Royal Albert Hall Bill [HL]
17:18 - Division on Lord Hodgson of Astley Abbotts’s amendment. - Ayes: 206 / Noes: 45 - Amendment agreed.
“Restrictions on powers to exclude members(1) No power exercisable under section 4 has effect unless—(a) it is approved by a sub-committee of the council of which the independent members of the council will form a majority; and (b) an undertaking has been given by all members who are trustees that any tickets for seats received from the exercise of the power to alter the number of events from which seat holders are excluded must only be sold by the trustee or relatives of the trustee through a ticket return scheme operated or approved by the Corporation.(2) In this section “relative” means in relation to any person any of the following―(a) that person’s spouse;(b) that person’s civil partner;(c) any brother, sister, aunt or uncle of that person or of that person’s spouse or civil partner;(d) any lineal descendant of that person or of a person mentioned in paragraphs (a) to (c).(3) In this section “trustee” means a member of the Council of the Corporation of the Hall of Arts and Sciences.”Member’s explanatory statement
This is to ensure that any power to exclude members from the Hall can only be exercised when approved by a sub-committee of which the independent members of the council form a majority and that any tickets for seats received as a result of the changes proposed in the Bill may only be sold through a ticket return scheme. This is because of the potential conflict of interest of the charity’s trustees. In the absence of this provision those seat holders, who are also trustees and so control the Hall, are able to resell tickets made available to them through third party websites at above the face value of the tickets.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I am very grateful to the noble and learned Lord, Lord Etherton, the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Barker, for putting their names to this amendment, as well as to a number of other noble Lords from across the House who signed the circular distributed to all Members of the House explaining the background to it. It will not have escaped the attention of your Lordships’ House that each of the signatories is from a different party grouping. I want to make it clear at the outset that there is no party-political angle to this issue. The amendment is about compliance with charity law.
Before I go any further, I need to clear up one extraneous matter of a personal nature, which I expected would be raised by the promoters, who have done so in a carefully worded paragraph XVI of the additional briefing that they have circulated. The opening sentence reads:
“The Hall expresses regret that the amendment is aligned with an agenda pursued by a disaffected President of some 14 years ago … He has waged a campaign against the Hall”.
The disaffected president is called Richard Lyttelton, and it has been a long-standing objective of some of the defenders of the status quo at the Royal Albert Hall to attempt to discredit and undermine my work by alleging that I am a close friend of the Lyttelton family and merely a mouthpiece for Richard Lyttelton.
The facts are these: over 50 years ago—not 15, 50—I was a friend of Richard Lyttelton’s elder brother, Johnny. Johnny was six or seven years older than Richard—a significant gap when you are in your 20s —and I had no dealings with him then. My friendship with Johnny regrettably came to an end when, as a result of ill health, he went to live permanently in Spain and died early, in his 60s, sadly. Forty years passed without my having any contact with the Lyttelton family. It was only about a dozen years ago, when I undertook the official review of the Charities Act for the Government and learned about the interplay between the Attorney-General and the Charity Commission, and, subsequently, its implications for the Royal Albert Hall, that I came across Richard Lyttelton again.
Do I agree with some of what Richard Lyttelton says? Yes, I do. Do I agree with everything he says? I do not. Am I his mouthpiece? Do not be ridiculous. If I were, is it really likely that I could persuade my three co-signatories—three eminent and experienced Members of your Lordships’ House—to join me on a personal crusade? I am afraid this is an example of how the hall is quick to kick up any amount of sand —personal sand, if necessary—when it becomes worried that the daylight may be let in on its governance structure.
Before I leave the point, I want to make it clear, as I am sitting beside my noble friend Lord Harrington, that I am sure he played no part in the drafting of that paragraph. I absolve him of any responsibility for it. He has no part in what I regard as a rather shabby exercise.
With that, to horse. There are two important features. I make it clear that this is not—I repeat, not—an attack on the hall. The hall is an iconic institution, home to many celebrated moments in our national cultural calendar. Further, it does not seek to change the entitlements of seat-holders who are not members of the hall’s governing body. It seeks to take a small step to partially address the fundamental conflict of interest that lies at the heart of the governance of the hall. I will briefly explain.
The construction of the Royal Albert Hall in Victorian times was funded by public subscription. In return for funds, individuals were allocated seats on, in effect, a freehold basis—a 999-year lease coterminous with the lease of the hall itself. They were free to make use of the seats as they wished. About 1,250, one-quarter of the 5,000 seats in the hall, were allocated in this way. They included some of the best seats in the house. The hall is governed by a 24-person council, of whom 19 must be seat-holders and one of whom must be the chairman. So some 80% of the body that controls the hall are seat-holders.
This was a purely commercial arrangement and continued as such for a century. But three decisions changed the terms of trade completely. First, and most importantly, in 1967 the hall applied to become, and became, a registered charity. This altered its fundamental position. Charitable status brings benefits. It brings relief from VAT, gift aid on donations and the advantage of a registered charity number. But it also imposes obligations. Notably, it imposes a public benefit objective and, importantly, a requirement that trustees of registered charities must not take decisions in their role as trustee that benefit them personally.
The second important development took place at around the same time. As the number of commercial lettings increased, it became clear that seat-holders would not want to attend every concert. The hall established what has become known as the ticket return scheme—TRS—so that seat-holders who did not wish to use their tickets for an event could pass them back to the hall box office and they would be sold at face value less a handling charge.
The third and final change came about with the dawn of the internet. Some seat-holders decided it would be much more profitable to sell the seats they did not want to use, not via the TRS to the hall box office, but on the open market via such websites as Ticketmaster and viagogo. Members of the House can go and check on the websites this afternoon what seats are available from the Royal Albert Hall. If Members of your Lordships’ House were seeking to go to the Last Night of the Proms, for at least the last three years they would have paid between £1,000 and £1,200 for each £100 ticket.
