rose to call attention to changes in the budget of the Foreign and Commonwealth Office and the levels of staffing in embassies and their effect on British foreign policy and on European co-operation on foreign policy; and to move for Papers.

The noble Lord said: My Lords, policy changes often emerge from financial decisions. The immediate context for this debate, then, is to draw attention to the continuing squeeze on the FCO budget, which will fall in real terms over the next three years under the Comprehensive Spending Review—while that of the Department for International Development, in contrast, is set to double between now and 2013. UK subscriptions to international organisations, which fall on the FCO budget and which are beyond the control of the British Government alone, operate to squeeze this already small budget—one of the smallest in Whitehall—further. There comes a point at which a succession of cutbacks becomes a step change: in the character of an organisation, in its ability to deliver the tasks demanded of it and in the objectives it is able to serve. I want to pose the question of whether we are now facing such a step change in the position and capabilities of the FCO, both at home and abroad, and to ask how we should adjust aspirations and objectives to match the more modest resources that the Government have provided.

I raise this not from a sharply partisan perspective, but as someone who has worked with British diplomats over nearly 40 years, and observed their struggle to deliver the objectives that their political leaders have set—very often without anything like the resources needed to achieve them. Sir Hilary Synnott, in his just-published book on post-invasion Iraq, remarks that,

“there seemed to be a great mismatch between what Tony Blair was saying and how Whitehall was operating”.

That was not for the first time, and probably not for the last.

The history of Britain’s long retreat from empire, since Suez, has been of Governments struggling to maintain their aspirations to be a global power without being willing or able to pay for the means to do so, with the press insisting that we absolutely must maintain our pretensions and not admit our limitations. Harold Macmillan thus famously stressed our role in global summitry; Harold Wilson attempted to maintain our bases east of Suez. There was an outcry from the Daily Mail when in 1968 the Duncan report on the future of the Diplomatic Service suggested that the UK was then a

“major power of the second rank”.

There was a further outcry, again led by the Daily Mail, when under Jim Callaghan’s Labour Government the Berrill report proposed the closer integration of the Diplomatic Service with the rest of Whitehall.

There has, of course, been a revolution in communications among Governments in the 30 years since then. Secure e-mail is now being introduced, enabling people in posts abroad to comment on and contribute to policy discussions within Whitehall. The number of member states of the UN has continued to rise inexorably: there are now more than 190, with resident British missions in some 145 of those—leaving large numbers of African states, and several in Latin America, without a British presence. That includes one state, Burkina Faso, which is currently a member of the UN Security Council. International travel has become both easier and cheaper, making it often far more cost-effective to send officials out to foreign capitals for successive short visits than to post them and their families abroad. The British Diplomatic Service now has 40 per cent fewer home-based staff serving abroad than it had 30 years ago—a substantial reduction as the number of posts and countries has sharply increased.

The work of government as a whole has become more international, and much more multilateral. One official recently offered me the estimate that 60 to 70 per cent of the work of Defra and of BERR—the Department of Business, Enterprise and something on regulation, I forget its exact title—is internationally driven, either by the European Union or by other multilateral conferences and organisations. Expert officials deal with expert officials from other Governments within these multilateral organisations, and often also deal there with the transnational lobbies that work to shape policies both here and abroad. It is, therefore, much less clear where bilateral missions fit into this world, or where the FCO stands in the making of overall policy in London. I have been told that different ministries now find it useful to second their own staff, not to UK missions abroad, but directly to the ministries of other important Governments—in Paris, Copenhagen, Tokyo and Brasilia—as well as to the European Commission and to the secretariats of UN agencies.

The Foreign Office, under its new Secretary of State, has done its best to try to fit resources to objectives; “Strategy Refresh” has agreed a reduction of some 25 per cent in home-based staff in European embassies to enable posts in Afghanistan, Pakistan and across the Middle East and Asia to be reinforced. The number of staff working within the FCO in London is also being cut back, as direct communications enable posts abroad to deal directly with other departments across Whitehall. There is a delicate question as to whether these cutbacks have undermined the future of the Diplomatic Service as such, since the FCO may now no longer be able to provide sufficient home-based posts at different levels for people serving abroad to spend sufficient time during their careers at home.

I therefore want to raise several questions about the future of the FCO and the management of British foreign policy. The first is about the co-ordination of British foreign policy and the relationship between the FCO and the other departments involved in international diplomacy, which now means most departments in Whitehall. The FCO, rightly, now defines itself as one of the three international departments with DfID and the Ministry of Defence. Since our new Foreign Secretary has defined tackling climate change as one of the FCO’s four strategic priorities, and combating transnational terrorist movements and political and religious extremisms is also a major theme of his, the need for closer and closer co-operation with other ministries—the Home Office, the Ministry of Justice, Defra, BERR and so forth—is evident.

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 staff 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 attachés in our European embassies when the UK is pressing other Governments so hard to increase their contributions to NATO and to 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 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 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—and 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.

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 a debate not 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 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 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.

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.

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:

“We welcome the fact that it was the FCO, rather than DfID or the MoD, that led on developing the new PSA on conflict. This sent an important signal that the Government was committed to diplomacy as the best form of conflict prevention”.

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

“we need to have a clear understanding of who runs foreign policy, and at the moment the lines are so blurred that it is very difficult to know”.

He went on to say,

“whether it is run by a Department called DFID or a Department called the Foreign and Commonwealth Office is not the point. The point is that there can only be one British Government foreign policy, and in every capital there can only be one voice that holds sway ... We cannot have—and this happens too often—two voices in the same capital”.

The committee concluded quite clearly:

“While we welcome greater joined-up working between the FCO and other Government Departments, we recommend that there should be a clear recognition across Whitehall, including from the Prime Minister’s office, of the FCO's responsibilities for foreign policy”.

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, 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 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:

“We must consider the immense diplomacy needed to take the steps that have been identified”—

in tackling the nuclear threat—

“Diplomatic leadership from the very top is essential. No doubt foreign ministries will be expected to organise the effort. Quite obviously, that effort must be taken side by side with ministries of defence. I would like to highlight another ingredient … Almost all of the steps involved have a major scientific and technical component … That is a diplomatic undertaking of immense difficulty and importance that can only be accomplished by teams that include scientific capability, private as well as public”.

I have one further quotation from George Schultz, from a book which I had the privilege to write the foreword to. It was published here last week and is entitled The World Crisis: The Way Forward After Iraq. He said that,

“we in the United States, and in other countries as well, face a radically changed world with rising powers, ungoverned territories, radical Islamists and immensely powerful weapons spreading around. This situation requires a much larger and invigorated commitment to the tasks of diplomacy, conducted on a global scale. We in the United States could be worse off. Colin Powell, in his time as Secretary, saved the Department of State from a downward slide. He reinvigorated the recruitment process, improved the resource base and technological capability, and raised the spirits of the foreign service. But much more needs to be done. The size of the foreign service needs to match global needs”.

Ours need not be that large, but the case for restoring its primacy in the conduct of foreign policy, as spelled out by everyone who has spoken so far, cannot be overstated or repeated too often.

