Royal Albert Hall Bill [HL]

Lord Etherton Excerpts

Thursday 19th October 2023 Lords Chamber

[Lord Etherton (CB)]

My Lords, I am very grateful to all Members who have spoken before me, particularly the noble Lord, Lord Harrington, for his introduction. I pay tribute to the noble Lord, Lord Hodgson, who has pursued the issues relating to the constitution of the Albert Hall for many years. One way or another, they have covered virtually all the issues, so I can be relatively brief. I want to concentrate on what, from a legal perspective, are the very simple issues involved in this matter. I do not want to enter into a close analysis of the merits of this private Bill. That is the task of the Opposed Private Bill Committee, which will hear detailed submissions and receive evidence I have not seen, and no doubt will have the benefit of legal advice. However, it is important to make two general points that are relevant to the context of the Bill and that the Opposed Private Bill Committee will undoubtedly wish to bear in mind when it considers the merits of the Bill and the petition against it.

As has been said, the Albert Hall, called the corporation, is in legal terms a most unusual entity—unique, in fact. It was registered as a charity in 1967. It has all the usual financial benefits of a charity and has received large sums of public money for refurbishment and improvement. There are two fundamental legal principles of charity law that are relevant to any consideration of the Bill and of any other decisions made by the council of the corporation. First, an entity can be charitable only if it is wholly and exclusively charitable. This does not prevent a charity having a trading arm, the profits of which are applied exclusively for the purposes of the charity. However, in the case of the Albert Hall, the seat-owners, who are the members of the corporation and form a majority on the governing council, are able to—and many do—treat their seats as investments, generating a profit by selling tickets on the open market for events the seat-owners do not wish to attend. In this way, this charitable corporation provides the means by which the members of the charity can make a purely private profit.

This leads directly on to the second very basic principle, which has been mentioned a number of times. It is a basic principle of trust law that the trustees, whatever they are called—board members, council members or whatever—must not place themselves in a position in which their private interests may conflict with their overriding obligation to further the interest of the charity. This is usually expressed in the pithy statement that trustees must not place themselves in a position where there is a conflict between interest and duty. Plainly, as we have heard, there is a real issue in relation to that point. The power to run the Albert Hall is vested in its members. The members are the seat-holders. The council of the corporation comprises 18 members and five appointed non-members. On the face of it, the presence of members on the council who have profited, intend to profit or wish to profit from their seats by selling tickets for them on the open market involves a clear potential conflict between personal interest and their duty to act solely in the interests of the charity.

This is, on any footing, an extraordinary legal situation. How has it arisen? As has been referred to, the first reason is historical: the building of the Albert Hall, which opened in 1871, was funded by subscribers in consideration of being granted permanent seats. As has been said, 329 members hold over 1,200 seats. The second reason, which was referred to by the noble Baroness, Lady Stowell of Beeston, concerns the limited oversight of the Charity Commissioners over the corporation. The Charity Commission does have power to create schemes to make alterations to the management or other terms of a charity. In the case of the Albert Hall, it can under the statutory constitution relating to the corporation—in Schedule 2 to the Royal Albert Hall Act 1966—only do so on the application of the council.

As the noble Baroness mentioned, the Charity Commissioners wanted to make a reference to the charity tribunal, but under the Charities Act 2011 they could do so only with the consent of the Attorney-General. Permission has been sought in the past, but on the last occasion relating to the Albert Hall, after a number of years without any response whatever, permission was refused by the Attorney-General without any explanation at all. This was really quite a scandalous approach to a serious issue.

I hope that I have said enough—together with everything everybody else has said—to explain why I respectfully recommend that, when considering the present Bill and the opposing petition, the Opposed Bill Committee should be careful to ensure that the charitable objects of the corporation will always have priority over the actual or potential private financial interests of members.