role in an organisation, you get things like additional contribution requests for certain activities. Isn’t it wrong that the Foreign Office’s budget is subject to these difficulties?

Our predecessor Committee made this recommendation in the previous Parliament, so I’m not saying anything new to this Government, but isn’t it about time that we had an international subscriptions section, to pay international subscriptions and so not put pressure on the FCO’s budget in a particular year because of variations in the dollar or euro exchange rate?

Mr Hague: You are very welcome to keep on making that case. It would certainly relieve pressure on the Foreign Office budget if we did that, but it would only be replacing it with a different pressure on the overall Budget of the country, so it is not really a radical solution to anything.

You are right about all the complications of exchange rate fluctuations for the FCO. It spends money in more than 120 currencies. This is why I was so critical of the last Government for abolishing the overseas price mechanism-

Mike Gapes: As we were.

Mr Hague: As your predecessor Committee rightly was; and we have reintroduced a foreign currency mechanism, which is at least as effective as the overseas pricing mechanism in protecting the Foreign Office against exchange rate fluctuations.

Q292 Mike Gapes: May I press you on that, Foreign Secretary? It doesn’t take account of inflation though, does it?

Mr Hague: It doesn’t take account of inflation, no, but it does take account of exchange rate fluctuations; and, of course, in a country with rampant inflation the exchange rate is going to devalue pretty fast on average. In that sense, it is built into it.

It does take account of exchange rate fluctuations, it is a complex and automatic model for doing so, and it brings real certainty back into the budgeting of the Foreign Office. The cuts made in the Foreign Office from 2008 to 2010 were unplanned reductions, just because the exchange rate moved. We will not be confronted with that in future because we have restored the proper exchange rate protection of the Foreign Office.

Q293 Mike Gapes: But my point about international subscriptions is that because we are permanent members of the Security Council, it would be very difficult for us to reduce our contribution or to withhold it, although I know that the US did it once. We are expected to pay a certain proportion; yet if we want to reform the UN and change the way that it works, we sometimes probably need to be in the forefront by making additional contributions because we wish it to move in different directions. Isn’t that an impediment for the FCO, because of exactly the pressures you are well aware of, to its being as active on the reform agenda if it knows that it has to use its own budget to meet part of the cost?

Mr Hague: Not really, no. In the case you give of reform of the United Nations Security Council, any sensible reform will bring more countries on to the Security Council and create more permanent members. It is likely that the financial burden for the United Kingdom, if we accomplished reform, would be reduced rather than increased.

If I was at the Treasury and discussing this with the Foreign Office, I would say, "Well, we do want you to have an incentive to control spending in the United Nations." It is important that a Government Department has that. Our diplomats have done a very good job in the current year in restraining additional spending within the UN, in controlling the supplementary budget that the UN bureaucracy asks for each year. The Foreign Office has a powerful incentive to take part vigorously in those discussions, because we have to pay the subscription.

You can argue this either way, and I really shouldn’t resist the Committee’s arguing for a change at some point, but it is not a magic solution to change it. The principle in Government is that whichever Department is most concerned with an international organisation pays the subscription to that organisation. Clearly, in bodies such as the ones you describe, the Foreign Office has the prime interest in those organisations.

Q294 Mr Watts: Foreign Secretary, given that all Ministers these days have some involvement with Europe, why is your own Minister still connected to the Foreign Office? Why not the Cabinet Office?

Mr Hague: The Foreign Office is coming back into its proper role in the determination of European policy. This is an important angle but, actually, it has not been much discussed in Parliament so far.

We have created a European Affairs Committee of the Cabinet, which I chair, through which all European policy is cleared and co-ordinated. That is a Foreign Office-led Committee. Clearance of policy on Europe by writing to Ministers comes to me for signature. In addition, the Foreign Office secretariat on Europe and the Cabinet Office secretariat now do their work jointly, removing duplication that previously existed and sharing reports. That means, for instance, that the Prime Minister’s adviser on European policy now copies his advice to the Foreign Secretary, which was not previously the case.

The Foreign Office is in a more central role in the determination of European policy, and arguably has a more central role than at any time since we joined the European Union. The structure of decision making includes not only the European Affairs Committee that I chair, but a ministerial group at Under-Secretary and Minister of State level that takes care of more of the day-to-day decision making, as necessary. It makes sense for that group to be chaired by the Minister for Europe-which it is-and for the Minister for Europe to sit in the Foreign Office.

