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I am no longer confident that the slimmer and slimmer FCO, with its tiny budget, can manage to provide the political overview that our Foreign Secretary rightly sees as its special role, to give us the “joined-up government” that is needed across particular negotiations. The Cabinet Office already holds the ring on European policy and is shouldering an expanding role in national security policy—not always in easy partnership with the FCO. However, people tell me that the Cabinet Office is currently in chaos, with far too high a turnover of staff and poor co-ordination between its different units; last year’s Civil Service capabilities review was sharply critical of its capabilities and performance.

I am very glad that our new Foreign Secretary has reinstituted the FCO planning staff to try to give a strategic role in foreign policy, but I am no longer sure that the Foreign Office can plan the strategy of foreign policy on its own. Furthermore, I suggest that the task has been made more difficult by our new Prime Minister. Gordon Brown was famously unenthusiastic about the Foreign Office and its posts abroad which, as Chancellor, he did his best to avoid when travelling to foreign capitals. Successive reductions in the FCO budget may partly reflect his lack of enthusiasm. He seems impatient with the complexities of multilateral diplomacy, particularly with the interventions of smaller countries, and is in danger of underestimating the importance of political relations with difficult Governments beyond the UN Security Council’s permanent members and the G8.

That raises difficult questions for some of us about the cutback in bilateral missions across the EU, and about the future of those missions. It is evident that we no longer need extensive staffs writing reports on technical subjects. That material is easily available on the internet and officials can come out from London when needed. However, we still need to cultivate good relations with the other 26 EU member states, smaller as well as larger, which means that we need politically skilled representatives well briefed in British domestic political constraints as well as in the politics of the countries to which they are accredited, to build and maintain relations of mutual confidence. As a succession of officials have told me over the years, departments across Whitehall still need good briefing on the domestic political context within which other EU Governments operate, not only in Berlin and Paris but also in Bucharest and Bratislava.

I suggest that we need further reflection, perhaps even on a cross-party basis, about what sort of missions we now need across Europe after the present cutbacks, and what their priorities should be. It is unfortunate that so many bilateral British ambassadors in other EU countries are appointed to these posts as their second or even third successive posting abroad. We need representatives who are seen to represent London, and are up-to-date and closely in touch with thinking in London and across the UK. I am not sure that it is sensible to cut back military attaches in our European embassies when the UK is pressing other Governments so hard to increase their contributions to NATO, European and UN missions outside Europe. I note that many of these posts now house liaison officers from our police and law enforcement services, and

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wonder whether departments across Whitehall have dispassionately considered the trade-offs between resident liaison and the stream of visitors that air travel allows.

Might I suggest that we should consider renaming our embassies across the EU—or even across the OECD world—as “British Government Representations”, to reflect the job that they now do and to underline how closely they relate, or should relate, to the whole of Whitehall? That would suggest less pomp and more encouragement of professional Government-to-Government interaction, parliament-to-parliament interaction, and wider than that. Further, I suggest that the heads of these representations should be drawn from a wider group within Whitehall than the FCO alone. I note, with approval, that our new ambassador in Ankara had previously served as head of the immigration and nationality service in the Home Office. That was, after all, what the Berrill committee recommended 30 years ago—a closer integration of the home and diplomatic services, to fit the changing career patterns and expectations of the women and men in our Civil Service and to reduce the proportion of years served that are spent abroad. That, of course, necessarily implies that more attention needs to be paid in the domestic departments to the acquisition of language skills, including “hard” language skills, and to ensuring that service abroad is seen as a path to promotion; but these are, of course, desirable objectives in themselves.

Outside the OECD world, British missions have more sensitive political roles to fulfil but also a growing mixture of officials to fulfil them. I note, for example, that now some 150 liaison officers from our law enforcement services are attached to overseas missions. Redefinition of Britain's national security and its management therefore also needs to address what sort of teams of officials, civilian and military, are needed to promote our interests in states of concern.

