Royal Albert Hall Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

Thursday 19th October 2023 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I begin by adding my thanks to my noble friend Lord Harrington. He has been infinitely patient in dealing with us gadflies, and I am grateful to him for that. I also share his view that the hall itself is one of the great cultural institutions, and nothing I say in the next few minutes should be seen as in any way criticising the hall as a structure or as a business or an activity—it is a wonderful activity; nor would I wish to be seen to be criticising my noble friend, who is in an unenviable position, as several noble Lords have pointed out, as one of the nominated trustees, nominated by no less than the DCMS, so no doubt my noble friend the Minister, from whom we shall have the pleasure of hearing in a few minutes, had some part in the decision on that appointment.

The noble Viscount, Lord Chandos, referred to Mr Richard Lyttelton. I want to put it on record that in my youth, in my teens and 20s, I was a friend of Mr Lyttelton’s elder brother, sadly no longer with us. I think that should go on the record. Do I agree with everything he says? I do not. Do I agree with some of what he says? I do. Am I his mouthpiece? I most certainly am not. Having cleared those points out of the way, I share the view that as regards the governance of the hall, there is at its heart a major, in my view irreconcilable, conflict of interest. This is an issue that has been of interest to many people: journalists, sector publications and, indeed, as my noble friend Lady Stowell said, the Charity Commission itself. Today, we have before us this Bill promoted by the governing body of the hall that does nothing to address this inherent conflict. Indeed, in some respects, it makes it worse.

I apologise for diving into the detail but we have no Committee stage so I have to take this opportunity to make one or two quite detailed points about the nature of the Bill. Just to summarise the history—not to go over the ground that has been well ploughed already—the Royal Albert Hall was established in Victorian times by public subscription, and in return for your dosh, you got seats in perpetuity. Because not every seat-holder is going to want to go to every concert on every occasion, the hall set up the TRS, the ticket return scheme, which, as many noble Lords have pointed out, enables you to hand your tickets back for the face value, less 10%—for a £100 ticket, you get £90 back.

However, a few years ago a group of trustees decided there was a much more profitable way of doing this by reselling them not through the Albert Hall box office but through third-party websites. Here I address some of the questions asked by the noble Lord, Lord Winston, of my noble friend. If you wish to go to hear Ed Sheeran on Sunday 19 November, you have a ticket with a face value of £200. I have here a screenshot from viagogo offering that ticket for £5,899—£6,000 for a £200 ticket. I also have a screenshot of a letter that Mr Sheeran and his promoters have asked to be circulated, saying that they deplore this practice. Mr Sheeran’s fans are being squeezed out of the hall because they cannot afford to pay £6,000 a pop. This is an extreme example, but a £100 ticket for the last night of the Proms was selling for £1,218, so this has clearly become a very profitable enterprise. The rumour was—and here I address the noble Lord, Lord Winston, again—that before the pandemic, seats were earning between £10,000 and £20,000 a year and were selling for £150,000. That was the rumour. Today, we have had a rush and the market in seats has been very good. I have here a flyer from Harrods Estates offering five seats in the second tier at the Royal Albert Hall for £1.5 million—£300,000 each.

My noble friend Lady Stowell made the point that there is a distinction to be made between those who are trustees who sit on the governing body and those who have private property. The right to enjoy your private property is of course an important cornerstone of our civil society. But the operation of the hall as a commercial business, as it was originally seen, changed when in 1967 it decided to become a registered charity, which has, as many noble Lords have pointed out, a public benefit objective, tax advantages and the regulation of the Charity Commission. I am not going to repeat the point that of the 25 members of the governing body, 19—75%—of them have to be elected from other seat-holders by the seat-holders themselves. There must be a concern, or at least the possibility, that the idea of selling Ed Sheeran seats is more important than an equally worthy but less prestigious concert, such as a school choir competition.

If we summarise the situation now and go to the detail of the Bill, my noble friend Lord Harrington said that it was a hybrid model. My goodness me, he is right. Within the shell of a registered charity, the trustees are running what appears to be a personally highly profitable operation and, by the way, along the way they have managed to get a £20 million loan from the culture recovery fund, which is apparently going to be paid back at £1 million a year over 20 years.

How do these issues play through into the Bill? There are four points. First, the Bill empowers the corporation to create and sell or let two further seats in grand tier boxes. There will be 72 of these. That in itself is a good proposal, because more seats means that there are more seats to be sold, making it more attractive to promoters, who are therefore more interested in hiring the hall. But on what terms are these seats to be sold or let? Clause 5(1) says that they are to be sold or let on such terms—including as to their price—as the hall thinks fit. As I said, the hall is controlled by the council, 75% of whose members are seat-holders, some of whom will be looking to buy seats. They will therefore be deciding the terms on which they award themselves the new seats. As I also said, some seats are on offer at £300,000, so the amounts at stake are far from trivial. This surely cannot be right. At the very least, the terms on which the seats are to be sold or let need to be set by an external valuer approved by the Charity Commission. After all, the hall is a charity.

Secondly, there is a concern, or at least a possibility, that some of those seats have already been allocated and so are already being used profitably by seat-holders. If true, this would mean that the trustees are now trying to give statutory protection through Clause 5(4) to an action they have already taken. Can my noble friend explain whether this is true? If it is, when were these seats allocated and what price was paid for them?

Thirdly, as I have explained, the hall has an outstanding loan of £20 million from the culture recovery fund—that is, effectively, the taxpayer. The Bill proposes the sale of 72 new seats. If they were sold for £300,000 each, that would be £22 million, which would enable that loan to be paid off immediately. Since these are capital items, not income items, priority should go towards paying off that loan, thereby relieving the long-suffering taxpayer of a burden.

Fourthly and finally, as my noble friend Lady Stowell pointed out, there is a need to disentangle the position regarding the resale of tickets by seat-holders who are trustees and so play a significant role in the operation of the hall from that of seat-holders who are not trustees.

It is absolutely clear that the hall has discouraged the resale of tickets in or around the hall. Section 15 of the Royal Albert Hall Act 1966 gave specific powers to prevent what in an earlier age was called ticket touting. Members of your Lordships’ House of a certain age will recall being approached at big sporting or cultural events by gentlemen in grubby macs offering to buy or sell tickets. It is quite understandable that the hall wanted to discourage that sort of activity in or around the hall. Ticket touting still goes on but nowadays rather more discreetly. It is no longer done via gentlemen in grubby macs but happens on the internet, but this does not disguise the fact that this is still ticket touting and damages the hall’s reputation—witness the Ed Sheeran promoter’s letter to every seat-holder. There are various ways in which this could be sorted. My noble friend Lady Stowell made the point that if you became a trustee, you could usefully be required only to use the ticket return scheme, which would show exactly what your return could be.

To conclude, I hope that the promoters of the Bill will be prepared to let some sunshine into this murky business and address some of the points that I and other Members of your Lordships’ House have made. If not, I hope that the Opposed Private Bill Committee will look closely at the implications. I am far from convinced that the House should allow this Bill to proceed further without at least some amendment.

--- Later in debate ---

[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.