Royal Albert Hall Bill [HL]

Lord Harrington of Watford Excerpts

Thursday 19th October 2023 Lords Chamber

Moved by

[Lord Harrington of Watford]

That the Bill be now read a second time.

[Lord Harrington of Watford (Con)]

My Lords, I felt I was reasonably experienced at doing Bills from my career in the Commons and my experience here. I have taken through quite a few Government Bills, usually with consensus, and I have done a Private Member’s Bill, which became law. I was not aware of the existence of a Private Bill, so this a new procedure for me. I beg to move that this Bill now be read a second time.

I declare my interest as a trustee of the Royal Albert Hall. I was appointed by the DCMS which, under the constitution, is entitled to a trustee. Without a doubt, most people—even the detractors of the Bill—would say that the Corporation of the Hall of Arts and Sciences, which everyone calls the Royal Albert Hall, is one of the nation’s great cultural institutions. Under the constitution, there a number of appointed trustees from other institutions such as the Royal College of Music—usually those geographically surrounding the hall. This stems from the original constitution of the hall and how it was built. Most people know and see the hall as part of the UK’s social and cultural fabric. Everybody knows the big, televised things like the Last Night of the Proms, the Royal Variety Performance and the Festival of Remembrance. However, not everybody knows—I did not know myself before I became a trustee—of its unique contribution to this country. As with many things in the United Kingdom, there are institutions that exist which perhaps would not be designed in the same way if they started now, but they do exist and do a very good job. It is fair to say that our parliamentary system is the classic example of that.

The hall itself was the brainchild of Prince Albert, who died quite shortly afterwards, and the corporation was established to enact his vision. The hall was opened in 1871 and became a charity in 1967. It has about 450 employees, and there are 400 events a year which attract close to 2 million visitors a year. It has an engagement programme that reaches out to more than 180,000 people of all ages and backgrounds. It was Prince Albert’s vision that the hall should serve all people in promoting the arts and sciences. From the beginning, the hall was part-owned by people who funded it by a form of public subscription where people paid to become seat-holders. In return for their purchase, seat-holders where able to attend and enjoy the performances and were given the full responsibility of running the hall, and they are an integral part of it. It is a unique model called a “hybrid model” and has been the core of the hall’s constitution and governance since its origin. I reiterate my view that it is a system that actually works because, after all these years—one and a half centuries—the hall exists and does a pretty good job representing this country with all the people who are involved in it.

The hall is governed by a council of 23 trustees and an elected president. Unlike myself, the majority of trustees are elected seat-holders, and are elected from the seat-holders. There are 319 seat-holders who together hold 1,268 of the hall’s 5,272 seats. Under the constitution, the seat-holders are members of the corporation, and they range from big companies to charities to individuals, some of whom have family ownership going back to the beginning. It is the long-term nature of their ownership that has created this unusual tie; it is the bond between the hall and its members that is its cornerstone today.

There are two ways in which all members support the hall financially, on an equal basis. First, they pay an annual levy, or “seat rate”, and, secondly, by forgoing their tickets for a certain number of days so there are more that the hall can sell commercially to non-seat-holders, and these are known as “exclusions” or “exclusivities”. The average seat rate is £1,900 plus VAT and the exclusion is for about 100 days per year of performances, which obviously brings significant revenue to the hall and increases accessibility to all.

This leads me to the substance of the debate which, following a periodic review of the constitution, seeks to amend the terms of the seat rate and exclusions. The Bill itself contains three substantive clauses. Clause 3 seeks to remove the provision of the cap to the seat rate which, under the constitution, is set by the members every six years. As a quid pro quo, the voting threshold for agreeing the annual seat rate is being changed in the Bill from 66% to 75%, which is the threshold now for the six-year cap. Members were restricted by the six-year cap in how much they could contribute, and recent unexpected inflation has demonstrated the artificiality and the difficulty in forecasting a six-year cap. The restriction on how much the members may agree to contribute will no longer apply. Clause 4 provides a mechanism for members to agree to exclusions over and above, and of a different form from, those permitted by the Act of 1966. The current process by which members do this is of doubtful validity, but it is well intentioned. It leaves the hall exposed to the risk of challenge of acting unlawfully, and the clause will put this on a proper legal footing. It has been a long-running problem for the hall, which we hope can be resolved through the Bill. Administratively and legally, there is a pressing need for this clause.

Clause 5 enables the hall to sell, with membership, two extra seats in the grand tier boxes with the consent of the existing seat-holders in those boxes, and to sell membership to a few existing seat-holders in grand tier boxes who do not have membership. Doing so will enable the hall to raise substantial new capital for the hall’s charitable purposes.

We are debating this Bill in Parliament as a private Act is needed, as I explained before, because the intended changes affect the private rights of members. There is no other way to achieve these means; I promise that, if there were, I would not be standing here today.