There is a particular issue about the partnership between DfID and the FCO in the non-OECD world, which others in this debate may well wish to address. DfID has become a major department in foreign policy, with both our previous Prime Minister and our new one giving its goals their blessing. But, as we have seen in Kenya in the past two to three years, development goals and good governance can easily cut across each other, and relations between the understaffed but more generously paid—so I am told—DfID missions and British diplomats are not always easy. I note that last year's capabilities review of DfID in effect raised doubts as to whether that department will be able successfully to manage the continuing increases in funding it is due to receive over the next two to five years. There is room for much more careful integration of strategic planning and policy-making between these two departments to make sure that political and development objectives are successfully reconciled.

The width of the gap between aspirations and resources should encourage the Government to take a much more open and positive attitude to the proposed EU external action service than they have so far displayed. Since we cannot afford resident representation in some 50 UN member states, we have an interest in

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making the best of shared representation and common reporting where we can. I know that Her Majesty’s Government have gone some way in sharing resources with friendly Governments in some foreign capitals—with the Germans in Reykjavik and Dar es Salaam, for example, even with the European Commission in one case. We should embrace the chance now offered to do more and face down the predictable cries of horror from the Daily Mail.

Above all, we need to be comfortable with our role within the European Union. I was extremely happy to read in David Miliband’s speech of 4 March to the FCO forum for leadership his careful distinction between our most important bilateral relationship with the United States and our work within the multilateral framework of the European Union—an institution, he said, of which we are a party. That is a very important distinction as regards the way in which we should now operate in different countries. We recognise that the Government are reluctant to state this obvious transformation of the context of British foreign policy too openly before the Lisbon amending treaty has been ratified. I am not even sure that the Prime Minister, as opposed to the Foreign Secretary, yet fully understands how much our 35-year membership of the European Union has transformed the management of British international policy alongside all the implications of globalisation which we have witnessed.

These Benches hope that in the wake of the ratification of the amending treaty Britain will at last become a settled and positive actor within the developing frameworks of EU internal and external policies and will wish to make sure that we play a major role in the formation, development and staffing of the EU external action service. Perhaps even the Conservatives will come to recognise the evident advantages of embedding British diplomacy further within that framework. I hope that is not too partisan a note on which to introduce the debate. I beg to move for Papers.

2.27 pm

Lord Anderson of Swansea: My Lords, we have heard a masterly survey of our present resources measured against our aspirations. Many questions were posed, most of which remain unanswered by the Government. The noble Lord spoke of a step change in our relationships overseas. Certainly, the old distinction between domestic and foreign has fundamentally changed. The nature and role of our missions overseas have also changed. But I wonder whether, at one level, this is not a debate about resources but about ourselves and how we see our role in the world, and therefore about the resources which we are prepared to commit to that. Indeed, our national self-confidence is also in question.

It may be helpful if I try to put in perspective through a historical survey whether the adaptation which the Foreign Office has endured over recent years is justified. When I entered the foreign service almost 50 years ago, in 1960, it was a very different world. The challenges and priorities were different. The cold war still existed. We had passed the shock of Suez but we were before the main EU debate. We were

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seeking a diversion through the formation of EFTA. There was not even a Foreign and Commonwealth Office but a separate Commonwealth Relations Office. It was before the east of Suez withdrawal, which was one of the milestones on our way to reassessing what we could do and the conflict between our aspirations, our view of ourselves then and the resources we were prepared to devote to this issue.

It was also a very different Foreign Office. It had hardly changed from the pre-war period. I remember with great affection the internal communication system. It was a shuttle, whistling around the Foreign Office like something in a Victorian department store. It was before the e-mail and before the intranet. On the personnel front, most of those in the senior levels of the Foreign Office had fought in the war, or had served either in the colonial service or abroad in other ways. Some had spent their war years in the US and were attached to the special relationship. The gifted amateur was very much the theme of the day. The only specialists that I recall were the legal department and—some years afterwards, I think—the first economic adviser. One book denoted it “the apotheosis of the dilettante”. The assumption was that the amateur could glide through any post—personnel, communications, defence or whatever. Indeed they were, and remain, very gifted people.

The public context was also very different. The public had looked at the red marks on the map, denoting our old empire. Many of the public had served in the war or the colonies and assumed that it was our responsibility to be involved overseas. There seemed to be a clear distinction at that time between domestic and foreign policy, and the great challenges now—terrorism, climate change, migration and weapons of mass destruction, save the nuclear—were not on the scene.

