§ 5.25 p.m.
§ The Minister of State, Cabinet Office (Lord Falconer of Thoroton) rose to move, That this House takes note of the planning, management and operation of the Millennium Dome, and of its future.
§ The noble and learned Lord said: My Lords, I welcome this debate. Indeed, I have always wanted a detailed debate in relation to the Dome, and this is the first opportunity to do so since the recent Third Readings of various Bills in this House. It is right that this project has been the subject of sustained and detailed parliamentary scrutiny throughout its life. It has been the subject of more than 1,200 parliamentary Questions, eight debates, including today's, five Select Committee inquiries, a National Audit Office report and a PAC inquiry.
§ Today's debate will inevitably cover material similar to that considered by the NAO report. But it will go wider. This debate will cover the planning and the building of the Dome, not just its year of operation. It will also, rightly, look forward to the future. It is not appropriate for the Government to respond in detail to 1368 the recommendations of the NAO report; that must await publication by the PAC of its conclusions. However, the NAO report can provide a mine of factual information on the year of operation and the history of the Dome. In this debate, I shall seek to cover all the main issues on the Dome and answer specific points raised.
§ In many respects, the Dome is a remarkable achievement. It has become the UK's top pay-to-visit attraction. It has been at the centre of the drive to revitalise the once contaminated and abandoned North Greenwich peninsula, bringing jobs and opportunities to thousands. And yet, in truth, the Dome has not lived up to the expectations of those who supported and initiated it. At the heart of its unpopularity is the additional lottery funding of £179 million over that budgeted which it has required during 2000.
As the NAO concludes:
The main cause of the financial difficulties is the failure to achieve the visitor numbers and the income required".
These visitor numbers were ambitious and inherently risky. It was the failure to meet those numbers which caused the need for the additional lottery funding. We need to learn lessons from the experience, in particular about what the public sector can and cannot do. But we also need to ensure that the problems that the Dome has faced do not obscure its very real achievements. Relative to its target of 12 million visitors, the Dome has not succeeded. Relative to every other pay-to-visit attraction in the UK, it has succeeded. It has received more than any other rival this year. It has made a significant contribution to the Thames Gateway and will bring a substantial legacy in jobs and regeneration to the area.
§ The story of the Dome starts in 1994, when the then Heritage Secretary, the right honourable Peter Brooke, said that he supported the idea of a millennium festival with a substantial exhibition at its heart. Right from the start the idea was driven by politicians, not the commercial or business sector. The previous government recognised this. The coordination of decisions in relation to arrangements for the millennium, including the Dome, were taken at Cabinet Committee level. The Cabinet Committee, Gen 36, was set up in February 1996, the same month as Greenwich was chosen for the site of the exhibition. The committee was chaired by the then Deputy Prime Minister. Among its members was the present Leader of the Opposition.
At the time of its selection, the North Greenwich site had negligible transport infrastructure and extensive contamination. It was selected, as the Select Committee in another place found,
because it offered … an opportunity to provide economic and environmental regenerations'.
Although private-sector operators were sought, it became apparent during 1996 that no such operator could be found. The risks and demands associated with the project meant that it would never be attractive to a private operator: an immovable deadline; and a year to start, run, finish and make a profit out of an
entirely new visitor attraction. Although it was not attractive to private-sector operators, it is, nevertheless, a venture that has had to trade as effectively as its well-experienced competition; namely, the museums, the waxworks, theme parks and attractions, which are competing for visitors throughout the year.
§ The previous government set up a structure which involved a private company running the exhibition. This company had, rightly, all the restrictions which apply to limited liability companies. It was also a non-departmental public body, so it had all the bureaucracy and transparency which, rightly, go with those bodies. All its funding which did not come from visitors or sponsorship came from the Millennium Commission. That body, rightly, was responsible for ensuring that the substantial sums it granted to the Dome were properly spent.
§ The sole shareholder in the private company (which was also a non-departmental public body) was a Minister, the then Chancellor of the Duchy of Lancaster, the noble Lord, Lord Freeman. The chairman of the Millennium Commission was also another Minister, the right honourable Member for South West Surrey, Virginia Bottomley. The arrangements for building and running the Dome involved two Ministers, a chairman, chief executive and board of directors, three accounting officers and nine millennium commissioners.
§ The final part of the jigsaw required in the planning stage was to determine how much of the funding was to come from the lottery. This depended, in large measure, on the number of visitors expected. The figure on which the final budget was based was 12 million. In 1995, when the idea of the exhibition was being developed, the figure of 12 to 30 million visitors had been proposed by the Millennium Commission. By the time the budget was being prepared before the previous election, the figure, having veered around, had been put at 12 million. The Millennium Commission, on which the primary duty for appraising the business plan fell, believed that the 12 million figure would be achieved.
§ The proposal for the project was ambitious and impressive in its vision. But, in 1996 and early 1997 when the planning was going ahead and significant sums were being spent in the preparatory stages, it would have had no chance of progressing in time unless the then Opposition indicated that they were willing to support it in principle. Without our support in principle there would not have been that degree of certainty which comes from a bipartisan project. We considered it very carefully. We recognised the risks. We also saw the regeneration gains and the benefits to be obtained from a successful exhibition.
§ In January 1997, we agreed the terms of an announcement with the then Heritage Secretary, the right honourable Virginia Bottomley, in which we indicated that, subject to a review if we were elected, we supported the idea of a national exhibition. The announcement which we agreed specifically drew attention to the fact that the decontamination and 1370 regeneration of the 300 acre site—the largest derelict site in southern England, just six miles from Westminster—would be one of the great legacies of the event. We completed our review within eight weeks of coming into office and the project proceeded. We accept full responsibility for that decision. We think that the prize was worth fighting for.
In the period between June 1997, when we decided to go ahead, and 31st December 1999, a major capital project had to be completed, a huge exhibition mounted and a large, complicated show written, rehearsed and opened. The project, as is well known, was delivered on time. Not only was the building completed, but also all the zones and the central show. There is a multitude of views about the contents of the Millennium Dome. Some, but not all, are had. Many of them are good. I quote what Jon Snow wrote in the Evening Standard on 9th June:
Spectacular from all quarters, vast and dramatic on arrival, and last week, crammed with people of all shapes, ages and conditions actually enjoying themselves".
We in the media have gone to unparalleled lengths to rubbish the thing. And we have failed".
Charles Spencer, the theatrical correspondent of the Daily Telegraph, wrote in that paper on 3rd January of this year:
I saw it through the eyes of my six-year old son, who was completely gobsmacked by the Dome and all its works … It's not often that one shares in a moment of communal, uncomplicated, good-natured joy but this was one of them".
We never expected everybody to like all of it. But equally we never expected the very high levels of visitor satisfaction which the Dome has enjoyed throughout the year.
§ In the course of 1999, the Dome company decided that 1 million free school places should be made available in the pricing structure. This was an idea that the Government advanced and supported. The Dome was keen to reach as many people as possible, particularly young people, who might not otherwise go. We did not want the schools which organised trips to be only those which would not be put off by a charge of £8 per head. It has cost us some revenue—the NAO estimates £7 million—but it has probably also generated some. The number of children who bring their parents because they liked it when they visited with their school is unquantifiable.
As the Select Committee in another place pointed out in its 5th report, the Dome company has been criticised for providing free school tickets, but would undoubtedly have been criticised if it had not. I believe that we were and are right to have made that decision on free school places. In a letter to the Prime Minister from Eastburn Junior and Infant School, Bradford, a teacher wrote:
I took a party of 40 Year 5 and 6 children to the Dome. Without exception every child thoroughly enjoyed the experience. I have never known such an enthusiastic response from children".
I move to the year 2000. On four occasions throughout 2000 the Dome company was awarded further grant by the Millennium Commission. The total value of the additional grant was £179 million.
The vast majority of this money was not allocated to deal with additional costs but to replace estimated income which did not materialise. As the NAO report states:
The financial difficulties were largely the result of the shortfall in income".
This is the view of the National Audit Office, the Dome company, the Millennium Commission and those advising them. These problems have not pushed up the money spent by the Dome (though the budget has gone up for other reasons by 4.6 per cent), but they have meant that a greater proportion of the Dome's budget has had to be provided by the Millennium Commission rather than by revenue from visitors.
Once the Dome had been constructed and much of the project cost had been incurred, the room for manoeuvre in the face of low visitor numbers was, in the words of the NAO, "very restricted". Its view is that closing the Dome or liquidating the company during the year of operation
would not have made financial sense".
This is a view shared by the Dome company, the Millennium Commission, David James, the accountants advising the Millennium Commission and PricewaterhouseCooper. The only people who do not share this view appear to be those in the Conservative Party.
On 6th September 2000, Mr Peter Ainsworth said,
We believe the Dome should close".
This, despite the fact that by then David James had made public the figures for how much more expensive it would have been to close the Dome early.
The right honourable William Hague, the Leader of the Opposition, seeing the passing bandwagon and ignoring the figures, said the next day that the plug should be pulled. It is not realistic, I suppose, to expect financial sense from the Conservatives, but surely it is reasonable to expect some degree of honour and consistency. We supported the scheme when they asked for our support. I pay tribute to the right honourable Michael Heseltine who has supported the project through thick and thin. He said:
Our task is to maximise the national gain and recognise that this is a non-party-controversial issue; it is an all-party endeavour".
§ Those on the Opposition Front Bench, on the other hand, have washed their hands of any responsibility. The electorate are angry about the extra lottery money involved. We accept our responsibility for it. But it was a bipartisan project from its inception. The idea was conceived under the Tories. They selected the site. They set up the company to build the Dome. They devised the complex management structure highlighted in the NAO report. They set the visitor numbers. They persuaded people to work on the project on the basis they supported it. They knew the risks. But at the first sign of trouble they abandoned the project. There can be no more depressing sight than the right honourable Leader of the Opposition standing outside the Dome with his spin doctor and a camera crew denouncing the project he and his 1372 government started. There was a no-car policy at the Dome, but that did not stop the right honourable Leader of the Opposition parking his bandwagon there. The gutless hypocrisy of the party opposite impresses no one.
§ Throughout the year, the New Millennium Experience Company (NMEC) and the Millennium Commission have worked closely together on solving the problems which have come from the shortfall in income. The NMEC has, rightly, been concerned to ensure that the quality of the experience and the stability of the company should be preserved. The Millennium Commission has rightly been concerned that costs should be kept to a minimum. It has provided staff and had its own accountants and consultants to help and inform them throughout this period. That is an appropriate and healthy tension.
§ The NMEC is a company which has been under considerable pressure during these 11 months. Any company which had just completed a massive capital project and had then opened a huge and novel visitor attraction would be.
§ As was agreed in February 2000 with the Millennium Commission, the NMEC's strategic priorities during the year have been to maximise revenue and keep cost to a minimum. Its financial systems have needed, and have had, improvement. As the NAO report pointed out, its record keeping of contracts, assets and invoices was at the beginning of the year unsatisfactory. But a thorough study of its contracts revealed no net increase in liabilities; that the failure in relation to invoices was delays in recording rather than missing debts, and that the asset register is well on the way to being prepared. Paragraph 3.4 of the NAO report sets out the detailed improvements which have gone on throughout the year in record keeping and financial management.
David James, the present executive chairman, confirmed during his evidence to the Public Accounts Committee on 15th November that,
NMEC has not lost money as a result of inefficiency".
We go back, as ever, to the visitor number estimates which, as the NAO found, was the cause of the problem. The problems should not have occurred, but I think that it is fair to give a company going through the experience which the NMEC was going through some extra time to get its record keeping up to date.
§ Whatever may be going on among the politicians about the Dome, there is a complex and difficult business which needs running down in Greenwich. Throughout the months of operations, the Dome company has been doing that. That has required a high degree of determination and leadership from the people running the business. To ensure the effective management of the Dome, changes at board level have been required. In February, it was plain that the Dome needed experienced visitor-attraction leadership. The appointment of PY Gerbeau as chief executive provided that. At the same time, the Dome and the Millennium Commission agreed priorities for the board to pursue and some new structures. The issues of corporate governance were very thoroughly 1373 discussed at this time between myself, the Millennium Commission and the NMEC. We all shared the same goals.
§ In May 2000, Bob Ayling, who had overseen the delivery of the Dome on 31st December and who had been instrumental in bringing in the new chief executive in February, resigned and was replaced by David Quarmby. Shortly before that, Malcolm Hutchinson joined the board in an executive capacity to oversee cost-cutting strategies. At David Quarmby's suggestion, in early August 2000 David James was brought in, first in a consultancy capacity and then as executive chairman.
§ Throughout this year the company has remained focused and upright. It has changed its management in response to events and has survived a battering to which less strong companies would have succumbed. The company is running the most popular pay-to-visit attraction in the UK. It has a highly committed staff despite the exhibition ending in a month. It has competent and confident management. It is doing the right thing in operational and financial terms. It has responded to problems and crises appropriately and quickly. That it did not get everything right from the outset is hardly surprising. Hindsight is a wonderful thing.
