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We are devoting ourselves in this debate to a wide range of issues. We must start, presumably, with the share of public expenditure involved as a share of the gross national product. Although we cannot spend too much time on it, that is the ultimate constraint—the share of total resources available for external activities and, within that, the share for the Foreign and Commonwealth Office and external policy. I share the view expressed most recently by the noble Lord, Lord Hannay, in that I am pleased to see the increases in DfID’s budget, although that should in no way be a reason for restricting or even leaving at a flat level the expenditure of the Foreign Office. Indeed, the more DfID does, the more there is a need for the political development to be maintained.

We then come to the way in which the Foreign Office uses its resources. In the discussions so far, the allocation and size of posts and the level of the heads of posts have been important. I can see the case for increasing staffing in south Asia and the Middle East. That is important, but on the whole the increase should have been found from additional resources rather than from the removal of posts from western Europe. There may be some case—not much, but some—for some reduction in countries that are members of the European Union, although my noble friend

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suggested that the case might not be so clear. However, I am not at all convinced that that applies to other European countries. I was recently in south-eastern Europe and was very concerned to discover that every post there, with the exception of one, will lose some of its staff as a result of these moves. The countries of south-eastern Europe are not stable. We need to have substantial staff in those posts until their problems have been resolved. I hope that can be re-examined.

Another example is Madagascar, which I visited on an Inter-Parliamentary Union visit and whose president is keen to reintroduce the relationship which the country had in the 19th century with Britain. It has introduced English as its third official language. Just over two years ago, the post was closed, and if the people of Madagascar want British visas they must either go to or communicate with Mauritius. We should look very carefully at this sort of post in Africa.

We have discussed the relationship between DfID and the Foreign and Commonwealth Office. The remarks made by the Foreign Secretary in his speech to the FCO leadership conference on 4 March were rather important. He said that there was a need for,

That is absolutely right. I hope not merely that the Foreign Secretary does that in speeches but that we will see it happening on the ground. Too often, one finds situations in which it at least appears as though there are two different levels of activity in a country: one operated by the Foreign Office, and the other by DfID.

On our relationship with Europe, I want to say something about the External Action Service and the way in which we and the Foreign Office have been able to provide significant and important contributors in the activities of the European Commission during our 35 years of membership. Many Members of this House have contributed at various levels within the Commission to making it effective. It is not insignificant that apparently every one of the current 27 Commissioners has a British member of his cabinet. It suggests the extent to which British officials are respected and found useful right across the European Union.

I am, however, concerned about the reduction in the number of those applying for the concours—the Commission entrance examinations. Although something like 28 scholarships are awarded each year for the College of Europe nears Bruges, which is one of form of preparation for entry to the concours, only 22 were taken up this year. There are considerable difficulties in encouraging people to go for them. It is partly a problem of language knowledge, a subject which is not infrequently discussed in this House. People do not have sufficient language knowledge and we must address it. It is a serious loss if we do not have people taking part. I should say that I come from a political party where both the leader and the president are alumni of the College of Europe.

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Finally, on the External Action Service, the European Union Committee has today produced our report on the treaty of Lisbon. I shall quote the paragraph that takes up the words used by the noble Lord, Lord Hannay. It states:

I would be glad to hear the Minister’s initial response to that. We will undoubtedly return to the issue in our debates on the treaty.

We have seen a great deal of cross-party cooperation and almost unanimity today, and from the Cross Benches as well. I hope that we can take this forward, working together to maintain the effectiveness of our Foreign Office.

3.21 pm

Lord Bramall: My Lords, as a military man I stress and reinforce this important point: when considering the Foreign and Commonwealth Office’s needs and resources, diplomacy and the activities of our diplomats should ever be playing a major part in our country’s overall strategy and national defence effort. The work of our high commissioners, ambassadors and defence and service attaches overseas has a major part to play in informing the Government, through the FCO or Ministry of Defence, of exactly what of significance and potential threat is happening or could happen in their respective areas. They thus contribute to the advice given to the Government and chiefs of staff as to what can, and perhaps should, be done to contain or counter it, if that is what is required.

