British Council

HL Deb 01 February 1996 vol 568 cc1619-40

7.38 p.m.

Lord Redesdale rose to ask Her Majesty's Government what plans they have for the future of the British Council.

The noble Lord said: My Lords, I begin by thanking all noble Lords who have taken the time to speak on this subject late on a Thursday night.

The future work of the British Council is seriously threatened by the devastating cuts to its budget that were announced in this year's public expenditure settlement. Despite repeated Government assurances of their support for the council and its work, they have imposed a 16 per cent. cut in funding which will seriously affect its capacity to operate effectively. The council plays a valuable part in British foreign policy and it would be short-sighted and damaging to Britain's global position if these cuts take place at the levels specified.

The noble Lord, Lord Chesham, has already stated today the difficulty in which the Government have found themselves in distributing these cuts. I hope not to be antagonistic, but I believe that this debate shows that these cuts are not just to the bone but would in many cases cut the limb off.

Although many departments have faced serious cutbacks to their budgets as the Government attempt to make savings to fund tax cuts, the British Council seems to have suffered disproportionately. While the Foreign Office's funding has been cut by 8 per cent. in real terms, the British Council's grant has fallen by twice that amount. Even more severe, the council's grant-in-aid from the ODA, which has had its budget cut by 5 per cent., is to be slashed by a devastating 28 per cent. So while cuts to the British Council were expected, it is the extent of these cuts that have caused shock. It is almost impossible to conceive of how the council is to undertake such reductions in its funding and continue to operate effectively and, indeed, in many areas continue to operate at all.

The cuts will probably force the British Council to implement cutbacks in many of its overseas operations as well as closing some of its country programmes altogether. However, in order to try and maintain a global presence and protect its front-line operations to the greatest extent possible the brunt of the cuts will have to be borne by its UK headquarters. The difficulty involved with this is that due to measures implemented over the past few years to improve efficiency the council's operations have little fat left to trim. The council is already on target to reduce its overheads in the UK by 30 per cent. For example, the council has recently shed 500 staff and will give up half its London headquarters this spring. In order to make the further required savings the council will be forced to axe a further estimated 500 jobs out of the remaining 1,200 jobs in the UK. A loss of nearly half of the council's British-based workforce would cripple the organisation and possibly force the closure of its Manchester joint head office. The British Council relocated to Manchester in 1992 in order to restructure. The prospect of another relocation is very harsh for those staff involved and deeply damaging to morale.

Yet assuming that the aim of cutting the council's funding is to save money for taxpayers, even this drastic solution will not, in the medium term at least, allow the necessary savings to be made. This only serves to highlight the extent to which the Government have made these cuts without any thought of their implications. The loss of such a high proportion of its staff would require both a large-scale restructuring process and the funding of redundancy packages. The council has no means of meeting these costs and would be required to look to the Foreign Office or Treasury for assistance. Such costs would, at least in the medium term, negate any potential savings that could be made. The result will therefore be very little saving at the cost of a large number of jobs and the British Council will have lost the ability to be an effective force in many of the countries in which it presently operates.

The British Council, defined as Britain's principal agency for cultural relations overseas, plays a vital role in promoting British interests abroad. It works in 109 countries to promote a wider knowledge of the UK and the English language and to encourage cultural, scientific and educational co-operation between the UK and other countries. In addition, the council also plays an important role in promoting long-term sustainable development in some of the world's poorest regions.

The link between the promotion of educational and cultural relations and political and commercial interest has long been recognised, and hence investment in public diplomacy is vital to every country's national interest. The English language, for example, is one of Britain's greatest assets that gives it a disproportionate advantage in world affairs. The British Council, through its English 2000 programme launched by the Prince of Wales, is working to ensure that English remains the dominant language for international communication into the next century.

The financial benefits of the British Council can be shown by the fact that its education and training sector, with implications of students coming to Britain, has been estimated at £7 billion a year. The recent work of the British Council in eastern Europe, I refer especially to the JICAP scheme under the management of the know-how fund, is particularly effective. I must claim an interest at this point as I am a member of the advisory board of the know-how fund. It is schemes such as these that introduce, through the British Council, people from abroad to British culture and business which, it is hoped, will lead to trade in the future. It is activities such as these that led the National Audit Office to the conclusion that arguably the British Council did more than the Foreign Office to further British interests and trade abroad. It has been estimated that the council's role in selling Britain's image abroad contributes up to £3 billion a year to exports.

The value of the British Council is obvious to all. Indeed, the Conservative Party manifesto for the present Parliament explicitly pledges to, promote the English language by strengthening both the British Council and the BBC World Service". One has to ask whether that commitment has been maintained.

I have visited many offices of the British Council in Africa and the Middle East. The most interesting trip has to he to the British Council's office in Beirut. The ride to the council was in a convoy going at 60 miles an hour through stationary traffic with a member of the Lebanese Army waving a Kalashnikov out of the window. In contrast, the British Council office represented a sea of tranquillity.

Such visits illustrate the importance of the British Council. People attending the council were most impressed by the way in which it was one of the first institutions to return to Beirut. Such action makes an impact abroad and Britain's overseas standing is highlighted by the innovative work of the British Council. I hope that the Government will put forward a formula that will negate some of the worst aspects of the cuts. It is in no one's interest that the full extent of the cuts is brought about.

Lord Chorley

My Lords, I am pleased to follow the noble Lord, Lord Redesdale, who has spoken with great authority on the British Council. I must begin by declaring an interest of a strictly non-pecuniary nature. I first became involved in the British Council in 1980 as a member of the three-man Seebohm Review Committee. In 1981 I was invited to join the board of the council and for the past six years I have had the honour of being its deputy chairman.

