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Mr. Sheerman: Will the Minister give way on that point?
Mr. Taylor: I am running short of time, so I shall not give way. [Interruption.]
Madam Deputy Speaker (Dame Janet Fookes): Order. It is clear that the Minister is not giving way.
Mr. Taylor: One of the key points in the debate related to management training, which is crucial. I am trying to enthuse the Engineering Council to bring management training into engineering courses so that more engineers can be competent managers. The same goes for many scientists because management is a key tool for the engineer or researcher or anyone else. I am glad to see that more universities are beginning to pick that up, because it will determine success.
From my discussions with the venture capital industry it seems that there is no shortage of money, but marrying a good idea to finance often requires other factors, most particularly management. In the DTI we are attempting to work with financiers and industry to find a way to encourage greater access to management skills for people with ideas so that the venture capital industry can have more confidence in evaluating a project and in trying to determine how it will become a commercial proposition for the industry. I hope that that process will yield results in the near future.
I shall deal briefly but determinedly with the comments about the decline in the science base. When I visit universities, I do not see any decline in that base. We could trade statistics across the Dispatch Box, but I can say that the amount spent on the science base by the Office of Science and Technology and by the higher education funding councils in terms of research is up in real terms by 10 per cent. over 10 years. However, I do not want to go into statistics or engage in trade-offs about Nobel prizes which often reflect research that has been carried out some time before such awards are made. However, I congratulate the chief scientific adviser on winning the prestigious Crafoord prize from Sweden only this week.
I do not wish to trade statistics on manufacturing, save to say that the prospects for manufacturing investment and for productivity and output are currently extremely good. We discussed that at a recent Question Time. Allowing for the various economic cycles, over the past 10 years productivity in the United Kingdom has been extremely good. I appreciate the point about capital funding. That is
why the higher education funding councils and I this year presented a targeted project for capital funding of£18 million of Government money which is reassigned specifically to equipment. With matched funding, that will amount to £36 million.
I am looking longer term at how we might overcome some of the difficulties of universities in funding capital equipment, which is vital for universities and for the quality of their research. I recognise that, and I do not intend to duck that issue, because it is important for us to realise that the quality of university research can often depend on fairly mundane pieces of equipment such as fume cupboards.
On its science and technology activities, the DTI will spend level cash of about £350 million over the next few years. Our figures have been distorted by factors such as the fast breeder and by launch-aid inputs. The Department is firmly behind the work of industry in innovation and application. It has a series of initiatives, some of which I have mentioned, such as the management in the 1990s programme, an area in which we wish to improve our activities and raise the standards of British companies.
Increasingly, I talk to universities about the way in which they can identify smaller companies, which can be difficult. The Faraday concepts are being examined by research councils, particularly by the Engineering and Physical Sciences Research Council. We are working with research and technology organisations and trying to get people to transfer from universities to companies because the skills-based transfer is important. The teaching companies scheme and the postgraduate training partnership are crucial. I have introduced a college-based scheme to ensure that we do not lose sight of the role that colleges and vocational qualification college students can play in companies in the areas in which they work. All that is themed to try to improve the competitive position of the United Kingdom in the vital fields of science, technology, innovation and inventiveness.
Mr. Robert Litherland (Manchester, Central):
I am delighted but saddened to have the opportunity to highlight the impact of the £22 million cut over the next three years on the British Council and its role as our principal agency for cultural relations abroad and in our aid programmes and diplomacy. The council's future has been undermined and jeopardised by the cuts. The Government know that full well, because the council has emphasised its difficulties in meeting the costs of restructuring to come to terms with the demands placed upon it by the swingeing cuts.
The council does not have access to capital to fund the restructuring that will be forced upon it to implement the cuts. It is a Catch-22 situation. The planned reduction in the British Council's grant and the enforced restructuring have not been thought through. It is another victim of ill-conceived Treasury policy and of what the Secretary of State described to me in his letter as
That is it in a nutshell. The council is a victim of public expenditure restraints, no matter how valued is its work. Dr. Roger Bowers, its Manchester assistant director general, informs me that its long-term commitment depends on whether there is any further significant change in the Government's financial support. My advice to him is not to hold his breath. We cannot rely on a Government that can impose such unexpected cuts without considering the effects on the service and especially on the efficient and dedicated staff. We cannot rely on a Secretary of State who, in a two-line sentence, informs me:
Those comments do not sound reassuring to me and I do not think that they will reassure management and staff.
I am assured by the British Council that it has a good efficiency record. It was on target to reduce its UK overheads and was restructuring its regional offices, producing savings and exceeding Treasury targets for efficiency savings. It had cut staff over three years by25 per cent., so it had played its part. Regrettably, that could not satisfy a Government hellbent on cutting public expenditure. Where better to do that than with an organisation that, in spite of its excellent activities, is little known domestically?
The ordinary voter knows little or nothing of the work of the British Council. Such savage cuts would not be a vote loser. How many people realise that the British Council promotes British interests abroad through many and varied channels? How many know about its management of overseas development projects, its promotion of the English language, its vital partnership links or its involvement with education and training, science and technology and the promotion of British arts? How many know how that work has benefited millions over the past 60 years? So what? It is not a vote loser. Nobody on the domestic front will miss it, so who cares?
There are many who care and who are anxious to make their concern known. This debate has generated a great deal of interest in what is happening to the British Council and where its future lies. I know that other right hon. and
hon. Members wish to speak who have taken a long-term interest in its activities and followed recent events with great concern. They are far more knowledgeable than I about the details of its crucial role in world affairs.
I regret that other interested Members such as me were not contacted earlier. Neither I, as Member for Manchester, Central where the council is sited, nor my hon. Friend the Member for Stretford (Mr. Lloyd) who represents the adjoining constituency and who is a Front-Bench spokesperson on foreign affairs, were aware of the extreme difficulties facing the council until a few short weeks ago when we received a two-sided A4 sheet from the Public Services, Tax and Commerce Union.
