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Mr. Bercow: The hon. Gentleman has just made an important point about what appears to have been a deficiency of service. Have I misunderstood him or is his interpretation that the public relations service was not subject to market testing or competitive tender?

Mr. Tyler: I cannot advise the hon. Gentleman. Perhaps the hon. Member for Broxbourne will answer that question when she responds to the debate. The answer is not apparent from my reading of the report but, as I said, I have had an opportunity to read it only at speed as a result of other preoccupations.

I have several other questions relating to issues arising from the figures. The figure for admissions, for example, which is given under revenues, is clearly for ticket sales.

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Therefore, we do not know precisely what arises from that figure, under which heading guides are paid for and how any future trial will operate other than at a loss.

There is a figure for entertainment of £1,074. Entertainment, as we all know, always causes some difficulty. Given the wonderful value of refreshments in the House, it is not immediately clear where the entertainment was provided, to whom and by whom. I assume that it was a responsibility of the Visitor Manager.

An important point that may apply to both of those previous items is that any enterprise of this sort incurs set-up costs. Are they to spread only over the first season, across the whole year, or across future years? How many of those costs are recurrent? That, too, is not spelt out in the report, which makes it more difficult for us, in our traditional scrutiny role, to be sure exactly what is going on. For example, are the merchandising overheads of £59,587 and the development costs of £18,204 recurrent costs, or once-and-for-all set-up costs? It is not immediately clear.

Looking ahead to the trial's continuation, the most important point to note is that overall operating loss of the trial was £209,611, or a loss of almost £6,000 for every day that the line of route was open. The total of 40,577 visitors means that there was a subsidy of £5.17 for every single visitor. That is quite a considerable sum. Given that, at other times of the year, Members' tours--tours undertaken by Members of Parliament, or by our staff, or on our behalf--attract no subsidy, we see that we are dealing with a curious upside-down world. The loss quoted for the operation of tours is £176,263. I cannot see how those expenses--or costs, whichever way one wants to see them--can be so reduced in future years, or that the House will want to approve a loss of £6,000 for each week that the line of route is opened on that basis.

The overriding issue, which I have raised on previous occasions and I raise again tonight, is simply that, both last year and this, we open the line of route for a comparatively short time during the trial period. Surely that means that we should establish a short-term, limited and carefully controlled budget for that period. Instead, we appear to have set up a permanent institution, with a Visitor Manager and an assistant who are present 52 weeks a year. Instead of finding a way in which to cater for a comparatively short-term operation, with short-term costs, we appear to have engaged in long-term costs.

Having said all that, I believe that the Committee was right to experiment and I consider its request to experiment once again to be reasonable. However, I ask that the costs be scrutinised extremely carefully. Answers must be given to some of the specific points that I have raised this evening, if not now, on a future occasion or in correspondence. I am by no means convinced that the experience of the House, and of the Committee on our behalf, fully justifies a permanent experiment.

9.48 pm

Mr. Eric Forth (Bromley and Chislehurst): While following the spirit and thrust of the comments made by the hon. Member for North Cornwall (Mr. Tyler), I wonder whether we should ask even more fundamental questions. Neither the report nor our previous debates has made it clear whether the House expects the line of route to be a subsidised cultural experience for visitors, or a regular contributor to ease the burden on the taxpayer of the costs of parliamentary activity. The answer could be one or the other, or something in between.

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Whether we should be shocked or pleased that each visitor is subsidised to the tune of £5 is an important and open question. If the idea was to draw in people from beyond the United Kingdom and, in effect, pay them to come through and marvel at the Palace of Westminster, that is one thing; if that was the aim, we have been moderately successful. However, if we expected the exercise to contribute to the real revenues of the Palace of Westminster and ease the burden on the taxpayer, it has been a miserable failure. Judging that properly will depend on where we start and what we set as our objective. That is not at all clear from the report, so it is difficult to judge whether the trial was a success.

Against that background, a much more fundamental set of questions should be asked about the accounting procedures that were used. When presenting figures on activities at both ends of the Palace of Westminster, we have never been clear about how we should account for those activities. In other words, should we charge a notional rent for space occupied? It is one thing to talk about a kiosk, sales outlet or even a line of route, but it would quite another if we factored in rental charges for the space occupied at central London rates. However, we assume that that is a free good. Few businesses have the privilege of a rent-free operation, especially in this location.