Q295 Mr Ainsworth: Foreign Secretary, the performance reporting regime that you have agreed within Government seems to be the same regime as that which applies to domestic Departments. Is that appropriate for the Foreign Office, which is different in so many ways?

Mr Hague: On performance reporting, I will defer to the Permanent Secretary.

Simon Fraser: Do you mean the setting of objectives and business planning for the Department?

Mr Ainsworth: Yes.

Mr Hague: Oh, I thought you meant the staff appraisal. You mean the business plan. Yes, I think it is appropriate. Clearly, the content is somewhat different, and more of the work will be labelled "ongoing." It may be highly desirable to reach an end point and bring the middle east peace process to fruition, but we can’t necessarily guarantee doing that in a particular month. It helps to bring transparency to what we are doing, and to bring into line the internal organisation and external presentation of our work.

Simon Fraser: Could I add one point from my perspective? Going back to the earlier discussion about having objectives and co-ordination in countries, it is important that our ambassadors in different countries have a clear business plan, a clear understanding of their objectives in relation to that country, and that they set clear specific objectives that they can work for and task their staff to achieve. I think it is useful.

Q296 Mr Ainsworth: I don’t demur from that, but when you are dealing with domestic issues, there has been a trend in recent years-I don’t know whether you agree with this-to move from outputs to outcomes in terms of the way we measure and apply targets to Departments. I can see how that applies easily and appropriately to an intern in a domestic Department. If you are talking about the police, or something like that, targets could be, "Disrupt so many gangs and organised crime", or "Stem the supply of cocaine," and so on. However, when you are talking about the Foreign Office and start trying to apply outcomes-"Stop the growth of poppies in Afghanistan", for example-the appropriateness of those outcomes is somewhat vague. I would have thought that perhaps there is a need for a different regime and a different method of measurement.

Mr Hague: I think there is an element of truth in that. Nevertheless, it depends how we express the desired outcomes. They must be expressed in a realistic way, and people have to judge the performance of the Foreign Office. Where outcomes are difficult for international reasons, or rather intangible, we have to trust people to be intelligent enough to judge things with that in mind. The alternative would be to not be geared to outcomes, and to not put those outcomes so much into the public domain, but that would be undesirable. If we use outcomes intelligently, and people judge them intelligently, it is fair enough.

Alex Ellis: Some of our work is measured by outcomes-I’m thinking of the consular side where we have requirements set by Parliament that you can measure us against. If you’re sitting in a post in Portugal, as I used to, those outcomes are extremely helpful in driving the work of the consular part of the organisation.

Q297 Ann Clwyd: I wanted to talk to you about the new commercialism at the FCO. I think Mr Fraser’s appointment is widely looked on as underlining the FCO’s new emphasis on commercialism. The media have reported that a number of other steps have been planned or are under consideration, such as the appointment of business leaders as ambassadors, a requirement that ambassadors tour UK regions doing road shows to highlight commercial opportunities for UK companies in their host countries, and the appointment of British business leaders as non-executive directors, particularly of US embassies overseas. Is there a risk that the new emphasis-it is a very strong new emphasis-could detract from other aspects of your diplomatic effort; for example, your big personal emphasis on human rights?

Mr Hague: There were several questions there. You quite rightly identify the emphasis that we have placed on commercial diplomacy, which has led us to set up a commercial taskforce within the Foreign Office. Indeed, Simon joined us from the Business Department, although he was long-steeped in the Foreign Office before doing so.

That emphasis is motivated by the fact that the patterns of world trade are changing very quickly, and that Government spending is clearly not going to be the engine of economic growth anywhere in Europe for many years to come, and so the expansion of trade is absolutely vital to our success as a nation. Foreign policy should support economic policy in helping to establish those stronger trading links, particularly where we need to make them much stronger-with so many of the emerging economies in Latin America, Africa, south-east Asia and so on. It is motivated by that.

I see that emphasis as being integral to our wider goals. It is not just about commerce, because the strategy that we adopt for each of the emerging powers in our NSC emerging powers sub-committee involves building up educational links, cultural links, defence co-operation if appropriate, and diplomatic links with those countries. The expanded commercial links are part of the elevation of this country’s entire relationship with the type of countries that I am talking about. It does not take away from those goals; it is an indispensable part of building up closer foreign policy co-operation and everything else.

That goes alongside our emphasis on human rights. I gave a speech at Lincoln’s Inn in September about how human rights are integral to what we do, but also go along with the case for an independent judiciary, for a system based on the rule of law in overseas nations and for people being able to be confident that there is not arbitrary government. The development of stronger commercial links goes alongside those things.

