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Official Report of the Grand Committee on the National Lottery Bill [H.L.]

Thursday, 29th January 1998.

The Committee met at four of the clock.

[The Deputy Chairman of Committees (Lord Strabolgi) in the Chair.]

Clause 14 agreed to.

Clause 15 [Objects]:

Lord Skidelsky moved Amendment No. 37A:

Page 18, leave out lines 5 and 6 and insert--
("(a) helping to develop talent and achievements in the fields of science, technology and arts;").

The noble Lord said: I hope that the Committee will forgive me if I slip out slightly before we finish this evening. Also, as this is the last day of the Grand Committee on the National Lottery Bill, I take this opportunity to thank the noble Lord, Lord McIntosh of Haringey, for his courtesy and consideration in the last two sessions of the Committee. I look forward to renewing our engagement today and on Report.

In moving Amendment No. 37A I start by stating briefly our general concern about the way NESTA is being set up. First, we welcome it; it is a good and imaginative idea. We also like the fact that it has been endowed. This links it to an old British tradition in setting up public institutions going back to the Middle Ages. Had the method of endowment been used for our new universities or, to give another example, for the Royal Opera House these institutions probably would not have experienced their recurrent financial crises--or at least not so acutely--and would have been independent bodies in fact and not just in name.

Here our first worry creeps in. I quote what the noble Lord said at Second Reading:

    "NESTA is the ne plus ultra of the arm's length principle".--[Official Report, 18/12/97; col.790.]

However, we see some rather large fingerprints of the Secretary of State on it, especially in Clause 19. Our amendments are designed to give it more genuine independence. Unless some of the Secretary of State's powers are limited, the danger is that it will become his toy.

A second worry is duplication. The objects for which NESTA is being set up are already being partly fulfilled by other grant-giving bodies--for example, the research councils--but also by charities. We do not want either taxpayers' money or private donations to be diverted to NESTA. Again, the question of additionality, which has dogged our footsteps right through the Bill, rears its head. Will NESTA, for example, be able to consider an application from a university group which would otherwise have been directed to a research council or to the British Academy? We want NESTA to be additional

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to other initiatives including voluntary ones, not a substitute for them. Finally, we do not want NESTA, any more than we want the new opportunities fund in general, to suck money away from the other good causes. We shall therefore be seeking to limit the Secretary of State's powers to enlarge its endowment at the expense of the original good causes.

I turn to my amendment. Amendment No. 37A is simply a drafting amendment. The word "individual" in the Bill suggests that only individuals will be eligible for grants; it carries that suggestion. We do not want to exclude team and group projects: for example, fringe film companies is one object that has been discussed. We believe that our draft accomplishes this aim.

As for Amendment No. 37B, which relates to subsection(2)(b), I should like to ask how exactly NESTA is supposed to help people turn inventions and ideas into products and services. The Government's note on Clause 15 gives no examples. Is NESTA supposed to finance companies or groups to market their products? Is it supposed to enter into competition with banks? If so, is that not back to the bad old days of picking winners?

The contention seems to be that we are very good at inventions but banks or others are reluctant to back them, so they end up being exploited overseas. The argument that our innovators have suffered from lack of venture capital is an old one, but it is very hard to prove. Surely, whatever the case, NESTA should not seek to become a venture capitalist or business angel in its own right. We should have learned by now that government agencies should not try to second guess the private sector. In the end it is the taxpayer, or in this case other National Lottery initiatives, who suffers the losses of bad decisions.

Also, what does it mean "to help protect property rights"? Are these not already protected by copyright and patent laws? It seems to us that the Government are trying to edge NESTA into commercial activities in which it should not be involved. I beg to move.

Lord Crickhowell: This amendment gives me the opportunity to probe the real intentions of setting up NESTA and to seek an explanation from the Minister as to why the Government's intentions in this field appear to be relatively limited. In reading the White Paper, and indeed the debate held at Second Reading, I am left with a considerable series of questions in my mind.