Diplomatic effort unaided—except, undoubtedly, for economic aid—will sometimes produce by far the best results. Sometimes it may need military support and muscle to increase its effectiveness. But whatever military force it is decided to deploy and use, the use of that force—even if it has temporarily become the major partner—will be of much less value, and even become counterproductive, unless there is also diplomatic effort in the wings to get allies and other interested parties on side to produce a more benign stability, healing the wounds after the military action is over.

It is of the utmost importance that our foreign policy and defence policy are properly joined up as one entity, sometimes with the latter, defence, in the lead and supported by the former. We hope more often than not that it will be vice versa, with diplomacy in the driving seat. I hope that is appreciated when settling the FCO’s priorities and resources, particularly in vulnerable areas where conflict is never far distant. If our representatives abroad are starved of resources, reduced to a skeleton or sometimes removed all together because of financial stringency, diplomacy cannot make the contribution which I have mentioned and which is so important to the national effort.

It is with that in mind that I am most distressed to hear that the Foreign and Commonwealth Office has reduced, if not removed, its participation in the work

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and instruction at the Royal College of Defence Studies. That seems absolutely crazy if we are serious about bringing our foreign and defence policy ever closer together, able to work in harmony one with the other. Perhaps the Minister can reassure your Lordships' House on the general principle I mentioned and on this particular, rather negative, manifestation of what happens in practice, albeit I hope only temporarily.

3.25 pm

Lord Parekh: My Lords, I congratulate the noble Lord, Lord Wallace of Saltaire, on securing this debate and I thank him for introducing it with the commitment and erudition that we have come to expect of him. Many noble Lords have talked about the mechanism of interdepartmental co-operation and staffing within the FCO. I had hoped to do the same, but in light of the fact that many noble Lords have already covered these issues with far greater experience than I have, I shall concentrate on issues that have got neglected, one or two of which were referred to by the noble Baroness, Lady Williams of Crosby, in her elegant speech.

It is important to bear in mind that resources are designed to achieve certain objectives. Therefore, we should ask ourselves: what are the major goals that our foreign policy should aim to achieve? The Foreign Secretary, whom I greatly admire, has set out those goals with great clarity, and in some respects they are new. They are new in that after the Second World War—certainly, during the past 20 years—our foreign policy has come to be haunted and influenced by three images. First, we want to be a bridge between Europe and the United States; secondly, we want to give leadership to Europe; and, thirdly, we are told that we must become a beacon to the world. Mercifully, the new Foreign Secretary’s thinking is free from these hubristic ambitions.

We cannot be a bridge because there is no chance that the United States will outsource its diplomacy to us. We cannot be a bridge between two institutions if we are already an integral part of one; namely, the European Union. We are not a semi-detached member of the EU. We are very much at its heart. We share its values and interests. Therefore, the first important lesson to bear in mind is that we must make the European Union a vital pillar of our foreign policy. This could take a number of forms, some of which would involve a reduction in expenditure. We should think, as we are rightly doing now, in terms of a common foreign and security policy in many areas. We cannot have embassies in all 191 countries. Therefore, a collective European Union representation in certain matters could be explored. Likewise, we could pool our consular services and ensure that there is greater co-operation between the European embassies in different parts of the world so that each one does not duplicate the efforts of others. As I say, that should release quite a large number of resources for other purposes.

My second point is that happily, so far, we are a minor major power and have not yet become a major minor power. As a minor major power we cannot rely on hardware. We can rely only on our soft power. Soft power always results, as Robert Nye and others have

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pointed out in the American context, from the trust that we are able to secure in other parts of the world in the judgment and wisdom of the policies that we follow. If others begin to feel that our understanding of world problems is intellectually more coherent and morally more persuasive, it is very likely that in the battle for ideas we might be able to influence the way in which they think about the world, which is the greatest impact that any foreign country can hope to make, and therefore join us in pursuing certain common causes. The question is: how can we make sure that our foreign policy is wise and inspires trust and confidence in different parts of the world? I am afraid that this has not been the case in relation to either Iraq or Afghanistan.

