‘at the end, insert “in excess of £1 million in any calendar year”.’
This amendment would limit the British Library Board’s power to borrow money to £1 million per year.
New clause 1 provides that the Act expires at the end of a period of five years beginning from the day on which it is passed, otherwise known as a sunset clause. I have tabled this new clause because I think it is particularly apposite in relation to this subject.
When the Government, or the Department for Digital, Culture, Media and Sport, first contemplated the idea that the British Library might be given the power to borrow, which it does not have at the moment, the report said that there would be an opportunity to have a full debate about the pros and cons of so doing, and I am not sure that that debate has ever really taken place. I am also not sure that the British Library board is that keen to exercise these powers. The reason for that may well be associated with the fact that borrowing incurs future costs, and those costs then have to be budgeted for from a grant in aid. It is well established that many of what are described as “arm’s length authorities”, which are the subject of grant in aid from the Department for Digital, Culture, Media and Sport, believe that it is better to rely on grant in aid, where they know where they stand, than to go down the route of borrowing.
My concern is that the Bill could be used as a means whereby the Government cut their grant in aid to the British Library board and, if the board whinges, tell it to borrow the money instead. Given that our national debts are at record levels, it seems to me that such an attitude would be completely out of place. If the Bill becomes law, however, there is no guarantee that that will not happen—that it will not be used as an excuse to ramp up costs for future generations: “Spend now, pay later”. The grant in aid process is designed to ensure that the British Library board can receive funding sufficient to enable it to do its work during the course of the year.
My background interest in this comes from the fact that I was the Minister responsible for the Property Services Agency. One of the biggest projects on its books was the construction of the new British Library. That whole process and the way in which it was funded should be the subject of a treatise.
The grant in aid process was used to fund the construction project each year; there would be an agreement between the Government, the Department and the British Library about how much money could be spent on it in any given year. But no limit was put on the overall costs. It was only when the then Prime Minister Margaret Thatcher got to hear about that that she decided that we could not carry on just funding the capital project of the British Library on a year-by-year, hand-to-mouth basis. We needed to say that that could not go on indefinitely and that there should be a finite sum of money for the project—and that would be that.
I do not know whether you have been round the British Library, Madam Deputy Speaker, but it is almost in two halves: part of it is adorned with fantastic panelling and money-no-object interiors, but I can only describe the second part as rather more utilitarian. That is a direct consequence of the then Prime Minister’s having said that there had been an abuse of the grant in aid process. I still have the trowel used in the British Library topping-out ceremony—as we would expect for such an extravagant project, it is made of finest silver and came from Garrard, I think. But that is by the by.
Just as the grant in aid was abused before Margaret Thatcher got a grip on it, I fear that the power to borrow could also be abused if we do not keep a tight rein on it. A five-year sunset clause would enable that assessment to be made, so that at the end of five years, if it had been a great success, it could be renewed, and if not, there would not be any need to renew it. Effectively, it would give this House the opportunity of policing what had actually happened under the powers being granted in this primary legislation. I go back to the point that we are not even sure that the British Library really wants these powers, and certainly it does not want these powers if the consequence is a reduction in its grant in aid.
Amendment 1 is designed to limit the amount of borrowing in any calendar year to £1 million. That is an off-the-cuff, arbitrary sum of money, but it seemed to be a reasonable sum for starters, in the absence of any other evidence as to what the British Library needs to borrow and for what purpose it needs to carry out those borrowings. I have tabled this more as a probing amendment, rather than one that I expect to be accepted just like that by the Government. This is quite a short point—and, indeed, it is a short Bill—but in the context of the national situation of public borrowing, it takes on a totemic significance greater than it might have had when the Bill was introduced last year.
I hope that those introductory remarks in support of my new clause will engender not only a debate but an opportunity for the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend Matt Warman, who I am pleased to see in his place, to respond and to share with the House his vision for the British Library and how much he thinks that vision is dependent upon the British Library Board having the borrowing powers set out in the Bill.
I would be interested to know whether the Minister has any idea of how much the British Library Board is thinking of borrowing. The explanatory notes make it clear that the board would not just be able to borrow willy-nilly; it would have to get approval for so doing from the Department. My understanding is that, at the moment, there is a sum of £60 million available for borrowing for all the arm’s length bodies that the Department sponsors. Would the British Library Board’s borrowings be subject to that limit, or would they be in addition to it? In the spirit of the need to ensure that we scrutinise these proposed pieces of legislation, I would be grateful if we could get some response on those issues.
I shall speak only briefly on my private Member’s Bill. I listened carefully to what my hon. Friend Sir Christopher Chope said. In relation to the point about whether the British Library Board or the executive committee want these powers, I can assure him that they do. It is also worth pointing out that what is proposed here is simply to align the British Library with all the other similar arm’s length museums, galleries and others that currently sit under the auspices of the Department. The Bill does not propose anything different from what various other similar institutions have. That is a very important point.