At no stage in our conduct of policy do we reduce the emphasis on human rights for any commercial reason. In all the dialogue that this Government have so far had with China, we have of course discussed expanding our commercial links, as did the last Government, but we also always raised human rights cases, as did the last Government. Those things go together, and a foreign policy that did not have that commercial emphasis, and which was not strengthening that commercial emphasis, would be in a weaker position to bring about all our other goals and to make stronger links with the growing powers of the world.

Q298 Ann Clwyd: But how many ambassadors are going to be business men? Do you have any targets?

Mr Hague: Sorry, you asked some detailed questions. I hope that some will be. We advertise some positions for people to apply for from whatever walk of life, and we have recently done so. I do not want to break a confidence about an appointment that is in the middle of being made, so I will ask the Permanent Secretary, who is more intimately familiar with where those appointments are, to expand on that, but we advertise for people to come in from other walks of life.

We should not be starry-eyed about that. It is important to have vital diplomat skills, to be able to work across Governments and to know how machineries of government work, as well as to have a business sense to be a successful ambassador in most countries. Of course, I hope that people will come in from the private sector. Simon, do you want to expand on that?

Simon Fraser: There is not much to add. All our ambassadors’ positions are first of all advertised across Whitehall to other public sector organisations. In certain cases, where there is a particular requirement for specific skills-for example, business skills-we advertise more widely and, indeed, there are cases ongoing in which that has happened. I cannot yet reveal the outcome of those competitions, but we are making a deliberate attempt to ensure that, when it is appropriate and where we can attract skills that we do not have, we absolutely seek to advertise in a way that attracts those skills.

Mr Hague: The other thing that is required is consciousness by Ministers of what can be done to build up our trading links with other nations. The Prime Minister and I have asked that, whenever we are meeting Ministers from other countries, we should be informed of major issues, how to improve market access to that country and whether there is a major contract for a British company that is being discussed at the time. Even if the Minister for Education, the Minister for Sport or whoever were visiting that country, we want to make sure that they are also conscious of such things because they will meet people who they can influence in a way that is helpful to British business. We are bringing the emphasis on commercial success for the UK into not only the work of our ambassadors, but the work that we do as Ministers.

Q299 Mike Gapes: Foreign Secretary, we are now in the position where, for several years, there has been a reduction in the number of UK-based staff in your Department, and a proportionate increase to two thirds of locally engaged staff. Is there a limit to this process? Are you concerned that you might reach a point where you have quite senior posts when you have locally engaged people and that that might not be appropriate?

Mr Hague: There is a limit, of course, and that is an issue we must watch carefully, particularly in senior posts. Nevertheless, it is important that we all recognise that the locally engaged staff in the Foreign Office around the world do a fantastic job for this country. I have met so many of them in my travels over the past nine months and am enormously impressed. As you know and well understand, how much we can use locally engaged staff will vary from one country to another. It can be more difficult in countries where our relationships are particularly difficult or have major security implications. There is a limit, but we should not be dogmatic about it and say that we have necessarily reached that limit if we can continue to become more cost-effective in some areas.

Q300 Mike Gapes: The chief operating officer, James Bevan, told us in November that UK-based staff can now expect to have one posting abroad compared with one in London, whereas the ratio previously had been two abroad to one in London. Is there not a danger that that means that we have less knowledge within the in-house team of people?

Mr Hague: I think that he was referring to the more junior positions in the Foreign Office rather than the rotation of senior policy-making people.

Q301 Mike Gapes: He said UK-based staff. I think that it was an average of the whole.

Simon Fraser: This is particularly in relation to the more junior UK-based staff who, in the past had more opportunity, it is true, to serve overseas than is currently the case. The reason is that, given the resource restraints that we have encountered over recent years, we have had to look at the most efficient, cost-effective ways of being represented overseas. It is true that, in some cases, things which used to be done by UK-based staff are, as you indicated, being done more by locally engaged staff. One consequence is that we can offer fewer overseas postings for the more junior staff.

Q302 Mike Gapes: I do not know whether you can confirm that this is the case, but I have been told that you do not have more than one person on your Afghan desk in the UK who actually has experience of being in Afghanistan.

Simon Fraser: It is true that an issue has been raised about the amount of expertise that we have of people who have served in-country on the desk, but that is a different issue if I may say so. In Afghanistan, we send out a number of staff on relatively short tours, because those are the terms we offer in Afghanistan. We try to benefit from that experience, but that’s a different issue, I think, from the sending out on posting of junior UK-based staff more generally around the world.