When I took on the trusteeship, I was not aware of the acknowledged conflict of interest between seat-holders legally profiting from their seats and the charitable purpose of the hall. I am very well versed in these matters, and they have been there for 150 years without any harm to the hall. In nearly all instances, the conflict of interest is in fact a shared interest, because in so many cases the interests of the hall and the interests of members are aligned. On the few occasions they are not fully aligned, there is a system of managing this. It has processes in place, including an independent conflicts of interest committee that scrutinises at close quarters the decisions of the trustees. We have to remember that in UK law it is the private property of seat-holders and it always has been. Their ownership is separate and legally stands apart from the hall; they do not form part of the charity, and their use within the rules does not deprive the charity of anything. Indeed, neither the charity nor the hall could exist without seat-holders.

When this Bill came up, I was asked to put my name to it on the basis that these were small changes that were legally necessary to ensure that the hall could continue operating in a legal manner. It was not my intention or my expectation that the Bill’s opponents would use this process as an opportunity to put forward their well-known objections to these conflicts in the governance of the hall. I pay tribute to all the people I have met, in particular my noble friend Lord Hodgson for his continued and good-natured engagement. I must confess that before my first conversation with him I was quite naive about these other issues, which I am now fully briefed on and aware of.

I have discussed this with nearly everybody who has put their name down to speak in this debate, and the Charity Commission has also contacted me. I will listen to all contributions to the debate with interest and an open ear, to inform my role as a trustee. I believe that in its intent and extent the Bill is a relatively modest measure and can only benefit the hall. I also believe it would be wrong to allow the critics of the hall—on significant wider constitutional matters—to stand in the way of this small piece of legislation. Whatever the merits of what they say, this small piece of legislation is needed.

At the Bill’s future stages there will be plenty of opportunity for its opponents to say exactly what they think, because it is the custom and practice of the House in relation to private Bills to give the promoter the opportunity in Committee to prove the need for it. I hope that those points are without the scope of the Bill and can be discussed on another occasion, because I believe in the Bill. Nevertheless, the onus of proof is on the promoter, and when it comes to Committee they will no doubt put the hall to proof in the usual way. I beg to move.

[Lord Winston (Lab)]

Before the noble Lord sits down, might I ask him, because I do not know, what income a seat-holder might make from a year’s lease of his seat to people who want to sit in it? As a person who has tried to book seats for a charity, I have the impression that it has been very difficult to do that in the Albert Hall. I would be grateful to know what profit margin a member might have.

[Lord Harrington of Watford (Con)]

I thank the noble Lord for his question. I am embarrassed to say that I do not know the answer, because these are their seats and they are entitled to sell them as they think fit. I am afraid I cannot answer that question. I have also been involved in a number of charities, which have used and booked the hall. There are lots of seats available that do not belong to the seat-holders, and I know that many seat-holders give some of their seats to charities to help them.

--- Later in debate ---

[Lord Harrington of Watford (Con)]

My Lords, I have never been in a debate where I have been complimented so much at the beginning of everyone’s speech and then had almost everything I said disagreed with afterwards. I thank noble Lords for their contributions. The noble Baroness, Lady Fraser, referred to the people who spoke as “gadflies”—I believe that was the expression. With due deference to my noble friend Lord Hodgson, Robin Hodgson and his merry men comes to mind, although I do not think he would quite articulate this Bill in terms of taking from the rich and giving to the poor. I will leave that for him to consider.

In all seriousness, the core point, as far as I can tell, is that the hall’s perspective of the conflict point—which has been brought up by nearly all speakers—is that the existing arrangements with the majority of what would be perceived as conflicted trustees are not really enough for a charity to progress itself in a charitable manner.

My noble friend Lady Stowell asked me when the conflict rules were last changed—that was in 2022—and what discussions there have been about conflicts. There is an independent conflicts committee, none of whose members are trustees. That meets routinely after every council meeting, so there is a process. I accept the argument that it may not be enough and that it does not deal with conflicts properly. That argument can be made, but it is not taken lightly.

[Baroness Stowell of Beeston (Con)]

Just to clarify, that conflicts committee meets after the decisions have been made by members who are conflicted.

[Lord Harrington of Watford (Con)]

Other than the fact that ongoing conflicts are discussed—it is not the conflicts that have come out in that council meeting, it is future conflicts. However, I accept there is an argument. I would argue, of course, that it is nothing whatever to do with the Bill. It is an argument, and it was very well articulated by other noble Lords.

I was impressed, as ever, by my noble friend Lord Hodgson’s and other noble Lords’ screenshots—I do not know how to do them—and technical knowledge, and by my noble friend’s serious point about tickets for Ed Sheeran and others going for large amounts of money. However, that implies that the people who own those seats have done something wrong by selling them. They own them and they are selling the seats that belong to them on the market, however crazy the market might be. I am pleased to see present Sharon Hodgson, the chairman of the APPG on such matters. She and I have discussed viagogo, for example, but I do not believe that that issue is relevant because those people own those seats.

