Examination of Witnesses (Questions 60-64)
RT HON
LORD KINNOCK
OF BEDWELLTY,
SIR DAVID
GREEN KCMG AND
MR MARTIN
DAVIDSON
12 OCTOBER 2005
Q60 Sir John Stanley: Thank you very
much. I am just coming to the wider question of British Council
status, if I may. When the Committee reported on this in our last
annual report to the Foreign Office we received the following
response from the Foreign Office when they replied to our recommendation.
I quote from paragraph 47 of their response: "We have also
made it clear that any discussions on the specific tax issues
must go hand in hand with agreement at a political level between
foreign ministries on the overall future status of the Council
in a Cultural Centres Agreement (CCA)". Could you tell us
what is the current situation on negotiating and concluding this
Cultural Centres Agreement with the Russian Government?
Lord Kinnock of Bedwelty: Yes,
readily. We are given to understand that we have had tax obligations
in respect of our operations in Moscow, St Petersburg and the
other centres in which we operate in Russia. The tax liabilities
stipulated by the Russian authorities were paid in full in respect
of Moscow in September. They were paid in full in respect of St
Petersburg last week. We are led to believe that we can reasonably
anticipate that by the end of this month the remaining tax issues
will be cleared. They form a minute part of the overall tax picture
and that is why we have got reason to believe that those who communicated
to us in those terms are being accurate. So far as the status
is concerned, we have heard of an explicit assurance that immediately
after these tax obligations are resolved, and as I say this is
at most now weeks away, so we are led to believe, there will be
rapid movement towards the conclusion of the agreement. We have
long sought that agreement for the very straightforward reason
that in replacing the 1994 existing agreement, that will give
stability to our status which will be beneficial both to the Russian
authorities and to ourselves. The more rapidly we can arrive at
that, the better it will be for the British Council, for the United
Kingdom, for the Russian authorities and for those people in their
hundreds of thousands who plainly have an appetite for using British
Council services in Russia. I hope that long before we next come
before this Committee, provided we are invited, we will be able
to relate the resolution of this issue. Certainly if what we have
been told about the conclusion of the outstanding tax matters
is the key, the very, very rapid action key, to the conclusion
of the agreement, we will be able to report that news.
Sir David Green: Can I just add
that we have been working very closely, as you would expect, with
the Foreign and Commonwealth Office in helping to resolve this
matter both in London and in Russia.
Lord Kinnock of Bedwelty: I am
aware of the time but for reasons that Sir John above all others
will understand, this is a critical issue. In the introduction
to your question you said that it appeared the situation now is
worse than it was when you last gave attention to it. Given the
fact that we are well on the way to the final resolution of the
tax issue, it is necessary to give attention to what a Russian
agency, as you correctly quoted, reported as an impending criminal
prosecution. We have got no reason to believe that this will add
additional complexities to what has been a complex situation,
given that we and our embassy in Moscow and our consulate in St
Petersburg diligently work with our counterparts in the Russian
Ministry of Foreign Affairs for a stable and mutually agreeable
outcome.
Q61 Sir John Stanley: I have just one
final question to put to you, if you just add it to the factual
information you are going to give us. Could you give us an indication
of the size of the tax payments which the British Council are
going to make so that we have got that in front of us?
Sir David Green: Certainly.
Q62 Sir John Stanley: There have been
two lines of suggestion as to how the British Council got into
this particular situation. It has been suggested that the British
Council have been less than diligent in examining their tax status,
and you are going to answer that in the note you are going to
provide. The other motivation that has also been ascribed here
is the suggestion that the British Council have become, unhappily
for themselves and through no fault of their own, something of
a political pawn in some outstanding issues between the Russian
Government and the British Government, in particular in relation
to the British Government's refusal to allow the extraction of
Mr Akhmed Zakayev and also Mr Boris Berezovsky, and also the Russian
Government's alleged displeasure that the British Government has
decided to make a substantial financial contribution to educational
projects in the North Caucasus region, including Chechnya. I would
be grateful if you would just like to respond to the suggestion
that the British Council may have been subjected to this tax action
as a result of a degree of political motivation by the Russian
Government.