Mr Hague: There’s one other factor that would come into play here, which is that we are now trying to strengthen policy expertise in the Foreign Office in Whitehall itself. That will, of course, require some of the people with that policy expertise to spend longer in the UK and so that factor will come into play to some extent. It’s not the main part of what you are talking about.

Q303 Mike Gapes: Can I switch focus to the way in which members of your staff manage their career progression? We’ve been told-and I don’t know whether Mr Fraser would want to comment on this, given that he is an example of people managing their careers, in a sense-that you’ve gone too far towards letting diplomatic service staff go into other areas, and in fact there isn’t a strategic direction. There should be more strategic direction as to where people go.

Mr Hague: Into other areas? Which other areas?

Mike Gapes: Within postings or particular countries. The priorities should be managed more by the Department than by the individual persons.

Chair: Before you answer, Foreign Secretary, I just want to let you know I am going to suspend the sitting in two minutes’ time.

Mr Hague: Okay; I’ll let Simon answer that.

Simon Fraser: There are two issues here: there’s one about encouraging our staff to get experience in other organisations through secondment, which is something we have deliberately tried to do-both inward and outward. In my own case I found that very enriching. There’s another issue, which is about how we manage expertise in the organisation, to make sure, for example, that if we invest in language training with somebody we actually try to help them-

Mike Gapes: Use that skill.

Simon Fraser: We try to help them develop their career to use that skill. I would accept, in fact, that we need to refocus on this. It may be that in allowing people to, as you say, manage their own careers and bid for jobs we have perhaps moved a bit too far away from focusing on maintaining particular cadres of expertise within the organisation. We are actually looking at that at the moment.

Chair: We are now adjourning for the Prime Minister’s statement at half-past 3.

3.22 pm

Sitting suspended.

4.30 pm

On resuming-

Chair: Foreign Secretary, we will continue. Mr Gapes was halfway through a line of questioning.

Q304 Mike Gapes: Can I ask you about the advantages and disadvantages to the diplomatic service of the interchange of personnel with other Departments, secondments into and out of the civil service, and permanent external appointments into the FCO from outside the civil service? What’s your assessment of the impact of those arrangements?

Mr Hague: They are desirable, in general, and there might be scope to push them further. Simon might wish to expand on that.

One of my main concerns in our first few months in office has been to increase the number of our civil servants who have experience in European institutions. We are restarting the European fast stream, as well as encouraging people who have never been in our civil service to go into the European institutions. We’ve held events for universities, to encourage that to happen. There is scope for more interchange between Departments, between the Foreign Office and DFID, and between the Foreign Office and the intelligence agencies. I encourage that kind of attitude and there is, of course, as I think we were discussing earlier, scope for external recruitment into Foreign Office positions. The Permanent Under-Secretary made the position clear on that.

Q305 Mike Gapes: When you bring people in from other Departments, are you content with the administrative and budgetary arrangements? Are they in need of revision or reform, or would it be better to have a new cross-departmental, cross-governmental external service of people from, say, the Home Office and other Departments-some of which you’ve mentioned-who are prepared to serve in posts in other countries?

Simon Fraser: May I take this Mr Gapes? I have two points. First, we do bring people in from other Departments on interchange. That works effectively, and I don’t think that we need to review the administrative arrangements, although it is true that with the recruitment freezes that are in place in the civil service, movement between Departments is a bit slower than it has been at some points in the past.

Q306 Mike Gapes: So, if you take someone from the Home Office, the job isn’t then filled.

Simon Fraser: Well, I think that Departments have to think about their work force structures. The second point, I’m sorry, was-

Q307 Mike Gapes: On the question of whether there should be a cross-governmental service.

Simon Fraser: The point that I wanted to make about that, repeating the point that I made before, is that certainly in the Foreign Office all senior jobs are now routinely advertised across Whitehall. So, we are constantly making vacancies available for people from other Departments to apply for, and in that way we can access that expertise. I don’t think that it would be necessary to look at a single cross-governmental external service.

Q308 Mike Gapes: Can I take you back to the earlier line of questioning, in which I asked you about locally engaged staff? Are there any specific posts that you believe it would be not appropriate for locally engaged staff to do?

Mr Hague: I don’t think we have any posts where it is not appropriate to have any locally engaged staff, but there are posts where it is appropriate to keep a higher proportion of UK-based staff.

Mike Gapes: When I said posts, I didn’t mean missions I meant jobs. I’m not being very clear.

