Britain is setting a dangerous precedent by undermining human rights and contributing to a worldwide “culture of impunity”, Amnesty International has said in its annual report on the state of human rights.

Plans to scrap the Human Rights Act, the UK’s absence from EU refugee resettlement schemes, proposed new spying laws and the alleged downgrading of human rights as a Foreign Office priority in favour of commercial deals are all cited by the group as evidence of a trend.

Amnesty’s UK director, Kate Allen, said: “The UK is setting a dangerous precedent to the world on human rights. There’s no doubt that the downgrading of human rights by this government is a gift to dictators the world over and fatally undermines our ability to call on other countries to uphold rights and laws.”

Ministers plan to replace the Human Rights Act, which was brought in by Labour in 1998, with a British bill of rights. The government has been criticised for breaching privacy and allowing insufficiently accountable agencies to undertake mass surveillance.

Allen said UK behaviour towards China, Saudi Arabia and Egypt showed the government had lost its passion to promote human rights, partly due to the replacement of William Hague as foreign secretary with Philip Hammond.

She said the government’s claims that it had made progress on human rights through private diplomacy were not borne out by any visible evidence, and highlighted George Osborne’s visit to China at a time when hundreds of dissidents were being arrested.

Chancellor of the Exchequer George Osborne hosts the Economic Financial Dialogue between British and UK businesses and government ministers in Beijing. Photograph: Stefan Rousseau/PA

There are concerns among human rights groups that the Foreign Office’s own comprehensive annual human rights report, due in April, is being “dramatically scaled back” and will be a quarter of the length of previous publications.

The Foreign Office, which is facing budget constraints and restructuring its human rights work, has argued that a more focused report will have much more impact. There has been a shift in Foreign Office language so that it no longer speaks of “countries of concern” but “human rights priority countries”.

The Amnesty report highlights how the government has continued to provide billions of pounds worth of arms export licences to a Saudi Arabia-led military coalition in Yemen, even though thousands of Yemeni civilians have been killed.

Amnesty has repeatedly called on the UK to suspend all sales of arms to Saudi Arabia and its coalition partners that could be used to commit human rights violations in Yemen. This call has been echoed by the parliamentary international development committee, while a group of leading international law experts have issued a comprehensive legal opinion showing that continued weapons exports to Saudi Arabia are in breach of UK and international laws.

The Foreign Office has so far opposed an independent inquiry into Saudi Arabia’s actions in Yemen and has not said it will impose a ban on export licences. The Foreign Office minister, Tobias Ellwood, told MPs that a recent UN inquiry highlighting human rights abuses in Yemen had not visited the country and was based on satellite images.

On Tuesday David Mepham, the director of Human Rights Watch, told the foreign affairs select committee that there had been a deprioritisation and a lack of political commitment to human rights at the top of the Foreign Office. He claimed Hammond regarded human rights activists as naive and was more focused on security.

Mepham said there has been a shift of expertise from human rights to trade on ministerial overseas trips. He said HRW was “very concerned by the trend in China policy”, which he said was increasingly run by the Treasury. Despite a “relentlesss crackdown on dissent” in China, Osborne had not raised human rights issues on a recent visit, Mepham said.

He said he found it astonishing that Egypt was excluded as a country of concern in last year’s Foreign Office report. “On any objective basis if you look at what is going on in Egypt – the mass deaths, the detentions, the largest mass killings in recent history, the clampdown on civilian society – Egypt would have to be included, but for political reasons Egypt has been taken out. That is very worrying.”

In response to the Amnesty report, the government said that it was absolutely committed to promoting and protecting universal human rights. It said the Foreign Office had doubled funding for global human rights and democracy projects to £10.6m, and “human rights, democratic values and strengthening the rules-based international system are vital and integral parts of the FCO’s work.”

Justice Minister Dominic Raab, said: “It is irresponsible for any campaign group to criticise our proposals before they’ve seen them. Amnesty have already been told our plans involve the UK remaining in the European Convention, so this scaremongering undermines their own credibility.”

A government spokesman said Britain was committed to finding a comprehensive solution to deal with the causes of the migration crisis and not just its consequences. “The UK has prioritised humanitarian aid to people in the region and has contributed £1.12bn to the Syrian crisis – the largest ever UK response to a humanitarian crisis. Britain is also committed to taking in 20,000 of the most vulnerable Syrian refugees.”