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Volume 722: debated on Thursday 11 November 2010


Moved By

To call attention to the case for Britain to have a properly resourced and active diplomacy; and to move for papers.

My Lords, the timing of this debate on the case for Britain to have an active and well resourced diplomacy is fortunate, not just fortuitous. If we had been holding this debate in advance of the comprehensive spending review, it could easily have been dismissed as a piece of special pleading on behalf of one of many government departments about to face deep cuts—all the more so since I have to declare an interest as a former member of the Diplomatic Service. But now that the comprehensive spending review is out on the table, the opportunity is there to focus not on the overall quantum but on how best to put it to good and effective use in the national interest—how to ensure that doing more with less is not just one of those meaningless and infuriating mantras but is a reality.

It was well over a century ago that Lord Salisbury gave his often repeated prescription for British foreign policy—that it should be like floating down a river, fending off the bank from time to time. In fact, this classical description of a passive, purely reactive foreign policy was out of date even when it was coined. As the country found at the time of the Boer War, it could well lead to splendid, or rather not so splendid, isolation; and that discovery led to a hasty scramble to acquire allies in the failed attempt to stabilise Europe, which culminated in two world wars. Out of date then, any such prescription is a great deal more out of date now.

The hard fact is that a country that is a global superpower, as Britain was then, needs an active diplomacy less than a middle-ranking power with worldwide interests, such as we are now. Everyone beats a path to the door of a superpower, which can take its time in responding because it is so indispensable. But a middle-ranking power has to work actively to further and protect its interests if they are not to go by default, and it needs to have strong alliances and networks in good working order for when they are needed. That is a lesson which was very clearly drawn in the recent national security strategy and in the defence and security review.

Such networks and allies do not simply drop effortlessly into our lap; nor can their policies be shaped to fit our as well as others’ interests without ceaseless diplomatic work. Add to this the fact that multilateral diplomacy, which now makes up so much of the foreign policy mix, is a labour-intensive industry necessitating work not just where a particular organisation is headquartered but in the capitals of each of the members of that organisation, and you have a lot on your hands. It was considerations such as those which led the Callaghan Government, some 30 years ago in the midst of an earlier period of cuts and austerity, to reject the view of the Berrill report that Britain could no longer afford what was charmingly described as the luxury of a first-class diplomatic service. Those considerations are even more compelling today than they were then.

If we are successfully to do more with less then we will have to increase the coherence of the foreign policy instruments at our disposal and the way they are deployed. We will need to marry our hard power—now considerably diminished—to our soft power and ensure, as we have not always done in the recent past, that together they are up to the demands we are putting on them. We will need to break down the stovepipes in which policy is formulated at home and executed abroad—security, diplomacy, development, energy, climate change and so on. We must also ensure that the practitioners—the diplomats, the military and the development aid experts—understand each other’s work much better and gain experience of each other’s work and how to work together and not in competition with each other.

We will need, too, to make the best possible use of the new European External Action Service, which is gradually taking shape in Brussels and around the world. To treat it as, at best, a tiresome and duplicative nonsense and, at worst, a competitor would be to miss a golden opportunity. We surely need to be thinking imaginatively about what the European External Action Service can do collectively for us and for the rest of the EU and what we should therefore no longer be trying to do individually ourselves. We need to second good people to the EEAS and support its efforts to reduce turf fighting between the European institutions, to achieve greater policy coherence among the EU’s external policies, to increase its own professionalism and to extend its outreach so that less time and effort are spent on cobbling together tortuous internal European compromises, and more time is spent on persuading third countries of the value of the EU’s policies and on public diplomacy.

Let me turn to the issue of resources, without which all that I have said previously in general terms could just remain empty words. Here are a few suggestions. First, I hope that we will avoid falling into the false dichotomy of thinking that there is a choice to be made between bilateral and multilateral diplomacy. One does occasionally hear echoes of that sort of approach in ministerial statements and briefing. But this is surely not an either/or matter but, rather, one of both/and. The two forms of diplomacy are now inextricably linked and need to be mutually supporting if we are to further our interests successfully.

Secondly, on the exchange rate risk to British diplomacy’s overseas expenditure—that is, most of it—I do not wish to delve too deeply into the background to the decision a few years ago to remove the existing policy of compensating losses as a result of exchange rate fluctuations. It reflects credit on neither the Treasury, which imposed it, nor the Foreign and Commonwealth Office, which accepted it. The result when sterling dropped sharply in 2008 was a double whammy for the Foreign and Commonwealth Office of external and internal cuts. Can the Minister tell the House that this will not happen again?

Thirdly, I hope the temptation to save by closing more diplomatic posts will be resisted. Multiple accreditation—having a mission in another country that serves the country in which you have closed down on a very random basis, visiting once or twice a year—is not a viable alternative to a presence, however small, on the spot. I still remember the helplessness I felt as ambassador at the UN when we had no post in Kigali when the Rwandan genocide broke, no post in Kabul in the years after the Soviet withdrawal and no post in Mogadishu through the UN’s troubled experience there. If very small posts have to operate somewhat differently from larger ones, and we have to accept that we can get fewer services from them, I would say “So be it”. We will just have to get used to that, but let us avoid ending up with a diplomatic cloak full of holes. I hope the Minister can say something on that aspect too.

Fourthly, my view is that the decision to shift the funding of the BBC World Service from the Foreign Office budget to that of the BBC should be a plus, at least in presentational terms. I have to admit that I never managed to persuade a single foreign interlocutor of the BBC World Service’s total editorial independence every time I had to admit that it was in fact being financed from the Foreign Office budget. That should be easier to achieve now. But how are we to be sure, under the new arrangements, that the World Service is not being bled to meet the BBC’s domestic demands? How, too, is the World Service’s coverage and editorial autonomy to be protected from interference by the BBC’s management, as it was from interference by the Foreign and Commonwealth Office? I wonder whether the Minister could give us a bit more detail on this; not very much has been said so far about this really important aspect of our foreign policy and our soft power. Could he also say something about that other crucial part of Britain’s projection of soft power, the British Council?

Of course, the resources that really matter in diplomacy are the Diplomatic Service’s human resources. I have the impression that in recent years those resources and their morale have been under considerable stress. Recent losses through early retirement, while perhaps unavoidable, have resulted in the departure of many top-class diplomats whom Britain could hardly afford to do without. I am, however, struck when travelling abroad by how well the morale and quality of our diplomats is holding up. But it is surely time that a bit more effort was put into reducing the stresses on them. We often speak, quite rightly, in this House about our admiration for Britain’s Armed Forces; not so often about our admiration for our diplomats, who also run very considerable risks. We should not forget what the Duke of Wellington said when asked, towards the end of his life, what he would have done differently. He replied, “I should have given more praise”.

I hope I have managed, in opening this debate, to set out a compelling case for Britain having an active and well resourced diplomacy. If we are successfully to meet the challenges of the increasingly multi-polar world in which we now live, that is what we will need. If we are to work effectively for an increasingly rules-based world, which I believe it is in our interests to achieve, that, too, is what we will need.

I conclude with a perhaps slightly eccentric plea for less frequent use of the phrase, “Britain punches above its weight”. I admit that I may have been partly responsible for its entry into our diplomatic lexicon but it tends to play to a strain of post-imperial nostalgia which I believe we must now leave behind us. Like courage, it is surely one of those characteristics which are better noted by others and not bestowed on ourselves. I beg to move.

My Lords, it is a privilege to speak in this debate. I congratulate the noble Lord, Lord Hannay, on securing it and on the way in which he has introduced it. He has certainly made the case for an active and well resourced diplomacy.

Had the great minds who organise the sequence of speakers known something of the content of the contributions, mine would probably have come a little further down the list as it is more esoteric in nature and focuses particularly on an instrument called the Olympic Truce. The noble Lord, Lord Hannay, will be familiar with the subject as we had a debate on it in this House on 11 October. I want to place it in the context of public diplomacy and the comments about soft power.

In a speech in the Foreign Office on 1 July setting out the new direction of foreign policy under the coalition Government, my right honourable friend the Foreign Secretary said that the coalition Government’s goal was to,

“deliver a distinctive British foreign policy that extends our global reach and influence”.

That is absolutely right. Influence matters in the modern world, as the ability for nation states to act alone is severely constrained in the modern era—and many of us would say rightly so. Modern diplomacy, like politics, is now the art of persuasion, and as in any exercise in persuasion, reputation is vital, hence the unarguable importance to the Foreign and Commonwealth Office and to British diplomacy of the BBC World Service, the British Council, the Chevening and Marshall scholarships and Wilton Park. They set the mood music around which the negotiations, discussions and diplomacy are conducted.

There has been some discussion about whether it was right to separate DfID from the Foreign and Commonwealth Office, as the valued work that DfID does around the world is phenomenal. I am immensely proud to be a member of the coalition Government who will increase overseas aid to the 0.7 per cent figure to which we have aspired for so long. We should be very proud of that.

The Olympic Games are referred to on the Foreign and Commonwealth Office website under the heading “Public diplomacy”. It states that it is:

“A once in a generation opportunity”,

and that:

“As 2012 approaches, the London Olympic Games will focus the world’s attention on Britain. The Games offer unique stimulus to invite people from around the globe to re-examine their views about the UK.

The FCO and our Public Diplomacy Partners view this as a remarkable opportunity to demonstrate the open, connected, dynamic and creative country that is Britain today”.

Nobody would argue with that. It is absolutely right that the eyes of the world are on London. The success that the Olympic Games are having is amazing. The stadium will be finished a year in advance. The velodrome, one of the largest facilities, will be opened in a few months. When the Chinese were doing that sort of thing for the Beijing Games, we all stood in awe; when the British do it, somehow we do not take the same pride, but it is a tremendous tribute to the reputations of the people who have worked on the Games and the leadership of the noble Lord, Lord Coe.

The Olympic Truce is a convention stretching from the original Games which says that, during the period of the Games themselves, the member states will,

“take the initiative to abide by the Truce, individually and collectively, and … pursue … the peaceful settlement of all international conflicts”.

That truce is moved in the United Nations General Assembly by the host nation, so it will be moved by the Government at the 65th session of the United Nations, next year. Her Majesty’s Government, like any previous Government in this country, have no intention whatsoever to take any initiative for peace or reconciliation during the Games at all. For not doing so, Britain will not be regarded as a pariah state because none of the other 191 countries that signs up to the Olympic Truce at the UN General Assembly, saying that they will pursue initiatives for peace and reconciliation during the Games, will do anything either.

