Reeves to cut allowances of British diplomats overseas
The Foreign, Commonwealth and Development Office (FCDO) is reviewing the payments made to embassy staff around the world after this week's spending review, which will force the department to make day-to-day savings of 7 per cent in real terms.
Ambassadors and other senior diplomats will have their 'specific allowances' for overseas postings 'reviewed and revised' as part of the efficiency drive.
Diplomatic sources told The Telegraph they now fear having to pay their own rent in foreign countries, if housing allowances are reduced.
Foreign staff receive a variety of extra payments under the FCDO's 'Overseas Employment Framework', including a general allowance for working overseas, additional payments for spouses and 'danger money' for working in hostile countries.
The department does not routinely publish the cost of overseas allowances, but a Freedom of Information request in 2017 revealed that the annual cost is in excess of £23 million.
Diplomats subject to cost-cutting for two years
Ms Reeves, the Chancellor, slashed administrative budgets of all Whitehall departments in her spending review on Wednesday, but the Foreign Office has borne the brunt of the cuts and will be forced to save £78 million a year.
The latest spending figures also reflected a significant cut of the overseas development aid (ODA) budget, which is administered by the FCDO, to find an increase in defence spending.
A 'departmental efficiency' document published alongside the spending review said the FCDO would 'reform the Overseas Employment Framework to modernise and simplify the end-to-end overseas allowance package for staff, streamlining provisions to make the system more transparent'.
It added: 'Aspects of the package will be combined to reduce processing costs, while the monetary value of specific allowances are being reviewed and revised.'
Diplomats told The Telegraph that they have faced cost-cutting measures for more than two years, and that hospitality expenses were now very closely scrutinised by the department.
One said that even the cost of a cup of coffee with a diplomatic contact overseas would require extensive justification, and that many civil servants choose to pay for expenses out of their own pocket.
Exact measures to be decided
Other allowances, such as the policy to pay thousands of pounds a year for the children of diplomats to attend private boarding schools in the UK, have already come under scrutiny in recent years.
In November, the FCDO wrote to top boarding schools to ask for the children of diplomats to be given discounts on their school fees, to offset the cost of Labour's tax raid on private schools.
Foreign staff are usually given a generous stipend to pay for living expenses, to allow them to rent a property overseas while maintaining a home in the UK.
But some choose to sell their homes in the UK when working abroad, allowing them to live without any housing costs while away on a posting.
The Telegraph understands that the exact 'modernisation' reforms to diplomatic allowances have not yet been decided.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
19 minutes ago
- Telegraph
Retirees pull billions from pension pots to escape Reeves's tax raid
Middle-class Britons risk a retirement 'disaster' after a record £5bn was pulled from pension pots in the wake of Rachel Reeves's inheritance tax raid. Official figures showed 672,000 retirees, representing roughly 5pc of all pensioners, pulled £5bn from their pots in the first three months of this year. HM Revenue and Customs (HMRC) said the amount taken from retirement funds was 25pc higher than the same quarter a year ago, with 13pc more people withdrawing money. It means withdrawals during the period were the highest since George Osborne introduced pension freedoms a decade ago. It comes after the Chancellor announced in her maiden Budget last October that pension pots would no longer be exempt from inheritance tax from April 2027, making them subject to a levy of up to 40pc. Baroness Altmann, a former Tory pensions minister, urged the Chancellor to reverse the policy, warning that many more people would choose to withdraw money from their retirement pot as soon as possible, creating a 'pensioner poverty time bomb'. Sweeping changes mean retirees can now withdraw unlimited amounts from their pot as soon as they hit 55. The figures also revealed a 50pc increase in the number of octogenarians taking money out of their pensions over the course of last year with the amount withdrawn by those aged 81 and over up by 80pc to £360m. 'It's a disaster' The Chancellor hopes to raise £1.5bn from her decision to bring pensions within the scope of inheritance tax. Pension withdrawals from defined contribution pots above the 25pc tax-free lump sum incur an income tax charge of 20pc for basic rate taxpayers and a 40pc levy at the higher rate. The changes mean heirs will be subject to both inheritance and income tax at the marginal rate from 2027. 'It's a disaster,' Lady Altmann said, adding that she expected withdrawals to accelerate as more people became aware of the looming inheritance tax charge. She added that the 'draconian' way the policy was introduced was storing up a crisis for the future, and said she was pushing for changes in the Lords that would see beneficiaries charged a maximum 20pc 'pension recovery tax' instead on inherited pots. Lady Altmann said: 'This policy could end up being as damaging to workplace pensions as Gordon Brown's tax rate was for DB [defined benefit] pensions. 'I honestly think this is an existential threat to the long-term survival of our DC [defined contribution] pensions, because there's a clear incentive to take the money out as soon as you possibly can.' She added that this would leave many middle-class families in danger of not leaving themselves enough to fund their retirement. Lady Altmann said: 'This IHT [inheritance tax] imposition will ensure that more and more people – especially those who don't have massive amounts of money – will just say, 'Why on earth would I want to lose two thirds of my pension to the taxman? I'll just take it out as soon as I can.' 'Those who build up, say, between £200,000 and £300,000 over their working life are now in danger of having a real financial incentive not to keep money in their pensions for their later life and then end up in poverty.' 'Taking a big hit' Guy Opperman, another former pensions minister, said: 'Pensions are taking a big hit from the Government's actions. 'The consequences of this policy are clear: people will save less for their pension and will withdraw more. This will also affect the ability to pass money on. There is time for the Government to think again and they should. It is very short-term.' Jamie Jenkins, director of policy at pensions giant Royal London, which manages more than £170bn of client cash, said there was already clear evidence that people were changing their retirement planning ahead of the changes. He said: 'There is increased interest from advisers and their clients in how they can mitigate the potential inheritance tax bill.' Claire Trott, at wealth managers St James's Place, added: 'Every individual's circumstances are different, but IHT changes to pensions have certainly triggered more conversations about gifting strategies and whether it makes sense to start drawing from pensions earlier.' An HM Treasury spokesman said: 'We continue to incentivise pensions savings for their intended purpose – of funding retirement instead of them being openly used as a vehicle to transfer wealth – and more than 90pc of estates each year will continue to pay no inheritance tax after these and other changes.'
