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Counterterrorism: Foreign Office Budget

Volume 716: debated on Thursday 21 January 2010

Private Notice Question

Asked By

To ask Her Majesty’s Government whether Baroness Kinnock’s admission of cuts in the FCO budget for counter-terrorism, counter-radicalisation and counternarcotics programmes in Pakistan and Afghanistan is compatible with the Prime Minister’s statement yesterday that “The action we are taking to counter terrorism at its source in the Afghanistan-Pakistan region and elsewhere is a central part of our counter-terrorism strategy”.

My Lords, the Prime Minister was entirely right when he said yesterday that our CT efforts in the Pakistan and Afghanistan region are a central part of our counterterrorism strategy. Our overall CT spend continues to rise next year and Pakistan has been and continues to be by far the largest single recipient of our CT support throughout this spending period, receiving more than a quarter of the CT budget. The budget for Pakistan managed by the FCO under the FCO’s countering terrorism and radicalisation programme is expected to rise from £8.2 million in 2009-10 to £9.5 million in 2010-11. Although this is a smaller rise than we would have hoped, we are still spending more than ever on Pakistan CT. Pakistan remains a critical partner in our nation’s security. A small number of projects that were not delivering CT objectives as effectively as other projects have been cut or scaled back. The noble Lord should note that the Foreign Office’s CT programme is but one part of the Government’s total effort in Pakistan, which includes the MoD, DfID and others. There is also a huge amount of political work and lobbying to help further our and Pakistan’s CT objective.

I thank the Minister for that Answer to my Question. I recognise that it has two aspects: one is the continuing deep cuts in the Foreign Office budget and the other is joined-up government on Afghanistan and Pakistan. Can she confirm the story in the Financial Times at the end of December that American and European diplomats have been asking the Foreign Office how deep those cuts are and how much they will affect Britain’s capacity to represent common western interests abroad? Can she reassure us that there is a coherent strategy, including a financial strategy, towards Afghanistan and Pakistan that goes across all government departments concerned?

I thank the noble Lord for his continuing interest in these matters. He and other noble Lords are well aware that the reason why the difficulties that the Foreign Office has had are having these effects is the fluctuation in exchange rates. We make our payments to the United Nations, the EU and others in their currencies, which has a huge effect because of the rate of exchange with the pound. As I think I said yesterday, the Foreign Office deals with something like 120 different currencies. The effect on our work is difficult to manage.

I do not think that this has an effect on the coherence of strategy. Across government, we are working on these matters, recognising that they are an essential part of the work that we need to do. These are the issues that concern our citizens and have a huge and important global effect. It is important that we work with our European Union partners, the United States and others and in the United Nations to ensure that we can more effectively deal with the threats that we face. That means dealing with them where they occur, as the noble Lord suggests.

I am not aware of any concerns that have been raised by the US or anyone else about the effectiveness of the British Foreign Office. It goes without saying that the British Foreign Office continues to have the great respect of the world for all the hard work that it does in representing Britain and pressing for the values and principles that we have in the United Kingdom.

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

We are totally committed to the objectives on counterterrorism and working across government that the noble Lord outlined. Joined-up government is often raised by the opposition Benches. We are very aware of its importance in the work that we do and I think that we do it well in working on counterterrorism with the MoD and DfID. I do not think that pointing fingers at any department of the British Government does any good when we have these debates and discussions. The important thing is that we work together to ensure that our work can be effective and that we deal with the counterterrorism challenges that we face.

My Lords, since, as is obvious from the nature of the Question, dynamic diplomacy does or should have a vital part to play in all modern military operations, should the FCO budget be considered more in a strategic context and therefore await the outcome of the long overdue defence and security review, rather than being slashed unilaterally?

I reassure the noble and gallant Lord that that review will take place over the coming period. Like him, we look forward to discussing its implications.

Does my noble friend recognise the danger that our foreign administration will be determined by currency fluctuations and not by a sober reassessment of our global role in the post-imperial world? I met our consul-general shortly before he was killed by an explosion in Istanbul. Can my noble friend reassure me that the current cuts do not affect the protection of our diplomatic personnel and buildings?

I can of course reassure my noble friend on that count. One of the increasing costs that we have faced is that of providing security in some of the more difficult situations in which we find ourselves working now. The cost of that kind of security is essential, but it places increasing pressure on the FCO budget.

I am sure that the Minister will recognise how much sympathy there is for the Foreign Office in large parts of the House. However, returning to my noble friend’s question, could she explain how, given that 80 per cent of the Foreign Office budget is non-discretionary, the Foreign Secretary could possibly have agreed that the effective implementation of our foreign policy should, under this Government, have to be determined by the level of the exchange rate?

Those decisions were taken on the basis of what was best for the country and best for the way in which we manage our affairs. I can comment on that no further.

The noble Baroness has given us some figures about the potential increase next year; I calculate that it will be about 12 per cent. Is she aware that the current inflation rate within Pakistan and Afghanistan is running somewhere between 20 and 30 per cent? If these funds were to be spent in country, the potential increase that she describes is actually a decrease in the budget.

My Lords, I reiterate that the original CSR settlement is £35 million, £39 million and £53 million and that Pakistan has been and continues to be by far the largest single recipient of our CT support throughout the period. The FCO’s countering terrorism and radicalisation programme fund has more than doubled since the last CSR period—up from £16 million in 2007-08 to £38 million in 2010-11—but I take into account the important point made by the noble Baroness.

My Lords, given the absolute priority given to the security and protection of the British people, can my noble friend tell us whether there is any plan to ring-fence the budget on security and protection, which is so important to the British people?