For pop concerts, the numbers have been much larger and reached a high point with an Ed Sheeran concert, where a £200 concert ticket was offered at £5,000. Ed Sheeran’s management team wrote to the Albert Hall asking it to circulate a note to all seat-holders deploring this practice and explaining how it made it impossible for an ordinary Ed Sheeran fan to attend his concerts. How much money the seat-holders make each year, as noble Lords would imagine, is a carefully guarded secret. But we do know—this is a public matter —that in a recent sale a box of 10 seats was offered for £3 million. That is £300,000 per seat. Remember, this is a charity.
For a little detail, not all seats for all concerts are available to seat-holders. Promoters of events will wish to exclude seat-holders so that the promoter receives the revenue resulting from the sale of that quarter of the seats owned by seat-holders, which otherwise would accrue to the seat-holder personally—not the promoter or the hall itself. By contrast, seat-holders will want to maximise the number of concerts for which they will be included, particularly where the event in question may be commercially high-profile and therefore any resale of seats would potentially be highly profitable.
Lord Etherton (CB)
My Lords, I rise to support this amendment, to which I have added my name. There are four fundamental legal principles which show the need for this amendment and why it should be supported by the Members of the House. Section 1 of the Charities Act 2011 states:
“For the purposes … of England and Wales, ‘charity’ means an institution which … is established for charitable purposes only”—
the emphasis there is “only”. Before that well-established proposition of law was incorporated in statute, lawyers would refer to the need for the institution, if it is to be a charity, to be wholly and exclusively charitable.
Secondly, Section 2 of the Charities Act 2011 says that a charitable purpose is a purpose which is “for the public benefit”. Sadly, the present position does not satisfy these two fundamental requirements, because the management structure of the Royal Albert Hall enables a sizeable group of seat-holders, which as we have just heard amount to the owners of some 25% of the seats in the hall—and they are the best seats—to potentially earn huge private profits for themselves from the performance of the charitable objects of the hall.
We all wish the Royal Albert Hall to be a thriving charity, enjoying all the fiscal benefits of charitable status. To maintain that status, however, requires, for the reasons I have briefly summarised, a radical change in the management of the hall so that it becomes, to all intents and purposes, a corporation wholly and exclusively charitable, operating solely for the public benefit. That is enough to warrant the amendment now being considered, but the matter goes further and concerns the legality of the role of the seat-holder council members.
The members of the Albert Hall council are charity trustees because they have
“the general control and management of the administration”
of the hall. That is the test laid down in Section 177 of the Charities Act 2011. As charity trustees, they are in the same fiduciary position as any other trustees: they must exercise their powers in good faith and as would most likely further the purposes of the hall. Their powers must be exercised for the purpose of advancing, directly or indirectly, the public benefit.
Furthermore, in accordance with the ordinary principles relating to fiduciaries, each member of the council, as a charity trustee, is not permitted to put themselves in a position where their interests and their duty conflict or may conflict. The majority of the council members of the hall are seat-holders, who face an obvious actual or potential conflict of interest and duty in exercising their powers under Clause 4. These are the reasons why the amendment introducing a committee, the majority of whose members are not seat-holders, to state whether it approves or disapproves of decisions by the council under Clause 4 is not only desirable but essential for maintaining the charitable status of the hall and the observance by the council member seat-holders of their legal duties.
Lord Bassam of Brighton (Lab)
My Lords, I am more than happy to be a co-signatory to this amendment. In agreeing with it, I want to make it plain that I bear the Royal Albert Hall, an iconic national and international institution, no malice or ill will. Who among us has not been to the Royal Albert Hall to enjoy its performances? I think I first went there at the age of 17, when I watched a rock band where the principal singer and flautist stood on one leg. They were called Jethro Tull; some noble Lords may have seen them. My family’s link with the Royal Albert Hall is not just that; my mother must have attended some 20 remembrance services on the trot, as a proud servant of the Royal British Legion, in her finery and uniform.
This amendment gets to the heart of the issue. It deals directly with the conflict of interest which the noble Lord, Lord Hodgson of Astley Abbotts, has so expertly outlined. To his great credit, he has fought this fight for a very long time and has brought a group of us together in support of his position. It is a scam and an outrage that the current situation persists. So far as I am concerned, I might describe it, indelicately, as an operation which involves ticket touting for posh people—certainly, very rich people.
We need to sort this out because it is wrong. It excludes ordinary members of the public from enjoying the benefits and delights of the Royal Albert Hall, because the tickets that then go on sale from the box owners are at a premium price. The noble Lord has given one very good example concerning Ed Sheeran. That is not right. Those tickets should be returned to the institution itself and go on sale to the general public, so that they can enjoy the pleasures the hall provides.
The other point is simply this: the Royal Albert Hall itself derives no benefit from those ticket sales, and that cannot be right. That hall, like any other, requires upkeep, maintenance and conservation, and it is a very expensive venue to preserve. I would like to think that, at the end of this process, ticket sales will make a direct contribution to the preservation of what is a fine institution. With those few comments, I am more than happy to support the amendment.
The noble Lord has clearly outlined the Charity Commission’s and the former Attorney-General’s position on this issue. We have also been given the benefit of advice from the House of Lords Special Committee. So I invite others to join the noble Lord, Lord Hodgson of Astley Abbotts, in the Division Lobby to vote “Content” and support his amendment.
Baroness Barker (LD)
My Lords, I apologise for being momentarily late, and point out that I have to chair the Grand Committee at 5.15 pm, so I hope that our deliberations will have concluded by then. I also declare my interests as set out in the register: I own a management consultancy that specialises in advising charities about governance, management and strategy.
This debate has taken me back to two weeks in my life when I enabled groups of trustees to set up trading companies at a moment’s notice, because the Inland Revenue had suddenly discovered that various Age Concern shops were selling balls of wool to pensioners for the grand profit of a penny a ball. We probably made a total of about £20,000 over the whole country, but it got the guys at the Inland Revenue very excited at the time, and we had to change our approach.
I say that because every charity in the land, bar this one, that has a formal relationship with a company has to declare it. If it is a sufficiently close and significant relationship, it has to produce group accounts. The whole purpose of that is to show the interactions and the transfer of assets between the charity and the company, in order that members of the public can be sure that charitable assets are not being abused for private gain—every other charity but this one.