My Lords, I, too, thank my noble friend for introducing the debate, which is of great importance at present. If I may, I shall take a different approach to the argument, although we have already had a remarkable level of consensus in the first four speeches.

The issue that I want to address is what appears to be the ambition of this Government and of the new Foreign Secretary to make some very radical changes, perhaps summed up in the phrase used by Mr Miliband in his first speech after becoming Foreign Secretary, when he referred to the crucial new distribution of power in the world. That speech was followed more recently by a remarkable speech by the Prime Minister in New Delhi, India, when he spoke about the need for a radical shift of power to the major developing countries from those that have traditionally been the major power brokers in the world. At that point, he referred to the possibility of India becoming a member of the United Nations Security Council. He has referred more generally to other major developing countries becoming crucial governing members of international institutions such as the World Bank.

If one has a major and radical shift in the structures of governance among international institutions in the world, including the United Nations, one first needs to understand those new and more powerful nations even better than one does today. One cannot possibly reduce the level of knowledge of them: one has to increase it and have greater understanding of internal, political and economic forces than is necessary for countries that are still on the margins of power in the world.

Secondly, one can no longer make assumptions about what one might describe as the ruling bloc in those same international institutions. If, for example, one introduced India, Brazil, South Africa and one or two other nations to the United Nations Security Council, it is most unlikely that it would be easier to reach agreement in that council than in the days when it was largely dominated by the power of the United States and her allies. In short, one needs a more complex and nuanced diplomacy than is necessary in the world from which we have emerged. That was reflected in Mr Miliband’s speech, but not in the resources that Mr Miliband has available to him. That is my first point about the need for much greater diplomacy than we have had in the past.

My second point, as I have tried to indicate, is that the likelihood of reaching agreement easily becomes more difficult in an increasingly multilateral world than in one dominated by, first, two great powers and then one. That, too, means that there has to be a higher, more patient and knowledgeable level of diplomacy.

Thirdly, there is the example that was usefully brought to the attention of the House by the noble and learned Lord, Lord Howe of Aberavon, in the point that he made just now about the remarkable changes that are occurring in the attitude in the United States towards such things as nuclear proliferation, for example. That also requires a steady and active level of diplomacy. Anyone who has studied the history of the United States under the two Bush Administrations would have seen very clearly the extent to which the first of those Administrations dismissed diplomacy as synonymous with appeasement: that was frequently advanced by the Administration in their first term. But diplomacy is not synonymous with appeasement: diplomacy is synonymous with trying to deal with conflicts and with building peace. One thing that we badly need to do—and the noble Lord, Lord Anderson of Swansea, along with the noble and learned Lord, Lord Howe of Aberavon, made this absolutely clear—is to recognise the paramountcy of diplomacy in a multilateral peace-seeking world. One simply cannot do without it.

Although I strongly support the goals of DfID, having travelled quite a lot as many Members of this House have done, it is hard to believe that money is always as effectively used at the margins of DfID as it is today at the margins of the Foreign Office. DfID probably has rather more money to make difficult choices about because that money has so readily flowed to it over recent years.

I turn now to the last half of what I have to say—I hope that I can persuade the Whip that she need not worry about my nine minutes because I promise to keep my eye on the time. I want to look at the objectives that were set out by the Foreign Secretary in his speech last weekend to the Foreign and Commonwealth Office leadership conference—an internal setting of priorities that he then made public. I will mention the four that he mentioned as his greatest single priorities.

The first is tackling nuclear proliferation and dealing with the vision of a nuclear weapons-free world—things that are certainly close to my heart. They imply to an extraordinary extent co-operation between civilian and overseas departments. In our own country, with the emergence of more and more civil nuclear power, the responsibility of BERR—I will not attempt to call it by its full name—is closely interrelated with the responsibilities of the Foreign Office in the international sphere. You simply cannot make advances in this field unless you recognise the crucial nature of this interlinking. We in Britain are still a long way away from what used to be called joined-up government, particularly where it is joined up between domestic and overseas departments.

The Foreign Secretary’s second priority was preventing and resolving conflicts. If you make the same assumption as I do that the previous Prime Minister's liberal intervention will make it more difficult in the next decade or so to get support for and seek legitimacy for action, the crucial fact about trying to prevent conflicts is to move as quickly as possible. You need to get in early, as in the end happened in Kenya, thank God. In other countries such as Rwanda and the Democratic Republic of Congo, late intervention allowed conflicts to seed and spread and become devastating in their consequences for the retention of the rule of law and of order in the world. His third priority was for a high-growth, low-carbon economy and his final one was to improve multilateralism.

I return to what has already been said so effectively by my noble friend and by other noble Lords in this debate: we have hardly begun to explore the areas where we should work within the structures of the European Union, not outside them—and the low-carbon economy is as good an example as one can find. I still find it quite extraordinary that we spent days in the House debating climate change and are about to spend days discussing the European Union's involvement in climate change, and actually the two could quite readily be incompatible in some areas. That seems a rather foolish form of management.

I conclude by asking the Minister to tell us more about the extent to which Foreign Office plans have subsumed the idea of working more closely in Europe, precisely on issues such as a low-carbon economy, climate change and on joint representation where that is the appropriate way to go. On the whole, the Foreign Office does a remarkable job, but we need to look again at whether it has been squeezed to the point where, with the best will in the world, it can no longer be as effective as we need it to be.

My Lords, this debate could not be more timely. The Comprehensive Spending Review announced last year and the current and prospective year’s budgetary provisions have left the Foreign and Commonwealth Office squeezed and starved of resources. The consequences in the form of post closures and the slow haemorrhage of downgrading and thinning out the remaining posts are already visible. The premature departure at a time when they could have given more years of valuable service of many talented and highly professional diplomats is taking place daily. Important scholarship programmes, prominent among them the Marshall scholarships, have been top-sliced and, as a result, fewer such scholarships are now available than in recent years.

I asked a Question about these false and damaging economies in the scholarship schemes last October and was then given a vaguely reassuring reply. I gather that the right honourable gentleman the Foreign Secretary today made a Written Ministerial Statement in another place which does not in fact take matters much further. Meanwhile, the facts belie the reassurance. There are fewer Marshall scholarships. We are waiting to hear whether the Government plan to restore these cuts in future.

All these signs of stress and damage to what our rivals and adversaries have always acknowledged to be one of Britain's outstanding national assets—its world-class Diplomatic Service—are ones that we cannot afford to ignore. The noble Lord, Lord Wallace of Saltaire, should be congratulated on bringing this matter to the Floor of the House. As a former member of the Diplomatic Service, I will try to avoid any special pleading and look rather at a number of general issues relating to the national interest.