We need to make sure that culture is at the centre of the formulation of foreign policy in an increasingly volatile and culturally diverse world. For example, in the context of Afghanistan, we need to understand its society and culture. We need to understand the economy of the drug market. We also need to understand how, in a society like this, institutions graft, and which ones have a hope of success and which ones do not. This means that our FCO would need to rely on anthropologists, historians, economists and a number of other specialists. It also means that our foreign policy has a greater chance of being wise if it is not merely left to the experts but also involves NGOs with considerable experience at grass-roots level. In the context of Afghanistan and Iraq, if NGOs with experience in those areas had been consulted, some of the mistakes that have been made would not have been made.

The third point I want to make is this: the Foreign Secretary has talked about four priorities, to which the noble Baroness, Lady Williams, rightly referred. In those four priorities I do not see any reference to two things which are absolutely crucial. The Foreign Secretary rightly talks about terrorism and preventing conflicts. At the root of all conflicts and terrorism lie poverty and a sense of humiliation in certain parts of the world. Therefore, global justice, understood both in economic and political terms, should be at the centre of our foreign policy. Economically, global justice would involve fighting poverty, and offering better terms of trade and well directed foreign aid. A just foreign policy would be an even-handed foreign policy, so that we do not end up doing things in other parts of the world that lead to disaster, or have a blowback domestically, so that we end up spending a lot of money dealing with the consequences.

The other important thing for a minor major power to bear in mind is that the world will listen to us and take us seriously if they think that we offer sensible advice. In this context, I am rather surprised that, in a multi-ethnic society like ours, very few of our diplomatic representatives seem to come from ethnic minorities. I do not have the figures and hope the Minister will provide them for high commissioners, ambassadors and senior officers in our foreign diplomatic missions, and, for that matter, the FCO itself. What kind of input is made by people from different backgrounds with, therefore, different kinds of expertise? This is where the United States scores a very important point. Although lots of countries find it hegemonic, they know that there would be no American delegation

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going abroad without black Americans and lots of other nationalities. That inspires confidence in the country. We ought to think about that.

Briefly, my last point is that our foreign policy naturally operates in collaboration with, and is articulated through, the British Council and the BBC. I want quickly to say three things about the British Council, on the basis of my considerable experience of what it has done and is doing in India. There are three ways in which it might need to reconsider some things that it is doing. First, it should not confine its offices merely to major centres where they have been traditionally based but should try to identify and reach out to new areas that are becoming important in a particular country. For example, in India it would not be just Ahmedabad, Delhi, Calcutta or Chennai, while there are other places, such as Baroda and many others, which are becoming extremely important in terms of foreign policy and economic interests. We should be concentrating on them as well.

It is also important that the British Council should be thinking not merely in terms of educational and cultural exchanges, but also of shaping the thinking of people within the country in the limits of neutrality. This can be done by organising workshops, conferences, debates, and bringing the intellectuals of the nation together so that they are able to arrive at a form of consensus. That will be seen as a contribution made by the British Council to the thinking in the country.

At the international level, it would do us no harm at all if we were to take the initiative in encouraging a global dialogue between different parts of the world, especially with Muslims, by organising some kind of international conference. The United Kingdom could certainly take the lead in organising a conference to which leading Muslims and others could be invited. We could then start thinking about new principles of global order.

3.35 pm

Viscount Montgomery of Alamein: My Lords, the noble Lord, Lord Wallace, has done a great job in bringing this matter to our attention, and he should be pleased that he has received such unanimity of support for what he said. The fact is that the constant erosion of the Foreign Office budget is nothing short of a national catastrophe, and I hope that the Minister is not only listening, but able to do something about it.

I am going to move the debate towards Latin America, mainly because it is the area in which I spent most of my working life. While I am in complete agreement that China and India are vitally important and fast-growing economies, that does not mean that Latin America, with its considerable economic potential, should be neglected or excluded. When the noble and learned Lord, Lord Howe of Aberavon, was Foreign Secretary—I am sorry he is not in his place—he made a famous speech about Latin America in which he said:

Unfortunately it has returned with a vengeance and has even been extended. An examination of recent GDP figures shows that total Latin American GDP is

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slightly larger than China with less than half the population. However, Brazil, which is the lead country in Latin America, and Mexico, which is the second, are only a few GDP points behind India with much smaller populations. This shows that Latin American purchasing power is valuable and we should be doing something about it.