I am trying to make the case for this being a great opportunity for British diplomacy. It can show us at our best. It is a once-in-a-generation opportunity to do something worth while. The United Nations truce will be the only element of the Olympic Games that falls directly within the bailiwick of the Foreign and Commonwealth Office. It is therefore astounding that there is no mention of it on the website. Yesterday, the Foreign and Commonwealth Select Committee in the other place had a hearing on public diplomacy at the London 2012 Games. During that, Jeremy Browne, the Minister, gave evidence for an hour but did not mention the truce once. In advance of that meeting, there was a 50-point statement as to what the Foreign Office would do on public diplomacy surrounding the Olympic Games, but it made no mention of the Olympic Truce.

I urge my noble friend to consider the Olympic Truce and give it its right place so that it can be an important element of how Britain is seen around the world, and in promoting good around the world.

My Lords, I have just excised from my speech the phrase “punching above our weight”.

Britain's Diplomatic Service is a centre of excellence admired worldwide and the noble Lord, Lord Hannay, is an outstanding example of the service at its best. I have had close contact with the FCO since 1960, when I entered as a third secretary. Traditionally, the service has been able to take a major share of the available pool of talent and, from my experience even over recent years, I am convinced that it still attracts high-quality personnel. The question, therefore, is whether that will continue as the CSR cuts bite. What will be the effects on recruitment and morale?

There are some welcome features in the CSR, such as the new foreign currency mechanism that will increase stability, but the settlement overall will have a disproportionate and negative effect on the service, with 25 per cent in cuts over four years. By 2014, the FCO budget will be £1.3 billion, which is only just above the UK's contribution to the European External Action Service. By then, DfID will have £11.56 billion—nine times as much as the FCO. DfID officials will not easily substitute for FCO officials.

Of course, traditional diplomacy has its faults. The “déformation professionelle” results in excessive caution and a yearning for the quiet life, but officials are immensely competent and loyal to the Government of the day, even when they feel under fire from that Government. For example, it was claimed that the noble Baroness, Lady Thatcher, in the 1980s said that the Ministry of Agriculture represented farmers and the FCO represented foreigners. Echoes of this arise in the talk of a cull of faceless bureaucrats in London. Is it right that over four years there will be a reduction of 10 per cent in the number of diplomats overseas? How many compulsory redundancies are planned for? Given the number of redundancy payments, how long will it be before the savings actually begin? Will the payment of school fees for diplomats’ children continue after the redundancy of their parents?

Even within the reduced total, the traditional diplomatic role will be reduced. That is, a larger share of the reduced budget will reflect changes in our society and mobility worldwide, such as the increase in consular and visa work. Will the Minister give an assurance that personnel, building security and counterterrorism will not suffer, and that language training will not be reduced? Our hard language ability is much admired and, of course, costly. I am sceptical about the claims of a revolution based on the new emphasis on trade promotion. For many years, the path to promotion has lain through expertise in trade. Trade envoys—yes, but ambassadors from the business community—no. Apart from the reduction in salary, the job is very different.

How do we mitigate the effects? I have time to give only some headlines. On the selling of the FCO estate, much has already been done, for instance, in the Lisbon and Vienna residencies. Is there a threat even to the Paris residence? As the noble Lord, Lord Jay, will evidence, it is much used for trade promotion. More locally engaged staff can have only a limited effect because there is clearly a ceiling for their promotion. If there are more jobs in London and development of the hub concept, we may lose the value of personal contacts cultivated over time and the facilitation of networks and alliances. As for co-location and overlapping subject areas with DfID, there is some scope in the fields of governance and conflict prevention.

On greater co-operation with allies, now that there is new Franco-British co-operation in defence, why not in foreign affairs? There are potential benefits in premises and personnel, particularly in west Africa. Co-operation with the European External Action Service includes the co-location of embassies and delegations and long-term personnel secondment. It is an interesting paradox that, by these cuts, a Conservative-led Government will lead to the posts in the European External Action Service, with its budget of £8 billion, having greater weight than our own diplomatic personnel.

Clearly, the role of diplomacy is misunderstood and undervalued. If we want a still substantial global role, we will have to pay for it. Development aid cannot be effective if there are problems of governance, as we have seen in Somalia. It is odd that a Conservative-led coalition is reducing our strategic strengths and promoting a “littler England”. Is this our “east of Suez moment” in foreign affairs?

Finally, the Independent of 8 July stated that after the FCO leadership conference, which was attended by more than 200 ambassadors and high commissioners, the Prime Minister addressed business leaders at Downing Street. The newspaper said:

“Mr Cameron laughed: ‘We made them all travel economy class, wherever they came from, I'm pleased to say’. The assembled audience laughed”.

Is the aim, or at least the effect, of these cuts to reduce a first-class service to an economy-class service?

My Lords, I, too, thank the noble Lord, Lord Hannay of Chiswick, for initiating this debate. It is now nearly 50 years since Dean Acheson said that Britain had lost an empire but had not yet found a role. In many ways, this is still true today. We continue to have tremendous reach. Senior membership of the United Nations Security Council, the EU, NATO, the Commonwealth and a host of other multilateral institutions are all admirable roles. However, alongside our desire to sit at the top table, there seems to be a lack of vision about how this middle-sized country on the edge of Europe can project its capabilities in a fashion commensurate with its ambitions.

The record of the recent past is poor in vision. Mr Blair's Chicago speech of 1998 on liberal interventionism seems as anachronistic as Britain's rhetoric at the time of Suez. Through our use of force, we have lurched from the positive power projection of the 1990s to international criticism and domestic cleavage. I say to the noble Lord, Lord Anderson, that if we have a “little England”, it is partly due to his Government's extravagances rather than to anything that was planned or preordained. This Government have moved with admirable speed to come to grips with what a national security strategy should look like. However, a security strategy inevitably does not cover the central question of how the Diplomatic Service should serve our national interest.

Despite the Foreign Secretary's excellent speeches in recent months, we are not yet clear about the shape and form of our Diplomatic Service in this period of austerity. While financial savings can and must be found, they will be least damaging if we have a clearer sense of our priorities. Building Britain's prosperity and safeguarding her security are not always compatible or obtainable in equal measure. The two require very different skill sets and capabilities in policy and diplomacy. The balance between them becomes ever more important in a democracy in which every citizen, through the internet and news media, becomes a freestanding and engaged foreign policy expert. On the high street, the exigencies of national interest are not always understood or supported. A recent YouGov poll, in advance of the Prime Minister's visit to China, showed that nearly 64 per cent of people were less concerned about our security, trade and economic interests there than in the plight of Tibet.

The national security strategy highlights how we find ourselves in a world that is more uncertain than it has ever been. Globalisation is in a “long crisis”, according to a recent Chatham House paper. This extended period of volatility, where demographic, economic and security challenges extend across the globe and where nationalism and interdependence are rising together, opens up a fresh set of challenges. Our values and outward-looking posture mean that we are better suited than most to confront these new trends, yet the comprehensive spending review has left our foreign policy capabilities rather weaker. In these circumstances, perhaps we need to define our power and those capabilities rather more narrowly than our ambitions would suggest.

Alongside the national security strategy, we need a more pragmatic view of our foreign policy priorities. Principal among these must be a realistic assessment of our global reach. I suggest that it should be somewhat more limited than the fully adaptive posture that the strategic defence and security review suggests. In these austere yet unpredictable times, we may well have to make a case for defining our international mission more accurately as managing global risks on behalf of British citizens. In practical terms, this should result in our lending more support to the EU's External Action Service than we have given to date to allow it to do more representational work for us while our own independent presence is reduced.

While there may be some specific differences in foreign policy among our EU partners, overall our values and priorities are surely more aligned than divergent, and we should consider how we might use the External Action Service as an opportunity rather than view it as an inconvenience. The vision of our strategic reach must nevertheless not be constrained merely to our commercial or national security imperatives. DfID’s budget and objectives should rightly be more closely aligned with our Foreign and Commonwealth Office-led interests, and indeed with the MoD’s capabilities, particularly in conflict-afflicted states, and I welcome the direction of travel in that regard.

The projection of our soft power is the reason why we are still well regarded in the world. Our language is spoken across the Commonwealth and beyond, our universities are worldwide centres of excellence, and the BBC and the British Council are almost as important for projecting influence as our military is for projecting power. Although the CSR has been “creative” in spreading the costs of these institutions across other bodies, they have all undoubtedly been rendered more vulnerable with the cuts. The danger is that years of success will be lost over a short period, with a cost to the nation over the longer term.

Therefore, we now find ourselves with these substantial reductions in budgets, which necessarily will have been arrived at without forethought. What is now needed is a hard-headed judgment of what we can achieve and, where these goals are more limited than those we have aspired to in the past, we need to set out and prepare for them in a more considered and coherent manner. That should be the basis of an active diplomacy that has risen to the new challenges, and I hope the Minister will be able to give us an indication of how he intends to achieve that.

My Lords, I thank my noble friend Lord Hannay for placing this debate on the agenda. I have to declare an interest because I shall be speaking about Iran. I was born and raised in Iran and I worked there as a journalist. However, what I really remember from my past is the extraordinary influence that Britain had on Iranian politics during my childhood—so much so that I remember whenever anything happened to the soup, our cook would immediately say, “Poltiqueh inglissas”. It took me a while to understand that she meant, “It’s because of the politics of the English”. It seemed to have an influence right across our lives.

I suggest that the BBC in particular retains the kind of punch that it has had for a long time. In Iran at the moment, with many of our journalists languishing in prison, it is regarded as one of the most reliable sources of information there. I can tell your Lordships that the BBC has been listened to and watched by Iranians for ever. I remember, as a young student, giving an interview to the BBC and inadvertently admitting that I was helping behind the scenes of the local pantomime. I was suddenly hit by an avalanche of calls and letters from irate aunts and uncles telling me how I should not be mixing with thespians. They had all heard the programme, in which I had thought I was just having a chat in an interview.

I find that appearing on BBC television has exactly the same impact. Iranians watch it. The Iranian Vice-President is on record as admitting that he does not like BBC Persian Television, although he has watched it during a Cabinet meeting. Therefore, it seems to me that Britain is punching above its weight in the case of Iran. That is not surprising, particularly as BBC Persian Television is run by people who have been largely recruited in Iran, including many young journalists who have found the situation there impossible. Therefore, not only to avoid imprisonment but also to have a voice, they have come to work for the BBC, and I assure your Lordships that their voice is being heard loud and clear in Iran. It seems to me that, in response, the Iranians provide the BBC with an enormous amount of information.