The third thing to say is, simply, that this is not about the Government reducing the grant in aid. In fact, in the Budget of March 2020, the Government gave £13 million to the British Library to help it expand. This money is not just for books or for the British Library in London; it is to help the levelling-up agenda all over the country. It is to help the business and intellectual property centres, which help thousands of individuals and successful start-up businesses. The success rate of those businesses—the proportion that are in existence three years after being started—is about 90%, double the national average, showing the value of those business and IP centres.
That is the sort of thing that this money is for. This is simply about aligning the British Library with all sorts of other institutions that sit under the auspices of the Department. I really believe that this is a sensible, practical measure that will help not just the British Library but communities up and down the country.
I am pleased that we are at this point with the Bill promoted by my hon. Friend Bim Afolami. As he said, it is absolutely the case that the Bill seeks solely to put the British Library on the level playing field that it deserves to be on.
My hon. Friend Sir Christopher Chope raises two points. Putting an expiry date on the powers proposed in the Bill would risk taking up further parliamentary time, which we all know is valuable, but it would also entrench the inequality that we are trying to resolve. The idea that the British Library’s power to borrow would be subject to review when none of the other arm’s length bodies are subject to the same review does not seem to me to be in that spirit of fairness. Of course my hon. Friend raises entirely reasonable points about the burden on the public purse of any borrowing, but it seems to me only fair that we take that as a whole rather than trying to impose separate conditions on the British Library.
The British Library is, as my hon. Friend the Member for Hitchin and Harpenden said, absolutely enthusiastic about the powers that the Bill would give it, it is enthusiastic about the opportunity to use them, and it is enthusiastic about the practical developments that that might bring, be it broader access digitally to its own artefacts or broader engagement with the community. That is currently constrained by the inequality that we see today. That is not fair on the British Library, but more to the point, it is not fair on the British public. It is important that we try to address the legislative barrier that currently and inexplicably prevents the British Library from having the same freedom to borrow that its fellow national museums and galleries enjoy.
Operational freedoms introduced in 2013 have given our national cultural institutions, including the British Library, greater autonomy to make decisions independently and greater flexibility over their income, helping them to innovate and continue their expert work. Flexibility and innovation will be more important than ever as we recover from the effects of the pandemic.
The British Library is, as my hon. Friend the Member for Christchurch accepted, subject to a host of scrutiny already. The Bill does not propose to subject it to any greater scrutiny than exists already for other arm’s length bodies. While I agree with him that we should pay close attention to those conditions, I hope that he will agree that imposing further specific conditions on the British Library when we would like, I think, to have the efficiency of dealing with all arm’s length bodies as one is not a sensible approach. While I understand the sentiments behind his amendments, I hope—
My hon. Friend talks about the other arm’s length bodies. My understanding is that they have the power to carry over surpluses from one year to the next. Is that power now being made available to the British Library? Will the borrowing that it will be able to make under this power be out of the same capped fund that is available for the other departmental arm’s length bodies? Or will this be in addition? If so, how much will the addition be each year?
The Treasury allocates a pot of £60 million per year that can be loaned out to all cultural organisations given the freedoms I mentioned. The responsibility for allocating that pot is with the Treasury. To my knowledge, there is currently no proposal to change the size of that pot, but of course all of these things are under review in the usual way. On that point, and on my hon. Friend’s first one, I hope he understands that we are not proposing anything here that it is in any way unusual, and that this is putting the British Library on a fair and level playing field. Unless he wants to intervene again, I hope that that clarifies the points he has made. In the probing spirit that he mentions, I hope the Government have been able to provide him with sufficient information so that he does not press his amendments to a vote and he allows the British Library to flourish in a way that will benefit all of our constituencies.
I beg to move, That the Bill be now read the Third time.
I wish to put on record my thanks to the Opposition Members, particularly the hon. Members for Wirral South (Alison McGovern) and for Batley and Spen (Tracy Brabin), and the Minister and all those who have supported the passage of this Bill so far. I hope for it to have speedy passage in the other place.
It is a great moment for libraries across the country to see the United Kingdom’s flagship British Library put on this level playing field. I pay tribute to my hon. Friend Bim Afolami for getting his Bill this far. I thank him and all those who have worked on this Bill, and indeed all those who have scrutinised it in this House today.
I would like to put on the record my appreciation of the great efforts that my hon. Friend Bim Afolami has made and his phenomenal success in bringing this Bill to a successful conclusion in this House. I hope that that will be duly recognised by his constituents—I am sure it will be appreciated by the British Library. May I put on the record the fact that I think that the British Library is one of the greatest of our British institutions and that I am an immense supporter of it? Although there was a lot of scepticism about the cost and design of the new library, I think it has been able to prove its worth in practice, and we much appreciate it.
Question put and agreed to.
Bill accordingly read the Third time and passed.