§ The failure to meet the visitor targets on which its budget was based has meant that the Dome's solvency has depended primarily on replacing the lost revenues with additional grant from the Millennium Commission. Throughout the year of operations the NMEC has been in detailed touch with the commission. The commission has always been required to be satisfied on every penny of extra grant— and rightly so. As the board and its advisers have always recognised, it can only continue to trade when it is solvent, or it can within a very short time make an application to the Millennium Commission for additional funds. With the exception of the period between the delivery of the PricewaterhouseCooper report on 22nd August and the application to the Millennium Commission on 5th September the board always believed that it was trading solvently. During that short period I have mentioned, it rightly continued to trade pending the application to the Millennium Commission.
§ In answering Questions in Parliament about the solvency issue, I have always scrupulously reflected the views of the board and its advisers. On 27th July, I answered that the company was solvent because that was the view of the board. The company was entitled to a substantial share of the proceeds of the Nomura deal and it was reasonable to suppose the Millennium Commission would advance money again against those proceeds, which it duly did on 4th August 2000. The board had, since May, received independent legal advice from a City firm on solvency issues. On the basis of that view, I considered the company to be solvent. It would have been wrong of me to have given any other answer than the one I gave on 27th July.
§ The PWC report delivered on 22nd August identified certain liabilities, in particular wind-down liabilities which had not been identified by the 1374 accounts department of the NMEC. This meant that the application made to the Millennium Commission was incomplete. It was necessary to make a further application to the Millennium Commission, which was done on 5th September. I informed the House of this error at the first opportunity; namely, on its first day back after the Summer Recess, on 27th September. I reject absolutely any criticism of my parliamentary conduct. While the error was sufficiently important to merit immediate correction at the first opportunity, it is important to recognise the reality. The Millennium Commission, after proper and detailed consideration, has recognised during the year 2000 the same point as the National Audit Office. It makes no financial sense to close early during the year of operation. It therefore decided that it would support the Dome during the year 2000. This meant that its creditors would be paid and possible insolvency avoided.
§ The exhibition continues for another month. So far 5.6 million visitors have attended. National programmes of worth and value have been running this year and were run last. Nineteen million pounds have been raised for the children's charities by the children's promise appeal. The "Our Town Story", in which every local education authority in the country took part, provided an opportunity for each community to tell its own story.
§ Legacy plc has been appointed preferred bidder in the competition to find a buyer for the Dome. There is work to be done before the contracts can be signed but there is an innovative and regenerating bid, backed by blue chip financial backers, which will produce a reasonable value-for-money return—comparable with any likely alternative use of the site, with or without the Dome.
§ The Dome is a building of distinction and worth. It has won architectural and design awards. It is world famous. It is a building we would be wrong to pull down. Six hundred and twenty-eight million pounds-worth of lottery money has or will be spent on the Dome. On the other side of the balance sheet, the Dome has contributed to the regeneration of the biggest derelict site in the south of England. In the next 10 years the investment by the public sector, including the "Dome Effect", is forecast to attract investment of around £1 billion: about £260 million by 2006 in relation to Legacy plc development; £250 million for the millennium village; £90 million for associated development such as Sainsbury's, cinema and hotel; and about £400 million on residential and mixed use between the village and Dome site.
§ We have stated that the Government should not run visitor attractions. We tried to deliver a visitor attraction within a budget—and to a degree of success which Disney could not manage. We should have realised that. But we have stayed in the arena fighting successfully to deliver a first-class visitor attraction which is well-managed and contributing to the legacy and future of the area for generations to come.
§ I hope that this debate will help us to learn lessons. I personally am very willing to accept them. But I also hope that the debate will recognise what has been 1375 achieved in this brave national project. The Tories can pretend that they never supported it. The Tories can abandon the people they persuaded to work for it. They can reduce public life by their short-term opportunism. They can run down a national project. But we will continue to work for and deliver the jobs and regeneration that North Greenwich so badly needs. I beg to move.
§ Moved, That this House takes note of the planning, management and operation of the Millennium Dome, and of its future. —(Lord Falconer of Thoroton.)
§ 5.49 p.m.
§ Lord Crickhowell
My Lords, that was an amazing speech. I, too, shall take a great deal from the NAO report, described as a mine of factual information, rather than the Alice in Wonderland information which seems to be the noble and learned Lord's principal source.
Before I get to the meat of the matter I must declare not an interest but feelings of prejudice and irritation which arise from two episodes. The first was when the Millennium Commission took its deplorable decision to reject the bid of the Cardiff Bay Opera House Trust for what in comparison with the Dome expenditure was an almost ridiculously insignificant amount of money; and Jennie Page justified the decision on the ground that the commission did not have confidence in our business plan. The dome project then went ahead under Jennie Page's direction on the basis of a business plan that was deeply and fundamentally flawed from the outset.
The second episode began in July, when it appeared to me that the noble and learned Lord, Lord Falconer of Thoroton, had, at the very least, acted with an extreme lack of prudence when he repeatedly expressed confidence that the New Millennium Experience Company would deliver the project within its lifetime budget at precisely the moment when the company was warning in its annual report that there were significant risks that might prevent it from so doing and just after he had received a letter from the chairman advising him of a further deterioration in the company's finances. I had to wait two months for a reply to my letter on the subject, which, when it came, failed to answer my question.
We all know that the noble and learned Lord is a very nice man. I was going to say that, having put aside my irritation, it pained me to have to be critical of his role as a Minister and as the government shareholder of the New Millennium Experience Company. However, after hearing his speech, I feel much less embarrassed at my line of criticism.
I start with his defence that it was all just as much the fault of the previous Conservative Government because they began the project and gave it its initial structure. The noble and learned Lord is not only a very nice man, but, by all accounts, a very clever one. If he has a case, he ought to be able to do better than that.
1376 Let me remind the House of the timetable. As the National Audit Office report says, in January 1997 the Millennium Commission offered £200 million,to enable further development of the business case and preliminary work, including the letting of major contracts".In May 1997—the month of the general election—the company submitted a revised business plan to the Millennium Commission and the incoming Blair government. At that time, final decisions had not been taken on the Dome's content, on ticket prices, on marketing strategies and on whether there would be access by car.
The new Government reviewed the project thoroughly, so we have been told. That review went far beyond the details of the business plan to ask the fundamental question of whether to continue with the project. The issue went to the Cabinet, where some members apparently thought that the answer should be "no". However, the collective decision was an emphatic "yes". The project was to be a symbol of new Labour. There is a ring of truth about the reported comment of one senior Cabinet Minister: "If Tony has made a decision, we will all have to support it". Tony had made a decision and they did support it.
Presumably the Cabinet had before it the Millennium Commission's written appreciation of the business plan which said that it lacked detail on commercial, operational and pricing strategies and that it contained no information on the key drivers for the company's business—the contents of the Dome.
Having taken the decision, the Government had two-and-a-half years to make sure that the business plan was sensibly developed and workable strategies were put in place. That is a long time. Ministers can hardly argue that they simply left in place the very preliminary arrangements that had been barely sketched in when the previous government left office. On the contrary, Ministers involved themselves to an extraordinary extent—probably unprecedented in the history of non-departmental public bodies. The coordinating group, chaired by the shareholder, met regularly from June 1997 until the opening of the Dome. Throughout 1999, the shareholder met weekly with officials from the Dome and the company. The noble and learned Lord became the shareholder in January 1999.
The NAO report reminds us that the shareholder is responsible, among other things,for setting the strategic direction of the company and for monitoring its programme in terms of cost, content, national impact, legacy and effective management".The noble and learned Lord attended 16 of the company's 22 board meetings held between April 1999 and 12th September 2000 and was represented at two that he could not attend. Once he had been given the thankless task of acting as shareholder by his old friend the Prime Minister, he was in it up to his neck. He is a nice man and a clever lawyer, but he appears to have been totally out of his depth.
The extent of the noble and learned Lord's involvement was extraordinary and most unusual. The normal—and very wise—practice is for Ministers to 1377 stand back from non-departmental public bodies. That prevents them from becoming party to the decisions taken and puts them in a position from which they can form a dispassionate judgment and, if necessary, take effective remedial action. To act otherwise obscures where responsibility lies. That is particularly likely to be the case when the structure is highly complex, as the NAO report confirms is the case here.
The confusion created by those arrangements is startlingly revealed by the correspondence reproduced in the NAO report. The noble and learned Lord had got himself into a position in which he appeared to be acting as chairman of the company—or at least as joint chairman.
The letters exchanged in February and March are remarkable. Chris Smith, as chairman of the Millennium Commission, wrote a highly critical letter, insisting that corporate governance at NMEC would have to improve. The letter was addressed not to Robert Ayling, but to "Dear Charlie". It said:The NMEC board does not appear to have played the role we would have expected in confronting the problems and providing leadership. This is disquieting on issues relating to commercial and operational strategy and media handling, and extremely serious when it comes to solvency and financial management. Either the Board did not see or it chose to discount the warning signs of the cash flow difficulties. As a result it seems possible that it failed to take decisions until after a date when the company became technically insolvent".Chris Smith went on:The Board must be encouraged to take responsibility for overall stewardship of the company and provide the clarity of direction any good management team needs".The noble and learned Lord, not the chairman, replied, to be followed a week later by a reply from Robert Ayling rejecting the concerns that had been raised.
Neither response satisfied the Millennium Commission, which remained so concerned that Chris Smith arranged a meeting with the noble and learned Lord in May to discuss his anxieties. By all normal conventions, it is odd that Chris Smith's original letter about board conduct did not go to the chairman, even if, by his attendance at the majority of the board meetings, the noble and learned Lord had inevitably become associated with and party to the failure to provide leadership, to take decisive action until after a date when the company was technically insolvent and to provide the clarity of direction needed. Has a Minister ever written more devastatingly critical and damaging comments about a colleague?
There was a second, and equally remarkable, exchange of letters in September, between the Earl of Dalkeith, writing on behalf of the Millennium Commission, and the noble and learned Lord. Lord Dalkeith said that the PricewaterhouseCoopers report made salutary reading, with its conclusions that there were serious financial weaknesses in NMEC, that budgeting was inadequate, that an exit plan had not been properly thought about, costed or resourced and that any further funds given to NMEC would be at risk without,substantially enhancing the skill and resources of the company".1378 The noble and learned Lord replied:Like you, I was shocked by what the PWC report implied about NMEC's financial management and corporate governance".Why was he shocked? He had attended 16 of the 22 board meetings and been represented at two others. He had been repeatedly warned by the Millennium Commission. He had the full resources of the Cabinet Office behind him. How could he possibly have failed to observe those shortcomings? Did he never inquire about the adequacy of the budget, the cash and solvency position of the company, whether it had a proper assets register and what were the contractual liabilities and those likely to arise from closure?
As the months and years passed after the Government had concluded their initial thorough— we have had confirmation from the noble and learned Lord that it was thorough—review of the business plan, did he and his colleagues—Peter Mandelson, who was the initial shareholder, and Chris Smith— never question the reality of a plan which meant that the Dome had to attract more than four times the number of visitors as the next most popular UK pay-to-visit attraction achieved in 1999? Did they never inquire whether there was a clear plan in advance of how the company would respond if visitor income fell significantly below the required levels? Surely that would have been an obvious question, particularly after it became clear quite early on that sponsorship income was also much less than originally planned.
With a business plan so obviously highly risky, was it wise of the Government to insist that up to 1 million schoolchildren should be admitted free, at a cost of at least £7 million? The noble and learned Lord said that the idea had come from the company. The NAO report is quite specific that, having considered the request, the company accepted the Government's view.
One would have expected that the noble and learned Lord would have asked all those questions and taken appropriate action. As I pointed out, from January 1999 he was responsible for monitoring progress in terms of cost, content, national impact, legacy and effective management. It is difficult to avoid the conclusion that he failed to carry out his responsibilities effectively. The failure to achieve visitor numbers was not, as he appeared to suggest, an act of God. It was the result of a business plan that was from the outset fatally flawed. And it was the result of the grave deficiencies of management exposed by the NAO report—grave deficiencies with which the noble and learned Lord was so closely associated.
§ Lord Falconer of Thoroton
My Lords, could the noble Lord confirm that the date of the business plan was April 1997?
§ Lord Crickhowell
My Lords, I have already gone through the history and pointed out that the revised business plan was considered and approved by the Government when they came into power.
§ Lord Falconer of Thoroton
My Lords, will the noble Lord confirm that the date of the business plan was April 1997?
§ Lord Crickhowell
My Lords, the date of the original business plan, which, as the NAO report concludes, was updated as time went on, was April 1997. As the NAO report makes perfectly clear, it was reviewed by the Government and it continued to be reviewed by the Millennium Commission at regular intervals thereafter.
§ Lord Falconer of Thoroton
My Lords, will the noble Lord confirm that the grant of £449 million was approved by the Millennium Commission on the basis of the April 1997 business plan, which estimated the number of visitors at 12 million?
§ Lord Crickhowell
My Lords, I am not arguing about that at all. I merely point out that the scheme did not go ahead until the Government had a chance to drop the whole project. They could have abandoned it. As the noble and learned Lord told us, they reviewed the business plan thoroughly and went ahead with it. The way in which the noble and learned Lord, who was in it up to his neck, tries to avoid taking any responsibility for his actions is quite extraordinary.