Interactive connections exist with the BBC, and I understand that at some point eight videos per minute were sent to the BBC during times of crisis in Iran, when no one in Iran could broadcast them but the BBC could. It became a source of information for many news agencies around the world. That interactivity is feared by the Iranian Government but respected by Iranians, because they do not see the BBC as the voice of the British Government. Often, the BBC reports the unheard voices of Iranians, and many of us rely on the BBC reports because our e-mails are checked and we do not get phone calls that are not controlled. Therefore, it is crucial that the BBC retains its ability to broadcast to Iran. We know that the Government fear it by the number of jammings of BBC programmes that have occurred again and again.

Given this important impact, given that Britain needs all the friends it can possibly get in the Middle East in general and in Iran in particular, and given that the nuclear debate has been very counterproductive in its impact on the popular mind in Iran, the BBC—radio, and television—is the most effective informal channel not only to influence Iranians but to convey Iranian views abroad. It is therefore a matter of great regret that, as I understand it, the Foreign Office has taken a 10 per cent cut in its budget but the BBC World Service is about to take a 16 per cent cut. Does the Minister consider that there is any room for reconsideration?

My Lords, it is a pleasure to follow the noble Lord, Lord Hannay, in a debate on diplomatic questions because of his immense knowledge and experience of world diplomacy. I lay claim to some experience, if not expertise, in that field; I currently work in Brussels for the European TUC as general secretary. The UK diplomatic representation, inelegantly called UKRep, is generally admired as the classiest operation, the top team, around the town—even by the French.

I do not always agree with what UKRep does on behalf of Her Majesty's Government. It has blocked progress on some important social issues dear to my heart, such as insisting on maintaining the working time opt-out. Why is it that UK workers can be pressed to work what are on average the longest hours in the European Union? On posted migrant workers—the category of migrants who are brought with an employer to fulfil a contract—why do only the minimum rates need apply in the UK, not the rate for the job? They often undercut British workers, and then people are surprised when there is some anti-migrant feeling.

Why do successive UK Governments continue to oppose a social clause in the single market and downplay the need for the single market to have a social dimension? Without such a dimension, hostility is likely to grow against free trade and the single market. That will encourage the protectionism that we saw in last week's American elections.

These are questions on which I battle weekly with the UK representation. Ruefully, I have to subscribe to the chorus of admiration for the skilful way in which it plays its cards. It is a powerful agent for UK government policy, and diplomacy is truly an area of British excellence.

I am conscious that I am very privileged to join this House. I hope to bring some insights, especially into economic and employment policy and European affairs. Eighteen years, first as general secretary of the TUC—it is good to see a quintet at least of former members of the General Council of the TUC, including the trio in front of me—and another eight years after that as general secretary of the European TUC, have strengthened a deep commitment to trade unionism as a force for good in our society. I hope that the economic crisis that we have at the moment will be rather like the 1930s in one respect in that people in difficulties will turn again to the union movement in democracies and that it will take its full and proper place in the national life of the country, not just as the awkward squad but as a real force for constructive engagement, especially on promoting greater equality, skills, productivity and, critically, higher standards of performance and governance in many of our companies.

I was addressing a City audience not long ago and making the case for more long-termist perspectives from investors and entrepreneurs. One financial executive smirked and said, “I have some long-term investments; they were short-term investments, but they have gone wrong, and I can’t sell them”. Short-termism is a British problem. It is a major reason why so many of our private sector companies, not just Manchester United and Liverpool, are carrying so much debt, why our manufacturing sector has shrunk to worrying levels and why foreign companies are able to pick up household names at bargain prices.

I certainly do not knock foreign companies generally. Some are exemplary long-term players, and they show up the weaknesses in too many of our own firms, but we need more home-grown companies that can hold their own in the world and do not sell out at the first whiff of a big cheque for shareholders and top executives. How company boards run themselves, which interests are included on the board, whether shareholder value should be the sole goal of companies, how to organise takeovers, and, if necessary, block them, and what to do about the often excessive levels of boardroom pay that risk directors being regarded, in Richard Lambert's memorable phrase, as “aliens”, and in my words as the Bourbons of our age, are all questions that are ripe for powerful scrutiny and new thinking. I am watching carefully the right honourable Vincent Cable, who has expressed himself strongly on these issues, to see whether he will maintain his interest and not get swamped by urgent, but not more important, questions.

Today is Armistice Day, and we remember all those who made and make the ultimate sacrifice for the country. The European Union was born out of the wreckage of the Second World War and has been a major part of ensuring that any repeat now seems a remote prospect. That is a huge achievement in a continent scarred by too many bloody battlefields and haunting cemeteries. Britain's place is in Europe, not just for reasons of the past, but for the future too, as new, major, formidable economies emerge to take a prominent place in the world. It is not just aircraft carriers that will need sharing in our corner of this world if European influence is to be sustained. Indeed, as the noble Lord, Lord Hannay, said, the European External Action Service, under the capable leadership of the distinguished former Leader of this House, the noble Baroness, Lady Ashton, is recognition that diplomatic efforts can usefully be shared in many parts of the world. I am sure that British diplomats will flourish on this particular European stage.

I finish by thanking noble Lords, the Clerks and, indeed, all the staff of the House for the friendly welcome that has been extended to me from all sides. I am very much looking forward to making my contribution to the work of the House.

It is a great privilege to follow the maiden speech of the noble Lord, Lord Monks, on which I congratulate him. I also congratulate him on his—in the American phrase—non-remunerated endorsement of UKRep and its excellence in Brussels. As he reminded us, he speaks with a lifetime’s experience of industrial relations in this country and throughout Europe, not least in his service with ACAS, so he speaks about diplomacy as a practitioner. Offering the possibility of reflecting on the Stürm und Drang of professional life in the relative tranquillity of the British senate is one of the ways in which your Lordships’ House plays a unique and valuable role in our constitution. The speech of the noble Lord, Lord Monks, was a notable contribution to this tradition and I know that the whole House hopes that his voice will be more frequently heard in the future.

I am grateful to the noble Lord, Lord Hannay, for introducing this debate and for doing so in a way that acknowledged the alliance between the traditional actors in diplomacy and others who represent a multitrack approach. The dissolution of the Soviet Union brought to a close the period in which a single international conflict dominated the international system. Instead, we have seen intra-state rather than inter-state conflicts, ethnic conflicts, secessions and struggles often, alas, fortified by religious rhetoric and symbols become the norm. As we speak, the turbulence and the suffering in Iraq continue, not least on the part of the ancient Christian community, which has suffered grievously in recent days.

During the Cold War, international relations were largely the preserve of the professionals, the diplomats and the politicians. I think that we should pay tribute to a number of pioneers in the US and Europe who saw the potential of applying approaches that were being developed in the setting of industrial relations. These have played an enormously important part in the development of a multitrack approach and in community mediation work through their application to conflict in general, including civil and international conflict.

At this point the question arises as to whether, in addition to being part of the problem, the faith communities may have a contribution to make in the field of conflict prevention. It is a question that has aroused some academic interest in the Anglo-American world ever since the publication, well before 9/11, of Professor Samuel Huntingdon’s book The Clash of Civilizations and the Remaking of World Order. It is evident that many of the violent conflicts in the modern world are rooted in threats to identity. Religion in many parts of the world is crucial to social cohesion and is therefore likely to be co-opted in any struggle that centres on identity. Folk wisdom easily understands how the highest ideals are bent to the most malign purposes. Jonathan Swift, that Irish dean and the author of Gulliver’s Travels, lamented:

“We have just enough religion to make us hate, but not enough to make us love one another”.

However, are there positive resources within the traditions and institutions of the world’s faith communities capable of making a contribution to conflict prevention and peacemaking? Is it possible that, as the title of an influential book from the Washington-based Center for Strategic and International Studies suggests, religion is a missing dimension of statecraft? It seems obvious now that US monitoring of Iranian politics ought always to have included the religious dimension, but a report from CSIS reveals:

“The one recorded attempt to do just that within the CIA, before the revolution, was vetoed on the grounds that it would amount to mere sociology, a term apparently used in intelligence circles to mean the time-wasting study of factors deemed politically irrelevant”.

No one, so far as I am aware, is calling for the call-up of platoons of clerics and mullahs to shuttle between capitals like ersatz diplomats, but we must try to be practical.

Here I must declare an interest as the founder and current chairman of St Ethelburga’s Centre for Reconciliation and Peace. St Ethelburga’s is a little church that survived the great fire of 1666 and the blitz but not the effects of an IRA bomb in 1993. That bomb, from a conflict that has a religious dimension, made us determined, encouraged by the late Cardinal Hume, to rebuild the church as a centre for reconciliation and peace. Over the past two years, 20,000 people have participated in our programmes.

I make a plea that, as we enter the dangerous second decade of the 21st century, where even the editor of the Economist has written a book suggesting that God is back, we should look to develop our active and well resourced diplomacy by making deeper alliances with the new resources for conflict prevention that the faith communities, not only the Christian ones, have developed.

My Lords, I welcome the debate introduced by my friend—if I may call him that, as he is my friend—the noble Lord, Lord Hannay. I was in the UKREP office referred to by the noble Lord, Lord Monks, on the very day that David Hannay’s name was in the papers—I think it was the Daily Mail—as being appointed a people’s peer. The people in UKREP said that they had not heard anything so funny in their lives.

I add my thanks to the right reverend Prelate the Bishop of London, about whose diplomatic experience, in the broadest sense of the word, we have just heard. I have witnessed the remarkable outreach job that he does in the St Paul’s area and in London generally—a job that the Anglican community does in many countries around the world.

My noble friend Lord Monks—John Monks—is the fifth former general secretary of the Trade Union Congress to come to this House. He joins an illustrious list: Walter Citrine, who had an historic reputation in the trade union movement, including for his short book, The ABC of Chairmanship, which is used from the Pacific Islands to the Falkland Islands; Vincent Tewson, who followed Lord Citrine; and Victor Feather—George Woodcock must have declined the invitation, but I do not know that for a fact—who took the TUC through the difficult years of 1969 to 1973, from the proposals of Donovan and In Place of Strife to Ted Heath and all of that.

John’s only fault is that he is too fond of irony. At a meeting with Mrs Thatcher in 1980 on the issue of red tape—too much regulation on small firms and so on—John asked, tongue in cheek, “So why not exclude small firms from the 30 miles an hour speed limit?”, at which point Mrs Thatcher turned to a civil servant and said “Take a note of that”. The white van man has certainly taken a note of it.

