influence in overseas countries, where these activities are financed from public funds, as well as the acquisition of information abroad which will serve British interests. Thus our examination covers not only the staff of diplomatic missions, but also the British Council and the BBC external services, which are paid for separately by the Government rather than by the broadcast licence fee. PRIORITIES OF POLICY 3. The focus of our concern has been on external policy issues and on the effectiveness of our overseas services as an instrument of British interests abroad. This marks the main difference between our investigation and that of the Plowden Committee which reported in 1964; the latter was chiefly concerned with problems of structure, especially with the major task of the merger of the Commonwealth and Foreign Services, and made a number of important recommendations which have led to improvements in efficiency. We were appointed at a moment when there had been a major shift in British foreign policy— the decision announced at the beginning of 1968 to withdraw our military forces from the area East of Suez. There had been other important, though less sudden changes of policy in the middle and late 1960s, notably the priority given to the renewed British bid for membership of the European Common Market and the greatly increased emphasis on the support of our commercial effort overseas prompted by the long-drawn-out series of balance of payments crises. 4. These events, as our terms of reference indicate, provided the occasion for our enquiry. We had to start by looking again at the traditional order of priorities and considering how far they were affected by the change of circumstances. Nothing that has happened could of course affect the first priority of external policy which is to maintain the security of this country, and our representation overseas will continue to have an important part to play in this. However, the balance of their work load should now reflect the clear precedence that belongs to the commercial objective in the day-to-day conduct of Britain's relations with other countries. There are other aims of policy, some of them of high importance, but they cannot be effectively pursued if the balance of payments is not put right. The Committee has therefore given special attention to the organisation of our commercial services and has considered how these might be reinforced to add vigour and direction to the export effort. The implication of this re-ordering of priorities is not that other major policy aims must invariably be sacrficed whenever they conflict with our commercial interests. It would be foolish, for instance, to suggest that in the midst of a crisis in Berlin which happened to coincide with a British Week in Germany the latter ought to be the chief preoccupation of the Ambassador and his staff. The question is rather how in ordinary circumstances the total diplomatic resource ought to be divided between the competing demands on it. We consider that to achieve a substantial and continuing surplus the design of British representation overseas and the distribution of its effort among its various tasks must reflect the towering importance of this aspect of policy. 5. Our concern with the balance of payments was also reflected in our immediate search for any economies that could reasonably be made in overseas representation, in the light of the changes in British external policy, without reducing its efficiency. Here our terms of reference presented certain problems of interpretation. On the one hand there was the urgent need for savings, particularly savings of foreign exchange; but on the other hand the most important policy changes that seemed to offer some promise of economiesthe withdrawal of forces from east of Suez-would be completed only after another three years from the time when we were appointed. In the meanwhile there might be special circumstances connected with the act of withdrawing which could arguably increase rather than diminish the demands that would be made on our overseas representation in and around the area of the Indian Ocean. We do not say that this will necessarily prove to be the case; but the argument was put to us by several witnesses and we concluded that it was one which could only be answered by a case by case consideration of the political circumstances of individual countries, and of their possible military implications for Britain, at various points in time during the course of the withdrawal. We did not feel that this was a task which the Committee could undertake. It involves a series of tactical judgments which can best be made by people working inside the administration of government, rather than by an outside committee whose concern must necessarily be with the broader issues of strategy. THE TIME-SCALE 6. We also had it in mind that any recommendation for short-term economies which we might make would be most unlikely to produce quickly a significant net saving in the overall budgetary cost of conducting our external relations. There was almost bound to be a time lag. Whatever changes might be made in the deployment of British representation overseas, the Government's financial commitment to its employees, both regular officials and locally-engaged staff, would not suddenly cease. Arrangements would have to be made for early retirement pensions or other jobs would have to be found for these people to do. The Diplomatic Service in particular has to be treated as an organic entity; it consists of a corps of highly trained people who have committed themselves and their families to a way of life which demands high discipline. It is based on the assumption that there is a corresponding commitment on the Government side to their financial security. Indeed any changes which resulted in the grant of a number of early retirement pensions might well produce an increase in the total expenditure in the short term. This is not, of