As I understand it, NESTA has an important, though limited, role. Like my noble friend, I am not quite certain how far it goes, particularly with this reference to individuals, and indeed what its limitations are. It is certainly perfectly possible to think of the development of scientific or intellectual ideas, but when we come to the arts, are we only dealing with the encouragement of the writer or the artist in creating a particular individual work? Are we, as has been indicated, going further and talking possibly about the ability to create scripts and productions in the world of film? If we are going that far, then what about artistic productions in the theatre or in opera?

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That takes me to the central question that I have about this Bill, and it is something which genuinely puzzles me. My noble friend Lord Gowrie, in an eloquent speech at Second Reading, drew attention to the huge problems facing the arts at the present time, particularly with regard to the shortage of revenue funding. In column 773 of Hansard on 18th December, he spoke of the huge capital inflows, which he suggested had led the Treasury to cut our small revenue. He spoke of our suffering the worst arts revenue crisis in his adult lifetime, and he referred to specific examples.

A good many of the supporters of the Government have in recent weeks expressed their dismay, concern and surprise about the situation they now face. They criticise the present Government because they believe they are merely continuing policies which they strongly criticised when they were pursued by the previous administration. In making those criticisms, some of those most outspoken tend to paint a picture of the arts having been in a catastrophic period over the past 20 years. I shall go on to comment about the shortcomings which I believe have existed in government policy under both the previous administration and the present Administration, but I happen to believe that the past 20 years have in many respects been one of the most productive periods we have seen in modern times as far as large sections of the arts are concerned. Despite the recurrent problems that have arisen, I do not believe that we have ever in this country had such a wealth of talent in the opera companies, or have seen such a series of outstanding productions from a number of opera companies. The strength of some of our orchestras has been remarkable, and theatre too.

However, it is true that in the early 1980s the arts were greatly helped at a time when there were government constraints by the strength of funding from the private sector. That funding tended to fall away as we moved into a period of recession and the problems grew.

In criticising what is happening now, let me assure the Minister that I am not doing something that I did not do even when I was in government. I did something in this field--I sent a minute to the Prime Minister which I certainly did not make a practice of as Secretary of State for Wales--at some point in the early part of the 1980s expressing my acute concern about policies for funding the arts and expressing the view that even quite modest increases in funding could make a dramatic difference. I supported the then Minister for the Arts--now Governor of Gibraltar, having moved on to a different role in life--in the battle he was having in the PES exchanges in government.

I would add that as Secretary of State for Wales I made a practice of finding financial support out of my block grant in Wales for heritage bodies. I found the money to build the art galleries at the national museum. Indeed those policies were followed by some of my successors; at least one of them supported the Welsh National Opera, for example, in a moment of crisis. This is an ongoing saga, but the fact of the matter is we have a lottery which has been injecting vast capital sums, and we can be thankful for that, but we face the real risk that as

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we move into the next millennium there will be no one to use the buildings. The companies that should be occupying them will be in a state of crisis.

This applies not only to the performing arts. Some of our national museums are still in a pretty bleak condition. I paid a visit to the Victoria and Albert Museum a little over a year ago. (I was practically brought up in the Victoria and Albert Museum. My father was keeper of the department of woodwork for many years.) I went upstairs to look at the British collections. I have to say I was almost in tears, tears of frustration and anger, as I left. I had earlier been admiring the superb exhibits of the Indian and the Far Eastern collections, to take two examples, funded on a magnificent scale by those from overseas. The display of our own collections at the present time in the Victoria and Albert Museum are a national humiliation and a disgrace. I think those involved would admit it. They keep talking about the difficulty of finding adequate funding to do anything about it. The collections are nothing like as good as they were in the period after the war, when those exhibits were first restored by the then director, Leigh Ashton, and others.

We have a pretty desperate situation right across the field of the arts. Here, as I understand it, with NESTA we are taking a modest but important step into a very limited area. I am not at all sure how limited that area is, and nothing I have read provides clarity. We keep hearing statements from those who now have the job of defending arts policy on behalf of the Government that steps are being taken to move away from the previous constraints that limited lottery funding entirely to capital projects. Indeed, the Secretary of State--facing a blitzkrieg from critics on television the other night--used words which indeed suggested that there was going to be a new ability to provide revenue funding for people and for activities taking place in the buildings, not just capital funding.