[Lord Hodgson of Astley Abbotts (Con)]

My noble friend really cannot be allowed to get away with that statement. The fact is that we have made a distinction between trustees who are seat-holders and are therefore deciding which concerts seat-holders can offer seats for, and those who are not. People who have no conflict of interest are free to sell seats they do not they want, but once you become a trustee, the name of the game changes. With great respect to my noble friend, I do not think the way he is putting it makes that distinction clear enough.

[Lord Harrington of Watford (Con)]

My noble friend makes his point clearly and with great lucidity, as ever.

Quite a few points were made about the Covid loan—as has been said, it was given according to the decision of an independent committee that DCMS, I presume, appointed for all the loans that took place—and whether surplus money should be used to pay back the loan early to the Government. Any charitable body which has a loan that it can pay back at 2% would not be doing its duty for charitable purposes if it did not invest it in something that would perhaps pay back at 4%. I do not believe that that point is relevant to the conflict of interest issue.

The valuation of seats was raised. My noble friend Lord Hodgson believes that seats should be valued by an independent evaluator nominated by the Charity Commission, or put through the Charity Commission. I remind him that, although the clause says that the trustees should take professional advice, all trustees, whether they are appointed, like me, or are seat-holders, are subject to the duties of trustees under the Charities Act, which means that they would be in breach of that duty if they sold them at less than the available market price. One noble Lord told me that some of these seats have already been allocated and sold. I am not aware of that, but I intend to find out. I would disapprove most strongly if that were the case, but I do not believe it is.

The noble and learned Lord, Lord Etherton, made, as one would expect, a very significant contribution regarding the legal aspect. He made a point about charities having separate commercial entities. I have some experience of that, having been chairman of a charity that had a separate commercial entity. That happens all the time. However, that is different because the commercial entity of the charity is set up for that purpose. In the case of the hall, the commercial interests are owned by the seat-holders. From that perspective, they are there in two capacities: because they are selling their seats and because they are trustees of the hall, trying to enforce its charitable purposes.

[Lord Bassam of Brighton (Lab)]

There is a point which we need to reflect on. In putting his argument, the noble Lord is seeking to protect those who have a conflict of interest. He is right that the hall can have a commercial side to its charitable practice, but it cannot surely be right that seat-holders be able to exploit its being a charity. Those seats are sold by seat-holders at a vastly inflated commercial rate that reveals no benefit to the hall itself. That is one of the fundamental objections we have voiced clearly today. Until this legislation answers that question, I cannot see the merit in having it before us.

[Lord Harrington of Watford (Con)]

I thank the noble Lord for that. He made it clear that he felt that his Benches would not be able to support the Bill in its current form, but I do not think that is particularly important today, because I think the last time a Private Bill such as this was divided on was in the 1930s. If I remember correctly, it was a railways Bill.

It has been my duty and pleasure to propose this Bill—perhaps a masochistic form of pleasure, given what has been said in the past couple of hours. The serious point is that I am proud to be a trustee of this charity, and I believe that the trustees act in a manner commensurate with its interests. If I had experienced any conflict of interest or if any decision of the council had been taken that was in conflict with the hall’s charitable purposes, I would not only have resigned but publicised the reasons for doing so. However, I have not found that up to now.

[Lord Winston (Lab)]

Perhaps the noble Lord can tell the House what he feels about the following. At the moment, London is under massive pressure for performance space, and a number of theatres may be at risk of being closed. The Coliseum, for example, which is occupied by the ENO, will clearly be under pressure as well. The great point about this wonderful institution, the Royal Albert Hall, is that it is a monument to culture—in fact, it is said that it is for science as well, although I must say that I cannot remember the last time there was a science meeting there, it was so long ago. There is surely a duty for the trustees to recognise the importance of the Albert Hall, particularly at this time, when the arts are under such pressure.

[Lord Harrington of Watford (Con)]

The trustees recognise that. The noble Lord’s point is one for any cultural institution of any sort. They are conscious of that point, and the number of performances that are put on effectively by the charity which would not be financially viable to be put on commercially shows their commitment on that point. However, he makes a specific point about financial pressures on the hall. I argue that it is a very well-run institution. Obviously, any surplus goes back to the charity. We had very difficult times during Covid, like all cultural institutions, and we are grateful for the Government’s loan. However, we are very conscious of that issue.

It is traditional with private Bills for the House to wait for a Third Reading when it considers the Bill as amended, admittedly by a different form of Committee to that we are normally used to in the Commons and the Lords. The House will then make its judgment as a result of the Committee and the Third Reading debate. In the meantime, I hope that I have answered some of the questions that were put forward. I argue that some of them are certainly without the scope of the Bill. It is my duty to ask the House to give the Bill a Second Reading.

Bill read a second time and referred to the Examiners.