HL Deb 24 July 1986 vol 479 cc442-7

7.20 p.m.

Lord Trefgarne

My Lords, on behalf of my noble friend Lady Young, I beg to move the Motion for Second Reading standing in her name on the Order Paper.

Moved, That the Bill be now read a second time.—(Lord Trefgarne.)

Lord Cledwyn of Penrhos

My Lords, the whole House will be grateful to the noble Lord, Lord Trefgarne, for acting with characteristic chivalry and for the concise way in which he has introduced this Bill. We on this side give the Bill our general support, which in the circumstances and against the background of what we have experienced today is a generous gesture which is not often witnessed in this House! I have one or two questions which I should like to put, and I hope that the noble Baroness, Lady Young, will be able to deal with them in due course.

Both the institutions which are dealt with in the Bill are very well known to us. The British Council and the Commonwealth Institute have an excellent reputation, and they are well known to most noble Lords in the House. I certainly admire and support the important work that they perform—the council abroad and the institute, primarily at least, here at home. I do not overlook that part of the work of the institute which operates abroad. I refer, if I may, to the China Centre, to the East Europe Centre and to the USSR Association. I think it is proper that people of all parties and of none should encourage the activities of the British Council and of the Commonwealth Institute.

It is right, I believe, that we should accept the recommendations of the committee set up under Sir Leo Pliatzky's chairmanship, and the committee recommended, inter alia, that the superannuation arrangements of these bodies should be changed and brought into the Civil Service arrangements. It has been stated that the transfer will result in substantial savings in administration costs. I was glad to note that all those who are affected have been properly consulted. The question which must concern us is that of cost, especially in the light of the financial difficulties experienced by the British Council. It is on this that I should like to concentrate, and I would appreciate the comments of the noble Baroness when she replies to the debate.

The cuts have been severe, and I shall give some of the figures. In 1980–81, they were 7½ per cent.; in 1981–82, they were 12½ per cent.; and in 1982–83, they were 17½ per cent. The council's annual report states: If present policies continue, it is estimated that by 1989–90 the cumulative cuts in the principal grant since 1979 will reach 25 per cent. in real terms". That would, of course, create an extremely difficult situation for the British Council, and I am sure that on reflection the noble Baroness and her right honourable and learned friend will agree with that. It would be helpful to the council and to all of us if she was able to give us an assurance that cuts of that magnitude will not continue during the next few years.

I now return to the point I made previously; namely, that it has been stated that substantial savings will accrue. I should like the Minister to tell the House whether they will accrue to the British Council or to the Exchequer. I think that is a very important point. I have noted that the Commonwealth Institute's annual report shows that the grant from the Government has fallen as a total of its receipts; the percentage has fallen, and the actual amount has also fallen. The report also shows that, although the percentage of grant used for salaries and wages has fallen, that used for superannuation has risen. Any measure which will alleviate this seemingly growing burden must therefore be welcomed by all of us.

Finally, I should like to take this opportunity to congratulate the new Director General of the British Council, Mr. Richard Francis. We know him in connection with the British Broadcasting Corporation. He had a distinguished career with them and he assumes his office at a crucially important time. We wish Mr. Francis every success in his new post. We know that during the next few years the British Council will go through difficult times, not only because of the international situation but because of the economies to which I referred and which have been imposed upon it. But I am quite confident that, in view of the esteem in which the council is held, both here at home and internationally, the Government and all parties in Parliament will do their utmost to ensure that the British Council can look forward with confidence to the future.

Lord Kilmarnock

My Lords, from these Benches I should like to give a general welcome to this sensible little Bill, which deals with the new arrangements for superannuation. I want to raise a rather narrower point than that raised by the noble Lord, Lord Cledwyn. As we are discussing the welfare and superannuation of British Council officials, it is not, I feel, stretching a point too far to raise a matter of mounting concern to the council and its employees over the past two or three years—a matter of which I have given notice to the noble Baroness's office.

Superannuation is fine if you are lucky enough to live to take advantage of it, but not everyone is so fortunate. Two British Council officials were murdered in Athens in the spring of 1984 and, as far as it has ever been possible to ascertain, it appears that they were assassinated by a Palestinian extremist. Consultations with the appropriate authorities made it clear that the British Council had to consider the possibility that its staff would henceforth be a possible target for terrorists. As a result of this, between the spring of 1984 and the spring of 1986 the council spent an additional £8,000,000 on security measures. Then, following the American raids on Libya three months ago, further security precautions were considered necessary, and I understand that the council is now spending at the rate of an additional £500,000 a year on these precautions.

So far, I gather that the council has not been reimbursed for any of this additional and unforeseeable expenditure. I understand that there is a possibility that the Foreign Office will come to the assistance of the council, but the Foreign Office's own additional security expenditure has also not received any additional reimbursement, so there may be a difficulty there. What I am suggesting is that expenditure of this nature should properly be borne by the Government from the Contingency Fund rather than taken from main stream British Council resources.

I hope that the noble Baroness will not consider it improper that I should raise this matter today. It was the subject of an Early-Day Motion in another place which will not be debated at any rate until the next Session of Parliament. Obviously I cannot raise it as a separate question in this House until October, but I think it is desirable that we should have an earlier indication of the Government's thinking on this matter. I assure the noble Baroness that I have absolutely no intention of interfering with the passage of this Bill, with its limited objectives, which we support; but I shall certainly revert to the matter unless we can have an assurance from the Government that money will be provided for additional security measures—money which at present can only be subtracted from the council's own slender resources, to which the noble Lord, Lord Cledwyn, referred. That is the only point I wanted to raise, and I should be grateful to the noble Baroness for an indication of the Government's thinking on that matter.