The noble and learned Lord then came to the House in late July and told us that he was confident that the NMEC would deliver the project within its lifetime budget of £758 million. He stuck to that assertion, even when I reminded him that the company's annual report clearly identified the substantial risk of failure and despite the fact that he had just received a letter from the chairman of the company pointing out that the financial situation was deteriorating. Indeed, the Millennium Commission then produced a review which stated that it might run out of money in the space of two or three weeks.
By September, the cost had become £793 million. On 15th November David James told the Public Accounts Committee that, if one took account of the cost of the two sponsored zones not included in the original plan, the true cost was now £834 million. Is that the final cost?
I shall leave others to raise questions about a possible sale. I use the word "possible" because there is no contract, and the last time that the noble and learned Lord announced a sale, it fell through. However, I want to ask what is the current estimate of the total cost of dismantling the contents of the Dome and whether that total cost is included in the overall total. On this occasion is there to be, as there was to be with Nomura, an early payment of £105 million, with £53 million of it going to NMEC, and, if so, when? I hope that I can have an answer to those questions before the debate ends.
I conclude by saying that I thought I had a good deal of sympathy for the noble and learned Lord—at least I did before the debate began. He was told by his friend the Prime Minister to do a job that he did not ask for, that I suspect he did not want and for which he was in no way qualified. However, Ministers must accept responsibility for the way in which they carry out the jobs that they have been given.
1380 The noble and learned Lord acknowledges that all has not gone well but says that he wishes to see the project through to the end. On the basis of what has happened so far, it is hard to see why that would be of benefit to anyone. Would it not be better if he added to his considerable reputation as a man of integrity by acknowledging failure and going, leaving it to others who may well be better qualified to clear up the mess?
§ 6.7 p.m.
§ Lord Sharman
My Lords, I welcome the opportunity to debate the situation at the Dome. I begin by declaring both an interest and a prejudice. My interest is that for many years I was the financial adviser to the London Docklands Development Corporation where this site was manifestly evident as a dereliction that needed to be addressed. My prejudice is that I was never a supporter of the Dome as a millennium commemoration vehicle. I believed that other things could have been done. Indeed, when I was chairman of a company before I retired, on two separate occasions we were asked to contribute financially to the Dome. We declined to do so on both occasions.
Having said that, I recognise that the Dome has many, many supporters, who must be somewhat disappointed at the nature of the media attention which it has attracted. I also recognise clearly the regenerative effect that the project has had on Greenwich and the surrounding area.
Before going further into an examination of the planning, management, operation and future of the Dome, which this Motion invites us to consider, I say at the outset that I do not intend to spend my time singling out any individual to whom to ascribe blame for the events that have taken place. I am content to wait for the conclusions of the PAC to do that. In any event, in my opinion the cast of culpable characters in this tragedy is so large that I would spend all my time trying to ascribe blame rather than, I hope, trying to establish one or two lessons that we might learn from what has occurred.
First, let us consider the planning. As the Minister said, we should always remember that this started as a private sector project. The intention was that it would be delivered by the private sector and bids were invited. I believe it is fair to say that at the end of the day it came down to a two-horse race—Birmingham against Greenwich. In the end, for sensible reasons Greenwich was selected. However, when the Government tried to sell the project to the private sector, there were no takers. The private sector considered that the risk outranked the reward. Here, I believe, is lesson number one for the Government. If the private sector does not want to run a commercial venture, what business do government have trying to run it? That is the prime lesson which comes from this and I believe that the Minister acknowledged that.
Once it was constituted as a non-departmental public body, however dressed up as a limited company, with a separate board of directors and so on, it is my view that that decision resulted in a 1381 commitment to open-ended funding. The only issue once that decision was made was who was going to pick up the tab: was it going to be the Exchequer or the millennium commissioners? The indemnities which were taken later by the directors only formalised the position; they did not do anything about changing it.
It seems to me that the only point in time at which a credible decision could have been made as to whether or not to proceed was at the time of the review by this Government. In the in-depth review to which the noble and learned Lord referred, were the costs evaluated of cancellation of the project at that point in time? Was an evaluation made of what it would have cost to call it off in April/May of 1997? If so, what were those costs?
Following the decision to create this as a non-departmental public body, we have what the NAO describes in its report as "complex organisational arrangements". In my experience, these are not complex; they are positively Byzantine—three bodies, three accounting officers and two Ministers, one of whom reports to himself. I have been lectured by members of legislatures about conflicts of interest in the profession to which I belong and I have to say that I am breathless as regards what went on here.
That leads me on to the execution because I believe that the execution of the project has inevitably been hampered by this complex arrangement. It may be large-scale and complex in terms of what goes in it, but this is a relatively simple, single-purpose project. And yet we end up with a scheme of arrangements which is breathtaking.
The construction phase was completed on time and, when I first looked at it, I thought on-budget too. I was quite encouraged by that. But then I looked again and read the report in more depth and it seems to me that there is what we might call in accounting terms a dangling debit of about £40 million. So that when you compare apples with apples or pears with pears, it looks to me—and I should be grateful if the Minister will confirm whether or not this is so—as though there is a construction overrun of about £40 million which is covered by contributions in kind and it is offset in that way.
Even so, to construct the project on time, reasonably close to budget is good. And it seems to me that a great deal of time and effort was spent on that, so much so that the people involved took their eye off the ball in terms of having to run what had been constructed.
The NAO report lists four principal causes of failure: the failure to attract visitor numbers, a lack of operational expertise, poor marketing and weak financial management.
I deal first with the lack of operational expertise. In that regard, again, I believe there is a very important lesson for us. This project was to plan, build and operate an asset, exactly the same as we have in many PFI and public-private partnership initiatives. I repeat, plan, build and operate. It is no good planning it and building it extremely well if you then forget to put in place the appropriate provisions for operation. When you look at the different skill-sets which are needed for each of those, it is incredibly important to 1382 understand that you start to build the operational capability as soon as you start to plan and build the asset. I suspect that that was lost sight of in this case.
The Minister said that hindsight is a wonderful thing. It is wonderful, particularly when you are looking at forecasts. But if you look back to what was available at the time the business plan was constructed and look in particular at the consultants' reports that gave indications of the likely visitor numbers, the number that was selected for planning purposes was at the upper end of the parameter. In my experience, that is unusual to say the least. It is much more usual to have a greater degree of prudence.
It seems to me that you should be looking for the same degree of prudence in these forecasts as you would look for in a prospectus of a company issuing shares. In view of what was then available, particularly the lack of information with regard to the content of the Dome, there was no chance at that time that a sensible financial adviser would have signed off on that forecast had this been a public prospectus. In the future, we need to look for that degree of prudence in relation to such projects.
In terms of poor marketing, I was astonished to read that the marketing plan was initially based on the notion that the Dome would sell itself. I acknowledge that that was quickly overturned. But again, I fail to understand how anyone could construct a plan on the basis of something selling itself when it was not possible to sell it to the private sector in the first instance. It seems to me that that was naive at best.
As regards the weak financial management, yes, there is always a case for saying that with new, one-off projects, there are sometimes what I would describe as problems which arise by moving up the learning curve. But not tracking your liabilities and commitments on a major capital project is simply inexcusable. That should not have happened.
Before moving to the future, perhaps I may make one or two comments about the solvency issue because that has attracted a lot of attention. The PricewaterhouseCooper report commences its executive summary with the words, "The company is insolvent". It does not say that it might be or may be but that "the company is insolvent". In continuing to trade, the directors had to take account of the likelihood of future funds being available.
To me, the most worrying aspect of the whole solvency issue is not so much the failure to attract the visitors. It was known that that was happening and something was being done to try to address that matter. But there is the additional £30 million which was identified only by Price Waterhouse at the time of its review. In my judgment, competent financial management should have had that on the agenda.
And so to the future. We understand that there is a preferred buyer and that the project involves the creation of what may loosely be described as an indoor science park. I have absolutely no doubt that in David James, we have a chairman of this entity who is well 1383 equipped to see it through to completion. I hope that he will be successful because regeneration of that area of London is very important to our capital city.
However, I say from my experience of urban regeneration that a leverage of £1 billion on government expenditure, if I can describe it as that, of £600 million is not a very good leverage. We should be looking for much greater leverage in terms of the money that has been spent already. I hope that that will be pursued.
§ 6.19 p.m.
§ The Lord Bishop of Southwark
My Lords, we, too, on these Benches welcome this debate. The Dome lies in my diocese so I hope that your Lordships will forgive me if I share a few thoughts about its past, its present and its future.
The Dome was, of course, to be the statement of the millennium. The Minister has reminded us that millions of pounds of public money were spent on it. Businesses were sought as official sponsors. Advertising ran at a high level. The Queen would greet the new millennium under its roof; the Archbishop of Canterbury would pray it in. That all happened but with hardly the aplomb that was planned.
That is partly because of the power of the media. On 31st December it was not a good idea to keep newspaper editors, with their guests, standing in the drizzle at an Underground station so that they missed the Dome's opening party. After the debacle of that opening night the press never gave the Dome a chance. I feel that the media treatment of the Dome has ill served the public by seeking to persuade people that it was not worth visiting. I believe that those who have not visited the Dome have missed something significant. I have visited the Dome several times, usually in the company of children, who have never failed to enjoy it.
I first visited the Dome when it had just been completed. It was light, airy, a wonderful open space, a miracle of architectural grace. Then we spoiled it; we put things in it. Perhaps it is a perfect symbol of our times: we can do anything, we can build anything, we have the skills, the computing power and the imagination, but we do not know what it is for because we do not know what we are for and we do not know what we truly value.
When the other great dome of London, St Paul's Cathedral, was built it was an equal miracle of architecture. The cathedral is a wonderful open space, but the builders knew what it was for: the honour and worship of God. They also knew what to put in it: the finest music and art to lift hearts and souls to the wonder of heaven. There is nowhere near the same coherence of purpose in the contents of the Dome.
Of course, there are some magnificent zones, but overall the quality is pretty mixed. I believe that even the spirit zone was at its best during its creation, when people of all faiths worked together in a way that had never been seen in Britain before. In my view, even the result of their labours was worthy rather than 1384 exhilarating. Nevertheless, there have been spin-offs from that co-operation. The inter-faith network has been greatly strengthened and has helped to launch and set up the great inter-faith celebration that launched the millennium in the Palace of Westminster.
Surely that is the point. Now is the time to turn the legacy around and get things right for the future. So far I have been a little disappointed that the focus of the debate has been almost totally on the past rather than on the future. The Dome could still be a major flagship building. In that part of London we need a flagship use for that flagship building on its flagship site. After all, there has already been much gain in the locality. Industrial land has been decontaminated; we have new transport systems, new highways, a new pier, a riverside walk and 50 acres of new parkland. There are arguments about whether the site would be more valuable with or without the Dome, but I believe that that is a little like saying that land in Sydney would be more valuable without the Opera House. True, not everybody likes the Dome, but in 1900 not everybody liked the Eiffel Tower. I still experience a thrill when I see the Dome from either side of the river.
What of the future use of the Dome? The borough has always believed that the Legacy plc bid is the one worth pursuing. The leader of the council has said so publicly. What do the local people think? As a diocesan bishop I have the advantage of being able to consult clergy in every area to find out what the local people are saying. In Greenwich I hear that the local people are mostly concerned about what the future proposals may mean in relation to jobs and housing. We are told that the Legacy plc proposal may create about 10,000 new jobs, which would be a great gain.
We are told that a major advantage of the bid is that it would create better quality jobs. If so, perhaps lessons can be learned from what has happened previously at the Dome, where whatever else they have done or not done, the New Millennium Experience Company has made every effort to employ local people. A policy was worked out and well implemented between the borough and the company so that a local skills base could be developed to match the skills levels required at the Dome.
If the bid of Legacy plc is the preferred bid, I believe that it should be a condition of the bid that every effort must be made to put in programmes of skills training in collaboration with local universities and colleges, so that Greenwich people can gain maximum benefits from the developments.
New jobs would bring new prosperity and a need for new housing, and it is vital that a good proportion of those are affordable, particularly for local young people and key workers. I know that the borough is trying to insist that at least a quarter of available accommodation must be affordable housing. It is hoped that what is being proposed will add to the energy of regeneration not only in the Dome peninsula but throughout the Thames gateway.
South London is changing rapidly. Recently, I held a brief staff meeting of my bishops and archdeacons in a pod of the London Eye, the wheel just across the 1385 river. Each of the pods has a guide assigned to it, and our guide was a young woman from Australia who knew her London, at least she knew her north London. As we faced south and kept asking questions, she eventually became irritated by us and said, "Why do you keep asking questions about south London? Nobody is interested in south London". We are and the people of south London are and people of London in general are increasingly interested in south London because they see the possibilities for developments south of the river.
However, that must not be at the expense of the local people or their environment. I am alarmed, for example, at Railtrack's plans for driving a new railway viaduct across the Borough market conservation zone, demolishing listed buildings as it goes and passing within yards of the most ancient cathedral church in London. South London needs regeneration but not at the expense of its communities and heritage.
That need not be the story of the Dome. Indeed, already badly polluted land has been cleaned up. Lasting improvements have been made to transport links. In the millennium year the Dome has provided much needed local employment and it has given millions of people something to remember. South London is proud of its Dome, but it will be prouder of it still if it can become a true sign of regeneration and hope for the future. There is no reason why it should not.
§ 6.28 p.m.