course an argument for delay in taking such decisions; where reductions in the establishment are needed, unambiguous action combined with fair compensation for those affected is what is best for all concerned. Our evidence is clear that this course would be welcomed by the Diplomatic Service, once anxieties about harsh or unfair treatment of individuals made redundant through no fault of their own were set at rest. We think it is important to stress that the morale of those who stay in the Service is intimately bound up with the treatment of those who go. 7. Apart from the financial consideration, there is the likelihood that any important change in the structure of our external representation, requiring emphasis on different skills or different kinds of training, could not take effect at once. It seemed to us that any proposals that we made to adapt the instrument of British external policy to changed circumstances ought therefore to be based on a reasonable prospect that the new circumstances would endure for some while. Allowing for this and for the time lag in the process of adaptation, we concluded that our recommendations should be so designed as to be relevant to the probable international environment in which British foreign policy would be operating in the mid-1970s. This has necessarily involved us in the business of prediction. We have tried to limit the range of such prediction to the minimum necessary for our task; but there is no means of avoiding it altogether. The would-be hardheaded person who refuses to make an explicit forecast is often, in effect, only making a series of assumptions based on the projection of the present, largely unchanged, into the future. The assumption of "no change" is the one which is surely going to be wrong; and as soon as that assumption is modified in an attempt to take intelligent account of the likely shift in some aspect of the situation, knowledge about the nature of an underlying trend is implied. That this assumption is implicit rather than explicit merely reduces the awareness of the fact that one is making a guess about the future. 8. We have had to face a further difficulty in our attempt to foresee the requirements of the 1970s. There is already public discussion of the timing and degree of the withdrawal of our armed forces from east of Suez and some divergence between the views of the two major political parties in Britain. Any Committee attempting to look ahead for a period of years, as we have done, cannot assume that any one administration will necessarily hold continuous office throughout the period under review. The withdrawal under the present programme may not be complete before the end of 1971. We have therefore felt compelled to consider whether our recommendations would be inconsistent with the possible retention for a longer period of some modest forces east of Suez (in addition to the Hong Kong garrison). We did not think, however, that such an eventuality would materially alter the general tenor of our proposals. It is possible that a change of British policy in this sense might be reflected in new requirements of political and defense representation. But the Committee felt that on balance any probable extra requirement would not be on such a scale as to invalidate the central argument of this Report, whatever localised adjustments in the deployment of our resources might be involved. CHANGED REQUIREMENTS OF REPRESENTATION 9. For the purposes of designing a system of representation for the mid-1970s, it seemed to us that overseas countries would be divided into two broad categories more sharply distinguished from one another than they are today. One is the category of advanced industrial countries with which we are likely to be increasingly involved to the point where none of us will be able to conduct our domestic policies efficiently without constant reference to each other. This group to which we refer as the Area of Concentration of British diplomacy— will consist of about a dozen or so countries in Western Europe plus North America. There are also a few industrially advanced nations outside the European/North Atlantic area with whom British relations will be very close and important for different reasons. Examples are Australia and Japan. There is not the immediate prospect here of the mutual commitment in the day-to-day process of government that there is in Western Europe. But British representation in these countries will have far-reaching responsibilities. The other category of countries comprises the rest of the world. There will be important differences in the kind of representation that will be appropriate, depending on whether the country concerned is in the Soviet bloc, commercially important, politically hostile, economically underdeveloped and so on. But none of them is likely to impinge on the day-to-day conduct of British Government business in quite the way that we expect the countries of the first group to do. 10. What is distinctive about the countries in the Area of Concentration is that their social structure, ways of living, methods of conducting political and economic business are sufficiently similar to make it possible for them to conduct their external relations with one another in a style different from the traditional one. Because their domestic affairs are increasingly interrelated and impinge on each other at so many points, it is likely that the range of topics in the diplomacy of the future will be much wider with an emphasis on economic and social issues. These countries will also be even more closely enmeshed with one another commercially and in other fields of activity, e.g., tourism, than they are today. The process of intermeshing will of course be greatly reinforced if Britain and other countries which are at present applicants for membership of the European Common Market, join it. But the argument about the underlying trend towards a new kind of diplomacy which is both more wide-ranging and more intensive is not dependent on any particular event. We think that there is a high probability that a considerably increased proportion of the world's trade will take place in the Area of Concentration and that an increasing number of policy decisions on commercial and broader economic issues will be taken in concert by these nations. There is likely to be a similar trend in the management of monetary and social questions. It is more difficult to foresee how far the development of multilateral diplomacy in international organisations like the European Economic Community, EFTA or even NATO will carry these countries towards the adoption of common external policies towards the rest of the world. But even if this process does not advance vary far by the Mid-1970's, the demands made on British overseas representation in the Area of Concentration will still be heavy. 