Royal Albert Hall Bill [HL]

Baroness Stowell of Beeston Excerpts

Thursday 19th October 2023 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, it is a great pleasure to follow the noble Viscount, Lord Chandos, and I echo his remarks about my noble friend Lord Harrington and the way he introduced this Second Reading debate. Like the noble Viscount and my noble friend, I too am a great admirer of the Royal Albert Hall in terms of its importance as a cultural and national institution. It has formed part of my own past too; in fact, only the second time I visited London was to go to the Royal Albert Hall as a teenager, so it is something of which I too have fond memories.

I also recognise, as my noble friend made clear, that he is one of the minority group of five appointed trustees and not one of the 18 majority seat-holders. So I reassure him that my criticisms are not directed at him—but I will have a question or two for him as a member of the hall’s trustee board.

I am grateful to my noble friend Lord Hodgson for ensuring that the debate is happening today and for his tireless pursuit of addressing the current shortcomings of governance at the Royal Albert Hall. I look forward to his and other speeches today, and any proposed remedies that they may wish to suggest that we look at during later stages.

I am not an opponent of the Bill, as I think my noble friend is categorising those of us speaking today, but it takes some audacity for the trustees of the Royal Albert Hall to submit a Bill requesting more decision-making powers without addressing their unacceptable conflicts of interest policy. To be clear, as the noble Viscount said, the fundamental problem with the Royal Albert Hall’s governance regime is that, contrary to standard charity law, its trustees can benefit privately from the decisions that they make about how the hall is run. Noble Lords familiar with charity law will spot immediately that this flies in the face of standard legal practice, which prevents private benefit for trustees. While the Royal Albert Hall’s set-up is perfectly legal, it is none the less unique.

To be fair, a combination of previous Acts of Parliament and the hall’s historic constitution does not render the situation illegal. But in today’s modern world—where public trust in institutions is low and expectations of accountability high; boxes and seats at the Royal Albert Hall are bought and sold for hundreds of thousands, if not millions, of pounds; and trustees of a charity can sell their tickets for concerts at prices at least 10 times their face value—the situation at the Royal Albert Hall seems, to me at least, to be completely unacceptable.

I remind your Lordships that I chaired the Charity Commission from March 2018 to February 2021, but I have no interest to declare and no ongoing involvement in this case, so I speak today in a purely personal capacity. I will come back later to the general practice of private seat-holders and ticket sales at the hall, as there is some connection to some of the general points I want to make, but I must emphasise that what private seat-holders at the Royal Albert Hall do with their own private property is their business and not mine—I well understand that. My concern and focus are on the trustees of a charity, not those who are not responsible for the charity itself, and my concern is that the board of trustees has failed to modernise the hall’s governance to protect its interests and reputation as a charity.

The Charity Commission was engaged in this matter long before I was appointed its chair. At the time of my arrival in post, the then Attorney-General had recently given permission for the regulator to refer the matter to the charity tribunal to clarify some legal questions about its charitable status. That was necessary because the hall had resisted dealing with the trustees’ conflicts of interest. As my noble friend said, they have an existing policy; it would be unfair to say that there is no policy. There is a policy—it exists and is there for anybody to read on its website—but it is a policy, in the minds of the Charity Commission, that is inadequate for the conflicts that exist by virtue of their dual interest. Unfortunately, it seems that, threatened with a judicial review, the Attorney-General withdrew permission and requested that the Charity Commission revise the questions and resubmit its application for the Attorney-General’s approval again.

While that was ongoing, I held several meetings with the then president and his successor to see whether we could resolve the matter without referral to the courts. Originally, the Charity Commission proposed changing the composition of the board so that the majority of trustees were not seat-holders and to introduce a regime so that decisions that might benefit trustees could be made by a quorum of non-seat-holders. Unfortunately, that was rejected. Failing to get the hall’s agreement to that, the Charity Commission proposed a new formulation of members—but that too was rejected. The board of trustees has even, as I understand it, resisted making any internal changes to guarantee that seat-holding trustees cannot sell seat tickets for anything other than face value or via the hall’s ticket office during their time sitting on the board. These are simple, straightforward measures that, I think, most people would expect as reasonable of trustees responsible for a charity.

When it comes to the benefits that private seat-holders who are trustees gain during their time on the board, the annual report of the Royal Albert Hall does not even declare how many seats the trustees or their close family members own or the income that they have derived from them. Ultimately, referring the case to the tribunal seemed to be the only way to find a resolution; but, as noble Lords have already heard, successive Attorney-Generals dodged the decision until, eventually, one of them rejected the Charity Commission’s request.

The hall has always maintained that what it wanted was a new Act of Parliament to modernise its governance and that there were outstanding issues that needed to be addressed. That is clear, as my noble friend has laid out, in the Bill that it has put forward, but the Bill fails to address the fundamental flaw in its model and any of the issues that have been of concern to the Charity Commission for the last 13 years.

As I said, it is important not to conflate the private property rights of seat-holders with the responsibility of the charity’s trustees, but that is what the trustees’ failure to act is doing. Increasingly, artists are objecting to the sale of tickets to their concerts at inflated prices. The hall argues that there is a difference between sale and resale because of their private property rights, but that kind of argument does not wash with fans when the effect on their pockets between resale and sale is the same. It is also worth reminding ourselves that the BBC Proms, the world’s largest classical music festival, is funded by licence fee payers. Yet that does not deter the sale of seats at massively inflated prices and for all we know—we do not know—some of those inflated tickets may be being sold by seat-holding trustees. We just do not know.

Retaining charitable status is clearly important to the hall’s trustees. Losing it was a big concern if the matter of this conflict got as far as a tribunal. It is also worth reminding ourselves, as my noble friend said at the start, that the Royal Albert Hall has not always been a charity, but if that is what it wants to remain, the hall’s trustees need to make some choices. Now is the time for them to modernise their governance and bring it in line with the rest of those charities on the register. I think it is as simple as that.

Just before I close, I have two questions. I ask my noble friend the Minister whether the Government set out any expectations of the hall in terms of modernising its governance at the time of its £20 million recovery loan during Covid. If they did not take that opportunity then, could he explain why not? Could my noble friend Lord Harrington tell us when the board last discussed how to deal with the conflict of interests of its seat-holding trustees and why it chose not to put that in the Bill? Also, has there been any recent discussion about what internal changes trustees could make to their own policies to bring them in line—something as straightforward as saying that for the period that somebody sits on the board, they must resist, or be refused the option of, selling their tickets for anything other than at face value via the ticket office? Clearly, the procedure for this private Bill makes amendments difficult, but I very much hope that as it proceeds to its later stages, that is something we are able to secure.

--- 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.