§ Lord Puttnam
My Lords, I am grateful to my noble and learned friend Lord Falconer for initiating this debate. I start by declaring a long-time interest, indeed a passionate enthusiasm for the Dome. I also remain unashamedly and unequivocally proud of my own contribution to a project which I believe, if treated constructively, could still come to be seen as a significant national asset.
Funded largely by lottery money, derided in the national media as "a disintegrating circus tent" and as "the joke of the century", it has an interior that is as unremarkable as the outside is remarkable; its costs have repeatedly spiralled out of control; its design has been praised and excoriated in roughly equal measure; there are constant rumours of insolvency; endless arguments about its future with some serious suggestions that it should be abandoned as a "romantic ruin" and, in short, it is a public laughing stock.
I refer of course, not to our Millennium Dome, but to the Sydney Opera House, or at least to the opera house as it was perceived in the mid-1960s. A generation later, it is widely acknowledged as one of the great architectural and artistic triumphs of the 20th century. Known locally as the "Eighth Wonder", it has become a potent symbol of Australian confidence and courage, the same confidence and courage that in recent years has brought about a brilliantly mounted Olympic Games, a thorough-going cultural renaissance and the ability to thrash us, and most other nations, at just about any sport you care to mention. 1386 In short, the once-derided Sydney Opera House is now a national icon of modernity, recognised across the world. Did ever an ugly duckling turn into such a swan?
It is difficult, if not impossible, to imagine such a transformation taking place in this country, for the simple reason that in our national pastime we have developed a culture of blame, with quite devastating consequences to our collective self-confidence. Given the traditions of this House, it would be generous and accurate to acknowledge that everyone involved with this most challenging and complex modern day project threw every scrap of their energy into trying hard to make it a success. It is to their enormous credit that the Dome opened on time and almost on budget, albeit somewhat on its knees, the victim of a dozen mutually contradictory agendas.
The genuinely unique structure has been widely and rightly celebrated as one of the great architectural achievements of our time—one that can truly rival the grands projets so beloved of the French. Many of my generation spent years gazing across the Channel, bemoaning what we regarded as a national lack of vision. Now that we, thanks to revenues from the National Lottery, have finally realised some sense of national ambition, what do we do? We fall back on what we know best—our bizarre affection for self-flagellation.
Overseas cultural and business delegations visiting the Dome, especially from the "can do" culture of the United States, are truly amazed at the way in which we obsessively seek scapegoats for what they regard as a quite remarkable achievement. In my judgment, we may well come to be proud of the Dome in a number of ways. First, the project's contribution to London's future development will, unquestionably, come to be perceived as of immense and enduring significance. Here was a vast tract of land that had been left literally contaminated and dying, the victim of an age when industrial efficiency was measured by the sheer volume of polluting smoke that belched from our factory chimneys. Thanks to English Partnerships, 300 acres of land have been reclaimed, over a thousand homes will be built, a new primary school, a health centre and a hotel have been opened. It is forecast that, together with other developments, these projects will eventually create over 30,000 jobs. Much of the credit for this physical regeneration must go to my admirable acquaintance in another place, Michael Heseltine, who at an early stage had the energy, vision and imagination to understand the potential for this all but forgotten corner of south-east London.
Anyone in this Chamber who has visited it must admit that that once benighted peninsula has been utterly transformed. I sometimes wonder how many of the more critical voices on the Benches opposite and elsewhere have visited the Dome. I surmise that the answer is remarkably few. Your Lordships may have noticed that the most extraordinary polarisation exists between those who have visited the Dome, the vast majority of whom have enjoyed it immensely, and those who have yet to "find the time", defending their apathy or their ignorance by the sheer volume of their 1387 lacerating criticism. The unpleasant smell that used to seep from the gas works across the Greenwich peninsula has been replaced by the unmistakable stench of schadenfreude. It is a stench that has drifted across from the other side of the River Thames, from a not wholly unexpected source—the printing presses of Wapping, West Ferry and well beyond. While almost 6 million people will have enthusiastically strolled through the gates of the Dome by the year end, much of our national press still prefer to gloat and pick over the failures and the disappointments. I wonder how many million more visitors have been deterred by this obsessive negativity?
There have undoubtedly been failures and disappointments. Some aspects of the Dome were hopelessly over ambitious, others not ambitious enough. The decision to accept approximately £160 million from the private sector removed any possibility of the contents having an overall coherence. But even that decision was just an unfortunate consequence of earlier public squabbling, which in turn led to an ill-fated mismatch between private and public objectives. An uncomfortable hybrid was created and the overall quality of the experience undoubtedly suffered accordingly.
However, some of the contents have unquestionably been triumphs. Consider Our Town Story, which has generated wonderfully imaginative grassroots activity in 250 communities across the country, engaging an incredible array of schools, youth groups and pensioners. For all of them, the Dome is now a part of their collective memory. Earlier this month the Dome's national programme produced a quite extraordinary Remembrance Day ceremony, involving thousands of children, which successfully reinterpreted that occasion in a way that made it relevant to children who knew nothing of either of the two great world wars. The Tesco SchoolNet 2000 project, associated with the Learning Zone, now holds the world record for the largest school internet site, with over 134,000 pupils having actively taken part.
In one very crucial respect, the Dome continues to represent a defining moment for this country. Do we wish to present ourselves as a nation that has the courage to take risks and the intelligence calmly to assess what went wrong, and even to learn from it, or do we simply wish to cut and run, preferring to avoid any possibility of risk or embarrassment? We should remember that this nation created the Industrial Revolution through daring and lengthy processes of trial and error.
The idea that "fitting up" a culprit, tearing down or even blowing up the Dome will somehow wipe the slate clean is simply fatuous. It represents either wilful stupidity or serious ignorance of the way in which, through the global media, we are perceived by other nations. As the right reverend Prelate has suggested, we must approach the future with the same boldness of conviction as we unquestionably displayed in the past. If not, we shall become mere spectators, condemned to stand by and watch as other nations, such as Australia, sail past us—young, energetic, confident nations 1388 sailing past a timid, geriatric Britain. If, through our neurotic attachment to blame, we allow that to happen, the joke of the century will most certainly be on us. Our entire nation, irrespective of the Dome, will risk becoming a romantic ruin, fit only for its role as a heritage trail of faded glories.
I do not know how long it will take for the Millennium Dome to find its justified place in history. But I do not for a moment apologise for my belief that the Dome will be remembered as one of the defining projects of our age. It is now entirely up to us either to roll up our sleeves, assess the damage and set out to make a success of it, or to carve its failure on the epitaph of a nation that has lost its way and could appear to have lost its will and its nerve. I find it very difficult to believe that that is what the party opposite wants. By their present actions, that is what they are in real danger of achieving.
§ 6.37 p.m.
§ Lord Marlesford
My Lords, it is not disputed that the Dome enterprise has been a financial disaster. It was almost admitted by the noble and learned Lord, Lord Falconer; it was brilliantly demonstrated by the forensic skills of my noble friend Lord Crickhowell. That it has been inexcusably badly managed has been demonstrated, equally skilfully, by the noble Lord, Lord Sharman.
I want to suggest why it went wrong. We all know that the word "hubris" means "an excess of ambition, pride—ultimately leading to the transgressor's ruin". It is a word that might have been invented for the conception and birth of the Dome. I do not disagree with the description of the building given by the noble Lord, Lord Puttnam. However, the construction of such a gigantic edifice, however splendid, without the slightest idea of what to put in it, is a folly worthy of any Greek tragedy. I remember that in the early days of its gestation we were told that what it was to contain was so exciting that it could not yet be revealed. I am reminded of the South Sea Bubble of 1720. Your Lordships will recall from your history books that this culminated in one particular investment prospectus for, "a company for carrying on an undertaking of great advantage but nobody to know what it is"—not so very different from the words of the Prime Minister about the Dome, that, "it will be the envy of the world".
The idea of celebration was fine. The idea of developing Greenwich was fine. Indeed, the idea of developing the River Thames through London would have been even finer. Before I come to the Dome itself, I should like to express my profound regret that so little has been done in recent years to make the beauty of the Thames available to the people. Indeed, far from developing it in such a way as to emulate the beauty of the Seine in Paris, we are at this moment allowing a fresh generation of utterly undistinguished buildings to be erected on both banks.
Just to give one example, there have already been constructed on the north bank of the Thames between Vauxhall and Chelsea Bridges private palaces of 1389 supreme vulgarity—others are under construction—in some cases commissioned and paid for by minor foreign potentates. They will wall off the Thames from the people for the next 100 years. In the meanwhile, the river continues to flow virtually empty of all passenger traffic, while the roads on either side every day are a scene of extreme and polluting congestion. What a missed opportunity. And yet even today, in their recent urban White Paper, the Government do not seem to regard the Thames in London as even worth mentioning in its own right.
However, to return to the Dome, it is the ultimate and most costly victim of political correctness. The presentation, let alone the celebration, of Britain's history over the past 1,000 years was considered far too excluding, far too divisive; indeed, far too shameful to be allowed to be under starter's orders as a theme for what was to go into the Dome.
Instead, such is the arrogance of our ruling establishment—I direct this attack to the chattering classes of all three of the major political parties and of none—that they presumed to use our money (that is, the £628 million from all of us who take a flutter on the National Lottery) to reveal their vision of our future. Was it surprising that they could not come up with the goods?
I have of course been to the Dome. In January, along with several hundred other parliamentarians, I went by kind invitation of British Telecom. I was appalled at the vacuity of what I saw in the Dome. By far the best part of the day was the trip there by river; the general impression of the site, which is very good indeed; and the journey back by the new Jubilee Line. By far the most striking exhibit in the Dome was the purely commercial celebration in the De Beers Diamond Pavilion. Its contents were indeed thrilling, and they appear to have been the only things that anybody has made a serious attempt to take away.
The Black Adder film, to which we were subjected as the introduction to our heritage, was hugely embarrassing. It might just have justified an hour of TV viewing on a dull winter evening after supper. The money zone, with its tunnel of £1 million in £50 notes, was a vulgar gimmick. The talk zone, until one could escape from it, was a torture tunnel. The actor who cycled round the Dome dressed as a pastiche of an RAF pilot from the Battle of Britain might have been an amusing contribution at a village fete, but in the context of the Dome it was an insult to the recollection of "our finest hour". Much of the science section fell well short of what is now on view in the Science and Natural History Museums in South Kensington. Quite frankly, in some ways when I visited the Dome before they started putting in exhibits, I thought it was much more impressive than when up and running.
Those are the reasons it has not succeeded. Those are the reasons it failed every financial test set for it by this governing body. Like the game of Old Maid, the responsibility for the Dome has been shuffled from hand to hand and for the present has ended up in the hands of the noble and learned Lord, Lord Falconer. I wonder whether he is proud of it. We shall see 1390 whether he adds it to his Who's Who entry. He has some sympathy from me and today I seek to help him. I want to make a specific proposal for the rebirth of the Dome.
To illustrate what we should have had in the Dome, I refer to the tiny former Portuguese colony of Macao, a pimple on the coast of southern China. Before they left, the Portuguese created a small museum to illustrate the social, political and cultural history of Macao since earliest times. I visited it this year and it is superb. It relates the history of Macao to the history of the world at the same time, in that case over several millennia. It thus gives a perspective of great educational value to children of all ages, including myself. I strongly recommend those noble Lords, and particularly the noble and learned Lord, Lord Falconer, who are visiting Hong Kong or China to go to Macao and look at it.
It is not too late to do the same sort of thing in the Dome. Of course, it would be a year or two later than it might have been. But to illustrate Britain's role in the world from the time of the last invasion of these islands by Europeans from the mainland to the prospect—like it or not—of ever closer European Union would, I believe, draw millions. It would become an essential part of the educational programme for school children and students of all ages from all over the United Kingdom, and of course a "must" for tourists. In short, it could become as great an innovation and opportunity for the people of this country as has been the Open University, which is still flourishing after 30 years.
§ Lord Falconer of Thoroton
My Lords, before the noble Lord sits down, he opened his remarks by a rather unfair reference to a lack of focus on the Thames. Does he agree that various offshoots of the Millennium Commission or the Lottery Fund have regenerated Somerset House, the Globe, Bankside, Southwark Cathedral, the "Wobbly Bridge" and Hungerford Bridge all in the course of this year? Many millions have been spent in enhancing those buildings on the Thames.
§ Lord Marlesford
My Lords, I am happy to agree in relation to Somerset House and many of the other fine buildings. But we should be doing much more. I am complaining that this Government, above all governments—rather like the failure of Melina Mercouri, the Greek Minister for Culture, who allowed so many awful things to happen in Greece— to protect the Thames and make full use of it throughout its length in London. That is my complaint.
§ 6.47 p.m.
§ Lord Grabiner
My Lords, as has been said by a number of noble Lords, hindsight is a useful forensic tool. Indeed, the noble Lord, Lord Sharman, made a distinguished professional career almost exclusively based upon making himself an expert on the subject. It enables the investigator, with the benefit of perfect 1391 vision, to examine the relevant sequence of events and then to provide an expert opinion as to what went wrong.
In relation to the Dome, hindsight has taught us a number of important lessons. First, the successes of the Great Exhibition of 1851 and the Festival of Britain of 1951 were entirely irrelevant precedents. In those days there was no competition for a pay-to-visit attraction. Today the public have extremely sophisticated requirements.
