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Lord Rix: My Lords, it is Velcro.

Lord McIntosh of Haringey: My Lords, at last we have discovered the secret! I am enormously grateful to the noble Lord.

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The noble Lord, Lord Chorley, accused me of not having a lean and hungry look. Perhaps it is because I am hungry that I am not lean. However, I shall do my best, whatever my girth, to satisfy noble Lords.

The noble Baroness, Lady Rawlings, referred to the timing. But, to adapt Dickens, this is the best of timing and the worst of timing for this debate. It is the best of timing in the sense that this afternoon we had the Comprehensive Spending Review, and I shall say a word about that in a moment. But the Comprehensive Spending Review has so far only been announced by the Treasury and over the next two weeks or so we will have a spate of announcements by different spending departments, including the Department of Culture, Media and Sport, in relation to the detail of how they will use the money made available. That will not be over just one year, but over three years. The effect of that is that I cannot say anything precise about what the DCMS spending programme will be, even for the theatre in general and still less for the repertory theatre--indeed, not even for the Arts Council, which covers a lot more than the theatre.

Apart from the noble Baroness, Lady Rawlings, let us be pleased with the result of the Comprehensive Spending Review this afternoon. As the Chancellor's Statement said, £290 million extra will be invested in museums, the arts and sport over the next three years. That will not just repair the damage of the last government's cuts, but will be a real increase of 5.5 per cent., making possible improved access to museums and galleries. The Chancellor picked that out because that has always been at the forefront of the department's objectives. Yet the noble Baroness, Lady Rawlings, called it disappointing. If the noble Baroness compares a real increase of 5.5 per cent. per annum over the next three years with her own government's record, she will not be quite so ready with that description.

The funding from the Treasury--I now speak wearing my DCMS and not my Treasury hat--will be used to deliver the new department's principal objectives of promotion of access for the many and not just the few and the pursuit of excellence and innovation. The noble Lord, Lord Beaumont, was afraid of politically correct theatre--what he called "innovative, meaningful or worthy" in somewhat disparaging terms. I do not believe that innovation should be equated with worthy. Excellence and innovation are perfectly proper targets and need not be politically correct; but excellence requires continuing innovation in order to thrive, though I accept that it must be on a sound basis.

The nurturing of educational opportunities, to which my noble friend Lord Jenkins properly referred, and the fostering of the creative industries are the economic base out of which a substantial amount of artistic effort derives.

I cannot give even the broadest indications of how the extra funding will be used. But it is important to stress that there will be three-year funding agreements; in other words, the allocation to the Arts Council, whatever it may be, will be for a three-year rather than a one-year period. That will make a huge difference when, in the autumn, the Arts Council comes to state its allocations

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to individual institutions, individual theatres or orchestras and so forth. It will have the security of knowing what will be available for three years rather than for one.

That is the good side and the bad side of what we know about the Government's intentions. But the important thing is that the Chancellor, in his Statement this afternoon, recognised the importance of the arts and our cultural life. They have been a political afterthought and have never been referred to in a public expenditure statement as specifically as they were this afternoon.

The comprehensive spending review placed art and culture at the heart of government. They have done so not only for themselves, but also because of the contribution the arts make to all the other priorities of the Government: that is, our priority for rebuilding communities; our priority for restoring community and personal life; our priority for education; our priority for the economic benefits from the creative industries in our society--an enormously important part of our gross domestic product and a major attraction for inward investment.

That is all very positive. The noble Lord, Lord Chorley, says that the devil is in the Treasury. I hope that he will recognise that the Treasury has done something to exorcise that devil in the course of today and that the Department of Culture, Media and Sport will do more in the coming weeks.

The Government recognise the importance of British regional theatre and, within that general category, the particular importance of repertory theatre. It is one of the country's great artistic strengths. The examples that have been given of actors and directors and craft skills coming from the regional theatres and repertory theatres is evidence enough of that, as the noble Lord, Lord Chorley, has said.

