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Diplomacy

I do not know where the noble Lord gets that figure from. I shall talk in a moment about personnel, but what he has said does not fit with what I am about to say. What I have said means two things. First, we are reversing the previous Government’s disastrous decision to abandon the foreign exchange protection which wiped overnight 10 per cent off FCO budgets—it was an appalling decision. We now have a major boost with the restoration of that mechanism freeing us from exchange rate gyrations. I hope the shadow Secretary of State in the other place, who was a Treasury Minister at the time of that terrible decision, now welcomes what we have done to put it right. Secondly, the BBC World Service move will enhance its independence—I agree with the noble Lord, Lord Hannay, about that—and it gives the BBC, at the same time, a flat-rate licence fee. The objectives will still be set by the Foreign Secretary and his approval will be required for any language service closures. The BBC has given solid guarantees that it will safeguard the World Service and I am quite sure that will be done. Your Lordships raised worries about this issue, but the position is absolutely secured. That is the story of our comprehensive spending review outcome and it does not match some of the gloom that has been perpetrated all around. Indeed, there is still more good news to come because, in addition, our budget is being reinforced by new funding from the Treasury—I emphasise from the Treasury—which recognises the increased development work that we are now promoting in line with OECD rules. It does not come from DfID; we are not draining funds from the increased DfID budget, which is very large. It is a subvention which for us, on our scale of expenditure, is of a very pleasant kind, to match the increased development work which is undertaken in the Foreign and Commonwealth Office. Several noble Lords raised the issue of posts, closures and postings around the country. In the coming weeks we will take strategic decisions on how to live within the settlement I have described. They will not lead to the kind of conclusion the noble Lord, Lord Anderson, has suggested. Our decisions—including on what we do, what activity we stop or scale back and whether our network of posts adequately meets the new realities—will be taken; none has been taken yet. I concede that this might mean closing some subordinate posts and consolidating in some capitals. Equally, in emerging markets or countries critical to UK security, it might mean opening new posts. We need a global diplomatic network to help bring the UK economy back to long-term health. The skills and expertise of our staff are vital to delivering active diplomacy. The settlement will allow us to invest in our staff, create a renewed focus on international policy and high-priority languages, and ensure that our diplomats are economic ambassadors for Britain, as all your Lordships wish them to be. The noble Lord, Lord Lea of Crondall, asked for total staff figures. There are approximately 4,500 UK staff working at home and abroad, and 10,000 local staff, all overseas. I turn to the other theme which ran through your Lordships’ debate: soft power; that is, the capability required to match the hard-power resources that we have to maintain as a nation. We have provided the means to resource properly our diplomatic work. However, that was not the only part of the Question of the noble Lord, Lord Hannay. He also called on the Government to ensure that our diplomacy would be active. We will certainly be so in the security, conflict prevention and peacekeeping fields. If we accept, as I certainly do, the notion that our prosperity provides the foundation for our power, we must seize the openings available to us. This means developing much deeper links with key centres of influence such as Japan, South Korea, Malaysia, South Africa, Brazil, Turkey, the Gulf States and particularly, as the Foreign Secretary and the Prime Minister have made clear several times, China and India. China may be the new giant market, and one must not forget that Japan is often seen as our best and most reliable friend in Asia, but perhaps the best gateway to the great new markets of the world is the network that is the modern Commonwealth, as my noble friend Lord Sheikh rightly pointed to. Today’s Commonwealth embraces at least six of the world’s fastest growing economies and markets, providing access to emerging powers where wealth is accumulating and purchasing power soaring. Stretching across continents and faiths, and covering almost 2 billion citizens, it is a soft-power network par excellence which Britain needs to serve our interests in, and give us access to, the new global landscape—obviously, that is a matter of great interest to me personally. Deepening our links with these countries will have multiple benefits for British citizens. We accept that diplomacy is no longer just a government-to-government business. We must and will engage all sectors of society as well as multilateral and regional bodies. Links forged through trade, education—my noble friend Lord Bates pointed to scholarships—culture, sport, science and an active global diplomatic network will help not only to secure our economic future but to guarantee our future peace and stability. Where combined EU action works best, we will use it to the full—the noble Lord, Lord Hannay, made a very good point here. We see the European External Action Service as a useful additional tool for our common purposes in key areas, lightening and assisting our nationally resourced activities. My noble friend Lady Falkner made the same point. Both the British Council and BBC World Service—on which I have touched already—will remain fundamentally important parts of Britain’s presence in the world. All parts of the FCO family will have to contribute to the cuts in public spending. I am quite clear that they will have to face budget restraints. Details have already been published. The British Council plays an important role in helping spread the UK's culture and values, and its charitable status and ability to raise a significant part of its budget through commercial and full-cost recovery activities give it independence from HMG’s policies. I was enormously impressed the other day in Kuala Lumpur to see how impressively the British Council runs its programmes, including intercultural dialogue and promoting the UK's creative and knowledge economy, which supports our foreign policy objectives. The settlement that we have secured protects that fully. In the face of great uncertainties and novel challenges, we need to deploy this nation's talents and resources with new agility and skill.