People have been to Disney in Paris, Florida and California. If they want to, and I have no doubt a number of noble Lords have done so and will continue to do so on a daily basis, they can play console games such as Nintendo 64 and Playstation. They can play Internet games with limitless numbers of players or opponents. That is the reason why it has proved so difficult to create the so-called "Wow!" factor; or the notion in the minds of the public that the Dome is a "must-see" attraction.
Secondly—and on this point I entirely agree with what was said by the noble Lord, Lord Sharman—we now know for sure that if the private sector will not touch a proposition, then it should not be touched by governments with a barge pole. Certainly, they would be well advised to tread with great caution.
In the case of the Dome, it was plain as early as June 1996 that the private sector would not accept the risks. Nevertheless, in January 1997 the then Conservative government decided to deliver the project in the public sector using the vehicle of a limited liability company whose sole shareholder would be a government Minister accountable to Parliament. I am confident that we shall never see such an absurd and (to borrow the noble Lord's expression) Byzantine structure again.
Thirdly, this is not a case of serious miscalculation on the expenditure side. The current forecast is that expenditure will be about 5 per cent over budget. The real problem is that all the sums and the key decision to award a lottery grant of £449 million in 1997 were done, or made, on the basis of 12 million visitors to the Dome in the year 2000. We now know that the actual figure will be about 6 million. It is the shortfall in visitor numbers which has given rise to the problem.
I should like to deal with the target of 12 million. The facts are that in January 1997 the Millennium Commission adopted a plan with a visitor target of 10 million. In May 1997, just five months later, the New Millennium Experience Company produced a business plan which assumed that there would be 12 million visitors and that the budget would balance with about 11 million visitors. The commission promptly asked Deloitte & Touche Consulting Group to review the figures which had been forecast by the company. It concluded that 12 million was at the upper end of the range and, as the noble Lord, Lord Sharman, rightly pointed out, that the worst case scenario was 8 million. The noble Lord did not refer to that figure specifically, but that was the range anticipated by the experts. In the event, the company 1392 stood by its target of 12 million. That was the basis of the business plan and budget which were duly approved by the commissioners. With hindsight, we know that there were not enough visitors, which turned out to be the critical point.
The Dome is the most successful pay-to-visit attraction that we have ever had. It has easily beaten the previous record set in 1999 by Alton Towers. Further, in exit polls the overwhelming majority of visitors said that it was a satisfactory experience. Mr Gore may have his own views about exit polls, but that is another matter.
There are one or two other aspects of the story which need to be emphasised because they are of importance in arriving at an overall judgment about the whole episode. First, the site at Greenwich was selected as long ago as March 1996. The choice of Greenwich was in part driven by its historic association with time. It was also chosen because it was recognised as an area badly in need of economic regeneration. It had previously been the site of a gasworks: it was derelict and contaminated. The strategic objective of the commission was the regeneration of the whole of what became known as the Greenwich peninsula.
The site was duly purchased for £20 million in February 1997 and the structure was completed in February 1999. I have seen figures to suggest that over the next seven years approximately 30,000 new jobs will be created as a direct result of the Dome project. Perhaps when he comes to reply my noble and learned friend Lord Falconer can confirm the accuracy of that prediction and tell us something about it. I believe that the regeneration of Greenwich and the new jobs represent real social gains with which we should all be pleased.
I should like to comment on the involvement of my noble and learned friend Lord Falconer. My noble and learned friend has been the target of some criticism by the noble Lord, Lord Crickhowell, who I note is not in his place. My noble and learned friend became the shareholder in January 1999. He specifically did not have responsibility for the day-to-day management of the Dome, and paragraph 26b of the report of the National Audit Office is to that effect.
There are two important sentences in the report of the Comptroller and Auditor General which bear directly on this part of the story. The first is as follows:19. Once the Dome had been constructed and much of the project cost already incurred, the room for manoeuvre in the face of low visitor numbers was very restricted".The second states:20. As the financial situation deteriorated the only options, short of closing the Dome and liquidating the company, which in the light of knowledge about the company's commitments would not have made financial sense during the year of operation, were to rely on receipts from the planned sale of the Dome and further grant from the commission".Next, reference has been made to solvency. I leave aside the technical point that my noble and learned friend was not a director but shareholder and so had no day-to-day responsibilities for the affairs of the company. However, on four occasions in the course of 1393 this year additional awards totalling £179 million were made by the commission to support the project. The accounts were regularly and independently audited, insolvency practitioners were retained and the commission's own auditors were sent into the company. My noble and learned friend was at all times in receipt of advice from outside professionals. I believe that he was perfectly entitled to conclude that the money would be forthcoming, and it was. I also note that no criticism is made of my noble and learned friend in the report of the Comptroller and Auditor General.
What emerges from all of this? I believe that I can summarise it in three short propositions. First, it should be borne in mind that we now have the benefit of hindsight. It is very easy to be judgmental after the event, especially when the critical events cover a very short and fast-moving period of time, as was the case here. Secondly, this was a cross-party initiative and attempts to point the finger at my noble and learned friend in order to make him a scapegoat are entirely misguided and utterly unfair. Thirdly, the report of the National Audit Office makes it quite plain that by the time my noble and learned friend became the shareholder in January 1999 the die was cast and there was little or nothing that he could have done about it.
§ 6.58 p.m.
§ Baroness Greengross
My Lords, we must all acknowledge that there have been failures and disappointments with regard to the Dome. Certainly, the Dome has not met our very high expectations, some of which may have been unrealistic in terms of visitor numbers. That was a mistake. I should like to underline the importance of regeneration, to which several noble Lords have already referred. We are all aware of the dire consequences of urban decay and neglect and what happens to very unfortunate members of society who live in such areas. We have already heard about the number of jobs which have already been created and are predicted. For once, we got the infrastructure right with the introduction of a very good transport system that will be of immense benefit to the whole of London and beyond.
There are other important points about the site. The site provides excellent access for disabled and older people. Such access has been neglected in the past. The Dome also provides a very good example of what may be called customer care. The mainly young people looking after visitors to the Dome have been exceptionally good at caring for people who are sometimes marginalised. I hope the future will provide opportunities for many of those marginalised people to benefit from the experience and that new avenues of employment and entrepreunership will include them in the future business park and development site. It is terribly important that they are included. In IT development it is especially important that the over-fifties and disabled people are targeted to benefit from the development.
1394 The opportunities that are available, and will become more available as the years go by, would not have existed without the decision to go ahead with the Dome.
§ 7.1 p.m.
§ Lord Lea of Crondall
My Lords, two years ago the TUC—of which I was then an official—decided to join with Tesco's and others in the creation of the learning zone. The TUC has no hesitation in saying that it is very glad to have been involved.
Three main points have emerged from the debate. First, April and May 1997 was just about the worst time to have received a carefully considered answer to the strategic question. But that is how the cards were dealt. Secondly, it is clear that the National Audit Office is far from lending support to the idea that the Government should have pulled the plug on the Dome half-way through the year. My noble and learned friend in paragraph 20 stated:Closing the Dome and liquidating the company would not have made financial sense during the year of operation".Some of us who have not been the greatest enthusiasts for the Dome and all its works have concluded that the attacks on the handling of it in recent months—in particular on the actions of my noble and learned friend the Minister—have been way over the top.
The third point is to refute the fallacy that 12 million as a visitor plan assumption is a recent act of madness. Even today we have heard the noble Lord, Lord Crickhowell, saying that, with the logic of hindsight, the figure is four times higher than any other visitor attraction, as if any fool could have seen that the figure of 12 million was wrong. But, going back to April 1997, if that figure was then a "tent of fools", we were all of us in the same tent.
Talking of tents—big tents in particular—it is the Labour Party which has found itself occupying this big tent, but it does not mean that the Conservative Party would not have happily occupied it themselves. Indeed, at the present time I suggest that if the Conservative Party could find any big tent to get into they would be in it like a flash.
It is a well-known phenomenon to all noble Lords who have tried to run a village fete when not enough people have turned up and one has spent £400 to hire the marquee. Many people around the country can identify rather precisely with this situation at a number of levels. The British people will not have much difficulty in seeing that there is an upside to the matter. The local village fête does not give one the immense spin-offs that we are now realising will come out of this.
Let us go back to the beginning, to Michael Heseltine. He was the one who supported—I come from the north of England originally—the idea that Liverpool and many other places should have a regeneration idea on which to work. It is very important that they do. I should be happy on a different occasion to argue—I have argued this before—that there is a regional question here. Let us stick to the Thames gateway for a moment. It was 1395 Michael Heseltine's imagination that led to the London Docklands Development Corporation and the emerging new reality of the Thames gateway for the whole of the estuarial area. We must give credit where it is due.
Perhaps I may also say in a non-partisan spirit that some of the Labour local authorities in east London, and to some extent in south London at that time, were rather parochial in not accepting the need for strategic growth points in the whole of east London. We need strategic growth points in London. The same argument would apply with west London, if Brent, or some area like it, could pose itself as an alternative to the Heathrow airport economy for the west London corridor.
The aim of the project partners, with the full backing of the Government, has been to ensure that the regeneration of the peninsula delivers a high quality environment that is suited to people's needs and which is innovative and sustainable, both environmentally and commercially. Construction contracts worth £300 million have been awarded as a result of the Dome. The vast majority of those have been to UK companies: 13,000 employees have gained work in construction and the operation of projects on the Greenwich peninsula. There has been a boost to the UK economy which has benefited the whole country.
The transport strategy has been very important. The transport access to the Dome is a model of integrated public transport. These days that is something that is not often said. It provides access to the Dome via a variety of public transport. The North Greenwich Underground station adjacent to the Dome—one of nine new stations on the new Jubilee Line extension—has not only encouraged the use of public transport to the Dome but also provides a major boost for east London as a whole. There is the Millennium transit link which was constructed to take state of the art guided buses from Charlton and Greenwich mainline railway stations to the Dome. Finally, there is the new £2 million pier to the east of the Dome, helping to bring the Thames back to life and become one of London's main transport arteries again. There has also been the construction of a river walk and cycle way right the way around the peninsula which links into the existing river walkway and the expanding national network for cyclists.
We can look forward with confidence. We can look to the news, which we hope will come to fruition, that Legacy plc is at an advanced stage of negotiation. We can look to an exciting future for the Dome, with £1 billion investment expected in the area as a whole. That will further change the mindset. That is why public investments are not the same as private sector economics. We have changed the whole mindset towards the Thames gateway. That is not something one can measure on a narrow private sector accountancy approach. I see that the noble Lord, Lord Sharman, is nodding in agreement.
Just as when we rescued Canary Wharf—I say "we" because it was the public sector, through the diversion of the London Transport investment plan towards 1396 building the extension of the Jubilee Line in preference to CrossRail, which had the greater return—I predict that north Greenwich too will join Canary Wharf as a £400 million jewel in the Thames gateway corridor.
§ 7.9 p.m.
§ Baroness McIntosh of Hudnall
My Lords, I intend to keep my remarks brief not least because, at this stage in the debate when so much of substance has been said, it is difficult to avoid the possibility of repetition. I hope I will be forgiven if some of what I say has already been said by other noble Lords.
From its inception, the Dome was always liable to be controversial because new and interesting things very often are, as my noble friend Lord Puttnam eloquently pointed out. The Government have, as is proper, accepted responsibility for what has been by common consent a complex and difficult project. My noble and learned friend the Minister is the man left holding the parcel when the music stops. That is usually a winning position, but I hope he will not mind if I suggest that on this occasion it has been something of a mixed blessing. Let us not forget that there were a number of others in this game when it began back in 1996 and decisions taken then are still reverberating.
Unlike other noble Lords, I can claim no expertise in project management on this scale. But I do know a little about the entertainment industry and from that perspective I want to make two points about, as it were, putting on a show. First, making an accurate and robust assessment of the likely capital costs of a major creative enterprise is exceptionally difficult. I spend a good deal of my life trying to do that in a small way. Getting the project within 5 per cent of original estimates and on time, as has been achieved with the Dome, is fairly sharp shooting, as any producer of a big West End musical will testify.
Secondly, a great deal has been made in the press and in the House of the fact that 12 million visitors were predicted and only 5 million will have been. Five million sounds like a hell of a lot to me. I am sure that I would be grateful for that number of visitors. The most vexed issue with regard to putting on any entertainment, regardless of the kind and scale of that entertainment, is whether anyone will come. Almost everyone in the theatre business would admit to having occasionally miscalculated—sometimes quite significantly—the likely appeal of something which they believed on quite reasonable grounds would be popular. Initial estimates of potential visitor numbers to the Dome were clearly optimistic, but they were not imprudently so, as my noble friend Lord Lea of Crondall pointed out.
The implication lurking behind a good deal of the discussion on this issue—that any fool could have predicted that 12 million was an unachievable target and that no one in his right mind could have imagined that 12 million people would want to see what the Dome had to offer—is misguided. It is really not that simple. An audience of any kind for any event is a strange and recalcitrant beast, as I know to my cost. It sometimes resists what it has liked before and often goes where no one has tried to lead it. The gift of 1397 discerning accurately in advance what will please is given only intermittently even to the most successful of cultural entrepreneurs. The fact that well over 5 million people, many of them young, will have been to the Dome by the end of the year is a major achievement, particularly in view of the relentless negativity of the press comment about the Dome. The great majority of those who go like what they see. That is a lot of satisfied customers, something of which everyone concerned should be proud.