The first point I wish to make is that since those days, 15 years ago, there has scarcely been a single year in which for one reason or another it has apparently been necessary to dig up this plant by the roots to see how it is getting on. It is fair to say that on every occasion the conclusion has been that the council has been doing an excellent job as the promoter of the nation's interests abroad in the field of education, English and cultural relations.

The staff of the council at home and abroad have been extraordinarily resilient in taking these investigations in their stride. Nevertheless—and I say this as neutrally as I can—it cannot be wise for any organisation to be relentlessly subjected virtually year by year to such treatment. It is extremely expensive of management time and it is generally had for morale.

Whatever the immediate future holds for the council—and I do not wish to go into the problem of the cuts, referred to by the noble Lord, Lord Redesdale, for I am mindful of the Addison rules—there must surely be a case for drawing a line and giving the council a period of stability—a minimum of five or six years—to enable it to continue to do its own repositioning and, more to the point, to get on with the job.

That is the first point that I should like to make. although I should perhaps add, for the avoidance of doubt, that in my period at the board, the council has always enjoyed the support of successive Secretaries of State. I recall vividly, for example, the help that the FCO gave about two years ago in a similar although not nearly so catastrophic situation. That is my second point. It is their support which is essential for the council's success.

Looking back over those 15 years, one has seen major changes. For example, in 1980 the total turnover of the council was £118 million; today it is £427 million. In 1980, 72 per cent. of our operating funds were from government; today the proportion is only 54 per cent. In the same period the number of UK-appointed staff has been reducing. Much of our external funding now comes from competitive tendering. Then, too, there have been massive changes on the ground following the end of the Cold War. The council now has 18 country operations in eastern Europe and the former Soviet Union. In 1980 we had just six and the scale of our activities was a fraction of what it is today. All those changes have been carried out with a minimum of fuss but against an almost continuous background of investigations by wise men or committees.

Back in the 1950s there was an image pedalled of a council devoting itself exclusively to the arts—and sometimes to ultra-traditional aspects of the arts. I am sure that was never true and it is certainly not so today. If anything, the council in my view probably spends too little on its arts side and what it does do tends to be at least as contemporary as traditional—witness the prizes that its supported artists win regularly at the Venice Bienniale. Today the council is more concerned with science and with technical co-operation programmes, with third world education, the English language and the transfer of skills. In those fields it is an acknowledged world leader.

The world of cultural diplomacy is a highly competitive one. We as a nation are one of a small number of countries capable of doing it and yet we spend less per capita, or per unit of GDP, than any other major nation. Our cultural diplomacy is focused and effective; the council is admired for its professionalism; and it is done on a shoe string. It is, to say the least, frustrating, when one looks around the world, to see so many opportunities there to be exploited but going begging or, worse, being exploited by our international competitors. The work of the council may be—and indeed it is—the envy of others, but at the same time those others are mystified that we pass up those opportunities.

We have the world's best diplomats; we have the respected World Service of the BBC, and we have the British Council. Like the BBC, the council is trusted overseas because it is seen to be above politics and to be independent of government. As a result, we have the unique capacity to reach and to influence parts of foreign nations that are simply not accessible in the same way to our diplomats.

I have been tempted to speak in the past tense, but I am an optimist; indeed, one has to be. I have to believe that a way will be found to overcome the present problems. But any solution will still require some very hard-nosed decisions to be taken. One cannot continue "salami-slicing" our budgets year after year. Moreover, one cannot cut overheads year after year. One can take those things too far and one can lose that very precious thing called quality.

We may—and this would be very regrettable—have to shut down our activities in individual foreign countries (and that may be quite a number). But if it is better for the council to be excellent in fewer countries rather than less effective across the whole board, it is surely far better for Britain for the council to be in as many countries as possible. It is a modest public investment, but one which is of key importance for this country's global position in the next century.

7.55 p.m.

Lord Wilson of Tillyorn

My Lords, I, too, must declare an interest as a member of the board of the British Council and as chairman of the British Council's Scottish committee. It is not a financial interest. Both noble Lords who have spoken so far—and I am sure this will apply to many who will speak afterwards—have spoken about the role of the British Council overseas. I should like very much to support that.

Over many years and in many countries, I have witnessed the work of the British Council, and it is admirable. It is nowhere short of the truth to say that the British Council reaches where other forms of political diplomacy or trade diplomacy simply do not reach. The contacts made by the council overseas, or through people who it brings to this country, create friends who last for a lifetime. One may not get immediate results from that sort of work, but the long-term dividends are great and they show up in the form of orders for British goods or contracts for British firms. Conversely of course—and, indeed, sadly—if people are not well looked after when they come to this country, one can get the opposite of friends for life.

Perhaps I may turn briefly to another aspect of the work of the council; namely, what it does in this country. That is sometimes not adequately recognised. I shall speak briefly about Scotland of which I have some experience. There is a modest British Council operation in Scotland. We have a mini office in Aberdeen, another mini office in Dundee, a slightly larger than mini office in Glasgow (where so much cultural activity takes place) and a headquarters in Edinburgh.

However, that very small operation does an enormous amount and has been playing a very valuable role in Scotland, especially over the past few years. In addition to what it does for cultural and arts promotion, both of which are very important, it helps to promote the export of Scottish education, which is rightly prized, and also helps to give a cultural edge—if one can put it that way—to Scotland's general export effort. The council looks after very significant numbers of people who come to Scotland; for example, some 800 overseas trainees at university or college level a year and about 500 senior visitors. Moreover, it runs a series of seminars on areas where Scotland has particular expertise such as keyhole surgery in Dundee or international investment in the petroleum industry.