What we have heard already in the speeches so far, which I will not repeat, is that, because of historical accident, this charity is now at risk of being abused for private gain. A few years ago, the Charity Commission attempted to head off that situation by proposing a governance structure that would address the conflicts of interest as set out by the noble and learned Lord, Lord Etherton. The Royal Albert Hall’s response has been not just to ignore that, but to compound in the Bill it has introduced the very problem that has been drawn to its attention. Therefore, we would be wrong to pass the Bill without this amendment, which seeks in a very modest way simply to do what other charities have to do as a matter of law.
The then Attorney-General’s decision not to back the Charity Commission in its attempt to bring the Royal Albert Hall into line with the rest of the charitable sector was wrong. Along with a number of other noble Lords, I happen to be a member of the Select Committee that looked a few years ago at the updating of charity law. We noted that the position of the Attorney-General on charity law was under some question, partly because of this case but also because of others. That is quite a serious thing. It is a very arcane part of law—but that is one of the things this House does rather well. We should be prepared to return to the question of the role of the Attorney-General in charity law.
Baroness Stowell of Beeston (Con)
My Lords, before I turn to the amendment moved by my noble friend Lord Hodgson, which I support—and I commend him for the comprehensive way in which he introduced it—I want to make a few brief remarks about public expectations of the charity sector more generally.
When I became chair of the Charity Commission in 2018, public trust in charities was at an all-time low. Here, I should reassure the House that I am no longer the chair of the Charity Commission and have not been for the last four years. At that time, we carried out extensive research and learnt that public distrust in the sector more broadly was driven by some very serious scandals in the preceding years among some of the higher-profile large charities.
We also discovered that, for many people, charities had become another group of institutions that disappointed them, because they no longer reflected in their behaviour or operation what people expected of or associated with charitable endeavour, or indeed what it meant to be on the register as a charity. This was serious, because it was having a detrimental effect on donations; and, in turn, when donations go down, charities’ capacity to deliver public benefit is understandably affected.
It also became apparent from our work that to remedy the situation, the emphasis for the charity sector—particularly among the high-profile charities with which we are all familiar—was on demonstrating that how they fulfilled their charitable purposes was in line with people’s expectations of charitable endeavour. If they did that, it would benefit the charity sector as a whole; it is a bit like collective responsibility for the “brand” that the sector relies on and that gives people confidence. Of course, different charities might have responded in different ways to that kind of effort, but I am just putting that out there by way of context.
For some 15 years—long before my arrival at the commission—the Royal Albert Hall and the Charity Commission had been in discussions to resolve the anomaly of its governance that my noble friend described, which allows its trustees potentially to gain personally while they are members of the charity board. The amendment put forward by my noble friend is very limited and as he said—it is important to emphasise this—it does not in any way fetter any seat-holder’s property rights. It simply brings the Royal Albert Hall trustee board in line with other charity trustee boards.
I will not rehearse the history of the ongoing discussion between the hall and the commission, because I did that at Second Reading, but I will repeat my point that it was surprising to me—and takes some audacity from the hall’s trustees—that they brought forward a private Bill to change some of its governance without addressing the issue which is so important and has remained unresolved for so long. In today’s modern world, the public rightly expect transparency and accountability from public institutions that exist in their name and enjoy tax breaks and reliefs at their expense. If those same institutions resist meeting the public’s expectations, they put their own standing in jeopardy and, in the case of charities, risk damaging the sector as a whole.
The Royal Albert Hall is a fantastic venue with a proud history. It is associated with so many national moments and lots of personal memories too. Accepting this amendment will not harm the institution; it will be to its benefit and to the credit of its trustees.
Baroness Hale of Richmond (CB)
My Lords, I am grateful to the noble Lord, Lord Hodgson, for moving this amendment and for having had the skill to devise an amendment within the scope of the Bill.
I would be failing in my duty if I did not draw your Lordships’ attention to the special report that was, very unusually, produced by the Select Committee on the Bill, on which served the noble Baronesses, Lady Fairhead and Lady Hayter of Kentish Town, and the noble Lords, Lord German and Lord Naseby, and which I had the honour of chairing, as the noble Lord, Lord Hodgson, has already referred to. We were all deeply shocked by the impasse which had been reached in relation to the governance of the hall. As we know, the hall is a charity, yet its governance is largely in the hands of the seat-holders, who have a direct financial interest in the running of the hall. This, as we have heard, is wrong in principle, but the hall is understandably fiercely resistant, as we have also heard, to any changes which would risk jeopardising the relationship that seat-holders have with the hall.
The Charity Commission, as we have heard, wished to impose a scheme upon the hall, and proposed to make a reference to the charity tribunal. It comes as something of a surprise that such references require the consent of the Attorney-General. Under the previous Administration, two Attorneys-General refused that consent. Nevertheless, a third Attorney-General, in her report to our committee, expressed her disappointment that the Bill was a missed opportunity to effect meaningful change to the governance of the hall.
Of course, there was nothing the committee could do; we could deal only with what was in front of us, and this House can make only amendments which fall within the scope of whatever Bill the hall chooses to promote. That is why I have congratulated the noble Lord, Lord Hodgson, on his ingenuity in devising something which, however limited, is within scope. It is noteworthy that the promoters of the Bill removed another clause which would have brought the governance of the hall into even more prominence.
I hope that the House will take note of the report, regret the impasse which has been reached, and perhaps express the hope that the Charity Commission will try again and that, this time, the current Attorney-General—for whom I have the greatest of respect—will not stand in its way. None of this, of course, is a reason to deny either the Third Reading or the amendment which the noble Lord has proposed.