First, does Britain of the 21st century need a world-class Diplomatic Service or should we accept a process of relative decline and settle for something skimpier and less effective? The answer that we do need a world-class Diplomatic Service and that settling for second best would be damaging to our national interest is not just a response of knee-jerk jingoism; it is surely a matter of rational analysis. Everyone beats a path to the door of a superpower. Just look at the way that countries staff their embassies in Washington or Beijing. But when you are a middle-ranking power with world-wide interests to further and defend, as Britain does, you need sharp eyes and sharp elbows. Some 30 years ago, the Callaghan Government commissioned a report that concluded that Britain could no longer afford a Rolls Royce of a Diplomatic Service. The Government rejected that advice. It is sobering to think of where we might be if they had accepted it. I hope that the Minister will reject it again at the conclusion of this debate and will ensure that his rejection is not just a verbal reflex, but a reality in terms of resources and manpower.

It really is important to look at Britain’s external policies in the round and to consider what is needed to manage them effectively, and not to look at them as a collection of disconnected stovepipes—some development aid here, some diplomacy there, and some military action when all else fails. This Government can take great credit for the massive and sustained increases in Britain’s overseas aid budget. We are at last in sight of the UN target of 0.7 per cent of gross national income to which successive Governments committed us and then did little or nothing to honour. But development aid cannot be a stand-alone policy. In many countries where civil strife or bad governance prevails, it is hard to deliver it at all; just look at Kenya today. In other countries which are successfully transiting towards developed status, aid will be of steadily diminishing significance. Look at India, for example. But we need active diplomacy in failed or failing states and we need it in rising powers. We should not be robbing diplomatic Peter while favouring development-aid Paul. We should be resourcing both as an integrated whole in our overseas policies.

The same is even truer for our Armed Forces. If all that requires a bit more of the taxpayers’ money, government and opposition parties should be prepared to say so and defend that as being in the national interest. We will certainly not defend those overseas interests successfully by pretending that more and more can be done with less and less.

It is sometimes suggested that in this era of rapid communication, of summit meetings and of increasingly specialised forms of multilateral diplomacy, we do not need diplomatic missions in the way we used to and that everything can be handled by experts from capitals and by political leaders themselves. In the real world, that is not the way things work. Ill-prepared meetings at political level seldom produce good results and often produce the opposite. Complex multilateral negotiations require a careful meshing of expertise from capitals, professional skills on the ground where the negotiation is taking place—in New York, Geneva, Brussels or wherever—and a world-wide diplomatic network lobbying for our objectives and warning where the obstacles to achieving them lie, and how best to get round them. Getting a good result from the post-Bali negotiations on climate change will require just that sort of multifaceted diplomacy; but we will not achieve it if we simply do not have diplomatic posts in some of the key places or if our posts are inadequately staffed. I remember a feeling of powerlessness and inadequate knowledge when successive crises occurred in three countries that were high on the Security Council’s agenda—Somalia, Rwanda and Haiti—in which Britain had no diplomatic representation at all.

Later this year, assuming that the Lisbon treaty is ratified by all 27 member states, the European Union will establish its external action service, drawing on, among other resources, the serving diplomats of its member states. Personally, I regard that as a great opportunity for Britain, not as a threat or as an issue of low priority. As one of the member states with a Diplomatic Service of the highest reputation, we have an opportunity to ensure the professionalism of the new service and thus further our interests along with those of the European Union as a whole. Are we ensuring that we make a serious contribution in ideas, structures and human resources to the work that is getting under way in Brussels? Are we going to provide some of the best and brightest of our diplomats to work in the new service and not just unload those whom we value least—an old trick of any bureaucracy in circumstances such as these? Are we going to ensure that the development of that European Union dimension to our diplomacy is valued and rewarded, so that British diplomats regard a spell at a European Union mission as a step up the professional ladder, not a diversion or a distraction? I would welcome a response from the Minister on those points.

My contribution to this welcome debate may have sounded a little bit critical. It is intended to be constructively so. We are dealing with an important national asset which will not retain its value if it is not properly resourced and led. The Diplomatic Service that I joined in 1959 has changed out of all recognition in the intervening half century. A series of rapid and fundamental transitions have taken place and the overall quality of the service has not declined. If anything, it has improved. That is surely a major national achievement of which we can be proud. But that process of unending transition and change will be successfully sustained only if we provide the necessary resources and political support. Let us just hope that today’s debate will have made some modest contribution to that.

My Lords, we live in a changing world and the importance of foreign policy becomes greater as time progresses. Britain is a key player in the European context, but our interests are wider and the Government owe a duty to ensure that our national voice is heard across the global community. It is for this reason that this debate is so crucial, and I congratulate the noble Lord, Lord Wallace of Saltaire, on securing this opportunity.

Inevitably, in a changing world, it will be necessary to make changes to the structure and representation that we wish to have in different countries; but there needs to be an open and honest debate about whether the changes being made are the correct ones—and, if not, what the appropriate level of representation should be. Further, there are economic considerations that need to be borne in mind, particularly considering the costs of maintaining posts in different countries. That is not an easy area of policy.

We currently enjoy 261 posts overseas, of which 43 are staffed exclusively by locally recruited people; 218 are staffed by UK-based civil servants and locally recruited people. In response to a parliamentary Question in another place, the Secretary of State listed those countries which no longer have a resident British ambassador, consul general or high commissioner. There were 52 such countries, of which two were temporarily closed for security reasons.

Since the Government came to power in 1997, we have seen more than 35 embassies, high commissions and sovereign posts closed. Of the 53 African countries, some 23 do not have any British diplomatic representation at all. Considering the increasing strength of the Chinese in that continent, we need to give very careful consideration to the strategic disadvantage in having such a minimal presence there. One approach to improve this situation might be to accredit civil servants from the Department for International Development where no Foreign Office staff are present in the country concerned, particularly in countries such as Lesotho and Swaziland. I hope that the Minister can give the House a commitment to consider such an alternative.

There is continued suspicion in many quarters that the closures we have witnessed around the globe are rather more to do with financial constraints within the Foreign Office than with the reason provided by the Government that it is a consequence of a changing world. Is it reasonable that the closure of the Foreign and Commonwealth Office language school and the withdrawal of the Foreign Office's contribution to the cost of maintaining defence attachés are connected with shifts in global circumstances? I doubt it. The Foreign Affairs Committee in another place has warned that the Foreign Office budget is likely to be cut by 5 per cent each year, which could jeopardise this important work. Presumably on that basis we shall see a further reduction in British representation around the world. I hope that the Minister can provide clear assurances about that risk.

We need to strengthen our traditional relationships and try to freshen and deepen other multilateral alliances. The extraordinarily rapid changes in the distribution of economic and political power in the world means that we will need to shift more of our weight to the relationships with the Asia Pacific region and other countries. We have a long way to go before we can claim to have been sufficiently successful at promoting trade with China and India, and we have lost out to other European nations as a consequence. The Government need to put that right. It can be argued that Britain has been slow, given its concentration on affairs in Washington and Brussels, to adapt to the rapid changes taking place in newly industrialised countries. As I alluded to earlier, we have seen the end of Chinese passivity in international affairs. Deepening our relationships with countries in Asia, the leading countries in Latin America, the Middle East—including the Gulf States—and Africa will be important to us. This cannot be achieved with a diminishing international presence for our country.