All of those activities are of great benefit to this country. The ones that I have given as examples are of great benefit to Scotland. It is calculated that those activities bring additional income to Scotland of something like £11 million a year. Moreover, the council in Scotland has been innovative in running a project by which particularly suitable students are picked up and given attachments to Scottish firms or institutions before they go back to their own home countries. In that way, some 250 people are now spread around the world who are points of contact for British business. I shall give your Lordships one example. There was a young man who came from China, called Mr. Long Baijin, who went to Edinburgh University to take an MBA. He was then given an attachment and went back to Peking where he is now the representative in that city of Scottish Trade International. So there has been a real benefit as a result.

As my noble friend Lord Chorley said, the council has been subjected to a whole series of investigations and cuts over the past few years. It has responded magnificently to those challenges. It has slimmed itself down; it has moved a large part of its operation out of London; and it has gone out to get private support from the private sector. But there must surely be a point at which one questions, as my noble friend Lord Chorley mentioned, whether that continuing process is really in the national interest.

There is a classical Chinese story about two Chinese farmers who had fields next to each other where they grew rice. One of them thought his rice was not doing as well as his neighbour's so every evening he went out and pulled out his rice shoots just a little. For the first few weeks he was enormously pleased because his rice shoots looked good and they were bigger than those of his neighbour; but then came a period of hot, dry weather and his rice shoots shrivelled up.

I suggest it is time that we looked at our general overseas effort and the role in it that we want the British Council to play. The British Council will respond positively, I am sure, but it needs a degree of certainty over a period of years. If it does not get that, I fear that that excellent rice shoot—the British Council—could well wither to everyone's great disadvantage.

8 p.m.

Lord Quirk

My Lords, I welcome the opportunity for this debate afforded by the noble Lord, Lord Redesdale, but if it were not for the dire financial circumstances to which noble Lords have drawn attention, one might, at first blush, have wondered why the future of the Council could possibly be in question. It is only about three years since the Conservative election manifesto pledged a "strengthening" of the British Council; only one year since the Foreign Secretary signed the memorandum reaffirming the council's role in "cultural and educational co-operation". It is only 10 months since the impressive conference, "Britain in the World", was held in Westminster, addressed by the Prince of Wales, the Prime Minister, Dr. Henry Kissinger, the Foreign Secretary, and the noble Baroness, the Minister of State, with an appropriately eminent supporting cast.

On that occasion Mr. Hurd spoke warmly of the contribution the Council makes in maintaining and enhancing Britain's reputation in the world, and he referred enthusiastically to the launch that very week of the Council's Internet link. To the Foreign Secretary and the many other speakers praising the Council's work I listened with a good deal of personal pleasure, since I have long been associated with the Council and indeed completed a stint on the Council's board only in 1991, with years of earlier service as chairman of an advisory committee. So although my interest does not fall within the Addison Rules, I have pleasure in declaring an abiding interest in a more informal sense.

In his introduction to the most recent annual report, the Council's chairman, Sir Martin Jacomb, speaks of the Council's commitment, to winning international respect and long-term friends for Britain through educational, technical, scientific and cultural co-operation". Two phrases here, "international respect" and "long-term friends", are especially relevant to this debate since they call for commitment and stability—two gifts that we as a nation seem to have denied the Council right throughout its 60-something years of existence. This is in sharp contrast, as noble Lords have pointed out, to partner and competitor nations around the world, some with cultural organisations that are much older, all with cultural organisations much richer, and some with cultural organisations that are overtly modelled upon the British Council.

For whether or not it is a surprise to be debating the future of the Council in 1996, today's topic is an alarming echo of similar occasions in your Lordships' House. In December 1954, after years of severe reduction in Council funding, Lord Birdwood spoke of the Council's role in sustaining, values other than those of economic advantage", of the contribution, which the arts and the sciences can make to life itself". The Council, he said, works to long-term methods and it looks for long-term results". Yet in June 1961 the then chairman, Lord Bridges, following the policy changes triggered by the Drogheda Report, found himself having to plead with your Lordships that the Council still had an essential role even with the birth of the new Department of Technical Co-operation (later to become the ODA). In November 1969, the Duncan Report was the subject of another Lords' debate with the issues of commitment and stability again arising, with the Council now expected to do a second U-turn on Europe. Another November eight years later and this House was debating the CPRS review of which memories are still fresh, I believe, and we are fortunate today in having the noble Baroness, Lady Blackstone, a major force in that review, here with us to speak from the Labour Front Bench.

Finally, I might just mention the occasion in December 1979—of which memories are still greener if only because that debate occupies more than 40 columns of Hansard—when a debate was introduced by the late Lord Hatch of Lusby in terms that anticipate the noble Lord, Lord Redesdale, almost word for word, asking, Her Majesty's Government what is their future policy in regard to … the British Council in view of the cuts in public expenditure". As it happens, I am one of those who believe that financial retrenchment and organisational restructuring can positively improve an institution's performance, and I am comfortable with metaphors about shedding fat to make you healthier, pruning a tree to produce better apples, vigorous weeding to enable surviving plants to flourish. But, as the noble Lord, Lord Chorley, indicated, none of these procedures can be repeated indefinitely without inflicting damage. I believe that the British Council has indeed incurred damage—some of it going back many decades to the smear and sneer campaign in some sections of the press which has cast a long shadow over the Council's core role in promoting our culture, a word and a concept that has had very little sympathetic resonance among the British people. There has been recurrent damage to staff morale and there has been serious erosion of that "international respect" which is stressed in Sir Martin's recent report. It cannot be to our advantage for Council representatives to be understaffed in shabby offices in shabby suburbs of a foreign capital. I recall my dismay on visiting the premises in Manila some years ago. Better to be well resourced in a few capitals (for example, the splendid building in Delhi) than ill-resourced in many, and I hope that in absorbing retrenchment in future, the Council will shun that salami principle to which the noble Lord, Lord Chorley, referred.