Baroness Fraser of Craigmaddie (Con)
My Lords, I add my support to the work of my noble friend Lord Hodgson and add my name to the list of the hall’s fervent supporters. As others have said, it has been a beacon for over 150 years, and we all want to see it flourish for another 150. I believe we all agree that the hall needs a Bill. It currently relies on operating practices, memoranda and guidelines that may or may not have a legal basis. As the briefing circulated to some of my colleagues by the noble Lord, Lord Moynihan of Chelsea, states, the Bill’s primary purpose is to address these risks by putting current practice on to a clear and proper legal footing.
The amendment we are debating in the name of my noble friend—which, I note, is widely supported across the House—is not a wrecking amendment. It does not interfere with any of this, inserting, as it would, a new clause after Clause 4. I too pay tribute to my noble friend for getting an amendment that is within the scope of the Bill and proportionate. It simply addresses a potential conflict of interest—nobody is saying that terrible practices are happening, but there is a potential conflict, which troubles us—of charity trustees and members of the council who are able to gain financially from the decisions they take as to the running of the charity. It does not affect the rights of seat-holders who are not council members—who can still sell their Ed Sheeran tickets for many thousands of pounds if they are not a member of the council—and it does not prevent seat-holders being members of the council. It simply addresses the perceived conflict of interest issue that has, frankly, plagued the governance of the hall for far too long.
As other noble Lords have pointed out, in 1967 the hall chose to become a charity, yet it remains an outlier in charity governance and good practice. Such a conflict of interest would simply not be acceptable in any other charity. As we have heard, this is a matter of concern for the Charity Commission but, because of the peculiar nature of the hall, the Charity Commission has been unable to address it. It is very disappointing that members of the council do not seem to wish to address it in the Bill or at any other opportunity.
Being a charity trustee—I declare an interest as I run a charity and have sat on the board of the Scottish Charity Regulator—comes with clear expectations. It is a bit like it is for all of us, as public servants, with the Nolan principles: it is not good enough just to have integrity; you must be seen to have integrity. The Charity Commission has clear published guidance on conflicts of interest for trustees: you have to declare the conflict; consider removing it; and, if you cannot remove it, you must manage it, and you must record it. The commission considers conflicts to be serious where a majority of trustees have a conflict and/or when decisions involve significant money or risk and there is a conflict. As a charity, the governance of the Hall, with its majority of trustees or members of the council being seat-holders, is firmly in this space. This is what my noble friend’s amendment is trying to address within the scope of the Bill.
I apologise, as I will now get a bit technical. Although ownership of seats initially provided access to all events at the hall, the charity’s constitution, as amended in the 1966 Act, says that it can exclude seat-holders for up to 75 days per year for events other than a concert, recital or boxing or wrestling event, for 12 further days for any event, and for one-third of a series of six or more events which are consecutive and substantially the same. In giving evidence to the noble Baroness’s Select Committee on the Bill, the president of the council confirmed that the latest exclusion list stood at more than 100 days and 120 events, which, as he said, helped the charity to attract
“high-end artists who might not otherwise come to the Hall”.
The Council of the Royal Albert Hall decides which events will give seat-holders the right to receive tickets, which can then be resold on the open market, potentially at a significantly higher price than the face value. The trustees bring that proposal on which events to exclude to the AGM, and the proposal is voted on by members and passes with a simple 50% majority. This amendment aims to ensure that those council members who take the decisions each year, and any connected persons, must ensure that any tickets they do not use are sold through the ticket return scheme or suchlike—a scheme from which, I point out, they are still not losing out financially from, as all seat-holders are compensated for the excluded events.
However—this is really technical—I have one fear. In my noble friend’s amendment, proposed new subsection (1)(b) refers to
“the power to alter the number of events from which seat holders are excluded”.
My question is, “to alter from what”? If it is the number of events laid down in the 1966 Act, which is being altered each year in practice according to the proposal laid down by the trustees at the AGM, is there a danger that we are not in practice going to achieve our aims of ensuring that those with financial control over the charity are excluded from gaining from the decisions they make? By this wording, would the requirement for trustees to sell through the ticket returns scheme be triggered only if they varied the number of excluded events from that which is laid down in the 1966 Act? If so, is this a loophole that we can close?
Lord Carrington of Fulham (Con)
If noble Lords will forgive me, I am probably a fairly isolated member of your Lordships’ House in opposing this amendment. If the Front Benches will forgive me, I think somebody at least ought to speak on the other side of the debate that has happened so far.
I do not have a registered interest in the Albert Hall. I do not own a seat. I am not a member of any body involved in the Albert Hall. My own interest in it is purely that I live very close to the Albert Hall—as do many other local residents in that part of Westminster. My real interest is to ensure that the Albert Hall is run properly: that the building is maintained properly, that the security around the building is properly assessed and implemented and that crowd control is put in place in such a way so as not to harm the residents round about.
All of those things happen at the moment. The Albert Hall is very well maintained. As we have heard, it has a wide range of very successful events: pop concerts, classical concerts, sporting events, charitable events and private events such as the degree-giving ceremonies for universities. It is a very well-run body.
It is unquestionably true that, as a Parliament, we would not have set up the Acts which govern the Royal Albert Hall in the way that they were set up in 1867. It is a very odd and possibly unique institution in the way it is set up by an Act of Parliament, subsequently amended by further Acts of Parliament down the ages to reflect progress, time and changes in custom. We have to remember that it was set up at a time when those who are of a literary bent will know that Anthony Trollope was writing a very good book on corruption in the City of London called The Way We Live Now. Well, you can draw parallels to the Act that set up the Royal Albert Hall in the way it was done.
The way it was done was very straightforward. They decided to build the Albert Hall on the back of the Great Exhibition. Their ambition went way beyond their financial resources and the hall was in the process of going bust, so they decided that the only way to cope with this, because Mr Gladstone was certainly not prepared to put money in to bail it out, was to sell seats in perpetuity for 999 years from around 1867 to 1870. And that is where we are. The seats do not belong to the Royal Albert Hall, they belong to the seat-holders. We would change that; we would consider that to be the wrong way of doing it, but that is the way the Acts of Parliament are worded, and if that is going to be changed, we need a proper piece of legislation to change it.