Finally, I join those who have already called attention to the remarkable qualities of the building itself. It is architecturally and aesthetically innovative and very beautiful, particularly at night. In fact, it is beautiful at all times of the day. It makes a distinguished and distinctive contribution to our urban landscape and it has brought in its wake the regeneration of a formerly blighted tract of land. I hope we can agree that at the very least the vision it represents and the courage of those of all persuasions who backed it deserve to be celebrated and built upon.
§ 7.14 p.m.
§ Lord Trefgarne
My Lords, like many noble Lords, I came to the debate with a considerable degree of sympathy for the position of the noble and learned Lord, Lord Falconer. Many of us have been in the position of receiving a constant barrage of criticism for some task that we have undertaken in public life. The noble and learned Lord said that he had been asked 1,100 parliamentary Questions on this matter. I remember receiving 650 parliamentary Questions on one defence procurement project from one Member of the other place, who is now a distinguished Member of your Lordships' House and sits on these Benches. Answering those Questions involved a great deal of work and I dare say that the noble and learned Lord has been similarly preoccupied.
However, I must confess that my sympathy for the noble and learned Lord began to evaporate as I listened to his speech, which, frankly, was a little OTT. The speech of the noble Lord, Lord Puttnam, was slightly in the same vein. Perhaps one point has been overlooked. Whatever may have been the inspiration behind the project—no doubt well intentioned inspiration—the plain fact is that public money was being used. Some people say that it was not public money; that it all came from the lottery and that is not public money. It is public money. It is subscribed by the public. I agree that a certain amount of corporate money was used to support some of the attractions inside the Dome, but basically it was a public money project. That is why the criticism has been so intense, and rightly so.
I intend to moderate my criticism on this matter and deal with just four points. First, the estimate of 12 million visitors was by any standards optimistic. When intervening towards the end of the speech of my noble friend Lord Crickhowell, the noble and learned Lord, Lord Falconer, said that the estimate came from the business plan of April 1997. That is not so.
1398 Paragraphs 1.30 and 1.31 of the NAO report state that the business plan was approved in the following month.
§ Lord Falconer of Thoroton
My Lords, in April 1997 the business plan was approved by the hoard of the New Millennium Experience Company. The noble Lord, Lord Crickhowell, is shaking his head. The facts are that in April 1997 the business plan was approved by the New Millennium Experience Company If the noble Lords, Lord Trefgarne and Lord Crickhowell, have any evidence to the contrary, I should be glad to hear it.
§ Lord Trefgarne
My Lords, all I can do is read from paragraph 1.31 of the NAO report, where the company's May 1997 business plan is referred to. The month is May, not April, by which time a different party had come into government.
It is the case that when in power both parties have given a degree of approval to the estimate of 12 million. Sadly, it has proved to be an overestimate. But it is no good the noble and learned Lord saying that it was entirely the construction of his predecessors that caused the plan to be agreed. That is not so. The noble and learned Lord is just as much in it up to his neck, as my noble friend Lord Crickhowell said, as anyone else.
I turn to my second point. Another area of disappointment was the creation of all the internal attractions. I have been to the Dome on three or four occasions and I must say that they are really very, very disappointing. I am told that the gentleman who was principally responsible for them has a name which will be familiar to noble Lords because his mother sits on the Government Front Bench in your Lordships' House. So perhaps he will take the view that his career has not been advanced by the project.
§ Lord Puttnam
My Lords, I worked with Ben Evans. He was responsible for three of the zones. That is far from being the majority.
§ Lord Trefgarne
My Lords, I am grateful for that clarification. I understand that he was the so-called "editor" of the attractions. I am not quite sure what that means.
§ Lord Trefgarne
My Lords, I am glad to hear that he was not exclusively to blame for all the problems that have emanated from those attractions. But I do not think that anyone seriously claims that, taken together, the attractions have not been a considerable disappointment.
The next point that needs to be dealt with is that the noble and learned Lord has not sufficiently answered the questions raised, particularly those put to him by my noble friend Lord Crickhowell both in the form of parliamentary Questions, letters and in his speech today. I refer to the noble and learned Lord's 1399 responses to the allegation that at various points during the programme, and particularly in July of this year, the project was seriously insolvent and by any standards unable to meet its future debts.
I have to accept that the legal position in these matters is almost certainly not as simple as many people would have us believe. I wonder whether the noble and learned Lord had received some assurances from sources other than the Lottery Fund—for example, from the Government— that they would stand by the debts if the need arose. That would not be a disreputable thing for the Government to do, but they must tell us whether that was the case. I do not know whether it was or not and perhaps the noble and learned Lord will say whether he received at the time any assurances from the Government in that regard.
I have addressed these questions to the noble and learned Lord as the principal shareholder in the project. Like my noble friend Lord Crickhowell, I am puzzled that questions were not more frequently asked and answered by the board of the company itself. Although we know that the noble and learned Lord attended many of the board meetings, it was the duty of the directors of the company, presided over by the chairman, to address these matters and to answer these questions. But they seem to have been extraordinarily silent leaving the noble and learned Lord to take the criticism and the flak.
I come to what I consider to be the most serious allegation; namely, that it is clear that there has been almost a complete failure by the New Millennium Experience Company to keep proper books of account. The plain fact is that throughout the time it has been conducting this programme, not only after the disastrous opening at the turn of the millennium, but also in the run up to that time, it is clear that it has not kept proper books and records of the money received and going out and also of the various contractual arrangements that have been put in place. I am not saying that there has been misappropriation of funds; I am not aware of any evidence of that. But it really is a disgrace that this vast sum of public money approaching, we are told, £800 million, has not been properly accounted for—not yet, anyway—and was being spent with gay abandon at a time when—
§ Lord Grabiner
My Lords, I am grateful to the noble Lord for giving way. It would be very interesting to see any passage in the report of the Comptroller and Auditor General which supports the proposition that the company did not keep proper books, which I believe is the allegation that the noble Lord makes.
§ Lord Trefgarne
My Lords, the allegation has been made quite widely, not only in this report, but elsewhere. If the noble Lord would like to study that document and others with a little more care, I believe he will find the difficulties to which I have referred.
The noble and learned Lord said that this matter is now being put right. I welcome that assurance. It is rather late in the day. What a pity that it was not done earlier. So much for the criticisms.
1400 I turn now to the final matter that I wish to address; namely, the future use of the Dome itself. Nobody doubts that it is a great building. I readily accept that. As I have said, I have visited it on several occasions and I am easily persuaded that that is the case. I am sorry that it is to be something modest in the form of a business park. Perhaps that is not modest. No doubt the noble and learned Lord would welcome any financially sound proposal that is put to him or anyone with a cheque for £100 million or more. I wonder whether the Dome could not be better used as a centre for international trade fairs. London is singularly lacking in such facility. We have Earls Court and Olympia, but they are both very old and in many ways unsatisfactory by modern standards. I believe that the Millennium Dome would be an admirable venue for activity of that kind.
I am glad to hear from the noble and learned Lord that the books of account at least are now being put in order. It is about time, too. I am sorry that the noble and learned Lord has suffered so much criticism and attack during the time he has held responsibility in this matter. Let us hope that it can all now be brought to a glorious conclusion as the noble learned Lord hopes.
§ 7.25 p.m.
§ Lord Dubs
My Lords, I shall be brief because I believe that virtually all the points that could be made have already been made. The original concept of the Dome under the previous government embodied vision. It was exciting and it has led to important regeneration. It has resulted in a project which has attracted in one year 6 million visitors. Even Manchester United would be envious of that number of visitors in a year. It is possible that if the life of the Dome were extended for, say, two or three years, the project would become financially viable. Other projects, such as Disney, took well over a year before becoming viable. There was a great deal of ambition in trying to accomplish so much within 12 months.
Mistakes were made by both Governments, although listening to some of the speeches from the Benches opposite it seems as though only the present Government made mistakes. That is simply not the case. Mistakes were made on all sides. Under the previous government the decision was taken to build the Dome; to choose Greenwich; to appoint the chief executive and the chairman; to develop the corporate structure; to use Lottery money; to develop the Dome's structure; to split job responsibilities between different Government departments; and to develop the forecast of 12 million visitors. All those decisions were made under the previous government and they were inherited by this Government. In those circumstances, it would have been difficult for this Government to say that, despite all the excitement and enthusiasm generated by the previous government, the project should have been dropped. That is difficult to do except with the wisdom of hindsight.
However, I believe that over the years the Dome will be seen as a more successful venture than some of the speeches from the Benches opposite suggest. In a few years time when we see Greenwich regenerated and the 1401 Dome being used for positive purposes, I believe that we shall forget this "Let's have a go, Charlie" atmosphere in this debate. We shall remember the positive things that have been achieved on that Greenwich site.
I regret that this debate is becoming a series of attacks, verging on the very personal, against my noble friend the Minister. I do not believe that that is called for. It is not appropriate given the previous government's record. The noble Lord is waving his hand at me. Does he want to intervene or is he simply gesturing?
§ Lord Trefgarne
My Lords, the noble Lord said that this debate was becoming rather personal. The noble and learned Lord, Lord Falconer, is the Minister responsible for this matter and naturally we are addressing our questions and criticisms to him.
§ Lord Trefgarne
My Lords, the noble and learned Lord is a much admired, even a loved, Member of this House. He is one of the most effective Members of the Government Front Bench. I regret very much that, with others, I have had to criticise some of his actions and policies as regards this matter. But he is the responsible Minister and I do not believe that even he would wish to duck that particular point.
§ Lord Dubs
My Lords, he is not ducking it. I have listened carefully and read in Hansard the comments made by my noble and learned friend. I have also listened to his opening speech. He is not ducking his responsibilities at all. It is a little mischievous to suggest that he is. He is taking the valid criticisms on the chin, but he has no reason to take on the chin criticisms which are not valid and which should be directed at those on the other side of the House who made the decisions when the Conservatives were in government.
I turn to a more positive note. There are many lessons to be learnt and perhaps I may pick on three. The first is the better forecasting of numbers. Clearly, had the forecast for the number of visitors been 6 million we would all be celebrating a success, but because the forecast was 12 million, people say that the project has not succeeded. Frankly, at the outset a figure of 6 million visitors would have been a successful achievement for the Dome. We would have all said that that was a good sign of popular support, as indeed it was.
The second point I wish to make in terms of lessons to be learnt is this. My right honourable friend the Prime Minister made the point some little while ago that there is a difficulty for governments in knowing how far at arm's length they should be from important projects. I fear that governments tend to get too close to projects when they should keep further away.
1402 Governments are not good—I say this as a long-time member of the Labour Party—at managing certain kinds of projects. Not that this one is managed by the Government, but if they had taken a few steps further away from it we might not be having this debate. Certainly there would not have been some of the criticisms that have been made. It is a challenge to governments to know when to take a step away rather than to get too closely involved.
My third point concerns the system that was set up by the previous government and continued by this Government. I have a feeling that there has not been quite the clarity of departmental responsibility that there might have been as between the DCMS and other departments of government. Had there been, it may have been easier to manage as things went on.
Above all—and I finish with the point with which I began—the project was exciting and showed vision. We should not be churlish about something which history will judge as being more positive than some of the speeches made today.
§ 7.31 p.m.
§ Lord Tomlinson
My Lords, the noble Lord, Lord Trefgarne, criticised my noble and learned friend for being over the top. I shall begin my speech with my criticism of my noble and learned friend. If I have any criticism of him at all, it is for his excessive equanimity and courtesy in the light of the unnecessary, politically motivated and quite outrageous attacks that have been made upon him, not only in this House but in another place, over far too long a period of time.
The National Audit Office report has been seriously misquoted by the noble Lord, Lord Trefgarne. I challenge him to show where it talks about "spending money with gay abandon". However, the report performs a singular service by giving a precise genesis of the Dome project. The Greenwich project—selected, as we all know, in February 1996—was quite clearly chosen for two purposes: because of its historic association with time, on the one hand, and the regenerative capacity of the project on the other. Those objectives were quite clear; they were there from the start and they were realised in the Dome project.
Greenwich never was selected by the previous government as an objective choice on the basis of the adequacy of its funding, its clear coherent business plan or its economic viability. If those had been the bases of choice, the previous government would have been forced to choose the alternative Birmingham project. I do not criticise them for not choosing it. However, they chose the Greenwich project for clearly political rather than economic reasons. To its credit, Birmingham did not do anything to rubbish the Greenwich project, although it felt a deep sense of grievance at the partisan nature of the discussion when there had been the pretence of an open competition based on proper financial viability. Were there to have been that choice, this debate would not be taking place.
Greenwich was a political choice on criteria other than financial viability, and we saw examples of it time and time again. Let me give the noble Lord, Lord 1403 Trefgarne, a real quotation from the National Audit Office report. At pages 12 and 13 it shows, for example, that the accounting officer of the then Department of the Environment considered the advance acquisition of land at Greenwich to represent less than good value for money. He sought, and received, a direction from the Secretary of State for the Department of the Environment to commit the funds, even though the accounting officer said very clearly that it did not represent sound value for money. That was done because of the political nature of the decision.