One may suspect, too, that there has been damage over the past couple of decades with the switch from a purely cultural role to a partly commercial one. It is a mix that staff on the whole have managed with dexterity and often with enthusiasm, striving to set up ring fencing around the commercial activity, though not always convincingly either in the eyes of client countries or in those of the private sector British firms competing for the same contracts.

British culture—artistic, literary, scientific—is world class and the British Council, itself a world-class institution, is uniquely charged with the responsibility of promoting that culture. I hope when the Minister comes to reply to this debate we can be assured of a fresh and enduring commitment to the Council in this vitally important mission. The Minister would no doubt agree that the cultural and intellectual health of this country is closely correlated with the health of certain key institutions which at present feel seriously in need of care and attention. They include British universities, the British Academy, the British Library, and—surely not least—the British Council.

8.9 p.m.

Lord Ackner

My Lords, the late Lord Diplock, whose death in 1985 created the vacancy on the Appellate Committee which I so inadequately filled, was the first judge to persuade the British Council of the vital moral sustenance which was, and is, provided by judicial seminars, judicial exchanges, by talks and discussions for the benefit of those overseas, and indeed for ourselves through the exchange of ideas. He purported to preside over the Law Advisory Committee. I say "purported" because in 1980 he persuaded me to take the chairmanship of that committee on the basis that it never sat. Very soon after I had accepted that privilege, there was one of the many subsequent reorganisations of the British Council which caused the committee to sit frequently.

The generosity of the British Council in enabling judicial exchanges to occur—judges from the Far East and elsewhere coming to this country, spending a week in Cumberland Lodge, and, in London, going round the courts, and then inviting some of us over to do likewise in their country—paid enormous dividends.

The vital role of the rule of law depends upon the independence of the judiciary, and no country is looked upon as providing greater quality in that sphere than the United Kingdom. I referred to moral sustenance. To the judiciary in some countries, hard pressed by attempts at political pressure, the knowledge that there are judicial brothers, perhaps some distance away, who will support them wherever possible and who will talk to them publicly in their own countries about the characteristics which are an essential part of judicial stature is deeply encouraging.

The British Council pioneered judicial visits to central and eastern Europe on the collapse of Communism. It was the first organisation to arrange for judges to go to Poland. I led a small delegation. The Polish legal administration has developed from that point forward and gone from strength to strength. Along with the Council of Europe, the British Council caused judges to go to all the other parts of eastern Europe—Hungary, Czechoslovakia (later Slovakia), the Baltic States, among others, and Russia. That has resulted in the creation of lasting goodwill, and it would be a great sadness if that were to be prejudiced in order that some economies could be made.

There has been reference to the possibility of having to shut down overseas operations. I was sent by the British Council some 10 years ago to attend the 200th anniversary of the foundation of the Mauritian Bar. It was not appreciated by many that the Mauritian Bar was celebrating the period some 200 years ago when advocates came to the Middle Temple in order to be called to the English Bar and practised the English procedure, despite the fact that much of the law was inevitably French and subsequently even became Mauritian and French. The judiciary have consistently followed the procedure of the English judiciary.

When I went to Mauritius the British Council office had recently closed down. That was no doubt of immense satisfaction to the French, who were only too enthusiastic to recolonise Mauritius if they could. Subsequently, the British Council has reopened an office in Mauritius, which has been an enormous success. The country itself has boomed and the amount of good that the Mauritian British Council directorate has done there is outstanding.

I submit that the disproportionate cut which has been referred to is the product of pure myopia, and I hope that future adjustments will put the matter right.

8.15 p.m.

The Earl of Sandwich

My Lords, it is an honour to follow the noble and learned Lord. I too extend thanks to the noble Lord, Lord Redesdale, for initiating the debate.

I add my halfpennyworth both as someone who has worked with organisations which are trying to improve the quality of life overseas and as someone concerned about the threat to jobs, both here and in the developing world, posed by this Government's policies.

Speaking in this debate is rather like defending motherhood: who can be against it? Few organisations provide a service as unique as that of the British Council, as we have heard. Like the BBC, it has been around for a long time and we almost take it for granted. That may very well be why it has become a target. It may, in the Treasury's view, have become a well-endowed, complacent kind of aunty with a guaranteed place by the fire.

I accept that there have been times when the council had a rather staid neo-colonial image, and I am aware that worldwide organisations which become too large can lose some of their energy and vitality. Nonetheless, with new management and technical skills, I believe that this one has come back to centre stage in recent years and is a dynamo of our educational, cultural, scientific and sometimes economic influence in the world.

Today the council is engaged in a remarkable hearts and minds campaign in 109 countries. Nearly half of its activities relate to the interchange of people. Recently it has been visible in multi-racial theatre in the new South Africa, in the re-emerging Beirut, as we have heard, and in new centres in Eastern Europe, the Ukraine and Kazakhstan. It is, of course, best known for its promotion of what it calls "British English". The council is also a catalyst for many other enterprises, including our universities and publishing houses. It is therefore a difficult programme to evaluate because of the numerous exponential effects of its work.

The council's work in developing countries is especially valuable because of the almost overwhelming demand there for skills and experience. It is rightly becoming more directly involved in poverty alleviation. I know that it is promoting HIV awareness and prevention in East Africa alongside CARE International and has facilitated the ODA's work on that theme in Calcutta.

The Minister indicated earlier today how much that work is valued. Can he give an assurance that no NGO aid programmes will be affected by these cuts? The British Council was closely involved with NGOs at the Beijing World Conference on Women last year and its information services have been extended to NGOs in Africa. Through its fund for international co-operation for higher education it has set up more than 400 training links with developing countries. Many of those, like the Indo-British science and technology scheme, have a direct commercial impact which benefits both countries. Others have estimated the value of education and training in billions of pounds of contracts.