Mr Hague: Sorry, I took posts to mean locations.

Mike Gapes: Are there any jobs that you feel it would not be appropriate to fill with someone who was locally engaged?

Mr Hague: Well, the ambassador or high commissioner has to be a UK-based member of staff. Simon, do you want to add anything?

Simon Fraser: It is of course correct that our senior people have to be UK based, but there are other jobs within embassies or posts for which there are particular security requirements or functions and which it would not be appropriate for locally engaged staff to take.

Q309 Mike Gapes: Do you have a list of the jobs that are available and the jobs that are not?

Simon Fraser: We do not have a specific list at present of individual jobs around the world that are or are not appropriate, but we do look at them as we consider the appropriate staffing of all posts around the world.

Q310 Mike Gapes: Okay, thank you. I’ll move on to the current role of the overseas network. You alluded to it in your opening remarks, when you talked about possibly establishing some additional posts in different countries. Do you have a strategic view, do you just basically take each country on an individual basis, or do you have a vision of regions or types of countries where we ought to be doing more and other places where we ought to be doing less?

Mr Hague: We do have a strategic view and we are working on that in detail at the moment. I indicated in the House last week that we will make an announcement in a couple of months’ time about that. The detailed work is going on now. The patterns of economic, political and diplomatic power in the world are changing, so we will need to adjust our diplomatic weight to take account of that. As I also said in the House last week, the context of those changes is that we will not be reducing the overall size of our diplomatic network. It is very important to retain Britain’s global presence and so we will do that.

However, we will need to adjust our diplomatic weight and we will do that in accordance with five principles. First, we are sticking to the principle of no strategic shrinkage; secondly, we will be deploying sufficient resources to seize the opportunities for prosperity that the emerging powers provide, as well as protecting our security; thirdly, we will enhance our ability to promote our values and our influence; fourthly, we will strike a careful balance between deepening the resources in emerging giants such as India and China and other emerging powers in Latin America and Asia, and widening resource so that we have enhanced bilateral relations with some smaller countries that we have neglected for too long; and fifthly, we will maintain close historic bilateral relations, which we have with many countries across the world and which remain essential for promoting our interests in a networked world. So we are working to that set of criteria and an announcement about the strategic view will come within the next couple of months or so.

Q311 Mike Gapes: Will you also take into consideration the growth of the EU’s European External Action Service and the possible implications that that might have?

Mr Hague: I don’t think that will lead us to say that we can cut back in a particular area because the EEAS will be there.

Q312 Mike Gapes: No, but we might have fewer people in a particular country than we might otherwise have had.

Mr Hague: No, I certainly haven’t come to that conclusion on anywhere so far. The EEAS is meant to work with and to support the work of national diplomatic services. But as you know, it is not our view that the EEAS in any way takes over the work of our diplomatic services, so I do not envisage cutting back on our services in any way because of the presence of the EEAS.

Q313 Mike Gapes: Is it viable to have a post where we have only two or three UK-based staff?

Mr Hague: It is viable, yes. There are some such posts that do very good work, because in some it is appropriate to have a high proportion of locally engaged staff. Simon, do you want to give any examples of that?

Simon Fraser: I think that we have quite a number of posts where we only have a relatively small number-two or three-of UK-based staff. In a number of our embassies around the world, that is the case. It is important to ensure that we give our UK-based staff the type of support that they need. For example, we are looking at whether posts where we have only one UK-based member of staff are really sustainable.

Q314 Mike Gapes: How many of those are there?

Simon Fraser: I can’t give you a precise number.

Q315 Mike Gapes: Perhaps you could write to us.

Simon Fraser: I am happy to write to you about that. However, the underlying point is that we are reviewing whether that situation is appropriate and indeed whether it is fair on the individuals concerned in some cases.

Q316 Sir John Stanley: Foreign Secretary, I am sure you will agree that the Foreign Office has a particular responsibility towards its locally engaged staff by virtue of the fact that overseas those individuals are, like the rest of the diplomatic service, standard-bearers for the UK but at the same time they have a degree of vulnerability that UK-based staff do not have, because by and large they do not have diplomatic immunity. I am sure that you are aware that there have been very disturbing instances in recent years in both Iran and Russia where our locally engaged staff have been subjected to really quite intolerable treatment, by way of threats, intimidation and indeed in some cases-in one case, I think-actual prosecution. Will you take a fresh look at what you can do to provide a greater degree of protection for locally engaged staff? In particular, will you look at the provisions of the Geneva convention on diplomatic immunity, which provides some degree of latitude for individual posts to confer diplomatic immunity on particular locally engaged staff on an individual basis, where they are felt to be particularly vulnerable to threat?