There is another similarity between working for the TUC and the Diplomatic Service. I was reminded of this only yesterday when the noble Lord, Lord Hannay, chaired a meeting with senior American diplomats on Afghanistan through the All-Party Group on Multilateral Nuclear Disarmament and Non-Proliferation, of which I am the secretary. One of them remarked that it might be useful to distinguish process from outcomes. I recognised that distinction and noted that trade union officials do that every day of the week. Before John mentioned the trio—now the duo—sitting in front here, I thought that perhaps the TUC should do some job swaps with the Foreign Office, but I think that they are probably already doing it.

I have given the Minister—whom I admire without always agreeing with him—notice of this question: what is the headcount of the FCO and DfID at the present time, both in Britain and overseas? In the latter case, there is also the separate category of locally employed staff. We need to be able to track where, when and how this transition takes place, with the position before the cuts being the benchmark or starting line.

I know from experience that, if there are missions from five, six, seven or eight different European countries in a small African or South American country giving different advice about auditing, project finance or whatever, the messages from London, Berlin, Paris and Stockholm and so on are different, no matter that they get together once a week. Reality stands all this talk about defending the national interest on its head, because small countries often have only one man and a dog to listen to all the conflicting advice. That can be counterproductive and give a totally wrong impression. I have seen countries in many parts of the world waste the time of a very small number of competent people.

Someone should, therefore, challenge the doctrine of keeping all the UK missions quite separate. As we have very distinguished diplomats, we should—here I follow the message of the noble Lord, Lord Hannay—be on the front foot in the European External Action Service.

Coming to my final sentence, I have some sympathy with the argument about the cuts—

I thank the noble Lord, Lord Hannay, for introducing and securing this debate. I, too, congratulate the noble Lord, Lord Monks, on his excellent speech.

The work of the FCO is fundamental to the work of this Government. I consider it an honour to have worked with the FCO on a number of projects and programmes. The work ultimately involved promoting British interests abroad.

We as a nation have much more to work towards in dealing with conflict in too many parts of the world, so the FCO will be key to ensuring a safe, prosperous and strong Britain. The FCO's consular services have an enviable reputation across the world as being among the best. Their support, advice and guidance are second to none and are essential if we bear in mind the huge number of Britons who travel abroad. During a time of hardship, the FCO is also essential in bringing in inward investment and exporting our goods and services.

I have been privileged to have been asked to lead FCO delegations to Egypt, Malaysia, Indonesia, Sudan, Pakistan and Bangladesh among others. The work of those delegations was to engage in dialogue and to highlight what Britain has to offer—its diversity and equality of opportunity being two key themes.

In 1999, the UK was the first non-Muslim country to send a delegation to Saudi Arabia for the hajj pilgrimage to cater for the approximately 25,000 British pilgrims who attend over a two-to-four week period. Since 2001, I have led this delegation. The work involves providing consular, medical and support services to British pilgrims. The cost of the delegation is almost insignificant when compared to, let us say, a state dinner.

An FCO-commissioned independent evaluation published in 2006 clearly demonstrates that, for the cost of £120,000, the benefit to the UK of that delegation is estimated at more than £1.6 million. The benefits that the report identified were in four key areas: economic productivity lost as a result of illness back in the UK; reducing NHS hospital consultations in the UK; reducing in-patient readmissions in the UK; and reducing GP consultations in the UK.

I am sure that noble Lords would all agree that saving one life is valuable enough. Over the past 10 years, the delegation has saved thousands of lives. For example, a female British pilgrim was going into a coma at 2 am when a doctor from the delegation went to her tent. He was able to stabilise her while Saudi authorities responded. She would otherwise have died.

This year, without any formal consultation, the delegation has been cut. That is in spite of the fact that the delegation saves the UK money and works because of volunteer doctors. It is a true example of the big society, in which individuals give up their time to help others and ultimately the state. As stated, more than £1.6 million a year is saved. Given the monumental scope of last month’s comprehensive spending review, the cut is just not logical.

Despite the reasons presented by the FCO and the noble Baroness, Lady Warsi, in her letter to me, Saudi medical services have improved, but given the high level of demand, more than 3 million pilgrims are still relatively inaccessible save in the most serious cases. The examples that I have stated rely heavily on early intervention to prevent serious or life-threatening cases from developing—a stitch in time saves 10 in the future.

The value of British doctors is great. They know and understand the diseases and symptoms that are particular to British pilgrims. For example, the delegation was successful in convincing Saudi medical authorities not to amputate a British pilgrim’s leg because of infection and instead insisted on a course of drugs that removed the life-threatening infection.

Why did no public consultation take place? More importantly, why was there no consultation with Muslim organisations given that the service of the delegation in Saudi Arabia positively benefits British nationals? Was the Department of Health consulted? The FCO report of 2006 stated that the work of the delegation formed part of the FCO’s race equality scheme to demonstrate its statutory duty under the Race Relations Act. Was a race equality impact assessment undertaken for the decision and, if so, what was the outcome, or is the FCO in breach of its statutory obligations?

Finally, I understand but do not agree with the rationale to abolish a delegation that saves more than £1.6 million per annum to the state. Did the FCO undertake a cost benefit analysis before it decided to end the delegation? Will it finalise figures to demonstrate how it came to that conclusion? Thank you.

My Lords, I add my thanks to my noble friend Lord Hannay for securing this Motion for debate today. I, too, declare an interest as a former member of the Diplomatic Service, although it was of a more humble status and variety than that of my noble friend.

This is a Motion of major importance and it is perhaps appropriate to be discussing it on Remembrance Day. If ever there was a reason to have a properly resourced and active diplomacy, it is to try to solve the world's problems, in Churchill's memorable phrase, through “jaw, jaw” rather than “war, war”. Beyond this, many of the other reasons for speaking in support of this Motion have been eloquently put forward by others, including in particular the importance of soft power, the World Service and the work done by the British Council.

I share many of the views expressed and particularly welcome the noble Lord, Lord Monks, and commend his maiden contribution today. I shall add my voice on two points—the issue of resources and the importance of retaining an active global network. On the issue of resources, I recognise that many government departments contribute to our diplomacy, but I should like to focus on the FCO's resources. This to my mind is the budget which is so crucial to the orchestration of our diplomatic activities overseas. The FCO's departmental expenditure limit in 2010-11, including the World Service and the British Council, is £1.6 billion. This represents less than 0.5 per cent of the Government's total budget. If you take out the new arrangements for the World Service funding, the FCO budget is to be cut by 10 per cent over the period of the spending review. Are we able to say now, “Thus far and no further”?

I do not doubt that there might still be some efficiency savings to make, but anything more than limited savings should in my view be strongly resisted, for two reasons. First, the Diplomatic Service has recently had to reduce its budget savagely in the light of exchange rate fluctuations, as my noble friend Lord Hannay reminded us. I welcome the spending review commitment to introduce a new foreign currency mechanism to manage exchange rate pressures. This must surely be right for the proper management of our diplomatic effort. I welcome anything that the Minister can tell us about this mechanism. Secondly, and most obviously, we are talking about really small amounts of money in overall government expenditure terms. Squeezing even limited savings out of the FCO budget will have a major impact on our diplomatic effectiveness; it will have precious little part to play in reducing our wider national budget deficit and we ought to recognise this.

This brings me to our global presence. We could trim our diplomatic reach to fit an ever smaller budget, but is this really the moment to do that? The world order is shifting; we have moved from superpower duopoly to G7/8 and now G20. The politics of globalisation, the economics of the emerging markets and the international consequences of climate change are shaping our diplomatic agenda. We have moved on from BRICs and are already looking at the emerging markets of tomorrow, including South Africa, Turkey, Indonesia, South Korea. The map of diplomatic and economic power is changing fast. We need to respond to the opportunities and the challenges of globalisation, not by withdrawing in on ourselves but by playing to our huge historical advantage of being an outward-looking trading nation with global links.

It is only by having a global network that we can be in a position to deal with the unexpected in this increasingly globalised world. We cannot know now what will be the future threats to our security, the opportunities for our business, or indeed the new pressures on our consular services. A properly resourced global presence must be part of the answer to dealing with the uncertainties of the future.

This brings me to my final point. Regardless of the internet and instant communication, it is only by having people in post and active on the ground around the world that we can continue to build and retain that deep political insight, that economic knowledge and that cultural perspective along with the language skills and the lasting, reliable contacts which are of real value to government and business. We need to retain that global network because once you close a mission, you lose it.

In conclusion, I pay tribute to the many men and women serving at home and overseas who are part of our national diplomatic effort. Many of them work in difficult and dangerous circumstances and they are certainly often the subject of admiration around the world. I am pleased to have this opportunity to speak in their support this afternoon.

My Lords, the Foreign Secretary’s speech delivered in July outlined the coalition Government’s diplomatic vision. Britain’s foreign policy is to be shaped around a number of key geopolitical challenges. Foremost among them is the establishment of stronger links to emerging economic powers, in order to gain influence and an improved foothold in the burgeoning markets of countries such as China, India and Indonesia. Britain’s need to generate wealth through trade is paramount, so few would argue that this kind of relationship-building should not be a top international priority. The process behind it is both complex and demanding, so the case for Britain to be equipped with a properly resourced and active diplomacy should be universally apparent. The reservation I have lies in the terms on which Britain’s future is articulated.

A pertinent question for debate centres on what, substantively, our diplomatic approach should be. When we talk of the need to build relationships with emerging economic powers, it effectively translates into a process of engagement with their Governments in the hope that mutually beneficial trade agreements can be established. The greatest challenge surrounding this endeavour is often identified as being that many of those countries do not share the same historical development as the UK and its counterparts in western Europe and North America, and that therefore they do not possess the same priorities and world views. Commitments to human rights, gender equality and political liberalisation, for example, may not be as strong in these societies as they are in our own. Such a diagnosis can indeed seem intuitive in light of the prevalence of misunderstanding and antipathy that is identifiable across the world today.

That is not a new problem. Experience has taught us that it is neither advisable nor feasible to expect another country to accept automatically that, in order for it to gain entry into the family of leading nations, it must embrace what we and others understand as the pillars of acceptable governance. For Britain, therefore, a dilemma presents itself—one that I am certain we will encounter increasingly in the future: that balance between the importance of our own economic prosperity and the well-being of the citizens of the countries with which we do business. Like the noble Baroness, Lady Falkner, I feel that we need to establish with greater clarity our international priorities.

There is no straightforward blueprint for the encouragement of social freedoms. I do not, however, subscribe to the view that certain cultures are intrinsically resistant to liberalisation. On the contrary, I believe that the universality of democracy and human rights lies in their universal appeal. We must avoid the adoption of a “clash of civilisations” world view that inadequately explains the international environment, portraying it as a series of rival and largely incompatible systems. This only serves to reinforce the already robust barriers that divide nations and ferment antagonism. If we are to learn anything from the global events of the last decade, it is that we must develop a more nuanced understanding of the world around us—one that avoids assumption, cliché and stereotype.