I am sorry I was not able to be present at Second Reading just before Christmas to make this point, but I do not understand why the opportunity was not taken in this Bill to go much further than appears to be the case with NESTA. Why was the opportunity not taken to give the ability--as we come to the end of the need to go on funding great capital schemes--to help the performing companies, individuals and galleries carry out to the maximum possible extent their own objectives within those buildings? It will be an absurd situation if, when the Bill is passed, we continue to face a series of crises right across the field about which I have been speaking with no real ability to do anything substantially about it out of lottery funding without further legislation.

It seems to me that we may be in the situation where we will be helping talented individuals in the fields of science, technology and the arts to develop their creative ideas, and then at the very moment when we might see them translated into vivid performances, into successful productions to strengthen the companies that invite the public in to see them, somehow the whole thing will fail and there will be no performing companies to take up the ideas. The productions that have been thought of, the ideas that will have been invented, will never be developed simply because we will be going on using money for a further range of capital buildings while the companies face an ongoing series of crises.

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I simply take this opportunity to try to extract from Government a clearer idea of what their policy is, how far we can now go with the Bill as it now is, and to seek information as to whether there is any prospect as a consequence of this legislation of finding a way out of the mess which we are now in, a mess which I fully accept--and noble Lords are not going to have to use that defence--arose as much from policies of the previous administration as it does from those followed now by the present Government.

4.15 p.m.

Baroness Ramsay of Cartvale: The noble Lord, Lord Skidelsky, began his treatment of the two amendments with some general remarks, and we are in complete agreement with the two main points that he made. There is no intention that NESTA will, as he put it, become the toy of the Secretary of State, and we certainly agree with him about the point which in brief was additionality, that NESTA should not be concerned with substituting for what is already available. We have tried to make this clear again and again in the Bill. The noble Lord, Lord Skidelsky, said that NESTA should be more at arm's length, and I believe he mentioned Clause 19 as giving the Secretary of State too much control. However, Clause 19 is all about powers to allow the Secretary of State to provide safeguards for the lottery endowment, and the powers in Clause 19 are concerned only with financial control and accountability matters; he will have no powers to influence NESTA's policies and programmes.

The noble Lord asked specifically whether NESTA will fund matters that other bodies fund, for example universities. We recognise that NESTA's interests overlap inevitably with some other bodies. We want NESTA to work with or through those bodies. In our opinion NESTA's first task should be to assess current provision, look for partners and ensure that its contributions are truly additional. That is a very important principle that we have tried to embody throughout the Bill.

The noble Lord also asked how NESTA would protect property rights. Intellectual property rights are protected by copyright, patents, design rights and so on, but protecting those rights and seeking registration in the case of some rights is a complex matter, particularly where rights need to be protected not only in this country but also in many other countries. Our idea is that NESTA will be able to work with inventors and artists to ensure that these rights are properly protected and we will be able to help them achieve that.

The noble Lord, Lord Skidelsky, also raised this question of individuals. I now turn specifically to the two amendments that we are dealing with. NESTA is primarily about the talents and creativity of individuals and helping them to reach their full potential, but individuals can also be part of a wider group. It does not have to be one single individual. It can be one individual or a group of individuals. It is difficult to see how NESTA could address its support for talent to whole groups and teams without actually specifying individuals.

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The noble Lord, Lord Crickhowell, raised very important and serious points, which we would all echo, about the state of the arts in this country. Many of them will be dealt with under Amendment No. 39, with which my noble friend Lord McIntosh will be dealing later. We are concerned that lottery-funded buildings should have something to go in them. Other parts of the Bill and other actions we are taking will mean that lottery funding can address the needs of both capital and revenue of the good cause sectors. That is how the distributor strategies will address the framework which governs distribution.

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