Why is it then that this paragon of Britishness which helps our overseas interests, and seems to fulfil all the Government's criteria for goodness, is under threat from the Treasury and its own foster parents, the FCO diplomatic wing and the ODA? The dreaded euphemism "restructuring", familiar to so many indebted societies the world over, is now written all over British Council documents, which show that it faces a disproportionate 28 per cent. cut in its ODA grants in real terms over the next three years. It is already undergoing a 25 per cent. cutback in its UK staff. Like the Treasury's other victims, it faces many more job losses here, some relating directly to students or programmes overseas, as we have heard. It also has to sell itself outside as never before in order to survive, just when it was already raising more of its own revenue, as we heard from the noble Lord, Lord Chorley, and exceeding Whitehall targets for efficiency.

In a sense the council may have become the victim of its own efficiency. Its relocation to Manchester was a cost-cutting exercise which caused a lot of internal upheaval including job losses in London which were not all natural wastage. For those who moved, pay was frozen because of the loss of London allowances. Now that they have moved, and are happy in their new surroundings, they are told that the axe may fall on them again. This has been a tremendous blow to morale, whether or not the cuts actually take place, and there is a lot of despondency about the future.

It may be helpful to quote the words of a recently retired staff member who said this week, "These cuts are making a lot of the staff unhappy, as it seems that it's always the council being hit. If you want loyalty and commitment from your staff you have to give them security".

Does that not express a wider malaise in public service which the Government need to address about the survival of loyalty in a world in which departments are under threat and more and more work is contracted out, undermining the sense of continuity? I know that a lot of the contracting out is ingenious and creative, but it must not be done at the expense of public service itself which is at the heart of so much of our national life.

I should like to echo what Richard Eyre of the National Theatre said only a week ago: when a national institution is suffering, it is the nation itself which suffers. The tragedy is that the fat has all been eaten. Any further slimming campaign will have quite serious repercussions which the Government seem to ignore. I join others in urging the Minister to reconsider decisions which seem too drastic and cannot be said to have public endorsement.

8.21 p.m.

Lord Birkett

My Lords, I am chairman of the British Council's music advisory panel; I know what it does for music all around the world. In the last century, Britain was cynically described as Das Land ohne Musik. No longer, my Lords. We have a reputation second to none. British musicians and British music are appreciated all over the world and are one of our greatest exports—a marvellous achievement. In terms of musical activity, this country fears no form of competition. New York, Vienna, Paris—none compares with London or indeed the whole of Great Britain for musical activity.

The promotion of music abroad is done on the thinnest of shoe-strings. We cannot afford to spend on the scale we would like. We often have to use very slim resources simply to eke out what is already taking place. We work with the musical impresarios of the world and sometimes we can just add an air fare to make a tour that much longer—perhaps for an orchestra, a string quartet or a solo performer to go to another country. Our resources are already as slim as they can be. I do not see how the resources for the music of Great Britain—British musicians are great cultural ambassadors—can possibly be slimmed down further.

Many noble Lords have referred to the history of cuts, retrenchments and reorganisations which have continued almost since the instigation of the British Council itself. Certainly, since 1992 the cuts and reorganisations have been drastic. Many noble Lords have been diplomatic about what they think of the cuts. I cannot find it in my heart to be that diplomatic. I note that the Minister's right honourable friend the Foreign Secretary has assured the council that the cuts do not mean that the outstanding contribution it makes to the UK's overall diplomatic effort is not appreciated. That is exactly what the cuts mean to me: that that effort is not appreciated. It is the only logical conclusion I can draw.

I note the hope that the council will continue to maintain a global network and avoid significant post closures. With a cut of this size, how can the council possibly maintain a global network and avoid post closures? The noble Lord, Lord Redesdale, asks the Government what plans they have for the future of the British Council. I see only one logical answer that the Minister can give about the plans for the future of the British Council—to cripple it. For diplomacy, for British culture, and for Britain's reputation abroad, the cuts we are considering are nothing short of a disaster.

8.25 p.m.

Viscount Waverley

My Lords, only a handful of countries worldwide have the vision and the capability to create advantage for themselves overseas by deploying a wide range of assets internationally in the areas of education, training skills, know-how, language and culture. The United Kingdom is one; Germany, France, the United States and Japan are others. Of these national efforts, our country is the worst funded, but by far the best focused.

New international competitors like Australia are arriving on the scene and capitalising on Britain's perceived weakness in its promotion of those national strengths. Our ground and our historical advantage is being taken from us.

The British Council plays a pivotal role in attracting full fee-paying overseas students to the UK. English language is a means for them to gain access to the West. The council has helped double student numbers from key international markets of the East Asia and Pacific region. These students will be tomorrow's political and business leaders.

Within the past week, 27,000 attended an exhibition in Hong Kong, and that followed successful events in mainland China. Only last week I hosted a meeting in your Lordships' House with the deputy prime minister of Uzbekistan. The United Kingdom's relations with that country are extremely cordial. The deputy prime minister has determined, together with his president to make English the second language. That is exciting news indeed. It has given relations between our countries a further real boost.

The council is also of direct importance to our export effort. I asked the Minister at Question Time today whether the DTI might become involved in funding related activities. The council is closely involved with Whitehall trade promotion activity. It is represented on the Whitehall Export Promotion Committee and the DTI's Education and Training Sector Group, and chairs the DTI's Education and Training Export Committee.

Export support activity is focused on priority market countries which are identified in close consultation with the DTI and the FCO. There is therefore considerable linkage between the departments. Will the Minister please undertake to think again when considering the next round of budget allocations?