If it is to be lasting, the respect for human rights must be organic and possess credibility within the society concerned. Achieving this will be extremely difficult. There will be times when we should acknowledge that we have no political or indeed moral right to get our own way, especially when it is at the expense of ordinary people of other nations. While we continue to promote the introduction of democracy and human rights in tandem with economic pursuits, the temptation to relax the former for the benefit of the latter will always remain.

Actively building relationships with new economic powers is an opportunity to develop novel and lasting international alliances that cement Britain’s reputation as a country that operates globally, according to an intelligent mix of pragmatism and principled action. To achieve this, though, we need not only to build bilateral partnerships but to promote multilateral action. In the face of unpredictable geopolitical circumstances, we must alter our outlook from one that focuses on what divides us from these other nations to one that emphasises the inherent and shared interests and characteristics identifiable in all human beings. Our diplomacy must be properly active.

Britain’s future and international priorities must be articulated and pursued in such a way that our efforts to encourage liberalisation within the societies of new global partners are not rendered perfunctory by the pursuit of our own economic interests. For real results to be achieved, the freedoms and safeguards that we value must be framed in such a way as to appeal to as many different parties as possible. I argue that this is a diplomacy that is also properly resourced in its psychology, and one that is more likely to meet with success.

Like my other colleagues, I take this opportunity to add my thanks to the noble Lord, Lord Hannay, for securing this debate.

My Lords, I, too, thank the noble Lord, Lord Hannay, for securing and introducing this debate. As he rightly said, we are a middle-ranking power with limited resources but, thanks to our history, we have a global presence and a good reputation. Although our uncritical support for the US-led invasion of Iraq did us great damage, we are widely respected for our commitment to certain values and our ability to blend political realism with moral idealism.

Being a middle-ranking power, our hard power is limited. So far as what is called “soft power” is concerned, I am not sure that the term really makes much sense. It is a metaphor based on “hard power” and, like all metaphors, it is indeterminate and ambiguous. I have debated this with the father of the phrase, Professor Joseph Nye, and he takes it to mean “the ability to get others to think the way that we do”. I am not sure why we would want to do that; it has an element of intellectual seduction and manipulation, and I should have thought that diversity of view had much to be said for it. I would rather think that our concern should be to ensure that others think well of us, take care of our interests, are concerned about us and wish to be close to us. In other words, rather than talk about power, soft or otherwise, we should be thinking of building bonds of interest and affection with other countries.

If that is the goal, and it ought to be, there are three or four things that we should be aiming at. First, as a country, given our history and geography, we stand for certain values like human rights and mutual respect between nations. We ought to be able to display those values in our foreign policy. We should also encourage them in other countries, but never in a hectoring or arrogant spirit. The banal dichotomy of either intervention or indifference is not an option. I would like to think that the Prime Minister has shown how this can be done in his recent talk to students in China, talking about human rights, not as if it were a western export but rather something that China itself should want in order to create a stable and vibrant society.

Secondly, we live in a world of free and proud nations with different cultural traditions. It is extremely important that we should conduct our relations with them in a manner that does not offend or alienate them. There have been hilarious examples in recent years of how we can easily end up offending them. I was told—I hope this is not true—that one of our Foreign Secretaries, on a visit to India, addressed the Indian Prime Minister by his first name. You do not do that kind of thing. I was also told that the first Indian Prime Minister, Pandit Nehru, once complained to Sir Isaiah Berlin that, although he found American diplomats brash and full of themselves, he could handle them, while he had some difficulty with the British, whom he thought were rather patronising with an effortless air of superiority. He said, “I can’t handle that, having suffered it when I was a student at Cambridge”.

Having talked to Indian diplomats in recent years, I am told that things have changed considerably but, nevertheless, there are occasional glimpses of that effortless superiority. We ought to be careful about that. In other words, I am suggesting that we make sure that our diplomats are multiculturally literate and able to talk to people in other countries in the terms of the language and traditions that they share.

My third point has to do with the fact that the Foreign and Commonwealth Office should be open to new ideas and long-term perspectives. I am thinking not simply about tactical responses to this or that crisis, but rather about the deeper factors that influence a situation so that our response to a crisis is grounded in a long-term analysis. That will require that more of our academics and journalists are involved in the formulation of FCO thinking. In that context I ask the Minister: how many of the senior personnel in the FCO and in our diplomatic missions come from the ethnic minorities? My feeling is that, despite being a multiethnic society, we tend to present a rather monocultural, mono-ethnic profile to the world outside.

My fourth point has to do with our educational institutions, which play a crucial role. Overseas students are attracted to our great universities, and they are tomorrow’s leaders in government, business and the arts. It is very important that we should attract them, fund them and invest in them. The Chevening scholarships should therefore not be reduced. They are one way in which we invest in our own future.

In that context, we must also take a second look at the BBC World Service. It is widely respected as a source of unbiased information. As the noble Baroness, Lady Afshar, pointed out, the BBC’s Persian service, for example, is widely respected. It is striking that President Obama chose to give an interview to the BBC’s Persian service to reach out to the people of Iran and to refute President Ahmadinejad’s comments before the United Nations General Assembly in September. It would be a great mistake to deprive the BBC of this capacity to reach out to many people.

Finally, I greatly welcome the fact that the Prime Minister has set his heart on having special relations with India. The two countries have had close ties over the centuries, not just because of the imperial connection but going back further. This does not mean that Britain should be silent in those areas where India is wrong—for example, over Kashmir. I have protested strongly over the years that India’s policy in Kashmir is to be deeply faulted. At the same time, this can be done in different ways. Given the presence of the Indian diaspora, it is important that its people should be involved in formulating Britain’s policy and liaising with India.

My Lords, I also express gratitude to the noble Lord, Lord Hannay, for securing this debate. Effective diplomacy is paramount in dealing with the emerging and existing challenges facing our nation, including tackling the effects of climate change, promoting free trade and protecting human rights. It is important not just to focus on our historic relationships but to seek avenues for building new friendships and influence with emerging players.

First, our diplomacy should recognise the importance of greater dialogue between the Department for International Development, the Ministry of Defence and the Foreign and Commonwealth Office. These departments are paramount in achieving progress through active and efficient diplomacy. The challenges facing our nation and the world at large require a multifaceted approach to how we conduct future relations. I was surprised to learn that officials from different government departments operating abroad do not work together routinely and are often located in different buildings. That is unsatisfactory and can only add to the expense while also undermining our effectiveness in projecting foreign policy abroad. I am pleased that the Government appear to have this in hand and hope that the Minister will be able to offer clear assurances on this point.

While strengthening existing relationships, we must forge greater ties with emerging economies such as the BRIC countries and the Gulf states where economic growth is likely to be considerable. During the year I visited Russia, Turkey, Qatar, Kuwait, Brussels and the United Arab Emirates, where I spoke at international conferences on boosting trade and achieving sustainable development. I recently visited Sri Lanka as a member of the Commonwealth Parliamentary Association delegation. I was impressed with the quality of our high commissioner and his staff but feel that there are business opportunities which we can pursue. We can also consider providing resources to aid in rebuilding the country.

I am pleased to note that the Secretary of State has undertaken to overhaul our network of foreign embassies, turning them into engines for trade that support our ambitions for an export-led recovery from the current economic situation. I see no reason why leading business people should not be appointed to diplomatic posts, and I commend the Secretary of State on his vision in making this announcement and undertaking to deliver on it. This accords directly with my experience of travelling across the world and speaking with key figures. The recruitment of senior business people should provide a new impetus for us to maximise trade opportunities, to deliver economic and political benefits to all parties.

I have established and maintained good relationships with the ambassadors and high commissioners of a number of countries and their diaspora. There is good will towards the United Kingdom but we need to build on these relationships further.

I support the Government’s effort to strengthen our economic strategy and commercial relationships with China and India. I was very pleased that our trade delegation to both countries was headed by the Prime Minister. We need to rectify the difficulties caused by our present economic situation. We can achieve this through spending cuts and raising taxes but we need also to look at ways of strengthening our business activities overseas. By increasing our trade with overseas countries, we not only generate wealth but also strengthen our political, social and cultural ties with them. Diplomacy has a key role to play in achieving these objectives.

I have spoken on several occasions and led a debate in your Lordships’ House on the importance of the Commonwealth. The linguistic and administrative legacy of British rule suggests that it costs less to trade within the Commonwealth than outside it. We need to work towards building closer business and social links with Commonwealth countries. However, we should not embark upon this at the expense of building wider alliances. We cannot use the opportunity to look at the issue of diplomatic activities without also considering the impact of the European External Action Service. A consequence of the Lisbon treaty, this approach could have a profound impact on our diplomatic footprint. We should not allow our footprint to diminish at the expense of European infrastructure that may be less efficient or effective.

I believe that the European External Action Service, now that it exists, should be harnessed to exert maximum influence. We should be proactive in helping to shape its agenda so that it can contribute positively on the international stage.

I would welcome further proposals to expand the United Nations Security Council. The emerging global order suggests that such an expansion is inevitable. I acknowledge that this will indeed result in challenges to our diplomacy as it will require efforts to extend and increase our influence among a larger group of countries. Effective diplomacy is necessary in order to secure our international prosperity. Our diplomacy requires a flexible and steadfast approach to how we further our interests in the emerging world order. This will undoubtedly contribute towards the reinforcement of British influence and prestige in global affairs.

Finally, I have been on pilgrimage to Saudi Arabia several times and agree with all the points made by the noble Lord, Lord Patel of Blackburn. I might add that I chair the Conservative Muslim Forum but there was no consultation on this with me or my members.

My Lords, I congratulate the noble Lord, Lord Hannay, on initiating this debate. I agreed with most of what he said and was particularly pleased that he sought further clarification from the Minister on our response to the EAS. I am glad that those remarks have just been echoed. I was also particularly pleased with his comments on cross-departmental co-operation, a subject to which I shall come back in a moment. I congratulate my noble friend Lord Monks. I do not know how many noble Lords noticed that he managed to slip in a reference to Manchester United in a debate on diplomacy. We may hear other such interventions in future but I am sure that they will be welcome, even on the part of those who do not support that team.