That brings me on to my noble friend’s amendment, which I think is trying to address an issue that is more theoretical than it is practical. I say that because the Albert Hall, while it is a charity—and it gets financial benefits from being a charity, as we have heard, on rates and VAT and so on—is a commercial operation of an entertainment venue and it has to make a profit. The way it makes a profit is by getting people to come and use the hall to put on events, which it does extremely successfully. It makes a profit; it washes its face; it does not get any money from the taxpayer; it runs a commercial entity.
We can all object, perhaps, to the way that some parts of it are run, but it is run well and there are internal procedures in place to ensure that the perceived interests of the seat-holders on the council cannot influence who is going to book the hall. But it is not just internal procedures that stop it; it is the commercial reality. I have the figures. Some 1,268 seats out of 5,272 in the hall are owned by seat-holders. If you are trying to fill 5,000 seats in the hall, you have to get commercial sponsors of entertainment who are going to put on very large events to attract very large audiences. It is much bigger than most other venues in London. The way to do it, if you are running an event like that, is to maximise seat sales and sell every seat in the venue.
What happens at the Albert Hall is that to attract major concerts—the rock concerts that the noble Lord, Lord Bassam, attended in the past—it has to make sure that seat-holders, who, as I say, represent 24% of the seats but 46% of the high-priced seats, have no right to attend that concert. It happens at the moment because it could not attract the promoters of the major pop concerts unless it did.
I think my noble friend’s amendment is unnecessary at this stage. I think it also runs into the problem that unquestionably the Royal Albert Hall would withdraw this Bill if that amendment was passed. As we have heard, this Bill is to try to increase the number of events that it can put on without seat-holders having the right to attend. It is also designed to stop some seat-holders taking the Royal Albert Hall to court because it is currently acting outside its existing legislation.
I hope that we do not accept this amendment. I hope that we pass the Bill because I am very keen to ensure that the Albert Hall carries on running as it does now, regardless of whether in the future we come back to review the whole structure and ownership of seats of the Albert Hall, but that would take primary legislation in this House to do, and it should not be done by a, frankly, cobbled-together amendment to the Bill. My interest is purely to ensure that the Albert Hall is run properly and profitably, is not a burden on the taxpayer and, above everything else, is a pleasant neighbour to people such as me who live close to it.
Lord Moynihan of Chelsea (Con)
My Lords, I support the Bill but oppose the amendment, which would undermine the Royal Albert Hall, its finances and, indeed, its future. I declare my conflict of interest as a seat-holder at the Royal Albert Hall and as having previously worked unpaid on its council for seven years, for four of them as president of the hall. Noble Lords trust each other to behave impeccably with regard to such conflicts, and I hope they will trust me similarly. In the case of the conflict of interest at the Royal Albert Hall’s council that the amendment seeks to address, it is again precisely of a type that we deal with every day in this House, and it is dealt with there, just as this House deals with its own conflicts. When president, I instituted a conflict of interest committee whose members are non-conflicted trustees. They meet after every council meeting at the hall to ensure that there has been full compliance with the hall’s ethics code. Noble Lords will understand that that is a more rigorous process than our own House sees necessary to apply to itself. That conflict committee has not once expressed concern about how council members have behaved at any meeting.
The entire governance set-up, including this inherent conflict of interest, was approved by Queen Victoria herself, who stated that she believed that the recently deceased Prince Albert, after whom the hall is named, would have approved of it. It was initially presided over by the then Prince of Wales. When he resigned as president, his successor was the then Duke of Edinburgh. The governance structure then and since is precisely what has led to the hall’s great success. Had Simon Rattle attempted to build a modern concert hall in London under the same structure, it is likely he would have succeeded and we would have another great concert hall in this capital city of ours, but he sought government funding instead and has now abandoned the attempt.
Misunderstanding was created and repeated at Second Reading and again now, originating from a petition that misread the purpose of the Bill. The misinformation about the hall I have heard today would take me far longer to correct than your Lordships’ patience would ever allow. For example, the petition asserted that the petitioner resigned from the hall’s presidency
“because he had serious concerns about the way the Hall was being run”.
That is not so. He left because he was asked to leave by his own council after a no-confidence vote, due to his rudeness both to them and to seat-holders. There is talk of “sustained public criticism” of the administration of the hall, but that criticism sprang mostly from that one individual. It is hard to see how the allegations can have force when opinion polls show the hall to be Britain’s, and the world’s, best-loved concert venue.
Lord Moynihan of Chelsea (Con)
If noble Lords will hear the end of my sentence, they might understand why I caught that impression. The Bill Committee allowed someone with no locus standi to address the committee for half an hour, and then refused to allow the hall’s representative to present the other side—
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, I remind all Members of your Lordships’ House that we are to be comradely— although that is probably not the appropriate language. The use of language and how we refer to each other is very important, especially when it comes to being accurate.
Baroness Hayter of Kentish Town (Lab)
My Lords, I was not going to speak because the noble and learned Baroness, Lady Hale, did much better than I could in explaining what we did on the committee. But I have to note that on the night before we met, having prepared for this for some weeks beforehand, the Royal Albert Hall tried to get me to recuse myself on the allegation of something that had happened 10 years ago: that somebody had praised me on a website. The night before, the hall thought I should stand down from the committee. That is how the Albert Hall dealt with us as a committee. We did not hear from the people whom we then decided did not have locus standi. Therefore, I hope the noble Lord will withdraw what he just said about our committee.
Lord Moynihan of Chelsea (Con)
I express my regret to the noble Baroness for any inadvertent inappropriate language, but I repeat that an individual who it was agreed had no locus standi was allowed to speak for half an hour before the Bill Committee, and then the Royal Albert Hall was refused permission to put its own side of the story.
Baroness Hayter of Kentish Town (Lab)
I am really sorry, but I do not think we can allow that to be said. Maybe it would be better for the chair of the Committee to say this, but I do not think an allegation like that, which is so inaccurate, can be made.