In summary, I do not believe that this is the moment for the Government to be reducing their funding to the council. It is a central and integral part of Britain's diplomatic effort. It promotes a wide range of attributes for which this country is justly renowned and which are the envy of other nations. Those assets include the quality of our education and training institutions which are dedicated to upholding the highest possible standards. They are marketable assets which hold the key to our future prosperity. The promotion of the assets involves an appreciation of the interdependence of our overseas efforts. The British Council is an integral part of that effort.

8.30 p.m.

Lord Wright of Richmond

My Lords, I must first apologise to the noble Lord, Lord Redesdale, and other noble Lords for my failure to be here at the beginning of the debate, due to a misunderstanding about the timing.

Perhaps I should start by declaring, in the most literal sense, my interest in and wholehearted admiration for the work of the British Council. For five years, as Permanent Under-Secretary and Head of the Diplomatic Service, I served with the noble Lord, Lord Chorley, on the board of the British Council. I had already experienced, as an ambassador (three times) and in my earlier service the outstanding contribution which the British Council makes to our worldwide interests overseas.

It is as part of our global representation that, with the permission of the House, I wish briefly to address the future of the British Council this evening. As the noble Viscount, Lord Waverley, said, apart from Britain only France, Germany, Japan, Italy and the United States maintain comparable combinations of diplomatic and cultural diplomacy worldwide. Because those countries exercise their cultural diplomacy in different ways, it is not easy to draw comparisons between the resources they devote to their cultural representation abroad and our own.

I think it would be a matter of regret to all of us if the financial cuts imposed on the British Council over the next three years were to force it to reduce the quality and quantity of its representation or to miss the unique opportunities which its contacts, skills and the enormous advantage of the English language provide for British interests overseas.

I think we should also be deeply concerned that the Diplomatic Service Vote is faced with even larger financial cuts of over 8 per cent. in the coming year and of more than 7 per cent. in the two succeeding years. We already maintain fewer diplomatic posts around the world than the French, Germans or Italians, not to mention the Americans or the Japanese. If the financial pressures continue on that scale, I fear that there is a real risk of severely affecting the quality and quantity of our overseas representation and therefore our political, cultural, commercial and consular interests worldwide.

The British Council and our Diplomatic Service are rightly the source of admiration and envy abroad. I hope that the Government will seriously consider the risks which their financial pressures are now posing for the future effectiveness of both institutions and for the promotion and protection of our interests worldwide.

8.33 p.m.

Lord Mayhew

My Lords, I cannot believe that the Government will not take note of the excellent speech of the noble Lord, Lord Wright, and of a most extraordinary collection of authoritative speakers with a remarkably wide variety of experience of the British Council. The widespread nature of the council's work has been explained. We heard about music from the noble Lord, Lord Birkett, and about spreading the judicial ethos in Mauritius from the noble and learned Lord, Lord Ackner. Everyone spoke from considerable personal experience and rammed home the message that the British Council is an essential asset of Britain which must not be diminished.

A theme common to all speeches is the acceptance that a cut now and again is inevitable or even healthy but that a succession of cuts, one after another, year after year—the salami process—will be disastrous for the British Council. I speak from experience. It is now 30 years since I was chairman of the Soviet Relations Committee of the British Council. I believe that we did a good job. We negotiated and signed the first two British summit cultural conventions. They were the first cultural conventions between any western country and the Soviet Union. We did much to penetrate the Iron Curtain and also to marginalise the fellow travelling organisations in this country which were screwing up our cultural relations.

Sometimes I wonder why the British Council does not make more of that achievement. I am not sure that the council, like its sponsor the Foreign Office, is a good Whitehall warrior. Like the Foreign Office, it believes in quiet diplomacy rather than the rough stuff. That puts a greater obligation on Parliament to ensure that the national interest is observed when the British Council's budget is considered.

In the debate we have carried out our duty to support the council. There is an overwhelming case not only for ending the salami cuts but for increasing the council's work in the outside world. I wish to put one question to the Minister. Sometimes I am worried about, for example, English teaching, which is vitally important. I feel that the British Council has arrived at a position of competition with non-governmental organisations such as International House. A remarkable statistic we heard is that the percentage of the British Council's income which comes from the Government has fallen drastically because, in such spheres as English language teaching, it makes a good profit. In the process of looking for its own commercial advantage, I sometimes feel that the council is not sufficiently co-operative with all the other organisations. Some are non profit-making, some commercial. And they are in the business of teaching English. It is in the national interest that we should expand English teaching all over the world. I hope that that is in the mind of the British Council and that it does not compete with the non-commercial and commercial English teachers who do a marvellous job in many parts of the world.

I was interested to hear that the British Council now has 18 focuses of work in the communist world. They do an amazing and wonderful job, very different from the job the council did 30 years ago. I hope that the Soviet Relations Committee is remembered by the British Council and that it still has a reputation among English-speaking Russians. We thank the noble Lord, Lord Redesdale, who introduced the debate in a balanced and comprehensive way. He enabled the rest of us to speak from our hearts and our experience on the subject.

8.38 p.m.

Baroness Blackstone

My Lords, like the noble Lord, Lord Mayhew, I have been delighted this evening to listen to the range of expertise in your Lordships' House which has come out in support of the British Council. There may be people with long memories here this evening who will wonder whether I can be counted as a supporter of the British Council and its work. As the noble Lord, Lord Quirk, mentioned, about 20 years ago, back in the 1970s, I was a member of the CPRS team invited by the then Foreign Secretary to undertake a review of our overseas representation. The British Council was one of the subjects which we were invited to consider. At the time we were rather critical of what we saw as the lack of clarity about the council's objectives. We were also a little critical about what we saw as a lack of willingness to prioritise, either with respect to the council's functions or to the regions and countries in which it might operate.