11. Thus the two central commitments of British foreign policy that have emerged clearly at the end of the period of decolonialism in the late 1960s, first the commitment to an increasingly integrated Western Europe on as wide a basis as possible, with the European Common Market as it core, and secondly the commitment to a North Atlantic Alliance under US leadership as the main instrument for the conduct of East-West relations, should be seen as involving something more than a geographical choice. They are also an expression of our growing commitment to a certain style of diplomacy. Without the latter neither the process of integration in Europe nor the maintenance in the years ahead of an effective multilateral alliance among nations of vastly differing military power would be feasible. But we do not view the New Diplomacy as being of necessity confined to a particular geographical region. We have already referred to Australia and Japan, where the appropriate diplomatic techniques seem likely to conform more and more to those which are coming into use in the European/North Atlantic area. In the Soviet bloc too, if and when the Soviet Union loosens its control over Eastern Europe, opportunities for the extension of the New Diplomacy will occur. 12. In order to remove any doubts on this score, we must emphasize that our view of the appropriateness of these advanced and intensive diplomatic tech niques in our dealings with a particular country does not rest on a judgment of its relative importance, either as a friend or enemy, in the overall framework of British external relations. What is significant about a country of this type is that our relationships with it involve us in contacts over a much wider range of govcernment and society than has been usual in traditional diplomacy, and that these contacts are concerned with many topics which have in the past been conventionally regarded as belonging to the domestic affairs of sovereign states. The diplomatic techniques tend to be multilateral because of the complex and inter-connected character of the interests of the nations which engage in this kind of bargaining with one another. The changing methods of conducting such international business are foreshadowed today in organisations like the European Economic Community, EFTA and OECD. Finally, a condition for the conduct of effective multilateral diplomacy, much of it involving problems which are sensitive politically and technical in content, is the existence of a sophisticated apparatus of national government and of a fairly sophisticated open society behind it. 13. In purely geographical terms the significance of the historic shift in the focus of British foreign policy in the second half of the 1960s to the European/ North Atlantic area needs to be interpreted with some care. There are issues outside Europe which will continue to matter to the nation. We shall continue to be concerned in the welfare of the Commonwealth and to be directly involved in the efforts of the new members to achieve economic take-off. There will also be the actual responsibility of government in a number of small Dependent Territories scattered around the world. Thus our interest in the countries bordering the Indian Ocean and the Persian Gulf as well as Africa will not cease in the 1970s-nor is it likely even that it will be reduced to the low level of priority that it has had in the Foreign Ministeries of most continental European nations. The evidence suggests that the policies of these continental nations are still must influenced by the post-war ebb in the concern for extra-European affairs which was a widespread phenomenon in Western Europe, and it seems unlikely that this unconcern will prove permanent. Indeed, there has already been some revival of interest. Even the most Eurocentred governments are beginning to find it is necessary to take a close interest in what happens on Western Europe's eastern and southern flanks. It is not unreasonable to anticipate that the European nations will sooner or later, and hopefully in concert, return to a more active diplomacy in these regions and further afield. It would therefore not be in Western Europe's long-term interest in Britain's considerable diplomatic expertise derived from long and profound experience of the problems of the African continent and the Indian Ocean area were now simply cast aside, perhaps prompted by a feeling that this rejection would in some sense make Britain more truly "European". Rather, Britain's connections with these distant places should be regarded as providing a valuable contribution to the instrument which it is hoped, Western Europe will feel that it needs in the long run to express its common interests in the African continent and the areas bordering the Indian Ocean. These areas contain a high proportion of the world's population; their capacity to produce is growing fast; and their capacity for engendering problems for the rest of the world is unlikely to diminish. What we are suggesting is not that Britain should take it upon herself to act in some