I agree with David Cameron when he speaks of a new emphasis on multilateralism. It is vital to widen the circle of British influence, making more of the underutilised Commonwealth to enhance our co-operation with countries with which we have a historical, cultural, political and economic tie. The noble Lord, Lord Wallace of Saltaire, has included the question of European co-operation in this debate and this is important. I welcome the role that the United Kingdom plays in Europe, in particular the expansion that we have seen of the European Union towards the countries of eastern Europe. I would like to see that widening continue with potential growth into the Balkans, Turkey, and even perhaps Ukraine. European co-operation on that scale would prove to be a very powerful influence in the world. European countries working together, speaking with one voice should be an aspiration for us all to work towards but the recent experience of the European Union suggests that a single foreign policy is not easy to achieve. A Europe constructed on flexibility and concentrating on practical solutions to the challenges confronting the global community is likely to be more effective than internal squabbling about the creation of institutional structures.

I hope that the Minister will be able to answer this important debate by reassuring the House that the financial pressures being confronted by his office will not result in a diminishing presence for our nation on the global stage; that the Government recognise the possible difficulties that may emerge from reliance upon the development of a common European policy; and that we need to be more proactive in using our unique position in the world to our national advantage through the establishment of stronger partnerships for the benefit of our citizens and the wider world community.

My Lords, I am very grateful, as other noble Lords have been, to my noble friend Lord Wallace for introducing the debate and particularly for his helpful and masterly introduction. I have found the debate particularly interesting because it obliged me to look at the House of Commons Foreign Affairs Committee report on the Foreign Office’s annual report, which indicates the extent to which House of Commons scrutiny of departmental activities has developed. Thirty years ago, I served on the predecessor committee of the Foreign Affairs Committee—the Defence and External Affairs Sub-Committee of the Expenditure Committee. Our reports were about one-tenth the size of the reports of the Foreign Affairs Committee; they certainly did not go into anything like the depth that is gone into now. The committee’s report, and the reply from the Foreign Office to it, shows the very helpful dialogue that now goes on. The activities of another place are not always recognised in this House, but I have found them to be of particular importance. This is the first debate that I have taken part in for which the Library has produced a specific briefing document. This is an important development, and I find it extremely helpful.

We are devoting ourselves in this debate to a wide range of issues. We must start, presumably, with the 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 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,

“better integration, particularly between MoD, DfID and FCO. I can set the lead, with regular trilaterals with Des Browne and Douglas Alexander. But we need to think more radically about joining up at all levels: from co-located staff at post to single cross-departmental country plans”.

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 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.

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:

“We would welcome assurances from the Government that, where it is in line with UK policy, they will contribute to providing the Service with high quality personnel with the necessary language skills, including secondees, and adequate financial resources”.

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 co-operation 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.

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 attachés 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 altogether 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 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.

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 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 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.

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 vital 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:

“The age of neglect is over”.

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 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.

My Lords, I, too, thank the noble Lord, Lord Wallace of Saltaire, for introducing the debate today with a 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 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 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 such as 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.

Secondly, there is the question of visas. Again, when I first went to the FCO this was another backwater of activity, a sidelined, difficult area of work that most of the FCO considered dull, routine and not what clever chaps did. However, it became an issue of huge priority for the tens of thousands of British Pakistanis and British Indians whose families wanted greater access, and for the increasing number of people who want to come to this country on business or for tourism. It became, in effect, a domestic issue and resources had to be put into it—rightly so. Of course those services are paid for by those who benefit directly, but they absorb staff time and human resources. I came back from Saudi Arabia this morning—I declare an interest as chair of the Saudi-British Business Council—where my Saudi counterparts told me that our visa service is now second to none. That is of direct benefit to us in this country when we depend so heavily on trade and investment.

The third area in which I see a marked change is trade, as the noble Viscount, Lord Montgomery, mentioned a moment ago. In 1977, ambassadors regarded involvement in trade issues as somewhat below their sightline, except perhaps when the serious business of defence equipment was involved. However, trade has become another area that requires our ambassadors to be fully engaged and to which they are required to commit time, intellectual application and staff resources. The FCO is our delivery mechanism for trade, not BERR or the UKTI exclusively—as I remember it at the time of the DTI—or indeed the Treasury. It is Foreign Office diplomats who do that on the ground throughout the world. I was the first Minister between the two departments, the DTI and FCO, and co-operation at working level was not always as wholehearted as it might have been in terms of Whitehall activity. Let us see what happens when those activities are added to by the addition of the Defence Export Services Organisation. I am interested to know what the Minister has to say on that when he responds.

The fourth area, which has assumed increasing importance, is human rights. That is characterised in different ways; our friends over the Atlantic think of it as democracy and for others of us, with perhaps less simplistic views, it is about establishing the rule of law, human rights and the growth of civil society, without which a vote for a Government becomes the licensed tyranny of the majority over the minority. The Foreign Office’s commitment to capacity building in civil society overseas is real and important, and it costs time, money and human resources. It is emphatically not a DfID issue; it is a Foreign Office issue and area of expertise. It needs real knowledge of the individual countries concerned. It is not a one-size-fits-all exercise.

I have characterised those four areas, not because they are exclusively important but because they are the day-to-day bread-and-butter issues, which so often get shoved to one side. They are not headline issues about the huge and enormous importance of our diplomatic presence in countries such as Iraq or our recently strengthened presence in Afghanistan. They do not deal with the burgeoning economic influence of China or India, the flexing of Russian energy muscles or the Gulf’s sovereign wealth funds. However, they are of huge importance to the security and the prosperity of this country.

Those areas are matched by increasing commitment in other areas, such as in the United Nations, where we field a superb team of highly motivated and intellectually able individuals; in NATO, where our strategic positioning with the US, Europe and Turkey is arguably more crucial than ever; and in the EU, where the United Kingdom’s down-to-earth attitude—which is without the doctrinaire fervour of some of our close neighbours—or the instinctive opposition to the winds of change of others usually put us in the right position.

The truth is that we all know that foreign policy now has to comprehend overseas development, defence and trade, and that it increasingly involves transport, health, education and justice and, as the noble Baroness, Lady Williams of Crosby, emphasised, environmental issues. However, it still has to cover foreign policy—hard, tough and intellectually rigorous foreign policy. I fear that that hard-nosed foreign policy often becomes the victim of that panoply of issues, which I have described. If we are not able to pursue that sort of tough foreign policy, we will not be able to deliver on the security and prosperity that people in this country have a right to expect from their Foreign Office.

My Lords, I rise briefly to thank the noble Lord, Lord Wallace of Saltaire, for the elegance of his introduction to the debate and to pay particular tribute to the noble Baroness, Lady Williams of Crosby, who has made most of the points that I would have wished to make. I strongly support what the noble Baroness, Lady Symons of Vernham Dean, said about the consular work of the Foreign Office and its posts abroad. We tend to forget how the exponential take-off in travel has meant that more and more people need the help of posts abroad, and therefore that it is desirable to retain posts.

