Examination of Witnesses (Questions 80
WEDNESDAY 17 JANUARY 2001
TEBBIT CMG, MR
80. You did provide us with a helpful couple
of pages when the briefing was sent. I am not yet clear how this
is going to work in practice, and I would be grateful for some
clarification. I understand that this is supposed to facilitate
what is described as "pro-active spending, to prevent human
suffering and greater expenditure that arises from conflicts and
their aftermath". The intention is to get in early and stop
bureaucratic delays and interdepartmental studies between the
MoD, DfID and the Foreign Office. I can see the logic of that.
How is it going to work in practice? Could you summarise it and
I will come in with a small question?
(Mr Tebbit) There are two of them, one for Sub Saharan
Africa and one for the rest of the world. Three departments put
money into it, the FCO, MoD and DfID, and there has been a top-up
from the Treasury. The levels that came from departments basically
represent the amount of money they spend at present in these areas.
When the MoD put in £32 million, for example, to the rest
of the world budget it reflects what we are spending, more or
less, at present on these sort of things, the Russian resettlement
programme for officers, teaching programmes, the training teams
that we send out around the world to train-up local ministries
of defence or armed forces, these sorts of things. We will all
sit around in a room together and we will take collective decisions
on how the money should be spent. We could end up by doing exactly
what we do already, and effectively. DfID, the MoD and the Foreign
Office will still spend, more or less, what they do at present
according to the existing divisions, or I might say, "It
is much more sensible to apply diplomatic instruments to this
problem rather than a few military people running around doing
a training programme, you have it, my dear fellow", or John
Kerr, I am sure, because he is such a generous chap, might say,
"No, no you must take it for your military people because
you are much more useful than we are", or we might get this
from DfID. That is how it will work. The value of it is that is
it transferring, it forces us to think in an integrated way about
crisis management and it should enable us to make quicker decisions
on what to do.
81. The MoD puts £32 million into the pool
for the rest of world but according to the paper, this is Foreign
Office led, for Sub Saharan African you put a very small amount
in, £1.5 million, and that is DfID led. Given the experiences
and the arguments with DfID over Mozambique humanitarian relief,
what guarantee is there that there will be consensus? What guarantee
is there that there will not be delays because you cannot agree
who is paying, for example, if your £32 million has already
(Mr Tebbit) Firstly, this will encourage us to set
joint objectives and have joint priorities. There was a misunderstanding
about Mozambique, it was not a fundamental problem.
82. I appreciate that.
(Mr Tebbit) There can still be disagreements, obviously
there are already.
83. What role does the Treasury have?
(Mr Tebbit) They topped up the money.
84. They are doing more than that, are they
not, the public service agreement is described as a key PSA target?
(Mr Tebbit) It is one of our targets.
85. Does the Treasury have an arm-twisting role
if you cannot agree with the other departments? I would have thought
that Treasury's attitude would be that they would rather not spend
(Mr Tebbit) It is the other way around, we would be
the ones on the front foot, ensuring that we use this money effectively
for these policy purposes. A further point, this does not cover
the big issues of Kosovo, for example, that does not have to be
squeezed within this strait-jacket.
86. Can I clarify, the budget arrangements appear
to say that there will be a separate pot of money for programme
expenditure and then there will be a separate pot for major peacekeeping
tasks. Will the MoD be in charge of managing the costs of potentially
significant unprogrammed peacekeeping, like Kosovo, for example,
and will you be able to do that regardless of the fact that the
rest of the world budget has already been spent and you just go
ahead and then assume that the Treasury is going to top it up,
or do have you other problems? Will you be expected to get it
from your own budget? Are we not still going to be in that fundamental
problem of uncertainties and extra expenditure? Earlier questions
referred to Bosnia in the 1997-98 budgeting, are we going to have
the same problem in regard to the Balkans or some other conflicts?
(Mr Tebbit) This reduces uncertainty for relatively
minor, smaller scale operations. It does bring a certain discipline
to the process. In one sense the MoD would not be able to do certain
things unless everyone agreed to give us more money. For the large
enterprises it does not work like that. The Prime Minister, the
Defence Secretary, the Foreign Secretary and the Chancellor collectively
agree on something and money is found from the Reserve for things
(Mr Balmer) Bosnia and Kosovo will be additional.