Several hon. Members were disturbed by the lack of communication between the British Council and Back-Bench Members. There appears to have been an air of secrecy and a softly, softly approach to its impending doom. Do not rock the boat; be nice to the Government--as if that course of action would make any difference. It was not until my hon. Friend the Member for Dundee, West (Mr. Ross), in his role as chair of the parliamentary Labour party foreign affairs departmental committee, invited officers such as the council's director general,Sir John Hanson, and Dr. Roger Bowers to our meeting that we realised its predicament. That meeting took place only four or five weeks ago. The cuts will damage the work of council in general but will have a detrimental effect on Manchester in particular.
On hearing of the fate of Manchester, my mind went back to a lovely summer's day in July 1992. Manchester was agog and there was an air of excitement and eager anticipation. Her Majesty the Queen was visiting the city. The crowds and the children turned out to offer the usual warm Manchester welcome. The Queen was there for a dual purpose. She had come to open the prestigious new British Council building to which its headquarters had relocated. She followed that opening ceremony by declaring the new metrolink tramway open. It was a day of achievement for the city and its citizens. The metrolink is still running; it has proved to be a huge success. However, the same cannot be said for the British Council, for what a sad, sorry story that has turned out to be.
Who would have thought that, only four short years from that July day in 1992, the British Council would face such a situation? It is four years since Her Majesty paid tribute to the building's architectural merit and admired the internal decoration, the new carpets and the unique wall-mounted clock. It is three years since it won the office of the year award, but that building will no longer serve the purpose for which it was intended. The building was a vital part of the jigsaw of our regeneration programme and the British Council's coming to Manchester was part of the process of urban development that we were trying to achieve. What we had envisaged as a success story is now in a state of collapse. After the depletion of our manufacturing base, we welcomed the new service industries that brought jobs to Manchester. Where do we go now?
It does not take a genius to work out that enforced redundancies--about 180 people are to lose their jobs in the current financial year--and staff being moved elsewhere means that the British Council will have to seek alternative accommodation. I am informed that it is exploring all options for possible new tenants and a new home for itself. Although we hear the mutterings of management, who say that they are committed to staying
in Manchester, I am sceptical of what they really mean--the city of Manchester or Greater Manchester. A new venue of Salford quays has been mooted, but Salford is a neighbouring authority. The British Council would be moving away from the city itself if it takes that decision.
I appreciate that the management are expressing regret that the reductions are taking place so soon after the official opening, especially when the council's work is most needed, but it is the staff of the British Council who concern me.
I recently received a letter from an employee, who told me that, as the letter was being written, the family were still in the throes of upheaval after relocation and were surrounded by cardboard boxes waiting to be unpacked. The family had faced the trauma of upheaval in leaving their home down south to move to Manchester, where the spouse had acquired a part-time job. The children had been placed in a new school, made new friends, and the family had made a new life. They informed me that they liked their environment and did not want to move on. Yet they could find themselves left high and dry without a livelihood, far from their relatives and friends who remain in the south of England. The Secretary of State has an obligation to offer a full explanation to such people of how they will be assisted and compensated for such loss.
The worry is that the cost of restructuring will be extremely high. The estimated cost of redundancies, based on previous redundancy programmes, is in the region of £12.6 million. With additional costs, a total restructuring cost of £17 million is estimated. If the Government will not meet those costs, will the council face insolvency? The council emphasises that it has no means of funding such costs unless it does not carry out its operational work for at least a year. Can anybody imagine that? It would seriously discredit the Government, their foreign policy and this country.
Where do the staff stand in such a scenario? Close to £15 million was spent on relocation, and a plan to save costs by going to Manchester was devised. What happened to all those carefully thought-out schemes? Why did the Foreign and Commonwealth Office allow the British Council to go ahead with its decision to restructure when it must have been aware that the Treasury intended to impose such draconian cuts? It must have known the effects that such cuts would have on the council's operations and staff.
The council is in an impossible position. There is no scope for savings of such magnitude. How can it maintain its present global coverage under such demanding financial guidelines? The short answer is that it cannot. The scale of cuts has crippled the organisation and there are grave doubts that it can carry on and meet the stated objectives of Britain's foreign policy for the 21st century. It is ironic that the 1992 Conservative party manifesto said:
Strengthen indeed! The Government should tell that to the family surrounded by unpacked cardboard boxes and with no future to look forward to.
If it is the intention to save the British Council's frontline operations at the expense of UK operations--the management are looking for a £5.5 million reduction in
the UK--we can expect more families to meet the same fate of the family that I have described. What a peculiar way to treat staff of an organisation that has fulfilled all its obligations and has been described by the Secretary of State as dedicated and one that has made an outstanding contribution. I am always cynical of the Government. Perhaps their aim is to undermine the viability of the British Council and make room for the private sector, which we know is watching events with interest and would quickly cream off the most lucrative commercial operations if it were allowed.
I picked up two articles on the subject recently. A letter in The Economist said:
The Times Higher Educational Supplement said:
My, my, the private sector is now telling the Government their obligations to the private sector.
"the recent very tough spending round which has reduced the Foreign and Commonwealth Office budget."
"We will do our best to help the council next year but that must depend upon the outcome of the next spending round."
"The British Council acts as a cultural ambassador for Britain and for the English language--We will promote the English language by strengthening both the British Council and the BBC World Service".
"The most drastic solution would be to privatise the council's commercial activities and restrict it to promoting the interests of all British providers of such services."
"What the Government refuses to accept is that this structure undermines its stated belief in market forces, the private sector and the discipline of competition."
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