Clearly the Dome has not been a success. It has not been the success it was stated it was going to be in a number of respects. To that end, we should heed very clearly the sound advice of the noble Lord, Lord Sharman, and my noble friend Lord Grabiner, in relation to the basis on which the public sector should get involved in projects where the private sector has decided that there is not a sufficient basis of viability for it to get involved.
From the initial conception of the Dome, the forecasts of visitor numbers were wildly wrong. A target of 10 million became 10.9 million to 16 million; then it was reduced to 13.5 million. Those targets were set on 18th January 1996, February 1996 and 11 th December 1996. They were acknowledged by the person who created those targets as being "all over the place". Those are the words of Mr Peter Ainsworth. When he was talking about the inaccuracy of his estimates he described them as being "all over the place", but now, as the Front Bench spokesman in another place, he seems to want to wash his hands more thoroughly than Pontius Pilate could manage to do.
If the Government have made any major error of judgment in relation to the saga of the Dome it is that they trusted members of the previous government. They believed their words of commitment and accepted that they could be relied upon to act with honour. That was the decision made by the Official Opposition, at the behest of the previous government, to guarantee the continuity of the project. Events concerning the Dome have shown that the official spokespersons of the Conservative Party have proved themselves to be totally untrustworthy, unreliable and with no sense of honour in respect of the agreements that were made with them when they were in government.
The record is clear. The noble Lord, Lord Dubs, listed the decisions that were the responsibility of the previous government, from the decision to build the Dome right through to the decision to use lottery money on the basis of the business plan on which those lottery funds were committed. "Hypocrisy" and "hypocritical" are much over-used words in what sometimes purports to be political debate. In the saga of the Dome over recent months, some of the people who have participated in what seems like an increasingly frequent and politically motivated vendetta against the noble and learned Lord, Lord 1404 Falconer, appear to be acting deliberately, as if they wish to attract those words as descriptions of their deeds.
The noble and learned Lord, Lord Falconer has behaved with total integrity in relation to the public and to the House. He has pursued the project that was created by the previous government and followed by this government at the behest of the previous Conservative administration. My noble and learned friend has earned the support of your Lordships' House. He deserves that support. As far as I and my noble friends are concerned, he will continue to receive it.
§ 7.39 p.m.
§ Lord Jacobs
My Lords, with hindsight it is always too easy to make penetrating comments about what should or should not have been done to make the Dome a success. I shall confine my remarks mainly to what I believe were the mistakes made when the Dome project was launched.
I seem to be one of a rapidly diminishing band of supporters of the Dome project at its commencement. Now, many people seemed to be certain that the Dome project would fail, but apparently were silent at the time of its launch. My own confidence in the Dome evaporated rapidly when I discovered, to my astonishment, that there was no clear idea of what was go inside it. It was never suggested that the Dome would be an architectural marvel sufficient to draw millions of visitors—although I must agree that it is an exceptional building architecturally. Clearly, the attraction had to be based on what was inside.
It appears that the originators of the concept did not even consider the possibility that, without the right attractions, the Dome could never succeed. It is like a successful industrialist deciding to build the most modern or futuristic factory in a development area such as Tyneside, and when the question is posed as to what the factory will produce, responding that he will work that out in the fullness of time. No entrepreneur would adopt such a course. Yet the creators of the Dome saw nothing unusual in not having decided what would go inside it. It seems that they believed that the concept was strong enough to stand alone even if the contents were of no great merit or attraction.
Let us consider for a moment why the Great Exhibition of 1851 was such a success. For the three preceding years, public consultations were held in all the main cities of Britain to discover what people wanted to see in the exhibition. The consultations were led by no less than Prince Albert and Sir Robert Peel. Perhaps in our time, the Duke of Edinburgh and Mr Prescott—who are renowned for their diplomatic skills—could have carried out a similar public consultation.
In one sense the Dome project was a success, for it came within 5 per cent of its budget. So the usual complaint that the Government and civil servants can never manage capital projects successfully has been refuted in this case. But that is not to say that they are equipped to manage operational businesses on a day-to-day basis.
1405 Where, then, did the project go wrong, apart from the obvious failure to make an attraction so exciting that vast numbers of people would demand to visit it? One can fairly compare the Dome project with another millennium project, the Tate Modern on Bankside. The Tate has the good fortune to be managed, directed and led by Sir Nicholas Serota—whose mother sits on the government Benches—who, in addition to having great artistic skills and judgment, is an exceptionally talented chief executive. That is one of the reasons why the Tate Modern has become a world-wide success. The Tate project cost just £234 million, of which only £70 million was public money, compared with the £600 million or £700 million that the Dome has cost.
Everyone in the UK knew that the Dome would be open for just 12 months. The public could not, therefore, delay their visit. The Dome secured 3 million visitors in its first seven months of operation, while the Tate Modern—which should be open for the next 200 years—secured 3½ million visitors in the first seven months after opening.
One can argue that entry to the Tate is free. That is true. On the other hand, in one year of operation the Dome has needed a subsidy of £179 million to cover its operating losses. As entry to the Tate is free, it has been granted an annual subsidy of £6 million, which, regrettably, is not sufficient. Those who run the Tate will no doubt be on their hands and knees begging for an additional sum, which I am informed is about £2 million a year. For me, that puts the whole Dome project in perspective. One can be sure that the Tate's claim for an extra £2 million will be examined rigorously, and probably argued over, while the Millennium Dome unfortunately burnt £179 million in more or less the blink of an eyelid.
Content is clearly important, but there are other factors. Location is also of vital importance. The decision—no doubt made for the usual environmental reasons—that access to the Dome would be by train or boat rather than by car or coach would very likely have caused a significant drop in visitors, particularly in the numbers from up north. The cost of travelling was an important factor for visitors to the Dome. It would have been immensely encouraging if they could have embarked on a coach in their local town and emerged from it at the entrance to the Dome. Disembarking from a coach in London and then going on by Underground is not a very attractive proposition, particularly for families with children—not to mention the difficulty for disabled people. I say nothing of the number who would have come by car or taxi.
Alton Towers, the most successful comparable project in Britain, has parking spaces for 3,000 cars and 300 coaches. Alton Towers is a commercial operation which understands what is necessary to maximise the number of visitors. Its average daily attendance amounts to 12,000 visitors, but for special events it receives up to 25,000 visitors.
A great deal has been said about the estimate for the number of visitors to the Dome, which ranged between 8 million and 17 million. As one who has examined numerous commercial projects, I have invariably 1406 found that while the estimate of costs may be accurately arrived at, the suspect figure is always the sales figure. The estimate of sales—or in this case the number of visitors—is invariably sufficient to cover the cost of the project. Many plausible reasons are given as to why a particular estimate is chosen, but I am certain that the key reason for choosing any particular estimate is based on a calculation that goes as follows. The cost of running a project for 12 months is estimated, usually fairly accurately; an estimate is then made of the price that can be charged for entry, and the second figure is divided into the first figure. The answer—surprise, surprise—is a number sufficient to break even: in this case 12 million.
Everyone connected with the Dome project will deny with their last breath that that was how a particular estimate for the number of visitors was chosen. Yet if one looks at other millennium projects one finds that the estimate for total revenue is always sufficient to cover the costs. Unless that is the case, they do not get the money. That is when the estimates are prepared. However, when a millennium project then incurs a huge loss, it will be found immediately that the number of visitors will have fallen well below the estimate. Just look at the Armoury in Leeds.
One may well ask why the lower estimate of 8 million was not chosen—even though it turned out that this was significantly above the actual numbers. The answer is to be found in the arithmetic. If 8 million was considered to be the likely number of visitors, the project would be making a loss; the whole project would be in jeopardy and the Dome might have been stopped in mid-stream. That was politically unacceptable.
There is no getting away from this issue; and it arises from the absence of professional commercial management. If professional management, such as those who run Madame Tussauds and Alton Towers, or even a company such as Bechtel, had been engaged for a fair fee but a very large bonus if the project did not make a loss, there would have been some very hard-headed analysis as to likely visitor numbers and no doubt other changes such as improvements in transport arrangements. However, I think it is fair to point out that, had that course been followed, the Government would have been faced with the reality of the situation—which was that it would have been impossible for the Dome to complete one year of operation without making a huge loss. So presumably the project would not have been completed. As usual, politics wins the day, and, the UK citizens pick up the bill by using lottery money to make good the losses rather than use such money for improvement of amenities elsewhere in the country.
I do not believe that governments or civil servants understand the reality of the difference between a commercially operated project which has to try to make a profit, or at worst break even, and a government-operated project for which there is in reality unlimited funding. Sadly, very few politicians have business experience and probably even fewer civil servants. No doubt everyone is claiming that lessons can be drawn from the calamity that befell the Dome.
1407 However, I remain uncertain whether politicians or civil servants will learn the correct lessons from this sad financial fiasco.
However, I should like to end on a slightly more cheerful note. I believe that the Dome project has been a very exciting one; indeed, in many ways it has been worth while. If the lessons that I enumerated can be drawn from the experience and changes are made when we are faced with similar projects in the future, then it will be doubly worth while.
§ 7.50 p.m.
§ Baroness Gibson of Market Rasen
My Lords, if I had a title to my speech tonight it would be, "Voices from Greenwich". I have spoken on the subject of the Dome on a number of occasions in your Lordships' House and I am pleased to do so again, to give a positive approach to the Dome experience and to the future.
Before the Dome was built, the Greenwich peninsula was certainly very derelict and, as such, it reflected how run-down the whole area had become. But, more importantly, it reflected in its dereliction the lack of hope and opportunity experienced by many of those living in the area. Today the regeneration of Greenwich and of the wider Thames Gateway, as well as the development of the peninsula, are acting as a genuine catalyst for additional business, development and enthusiastic support for Greenwich and its residents.
We have heard much of the regeneration of the area and I shall not repeat what has been said. However, in relation to the river, as well developments already mentioned, I should like to emphasise that there has been a start on the infrastructures for water front transit. Two miles of the river front has been opened up to the public, the Cutty Sark Gardens have been greatly improved and an innovative river terracing scheme has been established.
The developments in the area have already provided 9,000 jobs in construction and over 6,000 jobs in other areas of work, as well as work in the Dome itself. This has benefited, in particular, younger and older workers, people with disabilities and those who have either not worked previously or not worked for many years. Many of them are young black people who are now training for future careers, rather than just gaining jobs. Employment has already been halved from its 1994 level and, for the first time in a generation, the job gap is closing between Greenwich and the rest of London.
All that has happened because of the Dome. This is recognised in Greenwich. In giving oral evidence to the Select Committee in June, Bob Harris, lead executive member for regeneration on Greenwich Council, said:If you look at pre-Dome and then post-Dome you are talking about two completely different pictures. Yes, these changes may have happened in time, but there is no doubt as far as I am concerned that the National Exhibition has absolutely made them work and accelerated that process, and that Greenwich is becoming a prosperous and attractive place to be and to live in".1408 The Dome, therefore, has already generated for so many people a better quality of life and hope for their future.
There has been a lot of what my father would have described as "bunkum" talked about the Dome, which began even before it was completed. Indeed, it has become almost a national sport to attack it. And not always, but often, the attacks come from those who have never been anywhere near the Dome and are even hazy about where it is actually situated. I am sorry that those noble Lords who visited the Dome did not enjoy it, but I am pleased to say that they are in the minority. A staggering 88 per cent of people enjoy their Dome day, and that figure rises to 94 per cent when the millennium show is discussed. Moreover, 73 per cent of visitors think it good value for money, and 79 per cent would recommend others to visit it.
What a pity that those statistics have not been stressed, rather than the constant "moaning Minnie" attitude illustrated by many who should know better. Currently, discussions are taking place with the staff of the Dome to ensure their future—an action that I am sure everyone in this House welcomes. Recruitment advice sessions and open days are being held with advisors from Jobnet, aimed at securing redeployment opportunities for staff of all grades, ages and skills. The new bidders for the Dome are also playing their part. Legacy plc aims to spend a further £125 million developing the site and is set to create thousands of new jobs. It will be a high-tech business at the forefront of developments of the 21st century economy.
I can tell the House that the people working at the Dome and the local authority, the Greenwich Borough Council, as well as many people who live in the area, have no doubts about the building of the Dome in Greenwich. Indeed, many of the workers are both bewildered and hurt by the constant carping against the Dome, which has fed and fuelled the vitriolic press outbursts against it.
I can also tell the House that there is a great deal of anger in Greenwich about the Conservative Party's attitude to the Dome. The blame for many of the Dome's problems is being laid fairly and squarely at the door of those who have deliberately encouraged and taken part in the bad publicity for the Dome. That is not the Government and it is certainly not my noble and learned friend Lord Falconer, whose commitment to working for and supporting the Dome and its workforce has been second to none. Indeed, the recent involvement of Legacy plc with the Dome is seen by many Greenwich residents as yet one more positive step that my noble and learned friend the Minister has taken.
Finally, I can do no better to illustrate the positive local attitude to the Dome than by quoting the leader of Greenwich Council, Chris Roberts, who said this week:Our bid to host the Dome in Greenwich was always based upon the long term legacy that it offered the Borough, and the recent news about the Legacy bid confirms that we were justified in that vision. The Council will be working with Legacy to ensure that Greenwich residents are well placed to make the most of these new opportunities".1409 Thank goodness for positive thinking. If every politician, press mogul and the private sector had been as positive towards the Dome as my noble and learned friend Lord Falconer has been, they would have served this country better in its millennium year.