7.30 p.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Young)

My Lords, I should like to start with an apology to the House. Due to what I fear was a misunderstanding, I had been told that the order of business had been changed, and so I was not in my place when this debate started. But I have listened with great interest to what the noble Lords, Lord Cledwyn and Lord Kilmarnock, have had to say on this short but I think important Bill. I am very grateful to them for the welcome the Bill has received.

I should beg to move formally that the Bill be now read a second time.

Noble Lords

It has already been done.

Baroness Young

A further confusion, my Lords. I shall now return to where we were.

The Bill is designed to make certain changes to the pension schemes run by the British Council and Commonwealth Institute. I listened with particular interest to what the noble Lord, Lord Cledwyn, had to say about the activities of the British Council, which is responsible for co-ordinating Britain's cultural activities overseas. The council was founded in 1934 and now employs more than 4,000 staff. We as a Government think highly of the work of the British Council, and no one who has visited its institutions overseas can be other than impressed by the good work that it does and continues to do for British education and cultural activities.

The noble Lord, Lord Cledwyn, asked a number of specific questions about the funding of the British Council. As I am sure he will understand, most government departments and government-funded bodies could make use of extra resources, but the council, like others, is subject to the Government's policy on public expenditure. However, thanks to its increasing revenue activities the council has been in a position to maintain its activity levels in many areas. I would very much recommend noble Lords, if they have not had an opportunity to do so when travelling abroad, to visit British Council institutions. The number of people who apply, particularly those on English language courses, is very impressive. This has meant a considerable increase in resources to the British Council, which I think we all greatly welcome.

The noble Lord asked specifically about the savings that will accrue as a result of this Bill. The British Council estimates that it will save about £120,000 a year in direct staff management time plus a large saving in senior management involvement—for example, trustees' meetings and committee time. The Commonwealth Institute estimates that it will save approximately between £20,000 and £25,000 a year in legal, actuarial and associated administration changes. This will mean a direct benefit through this efficiency to the organisations concerned, but will be taken into account in the annual grant in aid.

The Commonwealth Institute, which exists to organise exhibitions and other activities to foster knowledge of the Commonwealth through education and culture, has 126 permanent staff. Separate pension schemes are administered by both organisations. Since 1972 these funded superannuation arrangements have provided benefits which are very similar to those received by civil servants under the principal Civil Service pension scheme. The close links between the work of these bodies and the Civil Service have raised the question as to whether separate pension arrangements are really necessary. Arising from Sir Leo Pliatzky's report in 1981 on non-departmental public bodies it was suggested that it might be simpler to bring the staff of such organisations under Civil Service pension arrangements. This move would be appropriate for both the British Council and the Commonwealth Institute. After careful consideration of all the effects of such a proposal, this primary legislation has been drawn up to make the necessary changes.

The Government Actuary's Department assessed the liabilities and assets of the British Council and Commonwealth Institute pension schemes in September 1985. This demonstrated that a transfer of assets would not quite fully cover the accrued liabilities for past service. The bodies will therefore need to make contributions which will be no greater than those paid at present, but will include small deficiency payments. From the administrative point of view, both organisations would benefit from significant savings. All members of both pension schemes have been consulted and overwhelming support for this move has been shown.

Before concluding my remarks I should like to respond to the very important point raised by the noble Lord, Lord Kilmarnock, about security. Security has been a matter of very great concern to my right honourable friend the Secretary of State, and to all Ministers. It is a terrible fact that members of the diplomatic service and the British Council have been assassinated. Therefore, security is a matter of high priority to us. I can assure the noble Lord that we take most seriously our responsibility for ensuring the protection from terrorism of members of the Foreign and Commonwealth Office and the British Council. The implementation of the action plan following the efficiency scrutiny on overseas security in 1985 will enable us to make the right response to the long-term threat.

In recent years the Foreign and Commonwealth Office has been successful in increasing expenditure on security by allocating resources from within its existing programmes. During the course of the 1986–87 financial year the Foreign and Commonwealth Office will adjust its grant in aid to the British Council to take account of the increase in the risk which its officers face overseas. As regards future years I cannot anticipate the results of the public expenditure survey but I should like the House to know—and I very much appreciate the opportunity of being able to put this on record—that it is a concern which I am sure is widely shared. Indeed, it is interesting (and I am glad to note it) that the Select Committee on Foreign Affairs in another place wholeheartedly supported the provision of new money for the council for increasing its security. This, alas, is one of the less agreeable problems of the modern age.

Lord Kennet

My Lords, is the Minister of State in a position to say by how much the Foreign Office will be able to increase the British Council's allotment for security purposes?

Baroness Young

Not at the present time, my Lords, but perhaps I may say to the noble Lord, Lord Kennet, as I have said to the House, that I entirely understand his concern. It is a concern shared by Ministers. We have increased the amount of money. If the figure is available I will, of course, write to the noble Lord and advise him of what it is.

Points have been raised which I am sure noble Lords will agree are slightly wide of this narrow technical Bill. I responded to them because I felt they were matters of concern, particularly on the funding of the British Council. I am glad to take this opportunity publicly to pay tribute again to the work that it does and to the concern on security. That is another matter about which we are all deeply concerned.

I hope the House will agree that the Bill is a sensible administrative reform. Both bodies depend on Government funds, and their staffs enjoy conditions of service closely linked to the Civil Service. I commend the Bill to the House.

On Question, Bill read a second time; Committee negatived.

Then, Standing Order No. 44 having been suspended (pursuant to Resolution of 8th July), Bill read a third time, and passed.