Mr Hague: I am happy to look at all suggestions on this. I feel strongly about this, as you obviously do. The former Foreign Secretary remonstrated very strongly with the Iranian Government in particular, and he was quite right to do so, about the abuse of locally engaged staff. I’ll certainly have a look at the issue you raise. I don’t think, from memory, that it is easy to give blanket immunity to large numbers of people in that way, but I’m open to all suggestions, of course, to improve the protection of our locally engaged staff.

Q317 Sir John Stanley: When you’ve done your look, could you write to the Committee and tell us your views as to whether anything further can be done?

Mr Hague: Yes, happily. We certainly will.

Simon Fraser: As I recall, Sir John, Sir Peter Ricketts was engaged in some correspondence with you on that point as a result of one of his earlier appearances. I’d like to look back at that correspondence, if I may, and then follow it up.

Chair: And down from the frozen north-Rory.

Q318 Rory Stewart: First, many apologies for missing the first part of the meeting, but I was stuck in the snow. Foreign Secretary, if we can just focus on staff development, why did you feel that the diplomatic excellence initiative was required?

Mr Hague: The Foreign Office has made many improvements in management in recent years, and that’s well reflected in staff surveys, where the proportion of people in the Foreign Office who think they’re in a well-managed organisation has gone up very sharply, to become a majority. It’s important to retain improvements in management and how we look after people, but it’s also important to make sure that the diplomatic edge-the cutting-edge abilities of the Foreign Office-in negotiation, analysis and in-depth knowledge of countries and regions and the ability to produce policy ideas are accentuated, without losing, as I say, the improvements that have taken place in management. We need to make sure that the Foreign Office is a centre for diplomatic excellence. In the drive to improve management, that sometimes received less emphasis that it should have. I feel we are now correcting that and giving a proper emphasis to diplomatic excellence.

Q319 Rory Stewart: Are you planning to shift the core competencies that determine promotion to reflect your new emphasis on geographical expertise?

Mr Hague: Certainly, we will place a greater emphasis in the coming years on such matters as hard languages, as having served in difficult postings-[Interruption.] Interesting music coming from somewhere; I was surprised for a moment.

Sir Menzies Campbell: I thought you needed context.

Mr Hague: Yes, there’s a definite overseas theme to the chimes there. I was talking about accentuating the emphasis placed on hard languages, difficult postings and in-depth geographic knowledge. It’s necessary to have a really strong representation of those things in the top management of the Foreign Office in future years.

Q320 Rory Stewart: Could we look at the technicalities of the promotion competencies? At the moment, obviously, people have to go through this very formal process to get promoted. Is there anything you could do to adjust that so the core competencies reflected the new emphasis?

Simon Fraser: We have an assessment and development centre process for people to make certain critical jumps in their careers. That is one of the things that has helped to achieve the improvements we have achieved in the way we run the organisation and in its leadership. That is based on some core competencies, which include, for example, strategic thinking, the personal impact of the individual and the leadership skills of the individual. What is important is that, in evaluating those competencies, which I am not proposing to change, we take full account of the expertise, language skills, the career track record of the individuals concerned when we make appointments and fit people to individual jobs.

Alex Ellis: Having done one of those centres and being an examiner on one of them now, one of the changes that we have made is to filter candidates for those going to the senior part of the civil service in the Foreign Office by having them do two papers before they can apply to go on one of these assessment centres. One of those is strategic thinking, because that is thought to be so essential to being a credible candidate. Also, whether someone passes or fails strategic thinking is a very good guide to whether they will pass or fail overall. That in a way is slightly showing that you have to be capable of doing that before you can even get on to one of these centres, and that sends out a signal as well.

Q321 Rory Stewart: Hypothetically, Foreign Secretary, if there was someone who was not able to pass that exam and get into the senior management stream, but had a very strong background or interest in a particular region, or great linguistic skills, is there something we could do to give them more honour, prestige or position in the Foreign Office? Understandably, they wouldn’t end up in a senior management position, but a role would be created for them, in a way that many organisations do for specialists, without their feeling that they are second-class citizens.

Mr Hague: Yes, I think it is worth looking at developing the flexibility to do that to a greater extent.

Simon Fraser: I agree that we should look at that and ensure that where people have specific expertise, we don’t lose that.

Q322 Rory Stewart: Finally-this is a slightly cheeky question-at the FCO leadership conference, what proportion of the time was spent discussing foreign policy?