I stand by much of our analysis, although I am a little less confident that all the recommendations that we derived from that analysis made complete sense. I certainly think that we were unfair to the council when putting forward one option; namely, that it should be abolished. However, we made many other proposals for change in respect of streamlining its operations, clarifying its objectives, incorporating some smaller agencies, and becoming more commercial in respect of some of its work. We also recommended a greater focus on the third world and the former Soviet bloc, and rather less on western Europe.

I believe that many of those recommendations were right, and in practice that is what has happened. I recently visited a number of British Council offices abroad. The British Council is now a very different organisation from the one with which I first became acquainted 20 years ago. It is highly efficient, commercially aware and, so far as I can see, cost-effective, too.

I also want to endorse what was said by other speakers about the great value of the council's work overseas, especially in the developing world, where it plays such an important role in a highly professional way in the delivery of educational aid.

Many publicly-funded bodies have been hit by the Government's heavy-handed approach to public expenditure in the last Budget. As somebody who is involved in a university, I know only too well that universities are among that group.

In spite of their manifesto commitment before the last election, the Government have hit the British Council harder than almost any other organisation. Inevitably, as other speakers made clear, that will affect the morale of people working for the council and will make huge demands on management time. I really cannot imagine what the Foreign Secretary meant when he claimed in an Answer to an oral Question in another place that the Government had protected the council's operating costs and that they had not subjected those operating costs to cuts. He claimed that this was "an indication of our good faith". It sounds to me more like an indication of Treasury doublespeak.

The real facts of the matter, as other speakers made clear, are that the British Council is being cut by 16 per cent. in real terms as a result of the November Budget; and on top of that, there is serious uncertainty as to whether the ODA technical co-operation training contract with the council will be continued. If the contract is not renewed, the council's operating income will fall by a further £9 million at the beginning of the third year of the PES period. This would come on top of the 16 per cent. cut I have already mentioned in its total grant. Will the noble Lord replying for the Government tell the House the ODA's intentions with regard to the threatened contract? It would be reassuring to us all if that contract were to be renewed.

These cuts would be hard to sustain in any circumstances. In the circumstances in which the council finds itself they are quite unattainable. First, the Foreign Secretary has asked the council to maintain a global network and avoid significant post closures. Since the great majority of the council's posts overseas, particularly those in the developing world, now have only one UK-based member of staff, it is very hard to see how post closures can possibly be avoided. There is clearly not much scope for cutting staff in posts. If posts do have to be closed, the council's work will not be able to continue as before in those countries. The bilateral aid programme would certainly be affected.

Secondly, and perhaps more importantly, the council has already made, as was mentioned by a number of speakers, huge efficiency savings. Even the Foreign Secretary acknowledged that the council is, "extremely leanly staffed", and that it has already rationalised its UK network. Yet that is apparently what he thinks will have to be cut further, since he wants the overseas side protected.

As we have heard, the council has already cut its overheads in the UK by 30 per cent. over the past three years. It is currently implementing plans to reduce its staff by 25 per cent. Will the Minister tell the House by what percentage the FCO and the ODA have reduced overheads over the past three years? Will he also tell the House by what percentage they have cut staff over the same period? If I am right in thinking that neither the ODA nor the FCO had embarked before the recent Budget on savings of anything like this scale, will he agree that it would be appropriate to protect the council from such large cuts, and to ask the FCO in particular to take a rather larger share of those cuts? I should be very happy to provide him with advice on where savings could be made in the FCO's budget. Moreover, I can tell him quite categorically that, though they may be hard to make and might even in some cases be damaging, as the noble Lord, Lord Wright, claimed, they can be made more easily and with less damage to British interests than can cuts of this scale to the British Council, which has already made such huge savings.

If the Government pursue these damaging reductions in the council's grant and the council is forced to take the axe to its UK operations, amounting to, say, one-third of the total reductions, it would mean that anything up to 500 jobs at headquarters would have to go. The council estimates that total redundancy costs will be between £20 million and £25 million. Where on earth will the council find that money? Unlike the ODA or the Foreign Office, it is apparently not eligible for the restructuring costs that go to Whitehall departments. Will the Minister ask the Treasury, or whoever is responsible for those rules, to think again? If they will not think again, I return to the point that it would be less damaging to cut staff in the FCO or perhaps in the ODA, for whom restructuring costs are available.

Finally, if the noble Lord speaking for the Government and his right honourable friend the Foreign Secretary are genuine in referring to the council's outstanding contribution, to which the noble Lord, Lord Birkett, referred, they would not agree to cuts of this magnitude over such a short period and after the massive savings that have already been made. I hope the Government will think again and withdraw these crippling cuts.

8.48 p.m.

Lord Chesham

My Lords, in the absence overseas of my noble friend Lady Chalker, it is my privilege to reply on behalf of the Government to the Question tabled by the noble Lord, Lord Redesdale, on the future of the British Council. I am most grateful to the noble Lord for initiating this debate and for giving me the opportunity to discuss the work of the British Council and to make clear the Government's continuing and unequivocal support for the council.

As noble Lords have acknowledged, the council is Britain's principal agency for cultural relations abroad and has worked in support of British interests overseas for over 60 years. The British Council is an independent, non-departmental public body incorporated by Royal Charter and is registered in England as a charity. This "arm's length" relationship between the Government and the council, under which the council is seen to enjoy a measure of independence, enables the council to support our objectives in a way which it would be quite unable to do if it were a direct agent of government. This unique relationship is widely admired in other countries and is frequently used as a model for other cultural agencies.