I want to concentrate on the point made by the noble Lord, Lord Hannay of Chiswick, about networks. There may be a systemic problem concerning the allocation of the slices of the FCO resource cake. Most people who have taken part in this debate would like a bigger cake. That is hardly going to be settled by what we say, but how the cake is sliced is an important issue. I strongly support the clearer prioritisation that has been introduced. The drafting of clear, short objectives for foreign policy is a good idea. The clear, short lists that have been produced, particularly by this Foreign Secretary, are very good; I strongly support that. However, there is a risk that they result in the favouring of programme expenditure as against network expenditure.

For example, the FCO’s work on climate change is of a very high calibre and is done by very good people. However, if you are the priority holder—if you hold the climate change objective—you will tend to have a bias in favour of initiatives, conferences and publications rather than conversation and contact-building in posts. You will not see an immediate interest for you in maintaining an embassy in Ruritania. Yet if we do not have embassies in the Ruritanias, the overall objective of trying to get the world to move the right way on climate change will be harder to achieve. If, as I believe, we are approaching a Bretton Woods moment, when we need to devise the new institutions to deal with climate change, there is no point in having just a British prescription; there needs to be an EU prescription, and a prescription that is pre-sold to a willing world that has heard about it previously, discussed it and seen its angles on it reflected in the final product. That is the risk if you go down the route of priorities: no one is directly responsible for maintaining the embassy in Ruritania, for the network: at least, I would like to hear from the Minister if someone is—I cannot see, in the charts in Foreign Office publications these days, who is. That worries me.

A number of points made in this debate were very relevant, such as that made by the noble Lord, Lord Sheikh, about language training. You have to have people on the ground; you have to have people talking to the Government in office in the country in question; you have to have people knowing the opposition—the people who might be the next Government—and correctly predicting who they will be. The Gorbachev prediction was very important at the time. It is no good saying that all of this can be done directly on the telephone from London. Yes, a lot of it can be done with the Government in office, if the approach is properly targeted and people have been briefed by the post on the ground—if you have the right people on the line. But the Government in London cannot ring up the opposition—the next Government—out there because, first, they do not know who they are and, secondly, it is politically dangerous for a Government to talk to another country’s opposition. You need someone on the ground; you need to have a network of people who speak the right languages in the right quarters.

Inside the European Union, we have not yet reflected in our deployments—in our network—the fact that the new member states have votes and vote on what become our laws. We still have posts of a size that were quite good for keeping in touch with the countries of eastern Europe before they joined the European Union. We do not have posts, in my judgment, that are fully equipped for the lobbying that should go on before there is a great debate in council, a great decision and a great vote. So I strongly support the point about Bucharest and Bratislava, which was elegantly made at the start of this debate by the noble Lord, Lord Wallace of Saltaire.

My Lords, the House would have been pleased to learn that the noble Lord, Lord Kerr, was going to make some remarks—inevitably brief but also illuminating—in the gap. If I may misuse the famous London slogan, I could say, “Mind the gap and stand clear of the floors”, using the verb “mind” in the old Anglo-Saxon sense of “pay attention to” and the phrase “stand clear of the floors” to refer to the Government’s policy, which involves far too tight a budget for the Foreign Office, with all its future duties. That has been a consensus outcome of this debate from all parts of the House, although it was couched in very polite language. I hope that the Minister will not misunderstand the politeness, which is a traditional House of Lords phenomenon for concealing, as it were, the anxiety that many noble Lords have expressed today about the new budget plans.

I, too, thank my noble friend Lord Wallace of Saltaire for his initiative in launching this debate. It has been a very great occasion. He spoke with his traditional authority and knowledge, blending the best elements of Chatham House and the international relations department of the London School of Economics, as well as his knowledge of these matters as a politician in the House of Lords. How right he was to refer to the Cabinet Office role having been built up in recent times by slightly jealous Prime Ministers, so that it becomes a miniature Foreign Office of a kind on its own. Its difficulties at present partly reflect that, and partly the need to recast some of its roles.

I also agreed with my noble friend Lord Wallace when he said that the now Prime Minister—the then Chancellor—did not appear at all keen on the Foreign Office and probably wanted it to be a small and more modest department in future—modest for the wrong reasons. I also agree very much with the suggestion of my noble friend that we call our embassies in the EU countries British Government Offices, British Government Representation Offices, or some such more modern title. That would convey that we are not too nervous about being reasonably integrated with our colleagues in the European Union.

It was also a great pleasure to hear the noble Lord, Lord Anderson, refer to DfID. I think that he used a phrase along the lines of “it has much more cash than it actually uses”. It is manifestly unfair on the Foreign Office, as both departments ultimately need more resources. DfID, as has been said in this debate, is getting going in a really striking way now, and no one would want to detract from that. The noble and learned Lord, Lord Howe of Aberavon, also referred to that unfair disparity between the two departments, which I hope will be dealt with in future years.

I am so glad that my noble friend Lady Williams of Crosby showed the strong support for the EU that we have come to expect from her. How right she was to say that that also means, by implication, an even more active role for our own embassies or missions in other EU countries, particularly the east European ones, where their modern nation-building needs help and advice from outside—but not of an overweening kind, I hasten to add. I rather agree with the analysis of the noble Lord, Lord Sheikh, when he said that it sounded as if the Treasury wanted a reduction and the Foreign Office Ministers then decided to build the modern strategy in that reality.

While one would like to have time to refer to other speeches, time is inevitably short on these occasions, but it was also a pleasure to listen to the wise advice of the noble Baroness, Lady Symons, who spoke from her knowledge of the modern problems of the Foreign Office. To declare an interest, the noble Baroness recently became the appointed chairman of the European Atlantic Group, of which I am president. She will contribute much knowledge and authority to that group in future. The diplomats in that group, whether as guests, visitors or members—for many foreign diplomats come to each of our occasions, whether we have dinners or other gatherings—frequently pay tribute to the quality of the British Foreign Office and its work.

The modernisation of the Foreign Office in recent years has been very considerable, with agreeable developments such as more women diplomats and more couples being located in missions, which are important for the modern development of the sociology of the Foreign Office. They are not just from Oxbridge, by the way; although that process is pretty slow, it is getting better—and the sooner it gets rapidly better, the greater that achievement will be. Links to trade and economics also reinforce the modern role of the Foreign Office, rather than reducing it. A number of your Lordships referred to more effort within the European Union.

The conclusions of the report from the House of Commons Foreign Affairs Committee, however, were pretty radical, although couched in polite language. Conclusion 2 states:

“We conclude that the Comprehensive Spending Review … settlement for the FCO, one of the tightest in Whitehall, risks jeopardising the FCO’s important work”.

That is a strong conclusion, and the Government must now answer some of the points made in this debate about those anxieties. However, I will quickly pay tribute to David Miliband’s leadership as Secretary of State, which has been quite remarkable—not least in the recent European reform treaty proceedings—as has that of Jim Murphy, his Europe Minister in the House of Commons. In future, under that treaty, the external action service of the EU will also be extremely important for British diplomats and their careers. I hope that that new mechanism will be successful in future.