BBC News
19 minutes ago
- BBC News
Daventry MP committed to constituency despite new shadow role
The new shadow health secretary said he is still committed to his constituency describing it as his "bread and butter".Stuart Andrew took on the role in Conservative leader Kemi Badenoch's reshuffle of her senior team last MP for Daventry was previously the shadow culture secretary and a minister in Boris Johnson's he said his work in the constituency was the "part of the job I absolutely love doing. So it's really it's about making sure you put in the hours". Andrew replaced Edward Argar, who stood down following a "health scare".He told BBC Radio Northampton's Annabel Amos that the offer of the role was "quite a surprise"."I'm under no illusions of the enormity of the task I have ahead of me, but it is one that I have quite an interest in. So I'm looking forward to it," he MP said he is "quite used to" juggling constituency work and being in the shadow cabinet."I know that my constituency is my bread and butter if you like, [constituents] are always are a priority for me."I always do what I can to help my constituents when they come and see me asking for my help and go out and about." 'Tricky position' The MP, who represented Pudsey in West Yorkshire from 2010 until the constituency was abolished before the July 2024 election, said he would "work constructively" with Health Secretary Wes Andrew was critical of his handling of the recent strike by resident doctors in England and said the health secretary should have put in guarantees over industrial action when medics were awarded a pay rise last year."The government have got themselves in a really tricky position, and what we need to do is make sure that the patients in this country are getting the care that they need," he has also written to the General Medical Council to say resident doctors should be prevented from British Medical Association (BMA), a trade union for doctors, and the health secretary agreed to resume talks earlier this warned the union it had lost the government's goodwill because of the latest strike, which finished on Wednesday. Follow Northamptonshire news on BBC Sounds, Facebook, Instagram and X.
Telegraph
an hour ago
- Telegraph
Five years in jail for giving people smugglers social media boost
Anyone caught promoting people smugglers' services in social media posts will face up to five years in jail under new offences announced by the Government. Yvette Cooper, the Home Secretary, is to change the law to criminalise the creation of online content which promotes or offers services facilitating a breach of UK immigration law. The new offence, to be introduced through an amendment to Labour's borders bill, will cover small boat crossings, the creation of fake travel documents such as passports or visas, or promising the chance to work illegally in the UK. It will also become a crime to post online content that encourages someone to break UK immigration law in exchange for money. This would cover someone being paid by a people smuggler to post material on social media which promotes illegal journeys to the UK. It will also be punishable by up to five years in jail. The new offences come as the Home Office revealed around 80 per cent of small boat migrants told officials they used social media during their illegal journey to the UK, including to locate or communicate with an agent or facilitator associated with a people-smuggling gang. More than 25,400 migrants have crossed the Channel to the UK so far this year in 432 small boats, up 50 per cent on last year's figure and the highest number since the first arrivals in 2018. Some 5,454 have made it in July alone in 80 boats. Ms Cooper said: 'Selling the false promise of a safe journey to the UK and a life in this country – whether on or offline – simply to make money, is nothing short of immoral. 'These criminals have no issue with leading migrants to life-threatening situations using brazen tactics on social media. We are determined to do everything we can to stop them – wherever they operate. 'We have to stay one step ahead of the ever-evolving tactics of people-smuggling gangs and this move, part of our plan for change to boost border security, will empower law enforcement to disable these tactics faster and more effectively, ensuring people face proper penalties.' The National Crime Agency (NCA) has smashed crime gangs using social media accounts to promote crossing, including a pair of men from Wales who ran an operation through Europe labelled ' Tripadvisor for people smugglers '. Dilshad Shamo, 41, and Ali Khdir, 40, brought about 100 migrants illegally to Europe each week over a period of two years and offered them bronze, silver, gold and platinum packages, depending on risk. They were convicted after pleading guilty to people-smuggling midway through their trial. A platinum package could get you a flight, whereas silver might land you a 'comfortable ride' in the back of a lorry. Migrants from the Middle East heading to Europe rated their journeys in videos filmed inside lorries, boats and even on planes. Investigators found the video reviews on the phones of the smugglers themselves, seemingly made as promotional material. Another network operated by Amanj Hasan Zada, a Preston-based smuggler later jailed for 17 years, also posted videos of migrants thanking him for helping them. Albanian gangs have used social media to promote £12,000 'package deals' to Britain, including accommodation and employment upon arrival. Since December 2021, the NCA has worked with social media companies to remove 22,000 posts promoting organised immigration crime. More than 8,000 were removed in 2024, a 40 per cent increase on the previous year. It follows measures introduced as part of the Online Safety Act under which social media companies have been required to prevent and remove adverts by people smugglers for small boat crossings of the Channel or face jail and multi-million pound fines under new laws. Under the Act, two current offences involving modern slavery or exploitation and aiding and abetting crossings have become 'priority' offences in the bill. This means social media firms have to proactively prevent the adverts from being posted and remove any that are put up. If they fail to do so, Ofcom, the watchdog, has powers to fine them up to 10 per cent of their global turnover, equivalent to £9.7 billion for Mark Zuckerberg's Meta, the owner of Facebook, Instagram and WhatsApp. The watchdog Ofcom will also be able to block their services in the UK.