I wish to take up the final point made by the noble Lord, Lord Sheikh, who referred to the remarks of my noble friend Lord Patel of Blackburn. My noble friend spoke about a topic that he knows well. I suspect that few noble Lords have experienced the difficulties to which my noble friend referred in connection with hajj pilgrimages. When representing my former constituency in another place I was very well aware of those problems. I congratulate my noble friend on the very significant improvements that he has made. It is important to recognise that these are very real problems, not least because of the language difficulties that sometimes arise when people attend this important event. I hope that the Minister will look at that issue again as it is very important.

The noble Lord, Lord Hannay, said that this debate was timely given the announcement of the comprehensive spending review. It is also timely as tomorrow we will debate the strategic defence review. While that debate will rightly concentrate on aircraft carriers and Harrier jets, the two issues need to be considered together as we want a joined-up approach. It is important that we concentrate on that. In that context I remind the House of the Ministry of Defence Green Paper published in February this year entitled Adaptability and Partnership, which is a very important reference document for today’s discussion and tomorrow’s. Today’s theme is active diplomacy. One of the questions posed in the Green Paper is how we can deploy the Armed Forces more effectively to support wider efforts to prevent conflict and strengthen international stability. In the section of the Green Paper on adaptability and influence, mention is made of the work carried out by the Foreign and Commonwealth Office, the Ministry of Defence and DfID in order to understand better the contribution that defence diplomacy and security co-operation can make to wider government efforts.

My purpose in intervening today is to underline how important it is not to lose sight of the very important, sometimes critical, and often unique, role that defence diplomacy can play. During my time at the MoD I saw many examples of this work. I understand that we cannot always talk openly about this but defence diplomacy makes significant contributions across a wide field that people sometimes forget. I shall mention just one. The British Military Advisory and Training Team, based in the Czech Republic, works with it and others to provide multinational training courses both on peacekeeping operations and on the wider basis. It is important to realise that we are not just working with NATO allies in that; there are 31 partner countries, from central Asia, the Caucasus, the Balkans and north Africa. Indeed, when I visited, I was impressed to see someone from Azerbaijan sitting next to an Armenian, which you would not get in most circumstances. That approach shows the influence of soft power and the fact that this country can be extremely important in making sure that such things happen.

Time is short, so I shall just say that I think that those working in aid are sometimes apprehensive about people in military uniform providing advice in a country. However, as the DfID White Paper of last year pointed out, unless you have security and stability on the ground, it is often impossible to provide aid. Very often, people in fragile states who are in uniform will take advice only from other people in uniform. It is important that we build on that sort of thing.

I emphasise a significant step forward—the establishment of the stabilisation unit. That brought together not just funds from the FCO, MoD and DfID, but many of the personnel who now work together in a productive way.

I hope that the Minister will confirm that, in this compelling case for an active diplomacy, there is also a compelling case for defence diplomacy, and that the words in support of that uttered by Ministers will not just be words but will be translated into very direct and very positive support.

My Lords, I thank the noble Lord, Lord Hannay, for securing this important debate. He has great experience in the field and has made an unanswerable case today for a properly resourced and active diplomacy. I congratulate the noble Lord, Lord Monks, on his maiden speech. It is some years since he and I marched shoulder to shoulder with many others—including the noble Baroness, Lady Symons, the noble Lord, Lord Brett, and probably the noble Lord, Lord Lea—in support of GCHQ trade unionists in Cheltenham. He made an excellent speech today and I hope that we will hear more from him soon. I make him this offer: if Cheltenham Town are drawn at home to Manchester United in the FA Cup this year, I will make sure that he gets a ticket. If we are drawn away, I hope that he will do the same for me.

I want to make three points. The first is to thank those diplomats I have met in this country and overseas. The second is to give some anecdotal examples of the work that I have seen them do. The third is to express frustration that in recent years we have undervalued and underresourced our diplomacy.

One of the most challenging projects on which I worked before entering Parliament was in Iraq during Saddam Hussein's era. My task was to ensure that new British computer systems installed at Baghdad University did what was required of them. At the time I did wonder why we were selling computer systems to the Iraqi regime, which was at war. I was more concerned when I was asked to provide support to British systems in the Iraqi defence department. British Ministers gave their approval to those exports; the logic was that Iraq’s being opposed to Iran meant that Iraq was on our side. How things change. These systems were mentioned in the Scott inquiry into arms for Iraq.

I wonder what advice our diplomats in Baghdad gave to our Government of the time on whether those “sales” were advisable. A properly resourced diplomacy can and should give timely advice to the Government on commercial, cultural and security issues, and the Government should take notice of that advice before taking decisions which could have far reaching implications. I know that our diplomats gave advice on new missile systems produced by Iraq when I was there. The al-Hussein missile was powered by a lawnmower engine. The later al-Samoud missile was similar in design, but powered by an uprated lawnmower engine. The guidance system was such that the launchers put their fingers in the air to judge the strength of the wind, made a calculation and filled the device with the appropriate amount of fuel. When the fuel ran out, the missile dropped out of the sky onto whatever lay beneath. They were not the most accurate of missiles.

I know that our diplomats fed back information on Iraq’s military capabilities, so I wonder how the infamous “dodgy dossier” prior to the second Gulf conflict came into being to justify the claim that Iraq posed a threat to the United Kingdom and could launch weapons of mass destruction in 45 minutes. Why was advice from our diplomats in Iraq not heeded? A lot of lives, as well as a lot of money and Britain's reputation, could have been saved if we had avoided that unnecessary conflict.

I take a special interest in Africa and have visited many countries where I have seen the work of our diplomats. I have literally been saved by several of them. On a Commonwealth visit to Malawi, our vehicle was in a collision with a passing cyclist. Immediately, we were surrounded by a huge and angry crowd demanding vengeance on our driver. It was a very nasty situation. One of the diplomats, a lady, shepherded the MPs to another vehicle, ordering, “Get the VIPs out of here”, before calmly dealing with the crowd, taking the cyclist to hospital, where it was discovered that he was drunk and not badly hurt, and she arranged for a new bicycle to be delivered to him.

While observing elections in the Gambia, our delegation came across a riot in which at least one person had been shot dead and a Minister’s house set on fire. After listening to what the crowd had to say, we returned to our vehicle and shots rang out again. It felt as though we were being shot at. Fortunately, the British high commissioner and his staff helped us to recover.

Another incident occurred while observing elections in Ghana at the end of Flight Lieutenant Jerry Rawlings’s presidency. On the eve of poll, the British deputy high commissioner explained that there had been trouble in northern Ghana. We went to an independent radio station, Joy FM, which, through its sister station, Love FM, confirmed that a melee had taken place and a dozen or more people had been arrested, including an opposition candidate. When this news was broadcast, a group of large, uniformed, armed men arrived and told the radio station to stop broadcasting. I found these men from the Bureau of National Intelligence to be intimidating, but they were nowhere near intimidating enough for the deputy high commissioner who pointed out: first, that democracies do not close down independent radio stations; secondly, that international election observers were present and would include this incident in their report on the conduct of the elections; and thirdly, that if they did close down the radio station, the elections might well be judged not to have been free and fair, and it would all be the fault of the men in uniform. Eventually the men turned and left. If we had not been there, and if that diplomat had not taken calm and considered action, Ghana 2000 might well have joined a long list of failed elections around the world. As things turned out, there was a peaceful change of Government, which was a credit to the growing maturity of Ghana’s democracy.

That diplomat—now no longer in the service—was Craig Murray, who became our ambassador in Uzbekistan. During his time there he discovered and reported back on appalling incidents of torture, implicating the United States, which was believed to be receiving information obtained under torture. Instead of acting on the information provided by one of his most senior diplomats, the Foreign Secretary recalled him to the UK and dismissed him. That was a great injustice.

In many of the places I have visited, diplomats have told me of their frustration that the United Kingdom could and should be doing so much more if only our diplomatic services were properly resourced. The advantages are self-evident in terms of trade and in relation to human rights and progress. Recent reductions of British diplomatic presence in certain parts of the world give the unfair impression that we cannot be bothered any more. In his reply, I hope that the Minister will set our minds at rest that the coalition Government understand what has been said in this debate and will ensure that in future we have a properly resourced and active diplomacy.

My Lords, I am grateful for the suggestion that the Diplomatic Service be open to new ideas. While there is apprehension about the cuts, active diplomacy in certain areas can deliver mechanisms to achieve results with less. The way forward might be to recognise that the role of government in bilateral relations, and by extension diplomatic endeavours, should be to create the environment to allow all the sectors that make up those relations to thrive, and that the United Kingdom is essentially a private sector-driven economy and that it is not the role of government to deliver for the private sector a better structured public sector/private sector partnership, whether for the benefit of trade or for the myriad other benefits that make up relationships.

Much of this type of initiative could be self-funding, thereby freeing government financial resources. Has a full review taken place to consider how non-critical outsourcing could play a role in the diplomatic world? Consular activities have always seemed to be a natural candidate. The parallel-to-trade objectives of advocating the benefits of democratic principles—good governance, transparency and accountability, freedom of the press and human rights standards—could all be addressed in a similar manner by appropriate specialists in order to make diplomacy effective.

Resourcing diplomacy in the context of today's debate must also be about bolstering abstract diplomacy with concrete and figurative measures. Leaving aside the complexities of whether the ECGD could be privatised, for trade diplomacy to be successful three components must converge. The first is on-the-ground preparation by ambassadors and their staff. The second is the fullest engagement, at Secretary of State level and above, regularly to lead missions overseas and to leave more diary space for meeting incoming leaders in London. The third component—I declare an interest as I am on the advisory board of the newly formed Central Asia and South Caucasus Association at Asia House—is the formulation of a well-defined partnership between the UK's public and private sectors, made up of trade and industry councils and umbrella self-funding representative organisations. This structure could create cost savings and replace anything other than support in strategic emerging markets. The money saved could be used to resource more effectively overseas posts’ commercial endeavours, with the remainder moved over to the general Foreign Office budget.

I congratulate the Prime Minister on leading two recent successful missions to China and India. I also welcome the Foreign Secretary's initiation of policy reviews of relations with priority strategic countries such as Brazil and Turkey. However, these endeavours need to be replicated many times over. Leaders such as Chancellor Merkel and President Sarkozy regularly travel around the globe signing bilateral trade MOUs and cutting megadeals in out of the way places. Secretary of State Clinton has even been supporting American interests in Papua New Guinea, where I happened to be this week. It is a country of crucial strategic regional importance to the UK, but our diplomatic financial resource is close to zero.

My concluding thought is that the Minister might wish to look at more speedily matching to requirements the qualifications of FCO London-based staff. Diplomats often find themselves in the corporate pool on their return from overseas postings. This human resource should be put to more immediate use and not be left to stagnate.

