§ Mr. Newens
asked the Secretary of State for Foreign and Commonwealth Affairs if he will issue a circular to suggest 417W guidelines to those responsible for purchasing or otherwise obtaining accommodation for embassy staff abroad in order to guard against unnecessary extravagance.
§ Mr. Ennals
Responsibility for the purchase of accommodation for diplomatic staff abroad rests with the Property Services Agency. Its decisions are taken in consultation with my Department on the basis of the most economic solution. Purchases are governed by the application of the Treasury's test discount rate, which now stands at 10 per cent., and this in itself is an effective curb on expensive purchases. Where, exceptionally, purchases are made outside the test discount rate criteria, they must be justified on the basis of strict need.
Responsibility for renting staff accommodation on a short-term basis rests with the Secretary of State for Foreign and Commonwealth Affairs. Rents are subject to continuous appraisal and control principally through the imposition of rental ceilings fixed after visits by inspectors, who follow a regular programme of visits to all overseas posts.
Those responsible for acquiring accommodation are aware of the need for economy particularly in current circumstances. I am considering whether further guidance is required.
§ Mr. Newens
asked the Secretary of State for Foreign and Commonwealth Affairs if he will give the cost of providing one unit of accommodation in Rio de Janeiro for the use of the British Ambassador to Brazil; and if he will make a statement on the need for this expenditure.
§ Mr. Ennals
The flat in question cost £191,000 including furnishing, decoration and alterations. It replaced a residence which was sold for over £2,200,000. In the Property Service Agency's professional opinion it was reasonably priced by local standards; it has already appreciated in value.
The Embassy moved to Brasilia in 1972 but the Ambassador still has to spend considerable time in Rio de Janeiro which is Brazil's main port and the major business, banking, Press and cultural centre. The fiat is not simply a place to live in; the Ambassador has to receive and 418W accommodate influential guests there, including important visitors from the United Kingdom, and carry out his representational functions generally. Apart from conveniences it would be more expensive if the Ambassador had to operate from an hotel.