Baroness Hale of Richmond (CB)
My Lords, I did not expect to have to answer that sort of accusation. The Select Committee was formed because there was a petition against the Bill from three people. The hall objected to the locus standi of the petitioners, and we heard both sides of that. That was when we heard from the petitioner. He was allowed to make his case for having locus standi. The hall was allowed to make its case that he did not have locus standi and nor did the others, and we determined that they did not have locus standi. Nevertheless, the hall went on at enormous length to address us on the virtue of its current arrangements. Because of what we learned as a result, we decided that the situation—the impasse—was sufficiently troubling to draw to the attention of the House. That is all. We certainly heard both sides of the story. I have to say, having spent decades of my life as a serving judge whose job it was to hear both sides of the story, I have been particularly upset by the noble Lord’s accusation.
Lord Moynihan of Chelsea (Con)
I regret any upset that I may have caused the noble and learned Baroness. Recollections may vary.
I have not completed my speech. As we have heard from my noble friend Lady Stowell, the Charity Commission also wishes to hijack this Bill. However, the commission has the power to intervene directly if it believes there is a problem but has declined to do so. The Bill is straightforward and simple, seeking to regularise an informal arrangement, already prevalent for many years, whereby seat-holders voluntarily vacate their seats for scores of shows each year. The hall’s executives—not, as has been alleged, the seat-holders—choose which shows they vacate.
The charity benefits by millions of pounds a year from this and other voluntary benefits ceded by seat-holders. The hall’s financial success has happened precisely during the recent period in which the disaffected individual has waged his campaign against it, but the new money allows the charity at last to spend the needed up to £10 million a year to upgrade its vast Victorian grade 1 listed building.
The hall has now spent 10 years trying to get this Bill passed, eight of them in persuading the Charity Commission to give permission to proceed. It is now essential that the Bill be passed, precisely because of those disaffected three seat-holders that the noble Baroness, Lady Fraser, mentioned, who are taking the hall to the High Court in a bid to ban the transfer of benefit from seat-holders to the charity. If the High Court agrees with them, the charity will lose millions from its annual surplus. I am cutting out most of the rest of my speech and am about to finish.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I ask the noble Lord to bring his speech to an end. Because of the length of the interventions I tried to give additional leeway, but we are now exceeding our time and I would be grateful if he could bring his speech to an end.
Lord Moynihan of Chelsea (Con)
I will do my best; I have just a little bit left. As president of the Royal Albert Hall, I think the House deserves to hear from me, as against the many who did not know.
I and so many current seat-holders have, over many years, put our hearts into making the hall and the charity a renowned success. It has been anguishing for all the hall’s members to watch misunderstanding and misinformation about the hall and its governance gain currency in this noble House. I have made an overall loss in income—not a profit—over the 30 years I have owned my seats. I made a profit for the very first time last year, partly because I spent so many evenings in this House, and I paid tax on it, of course. Many other seat-holders are the same. I feel sad that seat-holders and trustees are being so misrepresented and traduced.
I beseech noble Lords to reject this unworkable, impractical, misconceived, unreasonable, wrecking amendment and to pass the Bill unamended. Unless that is done, the Royal Albert Hall could end up badly damaged—something that this House has in its hands to prevent.
The Earl of Effingham (Con)
My Lords, I thank my noble friend Lord Harrington of Watford for sponsoring this Bill on behalf of the Corporation of the Hall of Arts and Sciences. He has done a tremendous job during the passage of the Bill as it worked its way through the various stages in your Lordships’ House. I also thank other noble Lords who have been involved with the Bill, notably my noble friend Lord Hodgson of Astley Abbotts, the noble and learned Lord, Lord Etherton, the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Barker, who have all put their name to the amendment that has been tabled.
The Royal Albert Hall is a great British institution. It has hosted the world’s most celebrated and famous musicians, performers and speakers since it opened on 29 March 1871. It has seen monumental figures such as Winston Churchill, cultural icons such as Dame Shirley Bassey, and sporting events such as Britain’s first indoor marathon. It is not just the historical significance of the hall that makes it so special. To this very day, it continues to highlight the best talent from across the world. Only this week, it has hosted events ranging from classical coffee mornings to late night jazz and even “Barbie The Movie: in Concert”.
As we have just heard, all noble Lords understand and appreciate this but it is apparent that there are differences of opinion regarding the governance and ownership arrangements of the hall. When this Bill came before your Lordships’ House for Second Reading, the government response was given by my noble friend Lord Parkinson of Whitley Bay, who sends his apologies for not being in his place. He set out then that the Government do not customarily take a position on private Bills. Of course, the roles are now reversed: we are on this side of your Lordships’ House as His Majesty’s Official Opposition and the responsibility for responding on behalf of the Government is taken by the Minister. Although we no longer respond on behalf of His Majesty’s Government, we do not believe that it is our place to take a firm stance one way or the other.
Many important points have been raised by noble Lords and other parties on both sides of this debate. We note that some noble Lords, such as my noble friend Lord Hodgson of Astley Abbotts, have concerns regarding the potential for a conflict of interest for the trustees of the corporation, owning, as they do, seats in the hall as their private property. It is an understandable objection that this arrangement conflicts with modern charity law, as has been noted by the Charity Commission and noble Lords. These concerns are reflected in the amendment to the Bill in my noble friend’s name and I am pleased that noble Lords have had the opportunity to discuss this in further detail.
We also understand the position of the corporation and the trustees. They face the unenviable situation of having to come to Parliament with a Bill whenever they wish to alter their administrative and managerial affairs. This is, of course, due to the corporation’s unfortunate entanglement with Parliament by virtue of its foundation by an Act of Parliament. I believe that my noble friend Lord Harrington of Watford will address both sides of the debate, and I am confident that we will be able to resolve the matters at hand in, I hope, a constructive and collaborative fashion that will be for the benefit of both the hall and all those people who enjoy its contributions to our national cultural life.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I thank all noble Lords who have taken part in the debate. In particular, I thank the noble Lord, Lord Hodgson of Astley Abbotts, the noble and learned Lord, Lord Etherton, the noble Baroness, Lady Barker, and my noble friend Lord Bassam of Brighton for the debate which their amendment has generated. I also thank the noble Lord, Lord Harrington, in advance. As the government-appointed trustee at the Royal Albert Hall, he has the task of bringing this matter before us today. We look forward to hearing from the noble Lord. I also thank other noble Lords, including the noble and learned Baroness, Lady Hale, for leading the work of the Select Committee.
