Boost Foreign Office budget for Brexit fallout, says former top diplomat Sir Simon Fraser

Former Foreign and Commonwealth Office permanent secretary says Brexit vote represented "an uncharacteristic act of withdrawal by the United Kingdom" – and calls for a "very considerable uplift" in his old department's Budget to help Britain cope

By Matt Foster

28 Jun 2016

The Foreign & Commonwealth Office (FCO) will need a "very considerable" spending boost if the government is to cope with the fallout from Britain's decision to quit the European Union, the department's former permanent secretary Sir Simon Fraser has said. 

Sir Simon, who stepped down as the UK's most senior diplomat last year after a five-year stint, told MPs that the Foreign Office's global network of embassies was already stretched – a problem he said was likely to be exacerbated by last week's referendum, which saw the public back a British exit from the EU by 52-48%.

Speaking to the Foreign Affairs Committee, Fraser said British civil servants and diplomats were "highly loyal, professional people" who would "no doubt seize the opportunities and challenges that lie before them" in the wake of the Brexit vote.

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But he expressed personal dismay at the referendum outcome, saying it represented "an uncharacteristic act of withdrawal by the United Kingdom" which he warned could damage the UK's key alliances.

"The United Kingdom will remain a significant player in the world," Sir Simon said. "But, in my view, this decision is certain to weaken our most important relationships internationally and to diminish, I believe, our standing in the world."

He added: "I think on the whole, on balance, it will make it more difficult for us to protect our security, promote our prosperity and spread our ideas in the world."

Despite his personal disappointment at the decision, Fraser said it was now important for the UK to "launch a major diplomatic set of initiatives", to "explain what we've done" and to build relationships with "both with our traditional partners and also with new partners around the world".

"We need more people in embassies with the right skills and the right expertise and the right backing to do the job" – former FCO perm sec Sir Simon Fraser

Such a diplomatic offensive could, Fraser argued, only be delivered if spending on his old department rose. 

"You can't do that if you don't have an effectively resourced diplomatic service. And I agree with the view that the budget of the diplomatic service has been reduced in recent years, very dramatically."

Fraser pointed out that the FCO had implemented a 25% cut to its operating budget during his own time as perm sec.

And although the former FCO chief pointed out that the department achieved this cut while growing the overall size of its diplomatic network, he said the UK's embassies were now "very thinly stretched, which obviously affected their operational capability".

"I do think we've got to thicken it out," he said. "We've got to build up the capacity within our embassies. We have lots of embassies, I'm not sure that we need more. But we need more people in them, with the right skills and the right expertise and the right backing to do the job and protect Britain in the world."

"Opportunity to redress"

In a the run-up to the referendum, the Foreign Affairs Committee said the FCO's budget – which was ring-fenced at last year's Spending Review after years of cuts – may need to be "doubled or even trebled" in the wake of a decision to leave.

While Fraser declined to put "a precise figure" on the spending increase he believed the FCO would need, he warned that capability could not be rebuilt "overnight", and said a "very considerable uplift in the Foreign Office budget would be appropriate".

"When you think of the figure, that I often like to quote, that the country spends only twice as much per year on the operating budget of the Foreign Office as it does on aid to Ethiopia alone, you see the sort of disproportion that has crept into the international spending in recent years, which I think this [provides] an important opportunity to redress."

Under the plans announced by chancellor George Osborne last year, the Foreign Office will see its resource budget held at £1bn until at least 2019-20. According to the FCO’s latest annual report, the department employs approximately 4,400 UK-based staff, down from around 4,800 in 2010. It also has around 9,000 local staff based in posts around the world.

"In my opinion, the Foreign Office has not only had fat cut out of it, it's having bits of bone chopped off as well" – Former British Ambassador to the United States Sir Christopher Meyer

But Fraser has already pointed out that the UK now has fewer than 20 trade negotiators of its own, following decades of such deals being drawn up at an EU-level. Meanwhile, former head of the civil service Lord Kerslake this week told CSW that there was "no question" that "key policy departments" likely to be involved in untangling Britain's relationship with Europe – including the Foreign Office – had been "stripped back" in recent years.

FCO has had the "fat cut out of it"

MPs on Tuesday also heard from Dr Malcolm Chalmers, a foreign policy expert from the Royal United Service Institute, who said the economic uncertainty caused by the Brexit vote would mean departmental spending totals across Whitehall were now likely to be highly uncertain.

"The Spending Review at the end of last year assumed that GDP was going to grow at around 2.5% in real-terms every year from now until the end of the decade," Chalmers said.

"That doesn't seem in any way realistic. It probably wasn't realistic before the referendum – and therefore that's going to impact on the capabilities that we're going to be able to devote to foreign policy, but also to every aspect of government."

The former British Ambassador to the United States, Sir Christopher Meyer, meanwhile told the committee that he believed the Foreign Office needed "a dollop of cash" to help the UK navigate the post-Brexit world.

"In my opinion, the Foreign Office has not only had fat cut out of it, it's having bits of bone chopped off as well," Meyer said. 

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