This week, the Foreign Office will decide whether to stick with its planned reductions in the council's support - reductions that seem the more unfair because staff claim to have been changing the way they work in just the ways ministers have demanded. The British Council now sells English-as- a-foreign-language courses. It puts on fairs in the Far East to attract students to British universities. It liaises with publishers. Yet it remains in the fiscal firing line.
That may be because it has fallen between stools. It has not been, like the BBC, robust enough to take some private sector shillings while retaining its public identity. Yet neither has it turned itself into a candidate for privatisation, for it still does things like meet foreign students arriving at Heathrow, which private companies would not pay for. It is a victim of Whitehall turf war, a symbol of the increasing enfeeblement of the Foreign Office under Malcolm Rifkind.
Yet the council's problem goes deeper. It lacks a popular mandate, but not because it promotes concert tours or is in any obvious way highbrow (in fact, the British Council's besetting problem is a kind of middle brow mediocrity). Its problem is us. Its fate is bound up with the half- debate now going on in this country about identity and nationhood. The crude imagery and debased language used by the Euro-sceptics (see Julian Critchley's polemic on the following page) should not obscure the resonance of their fear of the foreign and the future. In such circumstances, the British Council is condemned to construct a Britain for external consumption made up of safe culture, Shakespeare with Burns and Dylan Thomas in supporting roles.
What nation, whose culture? Any institution that dares to delve into this explosive territory is bound to live dangerously. The British Council suffers from anachronism. People think of it in terms derived from Graham Greene or, somewhat more up to date, Malcolm Bradbury. Libraries in Brno or Vilnius might once have served as a civilised corner during the Cold War. But in the age of the Internet, what is the purpose of the British Council? Would the Bulgarians rather have fast modems or George Eliot?
There are no reliable cost-benefit equations in cultural diplomacy. Defenders of the British Council tend to resort to outrageous non-sequiturs linking performances of the Bard in Cairo to Anglo-Egyptian amity. Other nations, the French and Germans, have never bothered with that kind of calculation. They do it because they are surer of who they are. German politicians do not worry whether the Goethe Institute helps to sell BMWs.
The British Council's problem is not just to do with the meaning of Britishness but the character of culture. These days, culture escapes the bounds of the "arts". It long ago ceased to be politically possible to define it as "high" in TS Eliot's terms. It is not a surrender to relativism to acknowledge that performances and products of high quality are made under all kinds of rubrics, musical, theatrical, sporting, fashion, film, "style", architecture and design. The British Council has suffered from being out of touch with this culture.
And this kind of cultural capital is increasingly what this nation will have to trade on. Culture is serious business, although it does not look like it. Only a hypocritical government would deny to fashion designers, music makers and performers the kind of assistance laid on over the years for munitions manufacturers and machine-tool makers. The practical question is: what mechanism will best promote culture, made up as it is by many "small and medium enterprises" let alone a near-anarchic gallery of doers. The answer is not the British Council as currently structured. Some new organisation, cooler, more credible, quicker on its feet, is needed.
The council's functions should be reapportioned - as part of a wider Whitehall overhaul. Student welfare and government sponsorship should be a university responsibility. For the "cultural mission", two principles hold. British culture is saleable. If only half the recent hyping of British artistic renaissance is true (and something remarkable does seem to be going on in a number of fields), then there are products aplenty. Foreign markets are eager. The state can assist by facilitating, promoting, celebrating.
The second principle is pride. Yesterday the Liberal Democrat leader launched a spirited attack on the Tory claim to be the party of patriots. A former military man, he scorned the identification of national strength with isolation. In the modern world, national pride might even take the form of feeling pride in the Vivienne Westwoods of the next generation.