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13 April 2024

British Foreign Office facing big cash pressures: report

Secretary of State for Business, Enterprise & Regulatory Reform Lord Peter Mandelson listens during a press conference held by British Prime Minister Gordon Brown inside the Foreign Office .(Getty Image)

Britain's Foreign Office is facing ‘serious financial pressures’ due to the falling pound which could hit its international diplomacy efforts, an influential group of lawmakers said in a report Sunday.

The chair of the House of Commons Foreign Affairs Committee, Mike Gapes of the ruling Labour Party, described the situation as ‘deplorable’ and called on the Treasury to provide extra support for Foreign Office activities. The value of the pound has plunged in recent months due to the credit crunch - in December, it hit near-parity with the euro, while it reached its lowest level against the dollar for nearly 25 years last month.

"We are concerned that the FCO (Foreign Office) is facing serious pressures in this financial year," Gapes said as the study on the Foreign Office's 2007-08 annual report was published. He added this was due to the Treasury withdrawing its support for a mechanism ‘which used to protect departments from the weakening of the pound.’

"There is a risk that the FCO may not be able to meet higher international subscriptions over the next two financial years, causing its performance... to suffer," Gapes added. "It is deplorable that the FCO should have to shoulder the financial burden from within its already tight budget to pay for subscriptions (to international bodies) which also benefit other government departments." The committee calls for the Treasury to meet some extra costs.

Responding to the report, Ed Davey, foreign affairs spokesman for the opposition centre-left Liberal Democrats, warned it would be ‘short-sighted, self-defeating’ and ‘penny-pinching’ if British commitments to bodies like the United Nations were compromised.