Mr Hague: Quite a lot, I hope. At the last leadership conference, which was in July, the Prime Minister, the Deputy Prime Minister, the Chancellor and I all spoke. We all spoke about the policies that we wanted to see pursued in the new coalition Government. The four keynote speakers, as it were, all spoke about policy, the wider policies of the Government and the place of foreign policy in that. I spoke about the type of foreign policy that I wanted us to develop. Certainly, in all the interaction that the leadership conference had with Ministers, it was very policy-orientated.

Simon Fraser: In last year’s leadership conference, that was absolutely the case. There was a particular economic focus, because that’s where the Government placed the focus at the time. As it happens, Mr Stewart, I chaired a meeting this morning to discuss the agenda of the next Foreign Office leadership conference; Alex Ellis was there as well. On the agenda that we are working on this year, the clear majority of the discussion is going to be focused on foreign policy issues.

Mr Hague: We have just had the senior leadership conference about two weeks ago, when the whole of my session with them was on policy analysis.

Q323 Chair: To pick on a current example of the sort of skills that are needed by diplomats overseas, what sort of early warning did you get about Egypt and Tunisia? Did it come from the post, or did it come from other sources?

Mr Hague: I feel that there was a reasonably early warning, not in terms of the precise timing-the Egyptian authorities themselves were not really aware of the precise timing of events-but of the fact that something was bubbling up, and that a great deal of trouble was brewing in Egyptian society and politics. I feel that that was very much part of the briefing I was given by our diplomats, particularly when I visited Cairo in early November. That was very much the view of our ambassador there, which is why, in the dinner that we then held with leading figures from the Egyptian Government, we put the case that what you need in your parliamentary elections is the emergence of a credible, secular and democratic opposition, and that the culture of alternation in government is something that you ought to be encouraging, rather than doing anything to prevent.

I think the consciousness that something was coming up in the pressure cooker was very much there among our diplomats, certainly in the case of Egypt. As I say, it was very hard for anybody to say precisely in what week that was going to come to a head.

Q324 Sir Menzies Campbell: How did that go down at the dinner?

Mr Hague: Conceptually, it went down very well, and either they didn’t take our advice, or they did want to take it, but miscalculated in the parliamentary elections that followed. Actually, they surprised themselves with their own strength. They won far more seats than they intended to. One of the reasons for that was that they had not given the space over the previous decade for a strong opposition to emerge. I often quoted to them the Disraelian dictum of, "No government can be long secure without a formidable opposition." Indeed, it has so turned out.

Q325 Mr Watts: Foreign Secretary, can I clarify a point that was made earlier, which I am finding difficult to understand? You appear to be saying that you want to change the skill base of senior management, with more of an emphasis on hard languages. Yet, the criteria you use for promotion has not been changed, we have heard. How will you achieve your one aim, when your criteria are stuck with a system that has not delivered what you are looking for?

Mr Hague: I think it will evolve over time, but those core competencies will remain very important. Over time, the people who are coming to the top-this is over a long time, because you are talking about the evolution of an institution over the next 10, 20, 30 years-will increasingly be those with the skills and experiences that I have described. If the promotion system does not make the most of that, we will have to change the promotion system.

Q326 Mr Watts: It seems to me that that is exactly what you need to do. That is why I am interested when you say that you might have to do that. If you want to make a change in the culture of an organisation, that has to be done by senior management changing the criteria for selection of senior managers.

Mr Hague: It can also be on how those criteria are interpreted. Since the ministerial direction is clear, and the support for that from the senior civil servants is absolutely forthcoming, I do not think we will have any difficulty on that, but of course we can revise things as we go along.

Q327 Ann Clwyd: I benefited over a period of seven years by having someone from the Foreign Office seconded to me to work on Iraq. It was a mutually enriching experience, because they really had very little idea how Back-Bench MPs worked. When you talk about secondments and attachments and so on, it is something well worth thinking about. There is a positive aspect in having your civil servants understanding how an ordinary MP has to work and the variety of issues that we have to deal with. I commend secondment, because it worked very well for me and for the people concerned, who have since had various promotions.

Mr Hague: I’m not accepting you are an ordinary MP, but we very much take that point.

Simon Fraser: This goes to the last two points. One of the things that we are doing under the diplomatic excellence programme is increasing the amount of money that we are putting into training in certain areas. One of those areas is language skills and another is parliamentary understanding. We are going to try to make sure that we enhance the knowledge of Foreign Office officials on parliamentary affairs.