As somebody who has been the head of governance for a national charity, I have a geekish interest in all things to do with charity law, so I have found doing the prep work for this debate absolutely fascinating. As the noble Lord, Lord Hodgson, and pretty much every other noble Lord who has spoken has made clear, it is important to note that the Royal Albert Hall is an iconic building. As the noble Baroness, Lady Stowell of Beeston, made clear, it has hosted many national moments. It hosts some of the world’s leading artists from many different genres, as well being the home of the BBC Proms, which have been held there every summer since 1941. It truly is an iconic venue, both nationally and internationally, and one that holds a place in all our hearts. Noble Lords can be united on that point, even if there were differences of opinion on other points in the debate.
The hall is still used for a range of events. While I have never seen Jethro Tull, either in the Royal Albert Hall or elsewhere, my own experience of the Royal Albert Hall has been as diverse as seeing my niece and goddaughter play at various events for schools, which give children and young people the opportunity to play in an incredible venue, as well as attending classical concerts and watching the remarkable Cirque du Soleil.
I will make one point before coming to a rapid conclusion. The noble Lord, Lord Hodgson, mentioned seats being sold at inflated prices. Noble Lords will be clear that this is an issue of concern to the Government. At the moment, as part of our live event ticket resale consultation, we are consulting on a range of measures, including introducing a price cap on the resale of tickets for live events. The consultation invites views on the most suitable level for a price cap on ticket resales, ranging from the original price to an uplift of up to 30% on that price to cover admin costs.
In relation to whether this consultation could fix the perceived conflict of interest, the measure proposed in the consultation would clamp down on unfair practices in ticketing, making tickets easier to buy and cheaper on the secondary market. It is not aimed primarily at addressing wider issues relating to charitable law.
The Government recognise that a number of your Lordships tabled this amendment due to concerns about the potential conflict between the private interests of seat-holding trustees and the hall’s charitable objectives. This point was clearly made by the noble Lords, Lord Hodgson, the noble and learned Lord, Lord Etherton, my noble friend Lord Bassam, the noble Baronesses, Lady Barker, Lady Stowell of Beeston and Lady Fraser of Craigmaddie, and the noble and learned Baroness, Lady Hale.
It is important to note the speeches against the amendment made by the noble Lords, Lord Carrington of Fulham and Lord Moynihan of Chelsea. In the Government’s view, it is regrettable that these matters relating to the conflict of interest inherent in the hall’s governance model have not been resolved prior to the introduction of this Bill. However, as the noble Earl, Lord Effingham, made clear, the Government do not generally take a position on Private Bills unless they contain measures which would contravene public policy. The same can be said of amendments to Private Bills. In our view, the Royal Albert Hall Bill does not contain any provision that contravenes public policy, and neither does this amendment. Therefore, respecting the tradition of Private Bills that come before this House, the Government will remain neutral on the amendment.
Lord Harrington of Watford (Non-Afl)
My Lords, I do not know quite what to say. I will try to keep my comments brief, because I do not want to incur the wrath of the noble Baroness, Lady Anderson, telling me to keep quiet. I shall try to be as brief as I can, but this is a serious matter to me.
I am here because I am a trustee of the Royal Albert Hall. As the noble Baroness, Lady Twycross, said, I was appointed to that job by DCMS. I am not a seat-holder. I have put in my registered interests that I am a trustee of the Royal Albert Hall, and am very proud to be one. When I took on that job, I was very cynical about the governance of the hall. I would like to think that I am an experienced trustee of charities—not in a professional sense, but I have been on the board of quite a few—and am fully aware of fiduciary duties and the responsibilities of a charitable trustee.
I have changed my mind about this because of my experience of what actually happens at the hall. If noble Lords will bear with me, I will explain why I have reached the conclusion that the measures which my noble friend Lord Hodgson and others have outlined in the amendment are not really necessary. I should also thank the noble Lords, Lord Carrington and Lord Moynihan of Chelsea, for speaking on behalf of the substantive Bill and opposing the amendment. For the sake of time—and the noble Baroness, Lady Anderson —I will not repeat those arguments.
I think most Members of the House are aware that the reason this Bill has come forward is not to do with governance: the aim is to regularise what is happening on an annual basis, where a significant number of seats are given by the trustees to the benefit of the hall through an arrangement on exclusives, which has been challenged, as my noble friend Lord Carrington mentioned in his speech. It has also been mentioned that there is a High Court action at the moment by three members who are trying to stop this. So the intentions of the Bill, I think it is generally agreed, are correct. It seems absurd that, in an organisation such as the Royal Albert Hall, this has to be done by an Act of Parliament, but that is because of its history and I thank noble Lords for their patience with that.
The members have the ability to sell their tickets as they wish, because they effectively own a property. For historical reasons, they own it and are entitled to do what they like with it. This is not a question of reselling tickets for profit, because I think it is mutually agreed that, as property owners, they are entitled to do this. So, first, what do they do to contribute to the charity? They pay what is known as a seat rate annually. I suppose it is akin to a service charge in a block of flats or something like that. Secondly, they forgo the right to attend many events, so their tickets are available for public sale. This is done annually by a vote, as mentioned during this debate, but it is open to legal challenge, hence we have the Bill.
The scope of the Bill does not include reform of the hall’s governance. It is a Private Bill and, basically, Private Bills have to be founded by a promoter who proves the need for this measure. This does it, and as the promoter—I have never been called a promoter in my life before, but for this purpose I am representing one—I say that we do not believe there is a need for a constitutional review, and, if there is, this is not the place to do it.