My Lords, in requesting permission to speak in the gap, I should like to draw attention to the fact that in the past locally employed staff sometimes made major contributions to the work of an embassy. I recall, for example, travelling in Spain in the 1950s. The ambassadors, who were men of great distinction, had the benefit of the services of a former schoolmaster called Bernard Malley, who knew everything about the country in which he was serving. He had an honorary position and did not allow his loyalty to his Spanish friends to cause any difficulties with his loyalty to this country. He ended up with a CMG, which he greatly deserved. I believe that there was a similar person in Paris in the shape of Sir Charles Mendl. Malley in Madrid, however, was a wonderful example. I believe that in future we should consider this sort of appointment in many other countries than those that I have mentioned. For example, I recently went to a Latin American country where the only person who remembered the previous elections was the ambassador’s chauffeur. He was a very good source, although I am thinking of someone more distinguished.

My Lords, I, too, thank the noble Lord, Lord Hannay, for introducing this very timely debate today. The noble Lord has rendered the House two services: first, in his excellent speech he comprehensively and skilfully outlined the issues concerning a properly resourced and active Diplomatic Service; and, secondly, he has reminded us of the importance that we should attach to such proper resourcing by being the embodiment of active diplomacy himself.

I also add my congratulations to my noble friend Lord Monks. I thank him, too, for choosing a foreign policy debate for his powerful maiden speech. In another life, my noble friend and I used to sit around the same meeting tables, and I am happy to say that he has lost none of his highly persuasive and cogent powers of argument. He will be a huge asset to your Lordships’ House, as his speech today clearly demonstrated.

I begin by acknowledging that we on this side of the House know that all departments, including the FCO, must take some share of the impending cuts. As the G20 meeting in Seoul is acknowledging today, the international downturn is a global issue, in spite of what is sometimes said in our domestic politics. As a colleague of mine remarked to me in the Middle East a couple of weeks ago, the only countries unaffected are the ones that are not part of the global economy.

In looking at resourcing effective diplomacy in this country, I turned to the FCO’s business plan, in which the Foreign Secretary says that he has organised his department’s work with three overriding priorities: safeguarding Britain’s national security, building Britain’s prosperity, and supporting British nationals around the world through modern and efficient consular services. I say to the noble Lord, Lord Bates, that these bear a striking resemblance to the priorities that the late Robin Cook articulated when Labour came into office in 1997, proving that very often there is nothing new in foreign policy. To any sensible person, they must be the cornerstone of what the Foreign Office is there to do.

The Foreign Secretary also spoke of harnessing,

“the appeal of our culture and heritage to promote our values”,

including on human rights. I suspect that for many of us that is a bedrock point without which achieving security and prosperity on a sustainable long-term basis would be absolutely impossible, as my noble friend Lady Drake suggested.

I agree with the noble Lord, Lord Waverley, that the Government’s energy in relation to trade is very much to be welcomed, but I know that there is concern that the Foreign Secretary’s great emphasis on trade and investment runs the risk of undermining the FCO’s work on human rights. Amnesty International and Human Rights Watch have both warned us about that. Promoting human rights is not just right in its own terms; it is a matter of self-interest, too. Even countries where there is acute poverty see access to information and international communications as very obvious. Young people in all parts of the world have access to mobile phones and cameras, and of course televisions. They see injustice as it happens, and they see repression, the results of torture and the horror of innocent civilians caught up in warfare.

They have their own opinions about what is fair, just and decent. Working for human rights to protect those who cannot protect themselves is another hugely important factor in our efforts to maintain our security. It is part of how we develop our agenda on counterterrorism and counter-radicalisation. When I looked beyond the opening headlines in the business plan to see how the FCO would be maintaining and expanding its work on human rights, in the 24 pages that follow those opening headlines, the subject was not mentioned once. Can the Minister explain why not? How is that to be delivered if the business plan does not offer us a mechanism to do so?

One way in which the previous Government sought to deal with that kind of outreach, both at home and abroad, was through our support for the hajj. My noble friend Lord Patel has argued that the cut in support for British Muslim pilgrims is damaging. Like the noble Lord, Lord Sheikh, and my noble friend Lady Taylor, I strongly agree with him. I declare an interest, because it was on my watch as consular Minister that the hajj support was introduced. Apart from the huge cut to the much-valued services to thousands of British pilgrims every year, does the Minister not realise what an appallingly negative signal that sends to the very countries that the Foreign Office is trying to impress in increasing our trade?

Do Ministers really not understand that many countries in the Middle East want a rounded relationship with the United Kingdom? They want a partnership with mutual respect and mutual understanding. I hope that concentrating so hard on trade, as the Government are doing—which I understand and, in many ways, support—does not lead to some of our friends in the Arab world to feel that we are not engaging as we should in politics and in seeking their views on interfaith issues, on the peace process, on Iran, Turkey and Somalia, and on the many multilateral institutions. If we really want trade, we have to do politics properly. That is what marks a real partnership that respects opinions as well as wealth.

I agree with my noble friend Lord Anderson that at the heart of what we are discussing today is an active diplomacy, which means people. We need active diplomats, and they need to be spread around the globe. I notice that the FCO business plan says that we shall have an enhanced partnership with India and closer engagement—I am not quite sure how that is different—with China, Brazil and south-east Asia. We shall need diplomacy campaigns, apparently—can the Minister please tell us what those are? I see, too, that the education conferences launched under the Labour Government will go global to get more students into the UK. All of that needs people and resourcing. My concern is that the commitment to review the UK's bilateral relationships and to look at something that we are calling the overseas footprint is in fact code for shutting down embassies and consulates in countries in which we do not have huge commercial interests.

The noble Lords, Lord Hannay and Lord Janvrin, are right: shutting our embassies is simply not sensible, because events catch up with us and stuff happens. By the Government’s yardstick, it can backfire very badly commercially. As the noble Lord, Lord Hannay, emphasised, we need embassies to maintain our intelligence networks, for our security and to build confidence—and, yes, at a very basic level, to be ready for those commercial opportunities when they arise.

One of the passages in the business plan that I find most perplexing is what was said about consular services. The headline objective of supporting British nationals around the world is apparently to be achieved through cutting our consular services. Consular resources mean FCO staff being trained to deal with a huge variety of problems, from lost passports to natural disasters and terrorist outrages. It is hard, painstaking work, and sometimes it is heartbreaking.

In 1997, the consular services were the poor relation of the FCO, and when I was first a Minister, I was astonished that Ministers did not meet the victims of terrorism or the families of people who had been taken hostage. Officials were told to increase the numbers and provide a better service to the British public. Let us face it; most people in this country do not wake up in the morning wondering what is going to happen at an EU summit or the UN General Assembly. They are much more concerned if they cannot get consular help when they or their families need it abroad.

Let me turn to soft power. The noble Lords, Lord Parekh and Lord Hannay, emphasised its importance. The business plan states that there should be a strategy to enhance the impact of the UK contribution on conflict prevention by looking at the UK’s educational scholarships, but in a Written Statement from the FCO on 10 July, a £10 million cut was announced in this year’s programmes of scholarships. There are no Chevening scholarships in 2010-11. Soft power, so brilliantly described by the right reverend Prelate the Bishop of London, is an enormously important building block in reconciliation and outreach, and we cannot have soft power without good networks. It all comes down to people and relationships. Often, we need our good diplomats to undertake that sort of soft power, and to do so they have to be properly resourced.

The World Service and the British Council have also been mentioned. I agree passionately with what the noble Baroness, Lady Afshar, and my noble friend Lord Parekh said. The BBC World Service is a huge asset. It is envied by so many other countries, particularly the United States, Germany and France. It is trusted, it is editorially completely independent of government, and it has a huge reach that is unrivalled by that of any other country. The important point is that we distinguish between the editorial independence on the one side and the responsiveness of the UK’s national interest to talk to parts of the world that are so hard to reach otherwise. Similarly, the work of the British Council is the bedrock of our national interest. It is important that its functions are recognised and properly resourced because that allows us to have the contact in helping development in many countries in the world, particularly among young people and women.

To sum up, I was enormously pleased to have the business plan. It is very much to the Government’s credit that they have published it. It is a real mechanism for accountability. It will help us and give us a real opportunity to ask questions and to get the answers we need. I appreciate the Minister’s experience and his willingness to give answers to the questions that we pose—I sometimes wish that more of his colleagues followed his example—and I look forward to what he has to say.

My Lords, like other noble Lords, I begin by warmly congratulating the noble Lord, Lord Hannay, on initiating this interesting debate. He has enormous experience from his previous profession as one of our country’s leading diplomats. I also extend warm congratulations to the noble Lord, Lord Monks, on his maiden speech. He brought to our Chamber his vast experience in matters of organised labour and unions and tactfully applied that experience to the world of diplomacy in a kind and understanding way.

I shall start my comments in the limited time available by concentrating on the people, the diplomats. I start by paying tribute to the work of all our diplomats overseas and at home and our locally engaged staff, who number about 10,000 overseas in FCO posts worldwide. A third of UK-based diplomats working overseas are in hardship posts, and this debate comes only a few days before the seventh anniversary of the Istanbul bombing on 15 November 2003 when 11 colleagues lost their lives in the service of our country. As recent events in countries such as Yemen or Iceland have shown, those working on Britain’s behalf continue to do so in the face of terrorist threats as well as of natural disasters. This creates extremely difficult conditions, as noble Lords have been good enough to recognise. The safety of all our staff is paramount, and our spending settlement, which I shall come to in some detail in a moment, will allow us to invest sufficiently in our overseas estate and in the security and safety of the staff. We continue to seek to upgrade our posts to meet modern-day threats, particularly in high security environments. We expect to complete all outstanding high- and medium-risk security projects by the end of this year, and our spending-round settlement, as I shall explain, contains adequate provision to allow us to continue this work over the next few years.

I apologise if I am putting excessive emphasis on the threat from terrorism, but it is very serious. The threat arises because terrorists are empowered with new weapons technologies, as well as emanating from other non-state groups and cells. It represents the biggest danger to the safety of our staff today. The number of posts where we assess the terrorist threat to be critical or severe has increased threefold since 2006. The nature of the terrorist threat is constantly changing and indiscriminate, as we saw in the two attacks on our staff in Yemen earlier this year. Fortunately, our security procedures worked in both cases and there were no casualties. However, it is not just Yemen, as although it is the latest place where our staff face a high threat to their personal safety, there are also acute terrorist threats posed in other locations such as Iraq, Afghanistan and Pakistan. Moreover, the threat of violent crime on top of terrorism is also serious and growing. Over recent months, several of our staff and their families have been the victims of armed robberies. Overall, our diplomatic network is operating today with much higher threats to the personal safety of its staff. It is a testament to them and their families’ resilience that staff are ready to live and work with these risks. I wanted to put that on the record right at the beginning of my remarks in closing the debate.