As for staffing, do we charge the full cost of staff to a particular operation, or do we absorb it into the general operation? For example, staff from the Refreshment Department would be here anyway, so we need not attribute an element of their cost to the activity that is being undertaken. Again, the presentation of such matters in the report does not make clear either the real costs or how we want to identify and attribute those costs to different operations in order to make a proper judgment about whether a certain element is profitable or extraordinarily expensive.

That is bad enough, but appendix 1 on page 28 of the report deals with the "pessimistic case" target, the adjusted target--to take account of reduced opening--and actual figures. If we are not careful, we will get into millennium dome territory: someone has made projections of what they think will happen but, lo and behold, it does not quite work out that way. In fact, when one looks at the figures, it is clear that it does not work out that way at all. There seems to be a shortfall in almost every regard.

One may seek to explain or excuse that shortfall by saying that last year was an experimental first year, that we were feeling our way and that we are not at all sure yet. At the very least, I hope that close attention will be paid to the figures and the targets. If there was a pessimistic case target, what on earth was the optimistic case target? If there was a shortfall of such a magnitude on the pessimistic case target, there is a serious question mark over the targeting process, on the one hand, and what went wrong with the actual figures, on the other.

Also on page 28 is an astonishing figure giving the average spend per visitor as £1.17, which includes VAT but excludes guidebooks. The average spend per transaction was £9.21. I should have thought that that indicated a distinct lack of success in persuading people who have visited the Palace of Westminster and paid the entrance fee, which they thought was all too reasonable--

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I will comment on that in a moment--to buy a souvenir of their visit, at least to any significant extent. We shall obviously have to consider that.

To reiterate the intervention that the hon. Member for Don Valley (Caroline Flint) kindly allowed me to make, we must reconsider carefully whether merchandise from this place is, as we would hope, of intrinsic value and rarity, can be purchased only here, and is therefore a genuine souvenir of a visit to the Palace or Westminster, or whether we should market it freely at airports, saying, "You might have gone to the Palace of Westminster. Grab a handful of souvenirs at the airport, whether or not you were at Westminster and take them home to whatever part of the world you come from." An important decision has to be made as to what we want to say about merchandise that is sold here.

Mr. Bercow: My right hon. Friend has set out for the House a key consideration. On this occasion, uncommonly for him, he has not specified his preference. Does he not agree that, even though we joust with each other as enthusiastic advocates of free market capitalism, having souvenirs of the House sold in the airports of the United Kingdom would be unspeakably vulgar?

Mr. Forth: As my hon. Friend challenges me to state my view, I should say that my preference would be for a degree of exclusivity and rarity to be attached to our merchandise. I haunt Capitol hill and Congress when I am in Washington, DC, as the hon. Member for Don Valley obviously does. I have bought the odd souvenir, but I would be rather shocked if on my exit from Dulles international airport or JFK I found a large stall with congressional souvenirs being pushed at me, no doubt at concessionary rates. That would somewhat alter my view of the undoubted magnificence of Congress and its history.

It is gratifying to be told that the results of surveys show that the overwhelming bulk of people thought that they had had a good deal when paying the charge to take a tour through the Palace of Westminster. That raises the obvious question whether a sufficient price is being charged. I was slightly disappointed by a recommendation that the price should be kept fixed. Following the entreaties of my hon. Friend the Member for Buckingham (Mr. Bercow), a market approach would suggest that if a large proportion of people thought they had enjoyed a bargain with a charge of £3.50, we could perhaps be more adventurous and ascertain whether we could charge more and reduce the deficit.

We are asking taxpayers generally throughout the country to subsidise those people who are fortunate enough to visit the Palace of Westminster, and perhaps that is getting things the wrong way round. It might be more satisfactory to expect those who visit the Palace--they do so voluntarily, enjoy the occasion and pay the charge--to help out the benighted taxpayer, who otherwise will be paying an ever-increasing amount to subsidise what goes on in this place, either directly in a political sense in the Chamber or Committee Rooms, or in terms of tourism. That is my main criticism of the approach that has been taken.

My hon. Friend the Member for Broxbourne (Mrs. Roe) and her Committee might want to give the matter serious thought, alongside the extension of the experiment. I am

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glad that there will be a further year of experiment and that we are not yet ready to rush into a permanent arrangement. I hope that the Committee will give serious thought to whether there should be a subsidised cultural experience provided by the taxpayer to the visitor, or vice versa.

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