I would like to thank the noble and learned Baroness, Lady Hale, for the work that her committee did. Having read it carefully, I feel that everybody was given a fair hearing and would like to put that on the record. I listened to my noble friend Lord Hodgson—I use the words correctly in this case—very carefully and I would like your Lordships to consider the amendment in three ways.
First, what merit does it claim to have? Merit is important in these things. Everyone, not least the hall’s trustees themselves, understands that there is, without any question, a conflict of interest for some of the trustees who own seats themselves. No one is in denial about that. The question is not whether they are allowed, with their private interest as a trustee, to do what they want with their own property, but whether this impinges on their duties and performance as a trustee.
My noble friend was very gracious, as was everybody else, in saying that the hall is a great national institution, but his argument was, basically, that it is a great national institution in spite of the trustees. I would say it is a great national institution because of their dedication to the cause of the charity and the financial sacrifice they are prepared to make for the benefit of charities.
Conflicts are accepted. The question is: how are those conflicts dealt with? With transparency, is the answer. Obviously, there are several trustees, including me, who are not conflicted in any way, but there is a conflicts policy and a committee to scrutinise conflicts that is made up of non-conflicting trustees, which I am part of. There is no denial that there are conflicts, but they are dealt with effectively by a committee of independent trustees, and it works in practice. I have seen no examples of abuse. I have never been asked about this by my noble friend or by anybody else and I have never been given specific cases—other than the fact that some trustees are able to sell their tickets—or told that they have done anything to skew their decisions as a trustee in their own personal favour. If, for example, I had heard trustees lobby to keep their tickets for the most expensive concerts and not put them in for the common good, that would be clearly incorrect. I state on the record that I have experienced no possible example of that. I would say so if I had.
Secondly, does a Bill such as this, as drafted, achieve its intended purpose? The answer becomes quite technical. The amendment is founded on the belief that a resolution by the hall’s members to award the exclusives to the hall amounts to them doing something for themselves. Noble Lords have argued that Clause 4 will allow members and trustees to manipulate for their own benefit, but the hall does not award anything to the members; the members would give tickets over for charitable benefits. They cannot sell them through the ticket return scheme, as these are not resale tickets—they own them.
Finally, what impact will this amendment have if it is passed? I would argue that, if it is passed, and if the hall does not continue with the Bill, the hall will be between a rock and a hard place and in difficulty either way. At the moment, all seat-holders give up about 25% of their tickets, which they will not have to. The chief executive has calculated that the benefit of that to the hall is about £1.5 million per year. That makes a material difference to the quality of the events, the programme, and everything that can be put on, because the promoters of those events want, as has been mentioned by the noble Lord, Lord Moynihan of Chelsea, them to be available for the common good, and they need all 5,000 tickets.
All we are really doing in the Bill is ensuring that what is currently done is put into a legal capacity, so that it cannot be challenged by members. I would sum it up with the cliché: if it ain’t broke, don’t mend it. You could use that argument for this House—if you started with a blank sheet of paper, it would probably not be designed quite in the way it is today. I am sure it would be the same if Prince Albert was able to say in those days that the Government had the money to build such a wonderful institution, but they did not, and so the hall has evolved. The hall is an extremely successful institution and it seems to work very well— I say that as an independent trustee. The conflicts are open and they are dealt with.
I do not support this amendment. I oppose it somewhat reluctantly because of my respect for my noble friend Lord Hodgson and others. It is incorrect for this Bill, which is a narrow Bill, and I implore Members not to vote for the amendment on this occasion.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I know the House is anxious to get on, so I will be pretty quick. It is normally good manners to namecheck your supporters. I hope that those who have spoken in support of this will accept a group thank you for speaking up and supporting the amendment. I do that not because I do not value the support or to show bad manners, but because I sense that the House wants to move forward.
I will spend one minute on the speeches made opposing the amendment, because that is important. My noble friend Lady Fraser of Craigmaddie raised the question of a loophole. There may be a loophole but, assuming we pass this today, we will send it down to the House of Commons and there will be another chance to have a look at it there to see whether it achieves what the noble and learned Lord, Lord Etherton, and I have set out in the drafting.
Much of what my noble friend Lord Carrington said was not relevant to the Bill. This will not affect the running of the hall or the policing around his flat. I was grateful for the history lesson but, as is often the case, it forgot the fact that the hall became a charity. If it had gone on as it had started, we would be in a different place, but the hall chose to become a charity, and that took it into a different area of the law. You simply cannot run with the hare and hunt with the hounds. You cannot say that you want to be a commercial organisation here but a charity there and think that you can get away with it, in the year of our Lord 2025. My noble friend and, I am afraid, my noble friend Lord Harrington, have a familiar phrase: “If you don’t do it, we will withdraw the Bill”. That is what happens when you talk to the hall; it has always said that nothing needs doing now and, if there is something that needs doing, it will be done later. And so we go round and round on that point.
Finally, my noble friend Lord Moynihan of Chelsea made a number of assertions. He said—this is more sand in the eyes—that I had not helped in getting to the hall the names of the people to whom I had circulated the amendment. I thought this might happen, so I brought the letter with me. It is addressed to Ian McCulloch, the current chairman, and reads: “Dear Ian, thank you for this prompt follow up. I have read your briefing with interest. As regards the names of those Peers to whom I sent the briefing, I am afraid I do not have a list. Probably best if you want to ensure that no stone gets left unturned you send your briefing to every Peer”. What is unhelpful about that? I am told that I was being unhelpful in sending that. That email was sent on 27 January.
I think my noble friend Lord Harrington is
The boy stood on the burning deck
Whence all but he had fled.
He has worked very hard on this, and I have enjoyed working with him on it, but he too misunderstands. We agree with the intentions of this Bill, but we say that we need some more hurdles. The hurdles are in the amendment that we have tabled, and we have been round those already. My noble friend believes that the Bill will be withdrawn, so back we go again, with no progress ever made to deal with the fundamental position that there is a conflict. We have been round and round this, year after year. I believe it is time now for the House to make up its mind, decide what it wants to do and decide whether there is a conflict. I beg leave to test the opinion of the House.