There have been profound changes over 50 years. Communism is dead and there are new powers, which the noble Lord mentioned. Personnel are being transferred from European posts to India and China. I make one comment in passing—that India is a member of the Commonwealth and we perhaps too readily forget the importance of the Commonwealth as an instrument. It is clear that the current Indian Prime Minister, and indeed Sonia Gandhi, place great weight on the Commonwealth. The incoming Commonwealth Secretary-General, who takes up his post on 1 April, is Indian. India is ready to devote more resources to the Commonwealth Secretariat and is giving more both to the CFTC and to the Commonwealth of Learning. Also in passing, I should mention the diversion, or illusion, on Conservative Benches that the Commonwealth can in some ways be deemed an alternative to the European Union. In my judgment, this is an illusion, a diversion which was wholly undermined by Don McKinnon, the outgoing Secretary-General, in a recent speech.

What has been our response, financially and institutionally, in the Foreign and Commonwealth Office? Has it been sufficient to meet the profound changes in areas such as migration—with its implications not only for terrorism, but for the strain it places on our consular services—or the other well known challenges

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of energy, food, security and so on? Historically, we have tended to muddle through—a little cut here, a little cut there—and hardly looked at our broader strategic objectives. The new Foreign Secretary has endeavoured to grapple with those issues, beginning with his speech to Chatham House in July last year. There seems to be at least an intellectual awareness of the problems, although it has not yet resulted in many changes.

It is useful to look at the continuing dialogue between the Foreign and Commonwealth Office and the Foreign Affairs Committee in the other place, which in my judgment has been extremely helpful and to the benefit of both. Has the process of change led to an FCO that is fit for today’s purposes? Is there recognition of the need for a new professionalism, not just for the gifted amateur, in estate management, finance, project management, personnel and communications? The FCO’s reply to the last Foreign Affairs Committee report, dated January of this year, showed some awareness of that.

One question posed was whether the need for traditional diplomacy has declined, and the noble Lord mentioned Kenya. In my judgment, there is a continuing need for sustained personal contact at all levels with key countries. Can the budget restraints be justified? There were financial constraints in the previous CSRs of 2000, 2002 and 2004, often masked by asset sales, but now we have real reductions. At the same time we now have not only new security demands but new posts made necessary by the dissolution of the Soviet and Yugoslav empires.

One question posed was whether the balance is right between the FCO and DfID. It is true that the FCO leads in Whitehall on conflict prevention, but there is a certain jealousy at the comparative finances available, as if everything is now predicated on the move to the 0.7 target. There is a perception that DfID has more cash than it can spend.

The final question posed by the noble Lord was whether we are taking the new Europe sufficiently seriously. Has the Foreign Office, and indeed have the Government as a whole, clearly recognised that our future lies in an ever closer relationship with our EU partners, where our interests largely coincide? The evidence hardly suggests that we have. We think of the 25 per cent reduction in posts in the European Union. There is also the UK problem of recruitment at all levels to the EU institutions. I refer in passing to the exchanges in this House on 20 February relating to Commission recruitment, where the Government accepted that we are falling far short. Why was that not tackled earlier? There is also the question of co-location of embassies. Looking at the response to these questions, one is bound to ask: have we the vision and drive to make a difference? There are some positive signs from the new Foreign Secretary but there must be a very qualified “yes” when we examine the evidence before us.

Baroness Crawley: My Lords, I remind noble Lords that we have nine minutes for Back-Bench speeches. When the clock says eight, we are in the ninth minute.

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2.37 pm

Lord Howe of Aberavon: My Lords, following that doom-laden piece of advice from the Front Bench, I begin by extending my thanks to the noble Lord, Lord Wallace, for having introduced this debate. I agree with every word that he said—indeed, I agree with every word spoken by the noble Lord, Lord Anderson, as well. The noble Lord, Lord Wallace, has been applying himself to this topic with tenacity, with speeches in Chatham House and articles in various publications. I played a modest part in a debate just over two years ago, on 8 December, and stand by everything I said then.