Mr Hague: We are also going-this is slightly off the point-to make more use of the skills, experience and knowledge of the people already in the Foreign Office and communicating that to people on their way up in the Foreign Office. I feel strongly that, for people who have accumulated a lot of experience, to be able to pass that on is part of their job and career satisfaction. A larger part of the Foreign Office training should be the engagement of newer people with people who, in some cases, have 30 or 35 years of experience of diplomacy.

Q328 Ann Clwyd: On the question of embassies, will you be reviewing embassies that have already shut? Will you be looking at what has happened in countries such as East Timor, where we shut our embassy and transferred the responsibility to the ambassador in Jakarta, which is a long way away from East Timor? It was a particularly crass thing to do, because East Timor had just got its independence, after a long battle with Indonesia. I suggest that it’s very well worth looking at that again, because I don’t think that representation at that distance actually works for the East Timorese.

Mr Hague: I can’t make any promises about any specific place. We will come to this in the announcement that I’m making in a couple of months’ time. Certainly we are looking at whether there are embassies that have closed that should be reopened. I can’t hold out the prospect of a huge number of such reopenings, but there might be some.

Q329 Chair: Are there any examples of best practice in Foreign Ministries around the world, which you can draw on here? One example is the US-style quadrennial diplomacy and development review. Does that have any place in your thinking and your management of the Foreign Office?

Mr Hague: Yes, it does in the National Security Council-to have a regular review of national strategy is highly desirable. That is what we are highly likely to do in the current Government. The idea of a diplomatic review is one we are open to-I would not discount that at all and, if the Committee were to recommend it, I think it would receive a warm reception. We can learn from that.

I have asked for detailed information about how the French and German diplomatic services work, but they are structured differently and their cultures are quite different. It is not easy just to cherry-pick one practice from one of those countries, but we are engaged in studying them at the moment, to see what we can learn.

Chair: That’s very helpful. Rory.

Q330 Rory Stewart: Just following up on culture for another second, is there any role for increasing the amount of time given in training to focus on history and case studies-as a way of training diplomats?

Mr Hague: Yes, the case study approach is part of what I was describing earlier. Certainly history is vitally important in knowledge and practice of foreign policy. The small bunch of historians in the Foreign Office are now being used more than they have been for some years, including by Ministers-including by the Foreign Secretary.

I could easily get drawn into the subject of the library and how deeply I deplored its destruction a few years ago, but I arrived in the Foreign Office too late to save it. Such things are a vital part of the corporate memory of the Foreign Office as an institution.

Such things will be reaccentuated again, and in new ways. Other measures are being taken to improve the corporate memory of the Foreign Office within each department. I think you are right, history must be an important part of any meaningful training in foreign policy.

Alex Ellis: On the case of Egypt at the moment, you see the people doing policy drawing a great deal on the research analysts within the Foreign Office, in terms of some of the background and some of the history, say, of the Muslim Brotherhood and other organisations-how it came into being, what its motives are. You see that used quite fast now, in terms of developing policy.

Mr Hague: We will also try to make greater use of people who have left the Foreign Office. I make a point of seeing all the new ambassadors when they are appointed, before they go out to their posts, and I see any who have finished their posting and are retiring. I find it quite distressing in a way, that these people who are really at the peak of their knowledge of the world, with immense diplomatic experience, then walk out of the door, never to be seen again in the Foreign Office.

One of the things that I have asked to be worked up is a better approach to how we use the alumni of the Foreign Office, so we do not just draw them to a seminar at Wilton Park every two years but really continue to connect them more systematically to the Foreign Office. I think it should be an institution that you always belong to really. When you come in, if you come in as a new graduate, you should meet the Foreign Secretary and feel that you are welcomed from the very top. When you leave, 40 years later, if ever-admittedly that is a career model that is less common these days-you should have a continuing connection with whoever is the Foreign Secretary and with the institution of the Foreign Office.

I didn’t get a chance to say this earlier in our discussion, but I believe in building up the strength of the FCO as an institution, so that people want to belong to it and always feel that they have a connection with it.

Q331 Chair: And the alumni are always welcome to come here and give evidence to us, as they frequently do.

Mr Hague: And some of them have done so very well, as I’ve seen.

Sir Menzies Campbell: Sometimes they are queuing up.

Chair: Foreign Secretary, thank you very much indeed. This has been an excellent session as far as we’re concerned. I wish you well on your trip. You’re coming to us again in March. We look forward to it.

Mr Hague: Thank you.