Gordon Brown was under pressure today to explain why there had been cutbacks in counter-terrorism programmes in Pakistan because of the falling value of the pound.
The Liberal Democrats called for an urgent parliamentary statement by the Prime Minister after a Foreign Office minister revealed that programmes to tackle terror and radicalisation in Pakistan had been cut.
The budget shortfall emerged in comments in the Lords yesterday by Baroness Kinnock of Holyhead, who said that the Foreign Office was trying to deal with a shortfall of £110 million, a figure expected to grow in 2010-11, due to fluctuations in sterling.
Her disclosure caused astonishment in the Lords and came just hours after Mr Brown told the Commons that the “crucible of terrorism” on the Afghan-Pakistan border remained the “No 1 security threat to the West”.
The Lib Dems today called for an urgent parliamentary statement from Mr Brown and accused him of starving the Foreign Office of funds both as Prime Minister and, before that,. as Chancellor.
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The Lib Dem peer Lord Wallace of Saltaire told BBC Radio 4’s Today programme: “We want
him to explain why the Foreign Office budget has been cut by a further 15 per cent to 20 per cent when these very evident priorities in Pakistan, Afghanistan and elsewhere are being squeezed so heavily.
“This is the last of a succession of Foreign Office cuts and the gap between the ambition of British foreign policy, and defence policy, and the resources provided is widening to a catastrophic degree.”
The Shadow Foreign Secretary William Hague also seized on Lady Kinnock’s remarks, saying: “Pakistan has been identified as one of the major sources of the terrorist threat to this country.
“Cutting FCO expenditure on counter-terrorism programmes in Pakistan because of the movement of exchange rates is clearly not the way to run an effective foreign policy.”
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Mr Hague said the cuts were the “direct consequence of Labour’s decision to remove the FCO’s protection against exchange rate movements”.
He said: “This momentous decision happened on David Miliband’s watch and the buck rests with him. There has never been a full explanation of how this happened and whether Foreign Office ministers took their eye off the ball.
“It is time that the truth is known and the full extent of the damage done to British diplomacy overseas laid bare.”
Lady Kinnock’s disclosure came at question time in the Lords yesterday afternoon as she outlined a string of areas that had faced cuts due to the shortfall. A fall in the value of sterling hits FCO spending as it makes the cost of its operations abroad - paid for in foreign currency — more expensive in realtive terms with the same expenditure in pounds buying less on the ground.
She told peers: “As a result of exchange rate movements, the FCO faces a shortfall in 2009-10 of an estimated £110 million; we estimate this shortfall will increase slightly in 2010-11.”
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She added: “We have had staff redundancies in Argentina, Japan and across the United States. Programmes in Afghanistan in counter-narcotics have been cut, capacity-building to prevent conflicts in Africa, counter-terrorism and radicalisation in Pakistan, the list goes on.”
She added: “It is a fact that counter-terrorism and radicalisation projects in Pakistan and elsewhere have been the subject of these cuts that the Foreign Office has been obliged to make.”
Her comments provoked concern on all sides of the House. Even Baroness Royall of Blaisdon, a fellow minister and Leader of the Lords, said she had to “confess to my surprise”.
She said counter-terrorism funding in the Home Office was ring-fenced, adding: “So if it can be ring-fenced in one department, perhaps it could be ring-fenced in another department.”
Labour’s Baroness Symons of Vernham Dean, a former foreign office minister and defence procurement minister, said Mr Brown’s statement yesterday - introducing a package of measures to improve security - and Lady Kinnock’s remarks did “not add up to a very coherent point of view”.
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She said: “There should be ring-fencing over the counter-terrorism budget. We can ring-fence other budgets; surely a budget that affects the protection and security of the British people should be the first to be ring-fenced.”
Baroness Park of Monmouth, a former senior MI6 official who sits on the Tory benches, said it was “absolutely vital” to use every resource possible in fighting terrorism.
“We are essentially going to be blind if the FCO is cut any further,” she said.
A Foreign Office spokeswoman said that counter-terrorism spending had increased year-on-year throughout the current comprehensive spending review period and was expected to increase again next year.
“Pakistan has remained our top priority for counter-terrorism and has rightly been the largest single recipient of our counter-terrorism support throughout this period,” she said. “We are constantly reviewing the precise allocation of our counter-terrorism spending to ensure that programmes are most likely to reduce the threat of terrorism and radicalisation