Royal Albert Hall Bill [HL]

Baroness Hale of Richmond Excerpts

Wednesday 29th January 2025 Lords Chamber

[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?

--- Later in debate ---

[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.