FCO will need "considerable" spending boost if Britain backs Brexit, say MPs

Foreign Affairs Committee report says challenges of vote to leave would not be "insurmountable" for the Foreign Office – but makes clear the department would need a big boost in resources to cope with the fall-out

By Matt Foster

26 Apr 2016

The Foreign and Commonwealth Office (FCO) may need to have its budget doubled or even trebled if the British people vote to leave the European Union in the upcoming referendum, according to an influential committee of MPs.

Voters will go to the polls on June 23 to decide whether or not the United Kingdom stays in the EU. The latest report by the Foreign Affairs Committee – whose members are split between the 'leave' and 'remain' camps – sets out to give an "unbiased analysis" of the costs and benefits of EU membership, including its implications for the FCO.

While it deliberately stops short of coming down in favour of either outcome, the committee says leaving the EU would pose three "key challenges" for the UK in the two years immediately following the vote, including negotiating a new relationship between Britain and the EU; redrawing deals with the rest of the world; and "navigating our allies' perceptions of the decision".

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Those challenges are described as "considerable" but not "insurmountable" by the group of MPs. But the committee says Brexit would require "swift action" by the FCO and adds that a "vigorous response would require resources and a decision to double, or even treble" the organisation's budget.

It adds: "This could have a powerful, positive impact in the event of a 'Brexit'—potentially guided by re-allocating some of the money that had hitherto been included in the UK’s contributions to the EU budget."

The committee specifically recommends that the FCO, in the event of a vote to leave, commits "significant resources" to bringing in teams of skilled negotiators to manage withdrawal and strike new diplomatic agreements and trade deals.

"It would also be necessary for the FCO to ensure strong representation in Brussels and in EU countries — reversing the recent trend of down-sizing its European network — to maintain positive relations, to ensure UK interests are represented, and to facilitate bilateral political co-operation in areas of mutual interest," the MPs add.

"Significantly boosting the FCO’s capacity would, moreover, send a strong signal of the UK’s commitment to an outward-looking, globally engaged foreign policy, thereby helping to reassure our allies and to mitigate the reputational risk associated with EU withdrawal."

"Complacency on the part of the government and FCO could ensure that the immediate risks become much more severe" – Foreign Affairs Committee

A vote to stay in the EU should also prompt some soul-searching at the FCO, the committee says, with the MPs warning that the UK's voice at the European table is already in an "apparent decline", limiting its ability to address problems including "slow and cumbersome" EU policy-making and the bloc's failure "to grapple with extreme instability on its borders".

The department should, it argues, "counteract this decline by launching an immediate and broad review into its handling of EU-UK relations", including its operations in Brussels.

"In particular, it could address the ongoing under-representation of UK nationals in the EU institutions, and could make a renewed commitment to driving an EU foreign policy that is more flexible, more effective, and more in line with British and global priorities. Conversely, complacency on the part of the government and FCO could ensure that the immediate risks we have outlined here become much more severe and entrenched challenges for the UK in future, if it remains inside the EU."

The FCO, which had its budget ring-fenced at November's government-wide Spending Review, is currently part-way through a "Future FCO" strategy exercise, designed to set out how the department will be run by the end of the decade.

In its evidence to the committee's inquiry, the FCO said it was government policy "not to speculate on post-referendum outcomes". But it argued that the UK, as a large member state with "global interests and membership of many key international organisations and groupings" was already "in a strong position to influence EU common action".

Launching his committee's report, Foreign Affairs Committee chairman Crispin Blunt – who has not declared an allegiance to either the 'leave' or 'remain' camps, said there was a "hunger" for "reliable, unbiased analysis" of the implications of both possible outcomes.

"I am delighted that the committee has risen to the challenge of providing this analysis by agreeing a unanimous report," he said.
"The referendum offers the British people a once-in-a-generation opportunity to chart a course for the UK’s role in the world. Voters should consider not only the short-term consequences of staying or leaving but the long-term opportunities and challenges."

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