As noble Lords will be aware, the council currently operates in 109 countries. As part of its grant-in-aid activities, it maintains over 185 libraries and information centres overseas; promotes 1400 British arts events annually; supports 50,000 visits to and from the UK each year in the fields of the arts, science and technology; and runs extensive programmes to help extend and improve the teaching of English overseas. It also promotes the use of British educational goods and services and maintains an excellent education counselling service which advises overseas students on opportunities to study in Britain. The British Council was a great help to me and my son in Australia when we were looking for tertiary education at a university in Britain. I am proud to say that my son is now in his third year at the University of Durham. I anticipate that, I hope many years from now, he will take his place in the deliberations of this House, which has been a tradition in my family for several generations.

As part of its non-grant-in-aid activities the council also maintains 94 of its own English teaching centres in over 70 overseas countries, administers over 300,000 British examinations each year and helps to manage 300 overseas development projects at a total value of a quarter of a billion pounds. These activities demonstrate British excellence across a wide area and help support substantial exports of British goods and services. Even more importantly, however, the council plays an invaluable role in winning friends and influence for Britain, thus making a vital contribution to our long-term interests overseas.

Most noble Lords have questioned the wisdom of reducing the grant to the British Council. I stress that this does not reflect any lessening of the Government's commitment towards the council. However, it is not realistic to suppose that the council can be exempt from the current drive to cut costs and sharpen priorities. Noble Lords may wish to note that only just over one-half of the council's income comes from the diplomatic wing and ODA grants-in-aid. The Government welcome the great progress made by the council in maximising other sources of income, such as English language teaching and organising examinations and seminars. Aid management contracts won by the council under ODA bilateral country programmes and from other aid donors is also an important source of income. Contracts under ODA country programmes amounts to nearly £100 million of the council's turnover this year.

Baroness Blackstone

My Lords, perhaps the noble Lord will clarify one point. Is it not the case that the substantial cuts in the bilateral aid programme will affect the contract income that the council has received over the past few years? Will it not be cut in future just as a result of the other cuts that have been made to the aid programme?

Lord Chesham

My Lords, while there may be cuts, our bilateral aid is specifically targeted. Those are the areas in which the British Council is of the greatest help in supporting or administering bilateral aid.

Within the bilateral programme, our country programmes are recognised for their excellence and poverty focus. They are at the heart of our aid effort, and therefore we continue to focus expenditure through them. We also seek to maintain our support for volunteers and non-governmental organisations. The funding of NGOs has risen sharply over the past five years from £65 million in 1989–90 to £185 million in 1994–95. The joint funding scheme, which is ODA's principal channel of support of the development activities of NGOs, rose from £16 million to £33 million in the same period, and a further increase in 1996–97 will take it to over £36 million. Similarly, our support to the volunteer agencies, like VSO, will be increased by over £1 million to £23.7 million in 1996–97. This means that expenditure on other aspects of bilateral aid, including grants to the British Council, will decrease.

I am pleased that some noble Lords have stressed the importance of the arts. The council plays a pivotal role in taking the best of our visual and performing arts overseas as well as promoting British literature and films. The council has also been highly successful in stretching its grant funding through sponsorship. Typically, the council now puts in only modest seed-core funding, plus its extensive expertise, to bring about major cultural events which bring us enormous good will, publicity and business opportunities. Many firms that have been involved in sponsorship have found this to be a sound investment, and I hope that others will follow suit.

The noble Lord, Lord Mayhew, referred to competition. It is the Government's policy to seek competition where it is cost-effective to do so. Competition enables us to secure and demonstrate value for money. Since 1991 it has been the policy of the ODA that new education projects will normally be subject to competition. Competition is not always appropriate; for example, where the contract is too small to make tendering worthwhile, or where a consultant already has an established track record in a particular country and will be virtually certain to win at competition. Therefore, in circumstances where the council's knowledge makes it the obvious front runner it may be appointed under a waiver of competition.

Within the FCO and ODA we keep up pressure on the British Council to address any criticisms and bring greater transparency into its operations.

The noble Baroness, Lady Blackstone, mentioned technical co-operation training. The present contract expires in March 1997. It is premature to suggest that it will not be renewed. Consultation is under way on the shape of arrangements thereafter, and the British Council will be kept closely informed as ODA thinking develops. As to the noble Baroness's question about savings in relation to the FCO and ODA, I do not have the figures with me as I did not expect the question. However, I will write to her.

Noble Lords have spoken most eloquently this evening about the high regard in which the council is rightly held both in this country and overseas. I am delighted to have had the opportunity this evening to join your Lordships in paying tribute to the work of the British Council and to make clear that the British Government remain fully committed to supporting it as an integral and essential part of the United Kingdom's overall diplomatic and aid effort. We recognise that the council faces a difficult time in adjusting to a lower level of government support. But the council has done exceptionally well in recent years in reducing its dependence on government grants by increasing its revenue-earning activities, expanding sponsorship and finding more cost-effective ways of doing things. We are therefore confident that the council will respond positively to the latest challenges that it faces as a result of the budget reductions.

Lord Redesdale

My Lords, I am grateful to the noble Lord for giving way. It appears from what he has said that the Government will go through with these cuts. Can he give an indication as to a question that has been raised by many noble Lords in this debate; namely, who will pay for these redundancy packages?

Lord Chesham

My Lords, the council is still considering how best to deal with the reduction in the grant-in-aid. We will discuss those proposals carefully with the council when they are received.

Baroness Blackstone

My Lords, I believe that the noble Lord asks a specific question about restructuring costs. I also put that question to the noble Lord. Before the noble Lord sits down, can he give an indication to the House as to whether the council may be awarded those restructuring costs and treated for this purpose in the same way as a Whitehall department, as surely it should be?

Lord Chesham

My Lords, I cannot give that assurance tonight.

We for our part will continue to work closely with the council both at home and abroad so as to maximise our assets in the common effort to further British influence and interests overseas.

House adjourned at two minutes before nine o'clock.