sense as the trustee of Western Europe's interests. Our point is only that in looking ahead to the kind of diplomatic instrument which Britain as a European power will need in the mid-1970s, we should not be guided entirely by the evidence of unconcern with extra-European problems which has been characteristic of most continental European countries in recent years. PROBLEMS OF INTERPRETATION 14. Our task has involved us in extensive discussion with a variety of witnesses in an effort to determine as precisely as possible the nature and relative importance of the long-term objectives of British external policy. This effort has been necessary because there are problems of interpretation and prediction here too. It would be disingenuous to give the impression that all those in authority whom we were able to question on this topic spoke with one voice and produced a uniform ordering of priorities. There was general agreement on certain major objectives. We have already mentioned three of them: the improvement of the balance of payments, the maintenance of the North Atlantic Alliance and the promotion of integration in Western Europe. Other broad aims on which fectiv there is general agreement are the reduction of East-West tension, whenever circumstances in the Soviet bloc permit this without weakening the Atlantic Alliance; the sustaining of Commonwealth links in a form appropriate to contemporary requirements, including our relations with a number of small Dependent Territories for which the British Government will continue to be responsible; the improvement of economic conditions in the less developed countries; and the strengthening of international organizations in which an effective dialogue can take place on issues which cause conflicts between nations. 15. The problems arise, naturally enough, when these highly generalised aims are translated into specific objectives, especially those objectives which are related to a timetable. We found that sometimes ambiguities of British policy impeded the attempt to design a service which would efficiently perform its task in the most economical fashion. This was markedly so in the sphere of defence policy (see Chamber XI) where the aim of reducing the costs of representation overseas is made more difficult of fulfilment by the uncertainties of the stated objective of the Government to maintain "a general capability based in Europe (including the United Kingdom) which can be deployed overseas as, in our judgment, circumstances demand, including support of United Nations operations." This is capable of being interpreted in different ways. It is evident that after our withdrawal from east of Suez we shall exercise less physical power around the world than before and shall aim to avoid intervening militarily, particularly on our own, in situations outside Europe. This would imply that we shall need less of the detailed information which might be relevant to an armed conflict in an area in which our forces might have an active role to play. But on the other hand it has been argued that wherever there remains any possibility that our forces may have to intervene, full information is needed to judge the situation and to support any eventual operation. Until a military contingency is finally abandoned this backing for it in terms of information would still be needed. And in many cases this need therefore depends upon specific policy and military planning decisions not yet taken. Faced with arguments of this kind, we felt very keenly that it was not possible for a committee, charged as ours was to secure an improved cost-effectiveness in the conduct of foreign policy by clarifying objectives and determining the appropriate scale of resources to be allocated to achieving them, to proffer useful advice if there were ambiguities at the very centre of our policy decisions. We conclude that ambiguity of intention, even if this ambiguity has the effect of deterring aggression, cannot be had on the cheap. THE COMMITTEE'S PROCEDURES 16. The working methods which we adopted were partly determined by the comparatively short time in which we were asked to complete our enquiry. We were not able to conduct research in depth into aspects of the problem of overseas representation which we felt deserve more systematic scrutiny than they have so far received. We instituted some limited enquiries of our own aimed at determining the orders of magnitude of certain items of cost, which we hoped we might relate in some broad fashion to the objectives of foreign policy. This would have been the first move in devising some measure of the cost-effectiveness of overseas representation. However, the basic data for an exercise of this kind could not be assembled in the time at our disposal. The feasibility of an overseas "output budget" is discussed in Annex D. 17. We did, however, carry out a preliminary investigation of the effectiveness of one particular aspect of overseas representation, viz. political reporting from Posts overseas. We used the case study method, because no material was available which would have allowed us to make a systematic analysis over the whole field, and employed the results to supplement the more impressionistic views that we formed of the content of political reporting. We regard the detailed investigation of political reports from four Posts conducted on behalf by our Research Director as having chiefly an experimental value. The exercise seemed to yield promising results, and we think that it could usefully be carried further by the Foreign and Commonwealth Office. our 18. Since we have no yardstick of achievement by which to measure the costeffectiveness of the various parts of the foreign policy operation, we have had to rely on other indications for our judgment of the appropriate scale for the various activities concerned with overseas representation. We have had to judge not only the relative importance of each of these activities but also |