One encouraging thing is the continuity of the campaign that the noble Lord has been running. It is getting increasing support and is increasingly important. One other moderately encouraging thing is that the Foreign and Commonwealth Office can be described as one of the great offices of state. We are living in a world where great offices of state are being knocked down like skittles in a bowling alley. The Treasury would just about acknowledge that the Foreign Office is a great office alongside it. The Treasury has an undue sense of its own importance. But look at what has happened to the other departments, such as the Lord Chancellor’s Department, the Home Office, the short-lived Department for Constitutional Affairs—all knocked around. We have a Lord Chancellor who turns up in all sorts of stray places, in stray uniforms, no longer representing a great department of state. The Department of Trade and Industry now has an abbreviation that the noble Lord cannot remember, and nor can I. The Department of Education is now Children, Schools and—not nannies, but Families. I dread to think what is coming. We have stopped short of the time when Edward Heath was described as “SOSFITARDAPOTBOT”—Secretary of State for Industry, Trade and Regional Development, President of the Board of Trade. That is a serious point. The Foreign Office is a crucially important department and needs to be recognised as such.

There has been one other change, which is not so important but is really rather curious. It is the scale of the huge document that is now produced as the annual report of the Foreign and Commonwealth Office, which is matched by an even larger volume from the Foreign Affairs Committee of the other place. In my day, no such documents existed. That does not mean that it was necessarily right, but they must take up a huge amount of energy and intellect. We got by with the occasional compact White Paper, with considerable help from the Foreign Affairs Committee, with the noble Lord playing his part in that in those days. That aspect at least is still there. The relationship between the Foreign Office and the Foreign Affairs Committee of the other place, as demonstrated from the reports that I have looked at this year, is of enormous importance. They understand each other, just as they did in my time, on strange issues ranging from diplomatic immunity to Grenada. It is of great importance that that recognition is there.

In paragraph 63 of its latest report, the Foreign Affairs Committee states:

It went on to say that Sir Ivor Roberts, in giving evidence, pointed out that,

He went on to say,

The committee concluded quite clearly:

There is a clear affirmation of a crucial understanding that must be achieved across Whitehall, and not least in the Prime Minister’s office. It is reflected by the arithmetic pointed out by the noble Lord, Lord Wallace, and by what he had to say. It is good to be able to say that there appear in the report of the Foreign Office other major improvements in the management style of the office, which is something on which Sir Peter Ricketts and the new Foreign Secretary are both entitled to be complimented.

There is one other point that I thought the noble Lord, Lord Anderson, was going to touch on. He stressed the importance of the Commonwealth. The striking thing is that, in the three or four-page document summary of the Foreign Office book, there is no reference at all to the Commonwealth. If one looks through the large glossy magazine, there are three or four minimal references to the Commonwealth—footnote references—and yet it is still an important part of the title of the Foreign and Commonwealth Office. It may be a regrettable oversight. Still, even in my day as Chancellor, the Commonwealth was a very important organisation. It briefed me fully on the economic affairs of the world before I went to IMF meetings. It is an enormous asset to us, and to its members, to belong to that organisation. I also endorse absolutely what the noble Lord, Lord Anderson, said about the importance of India.

As for the relationship between the FCO and DfID, as I have said before in this House, the growing disparity in resources allotted to those departments represents a huge error of judgment. It is an error of judgment that does not benefit from the fact that the Chancellor of the Exchequer was in a position, even as Chancellor, to take a much more liberal attitude towards the 0.7 per cent target than I ever did when I was in the Treasury. The trouble is that a 0.7 per cent target—a spending target that has to be achieved—is like a licence to print money. That is the sole framework within which DfID, and the old ODA, has functioned. The DfID allocation in the current year is three and a half times that of the Foreign Office, by contrast with two and a quarter times that figure 10 years ago. It is possible, though I would not go as far as advocating this, for DfID to prosper as the ODA

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did under the wing of the Foreign Office. Without arguing that case, I am quite certain that the resources have to be reallocated.

The Foreign Office is so important because of the growing importance of diplomacy in today’s world. It is not becoming less important, but more so. I know that some colleagues are aware of the initiative that was presented in this House only a week or two ago by George Schultz, the former Secretary of State for the United States, on the nuclear threat initiative, on which all the leading statesmen, ex-Secretaries of State and Secretaries of Defence and chairmen of the foreign affairs committee of the United States are agreed. Against that background, George Schultz gave a speech entitled “The Age of Diplomacy” in Oslo last week, in which he said:

in tackling the nuclear threat—

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