Of course, Latin America is a very diverse region, but the potential is there. In spite of that potential, we have chosen to cut four posts, downgrade others, cut staff and give the impression of a lack of interest in commercial relationships. Doing business in Latin America, like elsewhere, requires good contacts. During the 1960s, 1970s and 1980s, I was responsible for building local Latin American subsidiaries of British companies. Embassy staff on the ground provided both political and economic advice, but above all vital personal contacts. In those days, embassies had both UK and locally engaged commercial officers, but these have now gone. They should be reinstated instead of relying on UKTI information from London. EU embassies have been mentioned, and indeed they exist in all Latin American countries, but they are concerned with trade and can do nothing in response to British business interests.

Moreover, British companies are often in direct competition with our major European partners—Spain, France, Germany and Italy—so despite the fact that they may be useful in other ways, EU embassies are no help to us in that respect. I have made the case before that we should reinstate UKTI inside the Foreign Office, and indeed on the last occasion I said this, I received considerable support from the noble Baroness, Lady Symons of Vernham Dean, who is to follow me. I hope that she is still of a like mind. There is another organisation outside which used to be called the Committee of Invisible Exports and now has a new name. It is about to be headed up by a recently retired British ambassador, and I believe that it is of a like mind on this issue as well.

The fact is that the Foreign and Commonwealth Office is the smallest and was always by far the most efficient department in Whitehall. It should be re-empowered to do the job for which it was originally conceived and which it did so brilliantly. I like to think that this will happen, but I am not very optimistic about what is happening at the moment in budgetary terms. I hope that the Minister will have something useful to say on this matter.

3.39 pm

Baroness Symons of Vernham Dean: My Lords, I, too, thank the noble Lord, Lord Wallace of Saltaire, for introducing the debate today with his customarily thoughtful and well argued speech. He has posed a real question for us: do the successive cuts in Foreign Office funding now mean a step change backwards in the effective pursuit of our foreign policy objectives?

Speakers on all sides of the House have talked about the scale of change in recent years; indeed, going back over the past 50 years. Some of your Lordships have concentrated on the importance of international diplomacy in forestalling international

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conflict, some on maintaining the importance of our great multilateral forums like the UN and the EU, and others on the relative perceived inequities in the funding of DfID.

Your Lordships have also defined the purpose of our foreign policy in a variety of different ways. For my part, I believe in the straightforward position that British foreign policy should be focused on the security and prosperity of the United Kingdom. That includes active engagement in multilateral forums like the United Nations, NATO, the EU and the Commonwealth, and supporting the rule of law and human rights as essential prerequisites to the stable and constructive pursuit of international relationships.

In all the 12 years that I have participated in these debates in the House of Lords, and indeed before that during my time as a trade union general secretary responsible for diplomats, there have been constant rows about FCO funding. There has never been a senior diplomat or an FCO Minister, including me, who would not have made a pretty compelling case for more funding, more diplomats and more capacity throughout the Foreign Office. All Secretaries of State have fought hard to secure and sustain their budgets while secretly believing that those budgets simply were not enough. They have pleaded damage to our foreign policy if their bids were undercut, while the Treasury has pleaded damage to the taxpayer’s interest if the bids were met.

The rules of that game have not changed, but the context has. I shall highlight four ways in which that has happened. When I first became an FCO Minister in 1997, consular work was a very poor relation. It stood apart from the serious business of foreign policy formulation, was dealt with as a second-order issue in a completely different part of the Foreign Office and, frankly, was staffed by those who the Foreign Office hierarchy thought could deal with soft diplomacy and sympathy rather than hard argument and intellectual rigour. That has changed out of all recognition in the past 11 years; the fate of Britons in trouble abroad has become one of the most time-consuming and intensive areas of FCO activity. People in trouble, injured, killed or kidnapped, the victims of forced marriage, of natural disaster or of terrorist attack—they all have the right to expect support from their Government at home. Public opinion has demanded that and newspapers have focused upon it. That has been a deliberate and dramatic change in Foreign Office priorities.

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