I turn now to our objectives, which rightly have been discussed by a number of noble Lords on both sides of the House. The Government understand that to promote and safeguard Britain’s priorities, we must have a firm picture of what we want to achieve in a very fast-changing world. We must properly resource our diplomatic effort to make this vision a reality, and have a clear understanding of our national priorities and positioning in today’s global order that goes hand in hand with our internal sense of unity and purpose inside this nation. I have no doubts about that at all.

From the outset, this Government have brought a strategic basis to our overseas relations. The National Security Council was established as a centre of decision making on all international and national security issues. It oversaw the development of the National Security Strategy and the Strategic Defence and Security Review which, taken together, cement the position of the Foreign and Commonwealth Office at the centre of delivering the Government’s international priorities. The FCO played a lead role in setting the context for the National Security Strategy through its work on the changing threats and opportunities that the UK faces, and ensuring that the capabilities and structures set out in the Strategic Defence and Security Review were fit for the purposes required. I can tell your Lordships that the FCO will be instrumental in taking forward the strategic defence and security goals of tackling threats at source, bringing all of the UK Government’s influence to bear in order to achieve our objectives both at home and overseas, and working more closely with our key allies and partners, both old and new. The FCO will give the lead that allows foreign policy to be supported by other government departments.

As we have heard in the debate from the noble Baroness, the high-level foreign policy priorities have a lasting and enduring continuity. As she rightly says, they are to safeguard Britain’s security, to build Britain’s prosperity and to provide—which we will do—full and effective consular support to British nationals around the world. Those are the overarching objectives, and within them I want to discuss various policy issues.

First, however, I turn to the spending settlement itself and how it fits in with those overarching and broad objectives. After a lot of pessimism in the press and elsewhere about cuts at the Foreign Office and so on, the settlement we have secured is an extremely good one. Like everyone else, of course, we have to take our share of the austerity package because of the overriding need to cope with the budget deficit that certain people left behind that we have to clear up. That is our problem and we have to grapple with it.

The noble Lord, Lord Anderson, seems to have got the wrong end of the stick on this matter. The net outcome is not a 24 per cent cut but a 10 per cent cut in real-terms spread over four years—2.5 per cent a year. It works out as a flat cash settlement which, given some of the difficulties that have to be faced, is not a dramatic change. It gets better than that: we have secured the restoration of the foreign currency protection mechanism and we will move the BBC’s World Service funding over to the BBC in 18 months’ to two years’ time, which will take 14 per cent off our budget expenditure straightaway.

Will the flat cash settlement to which the Minister referred lead to a 10 per cent cut in Foreign Service personnel over the period until 2014?

I do not know where the noble Lord gets that figure from. I shall talk in a moment about personnel, but what he has said does not fit with what I am about to say.

What I have said means two things. First, we are reversing the previous Government’s disastrous decision to abandon the foreign exchange protection which wiped overnight 10 per cent off FCO budgets—it was an appalling decision. We now have a major boost, with the restoration of that mechanism freeing us from exchange rate gyrations. I hope that the shadow Secretary of State in the other place, who was a Treasury Minister at the time of that terrible decision, now welcomes what we have done to put it right.

Secondly, the BBC World Service move will enhance its independence—I agree with the noble Lord, Lord Hannay, about that—and it gives the BBC, at the same time, a flat-rate licence fee. The objectives will still be set by the Foreign Secretary and his approval will be required for any language service closures. The BBC has given solid guarantees that it will safeguard the World Service and I am quite sure that will be done. Your Lordships raised worries about this issue, but the position is absolutely secured.

That is the story of our comprehensive spending review outcome and it does not match some of the gloom that has been perpetrated all around. Indeed, there is still more good news to come because, in addition, our budget is being reinforced by new funding from the Treasury—I emphasise from the Treasury—which recognises the increased development work that we are now promoting in line with OECD rules. It does not come from DfID; we are not draining funds from the increased DfID budget, which is very large. It is a subvention which for us, on our scale of expenditure, is of a very pleasant kind, to match the increased development work which is undertaken in the Foreign and Commonwealth Office.

Several noble Lords raised the issue of posts, closures and postings around the country. In the coming weeks we will take strategic decisions on how to live within the settlement I have described. They will not lead to the kind of conclusion the noble Lord, Lord Anderson, has suggested. Our decisions—including on what we do, what activity we stop or scale back and whether our network of posts adequately meets the new realities—will be taken; none has been taken yet. I concede that this might mean closing some subordinate posts and consolidating in some capitals. Equally, in emerging markets or countries critical to UK security, it might mean opening new posts. We need a global diplomatic network to help bring the UK economy back to long-term health. The skills and expertise of our staff are vital to delivering active diplomacy. The settlement will allow us to invest in our staff, create a renewed focus on international policy and high-priority languages, and ensure that our diplomats are economic ambassadors for Britain, as all your Lordships wish them to be. The noble Lord, Lord Lea of Crondall, asked for total staff figures. There are approximately 4,500 UK staff working at home and abroad, and 10,000 local staff, all overseas.

I turn to the other theme which ran through your Lordships’ debate: soft power; that is, the capability required to match the hard-power resources that we have to maintain as a nation. We have provided the means to resource properly our diplomatic work. However, that was not the only part of the Question of the noble Lord, Lord Hannay. He also called on the Government to ensure that our diplomacy would be active. We will certainly be so in the security, conflict prevention and peacekeeping fields. If we accept, as I certainly do, the notion that our prosperity provides the foundation for our power, we must seize the openings available to us. This means developing much deeper links with key centres of influence such as Japan, South Korea, Malaysia, South Africa, Brazil, Turkey, the Gulf States and particularly, as the Foreign Secretary and the Prime Minister have made clear several times, China and India.

China may be the new giant market, and one must not forget that Japan is often seen as our best and most reliable friend in Asia, but perhaps the best gateway to the great new markets of the world is the network that is the modern Commonwealth, as my noble friend Lord Sheikh rightly pointed to. Today’s Commonwealth embraces at least six of the world’s fastest growing economies and markets, providing access to emerging powers where wealth is accumulating and purchasing power soaring. Stretching across continents and faiths, and covering almost 2 billion citizens, it is a soft-power network par excellence which Britain needs to serve our interests in, and give us access to, the new global landscape—obviously, that is a matter of great interest to me personally.

Deepening our links with these countries will have multiple benefits for British citizens. We accept that diplomacy is no longer just a government-to-government business. We must and will engage all sectors of society as well as multilateral and regional bodies. Links forged through trade, education—my noble friend Lord Bates pointed to scholarships—culture, sport, science and an active global diplomatic network will help not only to secure our economic future but to guarantee our future peace and stability.

Where combined EU action works best, we will use it to the full—the noble Lord, Lord Hannay, made a very good point here. We see the European External Action Service as a useful additional tool for our common purposes in key areas, lightening and assisting our nationally resourced activities. My noble friend Lady Falkner made the same point.

Both the British Council and BBC World Service—on which I have touched already—will remain fundamentally important parts of Britain’s presence in the world.

All parts of the FCO family will have to contribute to the cuts in public spending. I am quite clear that they will have to face budget restraints. Details have already been published. The British Council plays an important role in helping spread the UK's culture and values, and its charitable status and ability to raise a significant part of its budget through commercial and full-cost recovery activities give it independence from HMG’s policies. I was enormously impressed the other day in Kuala Lumpur to see how the British Council runs its programmes, including intercultural dialogue and promoting the UK's creative and knowledge economy, which supports our foreign policy objectives. The settlement that we have secured protects that fully.

In the face of great uncertainties and novel challenges, we need to deploy this nation's talents and resources with new agility and skill.

I can give the noble Lord a comment on the hajj and will certainly do so, but it will take the last of my precious minutes.

When the hajj delegation was first conceived, local Saudi medical facilities were not of a standard that we would like to see. Since then, this situation has changed significantly. In the light of that, the Foreign and Commonwealth Office conducted an objective review of the delegation's medical element. The number of people treated for minor ailments was 5,967 in 2007, 2,965 in 2008 and 254 in 2009. I hope that helps my noble friend.

We will pave the way into emerging markets to ensure Britain’s prosperity and our security. We will deepen our engagement with the rising powers and wealth centres and the great new markets of the modern and transforming world. We will steadily uphold our belief in human rights, political freedom, open trade and poverty reduction wherever we can. To reply to the noble Baroness, Lady Symons, I see no conflict between that commitment and the commitment to our access into markets and our new commercial drive.

People say that the age of the Atlantic and the West is passing, but our own age certainly is not so far as the UK is concerned. On the contrary, I see huge new possibilities for this nation as the pattern of world power and wealth shifts. We will move forward on to this new stage by working more closely with our partners across the world, because that is good for our own national interest and for all our citizens. I am confident that the spending settlement set out for the four years ahead enables our diplomatic community, despite all the challenges it faces, to play a full and highly effective part in this national strategy. I believe that we can have a resourced and active diplomacy of the sort that the noble Lord, Lord Hannay, has wisely called for and we can do it with great effect.

My Lords, I thank all noble Lords who have contributed to this excellent debate. I have served long enough in your Lordships' House to know that it is not my place at this moment to mention everyone who spoke. If I did, I would be way outside the limits. I have also learnt that it is not wise to refer selectively, so I will simply congratulate the noble Lord, Lord Monks, on his maiden speech and say what pleasure it gave me personally to know that the UK permanent representation in Brussels is still the best team in town, as I hope it was when I left it 20 years ago.

One thing that startled me most about this debate was the absence of any reference to that phantom beloved by newspapers—the special relationship. Not one single Member who debated mentioned it. I do not say that as someone who believes that our relationship with the United States should be downplayed—quite the contrary—but I have fought all my life against what I call the false choice between Europe and the United States. Having a debate today in which we were able to look at the whole world in the round and not obsess and agonise about the special relationship shows a great deal of wisdom and a healthy approach.

On a final point, a lot of noble Lords spoke about realism. I am sure that we must have it, but we must not confuse it with that dreadful concept, declinism. There is no reason for us to think that we cannot look after our interests in the world we now live in, if we are ingenious about it and apply the resources we have in an effective way. I hope that when we talk about realism we will mean seizing new opportunities, not retreating into ourselves. I beg leave to withdraw the Motion in my name on the Order Paper.

Motion withdrawn.