British Council

Debate between Stephen Kinnock and John Baron

Tuesday 10th November 2015 Westminster Hall

[Stephen Kinnock]

I do. ODA has been given as a demonstration of the effectiveness of the council’s work in least developed countries. The major challenge the council faces is the reduction in the FCO grant, which has been eroded constantly over the years. As the hon. Member for Somerton and Frome mentioned, the fundamental problem is that that increases the council’s reliance on commercially generated funding. We all acknowledge and welcome the council’s ability to raise that type of funding, but the reduction in grant funding reduces its flexibility to operate wherever it needs to in this rapidly changing world. I absolutely agree that the reduction in the grant is having a negative impact on the council’s ability to deliver across the board.

[Mr Baron]

In addition, is not there another concern about the decrease in FCO funding? It will not simply be a case of having to make up the lost income—and with regard to commercial activities, that can be many times the factor of the income required, as a turnover of £100 million may just about produce a profit of £10 million, and the reduction from the FCO grant would be £50 million over five years. As the British Council becomes more commercial to make up the lost revenue, its integrity and credibility could also be threatened. Does the hon. Gentleman consider that a risk as well?

[Stephen Kinnock]

I do. Also, as I will go on to argue later, the council’s English language teaching and exam work is important, makes a big impact and is very lucrative, but it tends to be for the elites in the societies where the council is operating. It is the high end of English language learning and people pay top dollar for it. If we are saying that it is important that we engage with the disaffected, disfranchised youths who are potentially going to become a security risk for us, it is arguable that that section of society will not be able to pay for those English language courses. Looking at the council’s strategic objectives and values, it is important that its reach is wide and that it goes into sections of society that its English language teaching and exams administration simply cannot reach.

The grant represents just 16% of the British Council’s funding. The rest is earned, as we have been discussing, and those earnings are projected to increase. Despite that good news, all is not financially rosy at the council. The FCO grant was reduced to £154 million in 2014-15, down from £201 million in 2009-10, so despite the extra £10 million in ODA, cuts to projects are having to be made. The choice for the council is stark: either a managed decline in its scale and reach, or growing its self-generated income to continue its work. The council has been forced to choose the latter, but should it have to and do we want it to?

Of course, it is truly commendable that the council’s English teaching and exam management can generate enough income from those who can afford to pay to fund projects aimed at those who cannot. Work done administering exams, managing international contracts and fostering corporate partnerships is important, but the more money that is raised from commercial sources, the more the British Council’s core purpose becomes divorced from its soft power potential. My concern is also that language teaching and exams are expensive, and so tend to benefit elites. Grant-funded activity is far more likely to have a wider reach.

We must recognise that, if the British Council is to remain an important wing of British diplomacy, public funding must remain an important element of its financial base. That is crucial for accountability and flexibility, and to supporting the council’s activities in fragile, unstable states, where it is harder for the council to raise the private funds to enable it to build long-term, mutually beneficial relationships with future leaders. It is an important fact that one in five world leaders studied in the UK; we are talking about a brand that we can, and do, export, but without public funding, it stops being linked to Britain as a country and becomes just another product.

ODA money is specifically for British Council work in areas that are of key interest from a security and stability perspective. Those areas are current flashpoints, and the money is crucially needed. In Tunisia, for example, a fledgling democracy is trying to embody all the original hopes of the Arab spring, but more of the foreign jihadists in Iraq and Syria originate there than in any other country. The British Council runs debating clubs across Tunisia—a programme that it wants to grow tenfold and that successfully engages young people at risk of radicalisation. For Tunisia, whose economy relies so much on tourism, the good publicity afforded by successful British Council projects feeds into confidence that the country can move on and rebuild after recent horrors.

ODA funding also goes towards co-operation work with countries such as China and India, where engaging with societies that are growing increasingly prosperous is an investment in our future.

The debate is about how best to build trust between Britain and the rest of the world, and nobody does that better than the British Council. More ODA money would maintain its public funding and consolidate its position as a respected arm of British diplomacy. The Government’s spending review is coming up, and my colleagues and I urge the Minister to communicate that request in the strongest terms to the Chancellor.

During his Grant Park acceptance speech in 2008, Barack Obama famously stated that the true strength of a nation is demonstrated

“not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals”.

I urge the Minister to take note and to ensure that the outstanding nature of the work done by the British Council is adequately reflected in the comprehensive spending review.

--- Later in debate ---

[Mr John Baron (Basildon and Billericay) (Con)]

I was not going to speak in the debate, but given that there is a little time available, I shall contribute briefly—I am grateful for the opportunity. I congratulate my hon. Friend the Member for Somerton and Frome (David Warburton) on securing this important debate, which is timely, given the advent of the spending review at the end of the month.

I think that all those who have spoken in the debate accept that the British Council is a valuable institution. It does great and sterling work in encouraging co-operation and improving communication, and it makes a great contribution to Britain’s soft power capability. I mentioned earlier that Joseph Nye cited the British Council as the original forerunner of the concept of soft power when it was formed in 1934. The concept has moved on, obviously, and we now talk about smart power as well as soft power, but it is important to bring the discussion back to soft power. Although the term is somewhat abused, the concept is perhaps more relevant today, in this uncertain world, than it has been for a long time. Joseph Nye defined it as

“the ability to get what you want through attraction rather than coercion or payment”.

