Learned Societies at Burlington House

James Gray Excerpts

Tuesday 8th June 2021 Westminster Hall

[James Gray (North Wiltshire) (Con)]

I congratulate my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) on securing the debate and on an outstanding campaign that he has waged over the past few months on behalf of the learned societies. It has been a model of good lobbying of the best possible kind. I agree with everything he and the hon. Member for Rhondda (Chris Bryant) have said. I will not repeat it, to cut things reasonably short.

I am reminded of Churchill’s great remark, I think about this place originally.

“We shape our buildings; thereafter they shape us.”

That quotation applies very much to the learned societies. They shaped those buildings and we shaped them together, over a matter of 200 years, or thereabouts. The shape and existence of those buildings and the things in them shape the learned societies. It would not be possible to remove them willingly and put them into an industrial estate somewhere on the outskirts of London. It would simply not work. Those buildings and the learned societies are integral to each other.

That applies to so many other great Government owned or publicly owned buildings across our nation. With those other buildings—cathedrals, churches, this palace, Buckingham Palace and the MOD buildings—the Government have taken an extremely sensible view over many years, which is to conclude that they are worth nothing. They are not worth anything; they cannot be sold. This palace could not be sold and is, therefore, worth nothing. Of course, it costs money to maintain but it cannot be sold.

The problem behind this particular episode is that the Government have concluded that the building is a valuable asset that they own, and which they can therefore sell or otherwise maximise income from it. That is the wrong presumption. That building was not set up as a Government asset, which could be subsequently sold. It was set up to be the home of the learned societies. Therefore, we require an extremely radical approach, not through a renegotiation of the lease, which cannot succeed. The lease cannot work and they cannot afford to pay the rent, so there is no point renegotiating it. These learned societies cannot pay a rent to the Government. Therefore, let us consider renegotiating it fundamentally. If we depreciate the value of an asset, that depreciation cannot count against profit and loss. It must not work at all.

I would like to think that the Government will consider not bleeding the assets, which is what they are effectively trying to do, whether through rent or another way. We should not be bleeding the assets; they are cultural and historic assets and they should belong to and be preserved by the nation. There are all sorts of ways of making sure they do not cost anything. None the less, the notion that a building, worth billions, freehold, should somehow become a national asset that is there to bleed seems to me to be entirely wrong. The capital value should be set at zero—the same applies to a great many other national assets of one sort or another. This is a political decision. It is not a cultural one; it is not a financial one; it is a political decision.

We need a Government who will say, “This is an asset to our nation. This is an asset that we want to preserve. This is an asset that does more for our nation”— £47 million worth more for our nation, as we heard from my hon. Friend the Member for East Worthing and Shoreham. Bleeding it, getting rent out of it and selling it off would achieve nothing for the cultural and intellectual assets of the United Kingdom. Finding a way of keeping the learned societies there, finding a way of making it possible for them to succeed in that location, seems to be something that we as a Government ought to be doing.

I hope that the Minister, in his reply, will not simply talk about the renegotiation. I want to hear a really radical restart to say, “These assets must be left as they are.”

--- Later in debate ---

[Eddie Hughes]

I am sure I will repeat this later on, but we have made our pitch to the learned societies and we are awaiting their response. Given the commercial sensitivity of those negotiations, it important that we wait to hear from the learned societies themselves about what they think the way forward will be.

We must acknowledge that the growth in annual rent under the lease contract has been unpredictable. UK rents have grown significantly since 2005, causing a significant challenge for the learned societies. Achieving a rent that represents value for money to the taxpayer while giving security and certainty for the learned societies is the Department’s goal, and we hope to achieve that in collaboration with the learned societies.

Rent for 2020-21 financial year is £15.35 per square foot, which was agreed through the formula and is some 70% lower than the £50 per square foot that is the current market value for similar use—as I said, for educational purposes, not compared with the much more expensive commercial properties. That was agreed by both parties. However, we have heard the real financial concerns of the five learned societies, and the issue has received significant media coverage. In 2019, the societies sought a grant from our Department that would allow them to purchase a 125-year lease from us at a peppercorn rent. We assessed the proposal and of course considered the benefits, which are incredibly difficult to put a value on, of keeping the learned societies at Burlington House.

The Treasury’s Green Book rules require us to assume that if a learned society vacated Burlington House, it could be replaced by a similar tenant who would meet the cost of the rent at the market rate. So, it is not in our Department’s gift to grant that peppercorn lease. I fully appreciate that others have said that different options might be available to the Treasury, but considering such options is clearly way above my pay grade.

[James Gray]

Will the Minister not accept that he is missing the point? We are saying that this cannot be done—this building cannot be leased at a commercial rent. We want the Government to assess the building as having cultural value and preferably to give it entirely free of charge to these learned societies. And the notion that somehow or other, over 85 years, the rent may rise to the market rate is ludicrous. It cannot do so—these societies will go broke, these collections will be ruined and the Government will be to blame. We want the Government to renegotiate fundamentally and to charge them nothing.

[Eddie Hughes]

I thank my hon. Friend for his contribution; the suggestion that he has made is clearly one for the Treasury to consider. However, in the meantime—as I said at the outset—it is the Department’s starting position that we are determined to try to keep the learned societies at Burlington House. So, as we enter into negotiations with them, I am sure that we will have the opportunity to discuss options further.

In January last year, we explained that we could not proceed with a peppercorn rent arrangement and proposed a simplified agreement, which involved slow convergence to the market rent by 2085. We subsequently held further discussions and recently we have put forward the proposal that I referred to, in order to provide security and guarantee predictable future rents for the learned societies, protecting them from market volatility while ensuring that they only have to pay market rent at the end of the lease.

This proposal is predicated on what I believe is a fair and reasonable condition that the learned societies should work with the Department for Digital, Culture, Media and Sport and its arm’s length bodies to become more accessible to the wider public and to advance their cultural and educational agenda, so that the societies’ work continues to benefit as many communities as possible. The societies’ future must also reflect a more open and commercial existence, in order to identify and deliver alternative sources of income.

In his opening speech, my hon. Friend the Member for East Worthing and Shoreham mentioned the fact that there would be a restriction stopping the societies from having, for example, a coffee shop. I am sure that restriction is in place now, but it would be open to us to enter into discussions as to whether we could make changes of use, or to see whether there are other opportunities that could be pursued for commercial purposes. It is important to engender a conversation and get that discussion under way.

I hope that hon. Members will forgive me for saying that I cannot refer in detail to the negotiations that are under way. However, what I can say at the moment is that both parties are in the early stages of the negotiations, and I very much hope that a constructive and positive dialogue will result in the learned societies remaining in Burlington House for the foreseeable future.

In conclusion, I thank my hon. Friend again for raising this issue today and I thank the other Members who have made pertinent and important contributions to the debate. The Government want to continue working closely with the five learned societies and indeed with MPs from all parties in the House, following their valuable contributions today, to ensure that the outcome of our negotiations is a positive one and that we make sure that the learned societies remain in Burlington House for the future, safe in the nation’s capital, where they can continue for generations to come.