Basra consulate closure 'better for Britain', says minister
UK interests in Iraq will be strengthened by the closure of its full consulate in the country's second city, a Foreign Office minister has said.
The government earlier announced it would keep an office in Basra, southern Iraq, but without permanent staffing.
But FCO minister Alistair Burt said a "beefed up" presence in the capital Baghdad would be "better for Britain".
British business leaders said the UK was not doing "nearly enough" to compete in the oil-rich south of Iraq.
Speaking to BBC Radio 4's World at One, Mr Burt defended the decision, explaining that British interests in Basra would be protected by increased staffing at the embassy in Baghdad.'Beefed up resources'
He said: "Our team in Baghdad will do the job in Basra that needs to be done.... It's a very important area for us with the oil fields, with the potential for infrastructure development.
End Quote Baroness Nicholson Iraq Britain Business Council
I think this is a foolish short-term thing but I don't think that's a Foreign Office decision - I think it is something that is done from the Treasury”
"The big companies we spoke to said they would rather we had a presence in Baghdad where big decisions are made and beefed up the resources there.
"Being able to cover both cities more effectively, we will be able to do better for British companies, better for Britain, and help the long-term development of Iraq, all at the same time," he added.
Mr Burt also rejected the idea that a "fly-in, fly-out diplomacy" in Basra would not work.
"To be in one place all of the time isn't necessarily a better way to build relationships. It used to take 48 hours to reach Basra from Baghdad, but that it now takes one hour."
Earlier, Foreign Secretary William Hague said the new approach would be more effective and save money.
"Because of the improving security situation, it is now easier and safer for staff to travel from Baghdad to Basra and around the country more generally," he explained in a written statement to parliament.
"We can support UK interests in Basra effectively without the need for staff to be permanently based there.
"In turn, this allows us to reduce the cost of our presence in Basra, currently £6.5m per annum."
He added: "The British ambassador, his deputy and other diplomatic staff will continue to make frequent visits across Iraq, including to Basra, to ensure that we continue to maintain the strength and depth of our relationship with Iraq."
The foreign secretary confirmed the savings would help the Foreign Office expand its diplomatic presence with 11 new embassies and eight new consulates in Asia, Africa and South America.'Have to do better'
But some representatives of British business have warned Chinese and Korean entrepreneurs could now secure more of the major infrastructure projects in southern Iraq.
They say Britain risks losing vital relationships with Iraqis, who often favour those who fought against Saddam Hussein rather than the Chinese, who opposed invasion.
The Iraq Britain Business Council (IBBC), in London, called the changes a scandal.
IBBC executive chairman Baroness Nicholson told the BBC she regretted the decision and she hoped it was only "temporary", even though the Baghdad embassy would "make every effort to serve Basra" from a distance.
She also warned the southern city would soon become "the prime oil producer at the hub, probably almost of the globe".
"Already fabulous British businesses are there - BP, Shell, Mott MacDonald, Kier Group. And many, many more like PWC and Touche Deloitte - masses of them.
"But it's not nearly enough compared with the Chinese and even the Italians. We have to do better."
Baroness Nicholson argued Basra was "one of the casualties of cuts to the Foreign Office" and would not be "a saving in Britain's best interest".
"This isn't the end of the road for British businesses... [but] there's all to play for."
Former Conservative Foreign Office minister David Mellor described it as an "inept decision" that would be "deeply damaging" for the UK.
"Basra is likely to become in the next decade one of the most prominent cities in the Middle East," he said.
"The decision to shut the British consulate is a short-sighted one and the amount of money saved - allegedly around £6m - a drop in the ocean compared to the benefit British business can gain by being there and having a centre of expertise at the consulate to help them."
British troops spent six years in Iraq after the fall of Saddam Hussein in 2003 - most serving in and around Basra - with 179 service personnel losing their lives.