However, £1.7 billion is really not enough to deal with the priorities that the Foreign Office will now face in this much larger and more demanding world, where there are more and more countries in total in the UN. The presence in African missions is totally inadequate, as has been said, and that applies to other parts of the world as well. My noble friend Lord Roper mentioned the helpful and beautifully laid out report from the House of Lords Library. The relevant figure in real terms is 5 per cent per annum. The £1.7 billion for 2010-11 will be inadequate for the Foreign Office’s tasks.

The new targets come after five to seven years of demoralising cuts in services and activities here, there and everywhere in the Foreign Office, as you rapidly find out if you talk to younger diplomatic members of the Foreign Office when they are entitled to be indiscreet in the corner of a pub or restaurant. The reduction of posts in EU countries at a time when enlargement and the Lisbon treaty increase the need for Foreign Office activities is difficult for the Government to justify. The military presence in Iraq and Afghanistan was mentioned several times. It needs to be finite so that we do not get into the morass of an inexorable rise in hugely extravagant and expensive defence spending without achieving our necessary targets. Although some people in the Middle East may be incorrect in their analysis, a lot of people in that area do not share our support for NATO’s role and regard it as a pretend assignment for an organisation that should have been disbanded shortly after the signing of the Warsaw Pact. Many Arabs and Afghans say that this is a pretend mechanism to keep NATO going and that it is not really an appropriate role. I do not agree with that but none the less one cannot go on saying that NATO’s role in Afghanistan will last for years and years with all the huge expenditure that that will involve for Britain and other countries.

The important matter of the arms trade treaty was referred to in the report. I very much endorse the need for that in the modern world. My noble friend Lady Williams also accepts that that is an important priority, and has campaigned for it recently. I do not have time to refer to the FCO services and executive agencies’ work mentioned at page 53 of the House of Commons Foreign Affairs Committee’s report. Therefore, I conclude by asking the Minister to respond seriously—as I am sure he will and as he normally does—to the points made. The figures are not adequate. At least £2 billion is needed for the immediate target of 2010-11. That constitutes a very modest increase. In future the Foreign Office needs to expand rather than being crunched into a relatively low-morale institution given the pressures from the Treasury and other parts of the Government.

My Lords, this has been a fascinating but distressing debate. I am, however, most grateful to the noble Lord, Lord Wallace of Saltaire, for introducing it this afternoon. It is always a great privilege to respond on behalf of my colleagues on these Benches.

As my noble and learned friend Lord Howe and the noble and gallant Lord, Lord Bramall, clearly stated, this debate is about the importance of democracy. The noble Baroness, Lady Symons of Vernham Dean, in her forceful speech referred to the importance of security and prosperity. Yet the Foreign and Commonwealth Office’s budget is due to rise by just £0.1 billion over the next three years. The Foreign and Commonwealth Office’s budget is supposed to,

“effectively rise through efficiency savings by restructuring, cutting administrative costs and changing the emphasis of resources, by streamlining towards the Middle East”.

Many of your Lordships mentioned that since May 1997 the Government have closed eight British embassies, eight British high commissions and 18 British consulates, making a total of 34 closures in 10 years. The “diplomatic surge” announced in January this year is supposed to account for the reassignment of these roles, with the number of staff in posts in the Middle East and south Asia to be increased by 30 per cent. However, over the past 10 years the closing of diplomatic posts has resulted in rock-bottom morale and a stampede for the exit door by disenchanted embassy staff. By 2005, diplomats on gardening leave were costing the taxpayer more than £500,000 per month. An issue noted not only in this debate by the noble Viscount, Lord Montgomery, but also in other debates, is that of the diplomatic black hole in central America, where just three out of the seven countries have any diplomatic—or even any DfID—staff posted there. This reflects a wider change in the geographical utilisation of FCO resources—part of the so-entitled “diplomatic surge”.

President Bush’s global war on terror—GWOT—has further strained the limited resources of the FCO by increasing security costs for diplomatic property and staff and by channelling money to the front line. Yet in 2004, the Kuwaiti embassy, undeniably a location of colossal strategic importance in the Middle East, was driven nearly to the brink of bankruptcy and was forced to close until urgent financial aid could be found. The noble Lord, Lord Hannay, rightly bemoaned the Foreign Secretary’s Written Statement today, cutting the FCO scholarship and fellowship funding, and also the lack of languages being taught.

I turn to the European part of the debate, touched on by the noble Lord, Lord Kerr, where I have direct personal experience of the FCO budget cuts. I declare an interest—I have been a member of the British Association for Central and Eastern Europe’s council since 1994. Since 1991, more than 5,000 politicians, civil servants, judges, journalists and businessmen from countries in central Europe have participated in courses, seminars and conferences organised by BACEE. This association has contributed to improvements in civil society in countries that have revived democratic systems after years of authoritarian one-party rule. Through the transfer of expertise and know-how, it has helped Governments, the media and key institutions of states in transition, and thus the lives of people in central Europe. The popularity of BACEE’s programmes in central European states is linked to its longstanding approach of responding to requests from states, rather than trying to impose something on them. BACEE closed, sadly, on 29 January, after 40 years. It had been run brilliantly in the past few years by the former ambassador, Nicholas Jarrold. Its closure is the direct result of the FCO’s decision to withdraw its grant in aid. Does the Minister not think that the FCO has made a dreadful mistake? This is not a casual question. To close BACEE now, when developments in Serbia and Kosovo are of such concern, compounds the error, especially as the sum of money concerned is so relatively minor—about £260,000. It gives a lamentable impression of reduced British interest in the new member states of the EU, and particularly in the countries that aspire to join the EU.

I return to where I started and quote again. The FCO’s budget is supposed to,

“effectively rise through efficiency savings by restructuring, cutting administrative costs and changing the emphasis of resources, by streamlining towards the Middle East”.

This is exactly what happened this Tuesday with the BBC World Service. Ten language services were closed so that it was able to launch the new Arabic television service. The three-year grant in aid of 3 per cent was only released provided the BBC World Service met its efficiency targets. It had to find savings to meet the rising costs of wages and pensions.

On a personal point, it is ironic that the issue of cuts to the BBC World Service was the subject of my first forays in politics. I lobbied furiously against the then proposed cuts in 1979 of £4 million on a £40 million budget. We were at that time due to attend the World Administrative Radio Conference—WARC—in Geneva, where all radio frequencies were being renewed and reallocated and would be binding into the next century. For this reason, it was vital then not to make these cuts. It was a unique opportunity, too, at the height of the Cold War, for the Russians to obtain at our cost what they felt was their fair share of the frequency pie. Luckily, the then Mrs Thatcher and her team listened and recognised the problem. They abandoned the cuts and allocated more money, thus saving the BBC World Service. Will the Minister consider augmenting rather than cutting funds both for the BBC World Service and for the Foreign and Commonwealth Office?

My Lords, warm congratulations are due to the noble Lord, Lord Wallace of Saltaire, on having picked this subject for debate this afternoon. Thanks are also due to all other speakers in what has been an extraordinarily good debate. One of the pleasures in preparing for this debate was reading the lecture of the noble Lord, Lord Wallace, which he made at Chatham House last December, and even more so perhaps the article that he wrote in International Affairs a few years ago—I think it was April 1978—when the younger noble Lord wrote a very compelling piece about the response to the Berrill report, whose reverberations we perhaps still feel to some extent today. I know that the noble Lord, having discussed it with him, feels so too.