I do not need to tell the House that it is the Arts Council and its regional arts boards that take the decisions on individual funding. Ministers do not interfere with those decisions. I have been challenged to comment on some individual funding decisions that have already been taken. The noble Lord, Lord Trefgarne, referred to the Greenwich Theatre. The Greenwich theatre has had £500,000 in public money from various sources since 1996. It has ended up with a deficit of £200,000 and audience figures which have fallen from 40 per cent. in 1996 to 35 per cent. in the first half of this year. It was denied funds by the London Boroughs Grant Unit before the London Arts Board decided to withdraw its funding. Under those circumstances, it would be difficult to make a case for the £400,000 a year which would now be necessary to revive it and to pay off its debts.

The noble Viscount, Lord Montgomery, referred to the Watermill Theatre. That has had standstill funding. He knows that the good management of the theatre has resulted in a £50,000 accumulated surplus rather than a deficit, in considerable contrast to the Greenwich Theatre.

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I do not know the answer to the question of the noble Lord, Lord Trefgarne, about a deficit in the London Arts Board figures. I shall find out about that and write to him. My officials do not know about it either, so we are somewhat taken aback.

Although we are not responsible for their decisions, the Arts Council and the regional arts boards will spend over £50 million of Government grant in aid on drama in England. That is a quarter of the Government's total grant in aid to the council. It will include at least £20 million on regional theatre activity in support of more than 50 regional theatres. I have seen from the excellent briefing of the National Campaign for the Arts how many theatres are in desperate situations. We must not think of Arts Council subsidies, central government subsidies, as being the centre of their funding. They have their own box office takings which, in a healthy theatre, could be 60 per cent. of the total requirement, as the noble Lord, Lord Beaumont, has said. They can generate other income through local authorities and local businesses. I appreciate the difficulties in individual theatres but the amount of contribution is not insignificant.

Similarly, the lottery has made a major contribution. The noble Baroness, Lady Rawlings, somewhat surprised me by suggesting that we should be going back to funding buildings and not people. All of the pressure that I have encountered from the arts world has been to fund people as well as buildings. Some £150 million has gone to capital expenditure in theatres. The Arts for Everyone programme set up by the previous government amounted to less than £8 million. The balance that we propose between buildings and people is not wrong. I would be sorry to go back to the more rigid and restricted provisions of the previous Arts Council lottery expenditure rules.

Let me now say something about what the Government plan to do. That is the basis of the noble Viscount's Question. Above all, we are committed to increasing access to the arts. Public funding carries with it the right to better public access. Without going into details, we will be using some of the extra funding to build on the new audiences initiative to extend access to the arts, both geographically and in terms of new target audiences. The new audiences fund was established at the time of the Budget in March. The funds are targeted to help arts organisations extend their audiences and to bring new young people to the arts. We agree with the noble Viscount, Lord Falkland, about the importance of training young talent and encouraging young people in particular to broaden their experience of different art forms.

Among the range of projects which are not part of this debate, the Sheffield Theatre project will, over the next two years have £300,000 of new audience funding. Sheffield is very suitable for this because it has a very high proportion of 16 to 25 year-olds, including approximately 50,000 students, and three regional theatres--the Lyceum, the Crucible and Crucible Studio. It will carry out a whole range of projects on ticket pricing discount schemes and will produce a publishable study at the end of this exercise. It will

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experiment with pay-what-you-can nights in different configurations, one-price productions at different price levels, matinee performances for school groups, bring-a-friend schemes, variations in performance days, times and types, workshop opportunities and transport to and from the theatres. It sounds a small amount of money but if it can be made to work and encourage theatres in other parts of the country it will be very valuable.

As I said at the beginning, this is the best of timing and the worst of timing. If the question were being asked after 24th July I would be able to give considerably more detail. I hope noble Lords who have taken part in the debate will understand the Government's commitment to--indeed the Government's passion for--the theatre and regional theatre.

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