To ask His Majesty’s Government what their response is to the concerns expressed by the Chief Executive of the British Council for the future of that organisation; and what steps they are taking to ensure that the British Council's art collection is not to be sold off.

My Lords, the British Council’s board of trustees is ultimately responsible for the British Council’s financial sustainability. The Government highly value the British Council as a UK soft power asset and are committed to working with it to ensure its financial sustainability.

The FCDO is exploring all options, including the sale of assets, with the British Council and the Treasury to ensure this.

My Lords, will the Government properly support the British Council which does so much for our culture and soft power, the soft power council indeed that already exists but is under enormous financial pressure? It is considering closing up to 40 country operations.

The Government should take careful note that wherever we move out from, Russia or China are poised to move in. Will the Government forgive the Covid loan, with interest accruing at the commercial rate of £1 million a month?

Will they review the funding of a vital institution that has been underfunded by government for years?

We will not be forgiving the loan. The loan was made by our predecessor Government. I cannot explain why it was done in the way that it was, and it is unfortunate that a payment schedule was not agreed as part of that process. However, we are where we are.

We are working very closely with the British Council. We speak on a regular basis, and I have visited the council when I have been on overseas visits. What it does is tremendous. What the noble Earl says about other nations filling the gaps that we leave is correct.

However, we must ensure that the British Council is put on a sustainable footing for the long term. That is why we are working closely with it and looking at all viable options to make sure that that is what happens.

My Lords, I hear what the Minister says about working closely with the British Council, but the Government give the British Council only about 15% of its total revenue.

Regardless of where fault lies, it is unconscionable that the British Council is having to pay £14 million a year in interest on a Covid loan. It is no good saying that we are where we are, when the Government have just launched a very high-profile Soft Power Council.

The British Council, alongside the BBC World Service, is the most important arm’s-length body in projecting British soft power. We cannot simply say we are where we are and leave it at that.

Nobody is saying we are where we are and let us leave it at that, but we are where we are. This is not where I would wish to be, for all the reasons that the noble Lord says. We must protect the British Council, and enhance and strengthen it.

I am very pleased to say that the British Council is a full participant of the Soft Power Council. I have spoken to the chief executive to get some advice on how we might go about setting it up and how to take that forward.

He is fully involved, and quite right too It is our determination that the British Council is strong and grows, and is able to do more of what it has done for decades. As the noble Lord says, it is a vital part of our soft power work.

At the moment, the Government provide around 16% of the British Council's funding. The rest, to the British Council’s enduring credit, it manages to raise itself through its own activities—mostly English language tuition and other activities that it conducts.

The balance of that we are discussing with the British Council. However, it is a strength that the council has that degree of independence from government, and I would not wish to see that jeopardised.

Whether or not we can increase the government grant and to what extent is open to discussion, but I point out gently that, if we did decide to do that, the money would have to come from somewhere else.

My Lords, we welcome today the vice-chair of the British Council as a new Labour Peer. We on these Benches look forward to robust defence of the British Council from the Government Benches. This is a Covid loan.

The loss that the British Council made was due to Covid and the drying-up of English language teaching. There are many other Covid loans outstanding. Many of them were fraudulent, as we know; this clearly was not. The Government will struggle to recover some of those others.

This was clearly an honest loan made in honest circumstances. Can we not treat this in that context, while the Government perhaps work harder on recovering other Covid loans which are a great deal less honest?

I will not get into the issue of the other Covid loans, because it is beyond my remit. The noble Lord talks about defending the British Council. There is no need to defend the British Council from this Government; we are strong allies, supporters, friends and protectors of the British Council.

The British Council will thrive under this Government. However, it is right that we are going through the process that we are now to make sure that the British Council is as strong as it can be going forward and that it can adapt to face its current challenges, needs and demands.

The noble Lord is absolutely right to mention that our dear and noble friend Lady Alexander, who is currently the vice-chair of the British Council, will soon be joining us on these Benches.

She is here.

My Lords, the Government should be commended for setting up the Soft Power Council, but, for the last 90 years, the British Council has been a vital component of the way in which this country projects its values and influence around the world.

A powerful example of this is the current photography exhibition in Portcullis House, which comes from the British Council’s season of culture between the UK and Ukraine.

In our debate on Thursday on the creative industries, I asked whether, rather than forcing the British Council to sell off the artworks that it has collected over nearly a century, the Government might look at the acceptance in lieu scheme.

Those debts could then be offset but these artworks could be kept and shared with the public here in the UK and around the world. Is that something that the Foreign Office has discussed with DCMS or the British Council?

I should make it very clear that nobody is forcing the British Council to make any decision in any direction about its art collection. As I understand it, around half of that is covenanted anyway and could not be sold.

There is a decision to be made, and it is right for the British Council—I would defend it on this—to look at other assets and make a decision. What that decision should be is not for me to say, but I support at least looking at that option. Does Rachel Reeves want to be paid in art?

I very much doubt it. What is important is that we are able to move forward, alongside the British Council, and that it is strengthened and can get the loan on a sustainable footing, look at where its income streams are coming from, and ensure that it can grow and be strong in the future.

My Lords, I declare my interest as a long-term member of the Hay Festival. We have worked for many years with the British Council and we now are working with the Soft Power Council. Despite many questions across the House just now, I do not understand why we need both.

I gather that the Soft Power Council is to be more businesslike. However, looking at the record of what we have done in Colombia, Mexico and other countries, I see that we have produced enormous amounts of investment in Britain by soft power. Why do we need both?

Why are the Government cutting down the council in favour of this new body? Is it just because they are the new kids on the block?

It is not an either/or. The British Council is central to the Soft Power Council. However, the Soft Power Council includes business, the Premier League, museums, and science and technology. It will be much bigger, but the British Council will be at the centre of it.

My Lords—

My Lords—

My Lords, we will hear from my noble friend Lady Keeley.

My Lords, I agree with noble Lords that the British Council is a vital part of the country’s soft power, and we have to recognise that its art collection showcases UK artists and architects across the world, including at the British pavilion at the Venice Biennale.

The current financial situation of the British Council is concerning. I have to say, following the other comments, it was irresponsible of the previous Government to leave the British Council dangling with a £197 million Covid loan with no repayment schedule, leading to the current uncertainty.

It is good to hear the strength of feeling in support of the British Council, but can my noble friend the Minister say any more about what steps will be taken to get it on to a sustainable footing?

The issue of the loan needs to be dealt with, but no one should think that that is the only thing that the British Council needs to concern itself with in making sure that it is as strong as it can be in the future.

It needs to look at changes in the way language tuition takes place and at different parts of the world where it may not operate currently but might wish to in the future.

All of these questions need to be discussed and thought through thoroughly, so that we get a strong, sustainable business plan and are able to see the British Council thrive in the next few years.

As everybody has said—there has not been a single word of criticism or doubt about what the British Council brings—this is a vital part of the way that the UK presents itself around the world.