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Counterterrorism: Foreign Office Budget

My Lords, the Minister was very candid yesterday in telling us of all the substantial cuts that are being inflicted on the Foreign Office—perhaps she was a bit too candid—including the ones in the counterterrorism and counternarcotics strategies, among others. Can she tell us how this muddle happened? It seems that the refusal to compensate for the foreign exchange fall was a Treasury decision. We all realise that all departments have had to face, and will have to face, increasing cuts and economies but, in this case, it seems that a Treasury one-off decision is having a major influence on British foreign policy. That cannot be right. Surely it is important to bring to this House and to the other place an explanation of how this confusion came about and how we are going to redress the balance between existing limited funds to maintain an effective foreign policy and not, as we appear to be doing at present, to damage the central issues—in the words of the Prime Minister—such as counterterrorism in Pakistan and Afghanistan.