Lord Kinnock of Bedwelty: I am
sure you will understand, Chairman, if the British Council are
not in an authoritative position to comment on what attitudes
may exist in Russia towards the granting of asylum to Russian
citizens, and it would not be appropriate for us to explore the
matter further. Plainly, this Committee, with its powers of investigation,
is in an appropriate position to secure any additional facts on
the matter. Part of me regrets that I will have to leave it there
but I think that is the wise thing to do, although I understand
the propriety and the effectiveness of the question. So far as
North Caucasus is concerned, it has to be emphasised very strongly
that the British Council's engagement in the education initiative
in that part of Russia is as a part of the United Kingdom's response
to the Beslam tragedy, the anniversary of which has just been
sadly marked. Consequently, therefore, we are not simply consistent
with government policy on this, which we are very happy to be,
we are effectively the executives of government policy. The discussion,
if it continues, should continue in that context. We have no wish
to evade, we accept every responsibility that is ours, but that
is the situation in which we find ourselves and are ready agents
of the execution of government policy in that sadly afflicted
area.
Chairman: Let us not move away from Russia.
In the four minutes that are left, if Andrew Mackinlay comes in
very briefly and then Andrew Mackay and if we have any other outstanding
issues we will have to write to you.
Andrew Mackinlay: The first is Kyrgyzstan
and the related countries there. There is no United Kingdom political
mission or embassy in Kyrgyzstan and that is a matter for another
occasion, but if you could amplify on that. The other one is if
you might touch upon the relationship with the Scottish Executive,
and it would be true if Northern Ireland was up and running and
also the cultural side of the Irish Republic's cultural ministry.
If you have a moment, could you just touch upon how we are going
to convey these nations within the UK, particularly whether they
have got some money, energies and an agenda legitimately of their
own.
Lord Kinnock of Bedwelty: If I
could respond very briefly to the last part of the question and
simply use Scotland as an instance. We now have a substantial
office in Edinburgh and it works in very close harmony across
the political spectrum with the Scottish Parliament and with the
Executive. The Presiding Officer of the Parliament is actually
a member of our advisory council in Edinburgh and the co-operation
is universal, we believe to the benefit of Scotland and its Parliament,
yes, and to the benefit of the British Council but, most of all,
people in Scotland and elsewhere in the world who are deriving
direct advantage as a consequence of this reinforced effort.
Sir David Green: On Kyrgyzstan,
we do not have plans to open an office in the foreseeable future.
We did a major review of our network some years back which, as
you remember, resulted in the closure of our programmes in four
countries: Belarus, Swaziland, Lesotho and Ecuador. We have since
then opened in Libya and Iraq and Afghanistan. From that previous
experience we knew that there was no point diluting our effort
and it is very important that we keep the quality of our work
here and, therefore, we cannot keep opening new operations. Sadly,
whilst we would like to, there is no opportunity for us to do
so in the foreseeable future.
Q63 Mr Mackay: You will recall that those
of us on the previous Committee when we reported were very critical
of your new logo and did ask you to reconsider the use of the
Union Jack. Since then, I think we have all been dismayed about
the Common Ground exhibition and the distortion of this country.
It was hugely regrettable and it was clearly a mistake. Linking
the two together does not give you many friends. I would like
you to briefly comment on both points.
Lord Kinnock of Bedwelty: The
photographic exhibition, Common Ground, shown in dozens of countries
across the world, was universally hailed as highly effective,
and that was by expats as well as by the recipient audiences.
There was one image out of 130 photographs that provided the opportunity
for one or maybe two British newspapers to produce sensationalist
coverage little informed by the facts. Apart from that context,
it is the reality that if the British Council were exclusively
to focus on celebrating the undoubted virtues and values and greatness
of our country, and sought to obscure the more difficult and challenging
features of our society, we would lose the credibility which is
fundamental to the development of understanding and trust internationally.
I know that Mr Mackay is entirely responsible in his view but
I would ask him to put that into context.
Q64 Mr Mackay: The Union Jack?
Lord Kinnock of Bedwelty: I think
the logo is very effective. Again, it has had a great reception
around the world representing, as it does, the four constituent
parts of the United Kingdom and I am damned if I am going to spend
any more money on that.
Chairman: I am afraid the Division bell
has stopped us. Thank you for coming, gentlemen. Thank you for
your answers.
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