There has been a great deal of wisdom and experience among the speakers in today’s debate. I am afraid that my credentials, since I am speaking in my first large Foreign and Commonwealth Office debate, are feebly pale in comparison. I have a half-brother who had a distinguished career first in the Commonwealth Relations Office and later in the Foreign and Commonwealth Office. I am proud to have a nephew who is a serving diplomat abroad as a member of the Foreign and Commonwealth Office, and my father was a senior officer in the British Council, which was his career. More personally, as a Minister in the Ministry of Defence some years ago, I received invaluable support and assistance from embassies and high commissions around the world without exception. Perhaps noble Lords can see that I have some background in being a supporter of the Foreign and Commonwealth Office over a number of years.

The issue that was raised is the promotion of Britain’s global interests and the resources that are provided to the Foreign Office to pursue them. I argue that those questions should be viewed through the prism of the ever-closer link between domestic and international affairs that many noble Lords have referred to today. The days when the Foreign Office provided the sole channel of communication for British statesmen with their counterparts elsewhere in the world are long gone. Indeed, they were already a distant memory 30 years ago, when the article that I referred to by the noble Lord, Lord Wallace of Saltaire, was written. The role of foreign ministries has moved on as the world has changed, and frankly that will only continue in what is an increasingly interconnected world.

The noble Lord, Lord Sheikh, made the comment that this is a changing world, and everyone has said that implicitly. I am very grateful for the genuine compliments that have been paid to my right honourable friend the Foreign Secretary during the debate from around the House. As he said in his speech on 4 March:

“Globalisation and interdependence already define our age”.

For that reason, if for no other, all Governments have a duty to keep the role and objectives of the Foreign and Commonwealth Office under regular review. The conclusions of the latest such review were announced by the Foreign Secretary in another place on 23 January. They identified the three main roles that the FCO plays: providing a flexible global network serving the Government as a whole; delivering essential services to the British public and business; and shaping and delivering Her Majesty’s Government’s foreign policy.

The new framework identifies four new policy goals; areas of the greatest importance to the UK where the FCO can make the most difference. We heard about them this afternoon. They are countering terrorism and proliferation; preventing and resolving conflict; promoting a low carbon/high growth global economy; and developing effective international institutions, especially the UN and EU. The noble Baroness, Lady Williams, made some very pertinent points about that list.

The noble Lord, Lord Kerr, who spoke in the gap, is concerned about the programme against our network. The strategy takes on an integrated approach to both, so that the climate change policy will raise the programme from £4 million to £21 million and create, critically, 35 new diplomatic staff posts, backed by 70 locally engaged staff to build the relationship and have what we hope will be a real influence on the climate change debate throughout the world.

This new strategic framework is now being implemented with FCO resources being reallocated to these new priorities. I am certainly not going to get into a numbers game on resources—that would be a mistake and would diminish this particular debate. However, I absolutely take the point made by the noble Lord, Lord Dykes, that the politeness and good humour with which this debate was conducted do not mean that what was said on all sides of the House was not meant with the greatest seriousness. I listened carefully to the noble Baroness, Lady Rawlings, and her sharp criticism of the lack of spending that she says the Foreign and Commonwealth Office has had over the years. I was listening for a clue—I ask this very gently—about whether any future Conservative Government would promise to increase Foreign and Commonwealth Office spending. I do not expect her to answer that now because I think the answer is probably no. That adds to the problem rather than offering an easy solution to it.

I will say no more about spending: the figures have been given. However, I will say what we will focus the resources on our four new policy goals. It means substantial increases in resources for counterterrorism, climate change and our work in Afghanistan. In addition, funding for counterproliferation, conflict prevention and international institutions is also set to increase, but by more modest amounts. The BBC World Service will launch a new Persian television channel and extend broadcasting, as we heard, of its Arabic language TV service to 24 hours a day, seven days a week. The British Council will extend its efforts to build mutual understanding with Muslim societies, particularly among alienated younger populations. I hope that my noble friend Lord Parekh will take particular notice of that.

To achieve these changes, all three bodies will benefit not just from new funding provided by the Treasury, but from money recycled internally through ambitious efficiency programmes. These increases will in part be financed through reducing funding for other policy issues, including three areas where other Whitehall departments will be taking on more of the burden: sustainable development, science and innovation and the field of crime and drugs. At the same time, the Foreign Office, the BBC World Service and the British Council are jointly committed to delivering £144 million in efficiency savings during the next three years, through a wide range of projects.

Funding the essential public services that we provide to the British people will be sustained and our dedicated staff will continue to provide consular assistance around the world to Britons living, working and travelling abroad. My noble friend Lady Symons made particular reference to how this issue has gone up the agenda in a huge way in the past years and will continue to become more important. We will continue to help British business and the UK economy through UK Trade and Investment, and we will continue to support Britain’s migration objectives through the FCO’s work, as well as in co-operation with the new UK Border and Immigration Agency.

In 2003, the FCO reviewed its global network to ensure that resources were deployed in line with priorities and that they were providing the best possible value for money. This resulted in the closure of a number of posts in Africa, the Americas, Europe and the Pacific. It goes without saying—and the noble and learned Lord, Lord Howe of Aberavon, will remember this from his days as Foreign Secretary—that a decision to close a post in any country is never taken lightly. Our global network is an important asset for the country and one which we intend to maintain and enhance. But priorities change and we have to deploy our resources in a manner which best reflects this. The FCO’s respect and reputation around the world remain second to none, but we cannot be everywhere, engaged on every problem. Choices have to be made and we have to look for new ways of working.

As we have heard, the overall number of FCO posts around the world has actually increased, from 242 to a total of 261 today. There have been 32 closures and two temporary closures—that was the figure of 34 that the noble Baroness mentioned—but there have been 18 openings, which were not mentioned, and 35 others that were not principal offices but trade offices and offices with other important diplomatic functions. Posts have been closed and opened, but I would argue that it is not so much the pure numbers that make the difference as to whether such decisions are good or bad; what really matters is whether they fit in with what should be the priorities for the United Kingdom. Do they take care of United Kingdom interests?

A range of matters were raised around this issue. As far as DfID and the point about heads of offices perhaps representing the whole of government are concerned, the only countries where that is a live issue are Swaziland and Nicaragua. The position of principle, for which I would think that there is a degree of support around the House, is that double-hatting DfID officers would require them to take on a whole range of diplomatic functions—consular, visas, trade and representational. That would contradict the statutory requirement to give primacy to reducing international poverty, which is DfID’s prime role.

Another issue raised by the noble Lord, Lord Roper, on which I answered a Question a few weeks ago, was entry into the EU civil service. It is not just a question of languages; it is a question of the relatively low entry grade into the EU civil service under its rules, which means that UK civil servants with a few years’ experience would sometimes have to take a retrograde step in seniority and pay. Our job is to try to make joining that civil service appear a more positive career move for young diplomats. The noble Lord will know about the internal review that is taking place.