87. Given that the Treasury with its Public
Service Agreement Review is now recognising that this is a key
target and that conflict prevention has a role, and peacekeeping
comes into that, is there going to be a greater onus on the Treasury
to come up with extra money earlier than there has been in the
(Mr Tebbit) They have already come up with extra money
just in creating these budgets. There has already been a move
from the Treasury to put £20 million each year into the Sub
Sahara fund and 12, 20, 30 million across the three years into
the rest of the funds. To that extent that is positive.
88. Will the Permanent Secretary and the Treasury
say, "You have had your 20 million, that is it. You are on
your own now". Then you have to make special pleas and seven
months later you get some more money, so, in fact, the culture
has not necessarily changed?
(Mr Tebbit) That is always a risk. Look at the positive
side. Here is a demonstration of Britain's commitment to helping
people whose lives are at risk. The message goes out to the world,
these budgets have been set up and Britain is doing more. That
is surely good news.
89. There is no argument about that.
(Mr Tebbit) It is not perfect, it does not solve every
90. We are exploring the process.
(Mr Tebbit) It does not solve every issue, it does
ease some of them.
91. The question is, will the Treasury be more
speedy? Will it be more forthcoming earlier when you get into
very expensive commitments like Bosnia and Kosovo, which we have
had for several years?
(Mr Tebbit) That description of the Treasury's attitude
does not sound very promising to me.
92. That is what I feared. Can I conclude with
a couple more points, the intention of this conflict prevention
pooled budget is to ensure the departments spend funds according
to shared objectives and priorities. Is that going to mean those
areas which are not included, like Kosovo, for example, which
are not, therefore, shared objectives and priorities will largely
be paid for by the MoD?
(Mr Tebbit) No, I do not think it means that at all.
I suspect what they are thinking of here are things like helping
to give effective reports under the UN where there will be pressure
for enhanced early warning of crises. I do not think that is going
to alter some of those other issues that you are discussing.
93. There is one other point, in your paper
that you sent to us there is a reference to what might happen
to money that comes back from the UN for payment for our peacekeeping
contributions. If the Americans pay their arrears and the UN is
able to meet the obligations that it has entered into when that
money comes back, is that money going to be money that will come
to the MoD automatically, will it go proportionately to the departments
that spent it or will it be part of the money the Treasury keep?
(Mr Tebbit) That is a very good question. The money
would come back to the department that has incurred the cost in
the first instance.
(Mr Balmer) It ought to be the case that if the MoD
has incurred expenditure, which the UN will in due course pay,
the Foreign Office will already have reimbursed us. It is the
Foreign Office which is currently out of pocket and they will
have turned to the Treasury because they are out of pocket and
the Treasury will bail them out. When the arrears turn up it effectively
goes to the Treasury.
94. We had two different answers there.
(Mr Tebbit) Under the current arrangements with the
UN the Foreign Office does the immediate business with the UN,
they are the department that pays. The monies are taken onto their
budget in the case of UN operations and they are the ones that
get the reimbursement. We, as it were, get paid by the Foreign
Office while, as it were, they are waiting to get the recovery.
95. If the conflict prevention budget was used
in support of the UN operation
(Mr Tebbit) That principle would change.
96. The Treasury is putting money into this
conflict prevention budget, does that mean that the money that
comes in will then be divided out and the Treasury will claim
its portion back as opposed to it being used by DfID, yourselves
or the FCO?
(Mr Tebbit) The Treasury money is there for collective
purposes. If at the end of the year it is unspent I dare say the
Treasury will be keen to get it back. That is the only circumstance
in which that would happen.
(Mr Balmer) Any UN contributions, when they are applicable,
would be in addition to this budget. If it is an operation where
we are allowed to charge the UN we will continue to do so.
97. The money will come back to who?
(Mr Balmer) We spend the money, we claim it from the
Foreign Office and they claim it from the United Nations.
98. When it comes back who does it come back
to? You said it came back to the Treasury.
(Mr Balmer) It comes back to the Foreign Office. If
it is arrears then usually the Foreign Office has been out of
pocket for a year or so and they would have been reimbursed by
the Treasury. Therefore, the Treasury is the one who get the arrears
when they arrive.
99. I am still not clear. Perhaps you can send
us a note to explain this archaic procedure?
(Mr Tebbit) It is called the Armstrong Formula.