We are not alone in recognising the importance of soft power. Many other countries, including some—without wishing to name names—whose credibility is far less than ours in this context, if only because they are not democracies, are realising that soft power is an increasingly important part of an effective, full-spectrum response to the threats that they face. We would do well to learn from that in the UK. We have been through a decade, if not 12 years, when we have seen examples of hard power not providing the solutions that the Government hoped for, including our interventions in Iraq, Afghanistan post-2006, when we allowed the mission to morph into one of nation building, and Libya. Another is our positioning on Syria, where initially the objective was to support the rebels, although we have now realised that that is where the greater threat lies, so we have rightly turned on them—or elements of them, such as ISIL, al-Nusra and al-Qaeda.

We should realise by now that hard power solutions are not always what we hope they will be. That should remind us of the importance of soft power in this increasingly complex and uncertain world, yet we are cutting funding to the Foreign and Commonwealth Office, which is in turn cutting funding for its various activities, including its support of the British Council. My right hon. Friend the Minister of State may disagree with me about one or two aspects of our hard power interventions, but I think that he and I can agree—he may not be able to do so publicly—that we should not cut funding to the FCO in these times. If anything, we should increase its funding, at a time of increasing uncertainty, because we need our eyes and ears on the ground. We need our expertise in foreign policy issues generally to be properly funded as that can save additional costs and prevent mistakes further down the line.

I rail against further cuts to the British Council. We have heard about funding being cut from £201 million to, I think, £154 million. Okay, there has been a £10 million increase since, but that is still a substantial cut of something like £40 million to a budget of £200 million in the past five years. The British Council has been left in a difficult situation because it must either scale back its activities, which cannot be good for many people around the world, or the UK, when it comes to soft power capability, or become more commercial. A sum of £40 million may not sound a lot in today’s world where figures of billions are bandied around, but to generate that £40 million, assuming a profit margin of 10%, the British Council will really have to gear up its commercial activity.

Although there are early indications that the British Council is coping, there is a risk that as it tries to become more commercial and enterprising—I accept that there is always room for improvement in such areas—its activity will begin to feed back against it, in the sense that its commercial activities will begin to erode its credibility and integrity. A great part of its strength is its quasi-independent approach, but if it is becoming more commercial, the danger is that that will be eroded in many respects. Will the Minister address that fundamental point? This concern is shared by not only me and other hon. Members, but many people within the British Council, as well as outsiders and experts.

[Stephen Kinnock]

Does the hon. Gentleman agree that the effect on the reputation of the British Council and the United Kingdom is an important aspect of the discussion of financing? Is there a risk of a negative reputational effect if the British Council starts to be perceived as a money-making machine in the economies where it works, rather than an organisation concerned with building mutually beneficial partnerships?

[Mr Baron]

I tend to agree, but there is a balance. In defence of what happened previously, I would say that when the funding was £200 million, there were always commercial activities in the British Council, especially through the teaching of English overseas, for which its reputation is second to none. I agree, but I am trying to get across the point that as the British Council must increasingly gear up, in a commercial sense, to make good sizeable funding cuts—something like 20% in the past five years—there is a risk of losing sight of the balance. I ask the Minister of State to consider that and give us his response, because I, like the other Members in the Chamber, worry about the integrity and credibility of the British Council. That needs to be addressed, and it is a concern that has been expressed by those at the top table of the British Council itself.

I am conscious of time, but I will quickly move to another aspect of the funding that worries me. This might be partly the fault of the five-year political cycle, but we lose sight of the longer term when it comes to these sorts of funding issues. I suggest to the Minister that although these short-term cuts might meet a financial envelope set over a relatively small timeframe, there is a real danger that by making them now, we are creating false economies. The very nature of the British Council’s work means that we are talking about intangible benefits: the improvement of communication; fostering good relations with future world leaders when it comes to the UK; and increasing communication and education links. The benefit of all those intangibles cannot, in all honesty, be quantified, but we know they exist and can become more valuable in times of crisis. These short-term cuts could create false economies over the longer term.

Most generations that have preceded us believed that they lived in a safe and stable environment, certainly compared with their predecessors, but if history teaches us one thing, it is that this is an increasingly uncertain world, with variables that need to be catered for and anticipated as far as possible. The value of soft power in helping us to meet and address those uncertainties will increase as time passes, yet what is this country doing? It is cutting funding to its soft power capabilities, and not only the British Council. Although one accepts that funding for the BBC World Service has been transferred to the licence fee, there is still pressure on it, so that is another aspect of our soft power that is having to tighten its belt.

I argue that the FCO itself should be better funded and should not have to face the current cuts. We need a properly sighted foreign policy apparatus with the expertise to face increasing challenges, yet what are we doing? We are making further cuts to that as well. As long as I am a Member of this place, I will continue—unpopular though it may be for certain Front Benchers—to make the case for increased funding for the FCO, in the hope that one day someone will listen. To be better sighted and to have the in-house expertise to ensure that we do not make the sorts of mistake we have made over the past 10 or 12 years in our foreign policy interventions, for example, is a saving that is well worth making. Such an approach would lead to considerable savings further down the line that would far exceed the short-term savings we are achieving by having to cut the FCO budget.