My noble friend Lord Parekh was concerned about ethnic minority numbers in the FCO. I will write to him with a full answer. I have figures that suggest that there are 507 “minority”—perhaps that is an unfortunate description—members of the Foreign and Commonwealth Office, or 8.4 per cent. That was the number of UK-based staff from ethnic minorities in 2007; but I will give him more details.

I always have a lot of sympathy with the noble Viscount, Lord Montgomery. I have a special affection for Latin America, as I think he knows. We now maintain 21 sovereign posts in the Caribbean and Latin American area. The remaining countries are covered by these posts and our staff make regular visits to them. Of course this is not a complete substitute for maintaining embassies in all countries, but it enables us to discuss important issues and protect British interests. I take a little exception to his comments on UK Trade and Investment. The UK Trade and Investment organisation is very much part of the Foreign and Commonwealth Office and my noble friend Lord Jones of Birmingham is a Minister both in the FCO and in the Department for Business, Enterprise and Regulatory Reform. It is not that difficult. The Chief Executive of UKTI, Andrew Cahn, is a member of the FCO board. As my noble friend Lady Symons said, ambassadors and UKTI staff in embassies, high commissions and consulates are part of a joint effort to promote Britain’s trading interests across the globe.

The noble and gallant Lord, Lord Bramall, in his robust way, posed some very important questions. I am sympathetic to the link between defence and foreign policy. As far as the Royal College of Defence Studies is concerned, he is correct. The FCO no longer funds the nominated overseas candidates as it used to but it still provides a lot of support to the RCDS. I have a list of things that it does—it has a seat on the contact group, it helps to identify overseas tours, it supports the tours, it fills secondee posts, it attends the training courses and it identifies high-calibre candidates overseas to attend the RCDS courses in London. I know this answer will not satisfy him, but the Foreign and Commonwealth Office is still very involved with the Royal College of Defence Studies.

I am running out of time so let me move on to the EU external action service that the noble Lord, Lord Wallace, mentioned in his opening remarks. Of course the new structures for EU external action established in the Lisbon treaty included the creation of this service, representing one potential driver of future change. The new structures offer a real opportunity to deliver more coherent and effective EU action on our globalisation agenda without weakening the intergovernmental nature of CFSP or the successful Commission-led policies on trade and enlargement. This is an example of working through the European Union mentioned by the noble Baroness, Lady Williams. The noble Lord, Lord Hannay, also made special mention of the future external action service. The new high representative for the common foreign and security policy will need support, so the proposal is—and I hope it will be supported around the House—that we bring together in one body the machinery and staff that already exist in the Council Secretariat and Commission while increasing the influence of member states through secondments. This is not about creating some new institution; it is about increasing the effectiveness of what is already there, including the Commission’s overseas delegations, at the same time making it more responsive—and this should be popular with all sides of the House—to the requirements of the member states themselves.

We have no plans for any future post closures in Europe or in the rest of our network beyond those that have already been announced. However, as the demand for FCO services—political, commercial, consular or visa—changes, the FCO must be able to deploy its resources in response to that, opening and closing posts and relocating resources where they are most needed. Unless the Foreign and Commonwealth Office does that, it is not doing its job properly.

My right honourable friend the Foreign Secretary attaches a great deal of weight to broadening the skills and experience of staff. I am pleased to say that the Foreign Office today is very different from the institution that the noble Lord, Lord Anderson, joined in 1960 or that my half brother joined even earlier than that and which has been caricatured endlessly. It benefits from the skills and perspectives of significant numbers of staff from other parts of the public and private sectors. At the most recent count, the FCO was acting as host to 211 staff on inward secondment or interchange. Many of the staff have also previously worked in business, in other parts of the Civil Service, or in the third sector, which contributes to a good mix of skills and experience that increasingly reflects the makeup of British society as a whole.

These new faces range from board members, such as: the FCO’s director general of finance, who moved from the Metropolitan Police; its chief information officer, who was previously with the BOC Group; ambassadors and high commissioners, notably the high commissioner in Dhaka, Anwar Choudhury from the Ministry of Defence; and the ambassador designate to Cuba, Dianna Melrose, formerly of DfID and Oxfam. The traffic is far from one way, with 100 FCO staff on outward secondments—a 60 per cent increase in the past year alone. Importantly, the FCO is showing the way to the rest of Whitehall by opening all appointments to senior Civil Service positions in London and overseas to interchange. Every vacancy is now advertised across the public service through the Civil Service recruitment gateway. The noble Lord, Lord Dykes, made the important point about women and particularly couples being able to work in embassies abroad. That is a step change of huge importance. Anyone who remembers the Foreign Office from years ago knew that such a thing was a complete impossibility then.

I have overrun my time. I am sorry that I have not dealt with all the points that have been made. This has been a significant and important debate. The FCO has demonstrated the flexibility, leadership and determination required to deliver on its international priorities, both now and in the years to come. We have had to take difficult and sometimes unpopular decisions, but I am confident that these have been the right ones. I am of the firm belief that the changes resulting from these decisions will ensure that the job of Foreign Secretary will still be considered that of a great officer of state in the future, and that the reputation of our Diplomatic Service as one of the best in the world will be maintained and enhanced, along with that of the UK as a whole. Once more, I am very grateful to the noble Lord, Lord Wallace, for raising this subject.

My Lords, I thank all those who have taken part in the debate. We have stressed how much the context of diplomacy has changed. The noble Lord, Lord Anderson, remarked on registry trolleys. The first embassy I ever went into was in a small town in Germany. I remember being disappointed that the registry trolley there did not still squeak, as John Le Carré said in his book that it did. We have changed, and we on these Benches accept that we must continue the process of change. We do not think that we should spend more, but we do think that we must prioritise. I was interested, after saying in a Radio 4 discussion programme in December that we should cut consular services in Europe because people getting drunk in Tallinn and Prague and losing their wallets did not necessarily deserve the full weight of the British Government behind them, to be told that there were cheers in relevant departments in the Foreign Office as they listened.

We do need to redirect our priorities. We know that the Government no longer like to have the sort of inquiries that they had in the 1960s and 1970s. I suggest, however, that we need to continue this discussion, that the Government should try actively to carry with them those outside and those in the other parties, and that the Foreign Office cannot do this on its own. Other departments are now enormously engaged in international business. The figures on exchanges that the noble Lord has just quoted are welcome. This needs to be a Whitehall approach as a whole.

On the point of the noble Lord, Lord Parekh, I have been impressed in embassies I have visited in the last three or four years that one of the economic staff always seemed to be an extremely bright young Asian economics graduate. The FCO is changing, although one should also say that our last permanent representative at the UN was someone for whom English was only his second language—Welsh being his first. We are beginning to cope with all these necessary social changes.

I have just one last doubt. I read about headcount reductions in the Gershon review. In all the capability reviews of departments I have looked at, I wonder whether, in pursing the goal of cutting back on staff, “efficiency” reductions do not sometimes risk cutting those who need to carry through the responsibilities we give them. Having said that, and hoping we will all continue to follow this discussion, I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.