§ 7.56 p.m.
§ Lord Harris of Haringey
My Lords, I believe that I speak more or less at the mid-point of this debate. Therefore, I intend to be brief, which will no doubt be a relief to all noble Lords. As my noble friend Lady Gibson pointed out, it has been fashionable throughout this year to run down the Millennium Dome. I believe that that is part of a wider disease in this country, which means that we are dismissive of anything new or different.
The Dome had a difficult opening and it did not help its subsequent coverage in the media that so many distinguished—and perhaps a number of not-so distinguished—newspaper editors and columnists, media moguls and other assorted opinion-formers had excessive waits for security clearance at Stratford Underground station. But the Dome was also subjected to a lot of negative sniping in advance of that from those MPs and others who did not believe that the country's celebration of the millennium should be centred on London. Indeed, the same people seem to object to anything being based in the capital city.
I have to say that I am saddened by the anti-London attitudes in the rest of the United Kingdom. After all, London is our capital city. It is the capital for everyone in the country as well as Londoners. We should all be proud of it and not try to knock it or starve it of funds. The Dome debate outside your Lordships' House has been coloured by the many anti-London voices who think that London gets too much. Indeed, we heard something similar in a few of today's contributions.
It is sad that so many politicians from outside London find it difficult to celebrate the Dome, the new Tate Modern or the Globe Theatre. These are national monuments—achievements of which everyone in the country should be proud. Yet those who knock London cannot accept it if anyone suggests that their areas are less than perfect, however much the remarks are made tongue in cheek. Today, for example, I find myself attacked in the Evening Standard by the former Lord Mayor of Birmingham for saying that I am a fan of this great capital city of ours. I subscribe to Dr Johnson's view: if you are tired of London, you are tired of life. Admittedly, I went on to say that I also subscribe to his lesser known dictum that if you are tired of Birmingham, you are absolutely right—
§ Lord Harris of Haringey
But that does not mean that London is threatened by Birmingham's success; indeed, quite the contrary. I should also make the point that this is not so much a criticism of Birmingham but perhaps of a number of places slightly further north. This jealousy of London which has so undermined the Dome is very damaging. It rests on the incorrect view that London has received and continues 1410 to receive more than its fair share of resources. The decision to site the Millennium Dome here was, for such people, yet further proof of that incorrect belief.
Yet the facts are rather different. It is not the case that London receives more than its fair share of resources. The opposite is the case: London subsidises the rest of the UK. It contributes nearly £20 billion more in taxes than the Government allow to be spent in London. What is more, London acts as the engine for the UK economy. The fortunes of the country as a whole are entwined with the fortunes of London. London is not only an employer on a massive scale accounting for 15 per cent of the workforce, but also a vital domestic market. Each year the city imports goods and services worth £53 billion from the rest of the UK and more than 4 million jobs outside London depend directly or indirectly on supplying those goods and services.
London is a magnet for the whole world. It is the main gateway to the UK and possibly the premier gateway to the European Union. Some 23 million visitors come to London each year, spending £7 billion, and many go on to the rest of the country. My point is that the UK's prosperity depends on London and its prosperity and security.
That is why the Dome and its visitors—even the more realistic visitor figures that everyone today accepts—were an important investment in locating London, and continuing to locate London, as a prime visitor attraction. It is to be hoped that not too many overseas visitors were put off by the sniping.
I conclude by echoing the words of my noble friend Lady Gibson. The Dome has also been a vital contributor to the development of the Greenwich peninsula and the wider Thames gateway. The galvanising effect of the 1996 decision to locate the Millennium Experience in Greenwich prompted a huge amount of regeneration activity that has begun to lift the whole area out of the economic decline it had been in for a generation.
The direct impact of the Dome has resulted in the 8,700 construction jobs that my noble friend mentioned, 9 per cent of them going to Greenwich residents, and the 5,700 operational jobs, 40 per cent of them going to Greenwich residents. We have seen the decontamination of 300 acres of derelict land; the creation of 50 acres of new parkland; new leisure facilities; a new primary school and health centre; 1,400 new homes and an expanded industrial estate. There are the transport improvements attributable to the Dome. I refer to the completion of the Jubilee Line extension, which I rather suspect would never have happened without the Dome; the new millennium pier at Greenwich; the widening of the Woolwich Road; the Cutty Sark station on the Docklands] Light Railway and so on.
All of this has kick-started the wider economic, environmental and social regeneration of the entire area. The expected outcome of this over the next 10 years is 30,000 new jobs, increasing the jobs base in the borough by 60 per cent; 10,000 to 15,000 new homes and major improvements in existing housing; 1411 1,000 acres of land decontaminated; and a general raising of skills and educational achievement among local residents and an improvement in their health status.
Those will be real and lasting achievements and, if noble Lords want to draw up a balance sheet for the entire Dome enterprise, the impact on the local economy must be properly recognised, as should the impact on London and the beneficial effect that that will have on the nation as a whole.
§ 8.2 p.m.
§ Lord Lyell
My Lords, noble Lords will have heard many interests declared. I shall start with that, not that I have been to the Dome. However, the noble and learned Lord who is to reply to the debate will know that I am a compatriot of his; I am a Scot. Most Sunday evenings I am fortunate enough to obtain a window seat on one of the flights from Edinburgh to Heathrow when I am able to look down upon a marvellous structure in east London. It is a striking and impressive structure and is broadly similar in outlook to some of the structures that I viewed earlier this month, St Peter's in Rome and, indeed, the lovely cupola of St Paul's in London.
The structure is beautiful from above but I think that even the noble and learned Lord and all noble Lords who have spoken this evening might admit that the events at that site on 1st January 2000 were not the most glorious debut for the project. Many reasons have been put forward for that which I may mention later. The Motion that we are discussing this evening concerns the,planning, management and operation of the Millennium Dome, and of its future".I concentrate my remarks briefly and humbly on the financial management and control of the Dome. I declare my interest as a member of the Chartered Accountants of Scotland. Many years ago when I undertook my apprenticeship in Glasgow and then in London I was taught as a young apprentice auditor to ask questions. The noble and learned Lord, Lord Falconer, may have considered a career with that wonderful institute north of the Border. Certainly many of the remarks that he has made over the year—we await his reply tonight with eager anticipation—might have benefited from an apprenticeship in our perhaps slightly narrower and, I dare say, less lucrative profession.
However, in this debate I take cover behind the excellent speech of the noble Lord, Lord Sharman, who, alas, has had to slip out of the Chamber, no doubt briefly. He used the marvellous terms "breathtaking" and "byzantine". He is a man of enormous experience, far greater than mine as an accountant. I await with great anticipation the speech of my noble friend Lady Noakes. It was nice to hear the speech of the noble Lord, Lord Jacobs. The noble and learned Lord will no doubt appreciate the wisdom and the trenchant remarks of the noble Lord, Lord Bruce of Donington, who for many years has been a representative of the accountancy profession.
1412 Many years ago I sat roughly in the same position as the noble and learned Lord, Lord Falconer. When any trouble was directed at me I used to invite the Opposition to play what I called a game of Bingo. I used to direct noble Lords' attention to various Acts. That worked wonders. I ask noble Lords to glance briefly at the National Audit Office report. The first provision that attracted my attention is to be found on page 31 at paragraph 2.52. That paragraph states—perhaps not in the language of my noble friend Lord Trefgarne which caused the noble Lord, Lord Tomlinson, some difficulty—the Commission's own assessment, based on 4.4 million paying visitors, was that the Company might run out of money within two weeks and might require an additional",sum of money. The notion of paying visitors is important to an accountant. When the report came to the attention of the noble and learned Lord, let alone any of his advisers—I understand that he has many responsibilities—I believe that it would have triggered a trip wire. However, I have never had the responsibilities of the noble and learned Lord.
Paragraph 3.7 of the report on page 40 refers to what I shall term the "forecasts" which are part of the major business plan. The paragraph refers to the run up to the opening of the Dome. The paragraph states:The Company used this data in November 1998 to estimate that some 8.74 million people were 'likely' to visit the Dome and that a further 3.65 million 'could be persuaded'to visit the Dome. I am only an accountant. We have to leave this to the marketing people. But that might cause me to stub my little toe on a trip wire.
I apologise for directing the Minister's attention back to paragraph 3.3 on page 39. There it mentions the vast range of visitors and those who might appear. But certainly there is an interesting figure mentioned in that paragraph which hints that 11 million people might visit the Dome. Paragraph 3.13 states that I million schoolchildren would obtain free entry.
There will be many reasons for that. I am a humble auditing accountant. Can we differentiate between paying visitors and those with free entry? It will be nice if there will have been 6 million visitors by the end of the year. But does that figure include 5 million paying visitors and 1 million free entry visitors? The 1 million school children with free entry might have to be included in the financial forecast. Visitor numbers seem to be rather like my skiing and that of my noble friend Lord Selsdon, downhill very quickly, with figures decreasing from 12 million to 10 million to 6 million and now to 4.5 million. According to the NAO report, the figures at the end of August were 3.8 million. It is hoped that the figure will be 6 million at the end of the year. I hope that that will include 5 million paying visitors and 1 million free entry visitors, or thereabouts.
The original figure of £199 million was presented in the business plan of May 1997. That is stated at the end of the report in large capital letters.
§ Lord Falconer of Thoroton
My Lords, perhaps I may deal with that point. The May-April issue was raised with the noble Lord, Lord Crickhowell. I have 1413 had produced the evidence given by Miss Jennie Page to the Select Committee. It makes clear that the 12 million visitor figure came from the NMEC board meeting in April 1997. What the National Audit Office report indicates is that the business plan was put to the Government in May 1997 for the purposes of the review. That is why it is called the May business plan in the MAO report. It was in fact approved in April 1997 by the NMEC board.
§ Lord Lyell
My Lords, perhaps I may I continue. The figure was accepted by the noble and learned Lord with alacrity. Perhaps he had the number 15 jersey at Twickenham; or perhaps one of his predecessors accepted the figure. But the noble and learned Lord is a traditional lawyer; I am not. I leave the matter there.
I was somewhat scared when I found on page 52 of the National Audit Office report a note addressed to "Dear Charlie". I suddenly thought, "Good heavens, is that something I should have answered?" However, I was delighted to note that at the top left-hand corner of the page the letter is addressed to "Lord Falconer of Thoroton QC". My noble friend Lord Crickhowell pointed out that the third paragraph of the PWC report makes salutary reading. However, a slight bruising of my little toe was caused by page 53. The second sentence of the reply of the noble and learned Lord to the noble Earl, Lord Dalkeith, states,Like you, I was shocked by what the PWC report implied".This is nearly nine months into the year. I hope that I am not being impudent; it was perhaps at the end of a holiday season when matters in Whitehall tend to ease off somewhat. Perhaps the noble and learned Lord had other matters to consider. He made a fair statement in July. If the noble and learned Lord had used the word "startled" I might have understood but he says that he was "shocked" to receive the news. It seems odd that no one in his department had presented to him those serious figures relating to the budget. That startled me and caused me some amusement.
The noble Baroness, Lady Gibson, made a valid point, as did the noble Lord, Lord Harris of Haringey, with regard to London. It is excellent stuff; I enjoy it greatly. However, I travel about the furthest distance to this House. The Official Report of today's debate may go down well in the glens of Angus, Kirriemuir and Forfar. The reports I have received from those who have visited the Dome have not been too harsh. Nor have they been as glowing as those of that eminent institution in the north-west referred to by the noble Lord, Lord Dubs. I wonder whether the noble Baroness and the noble Lord, Lord Harris, are suffering from a case of what some call "BSE"—blame someone else. I hope that that statement is not over the top.
At paragraph 3.23 on page 44, noble Lords will note that in February 2000 the company reviewed its marketing approach, and so on. The original reason for setting the level of budget was,that ticket sales would be driven by: massive free media exposure; word of mouth recommendation; [and] a traditional fascination with 'Expo'-style events".1414 I am fascinated by paragraph 3.25. It states that the company considered that several factors had not helped the finances. First, there was,negative media coverage which undermined people's confidence …; word of mouth had not spread the message to the extent anticipated".That is somewhat at variance with what the noble Baroness, Lady Gibson, said. It states thirdly that,the Dome's content had not been explained".and so on, and that,there was a perception that travel costs were high and travel times long".That was referred to by the noble Lord, Lord Jacobs. The report is from an austere, correct, middle-of-the road organisation. It is not from the Conservative Party; it is not from this side of the House. I hope that I can align myself as a simple accountant. I do not think that all the people who have not visited can be wrong all of the time. That may be carping. It is in the past and perhaps should justifiably remain there.
The Minister may have much to say in winding up. Perhaps he will write to me. The word "May 1997" is written in large letters on page 71.
§ Lord Tomlinson
My Lords, if the noble Lord wishes to quote the whole of the report, perhaps he would like to cite the final paragraph on page 75. He has nearly reached it, but in case he missed it, it states:It is unsatisfactory that procurement processes operated in October to December 1996 did not conform to those agreed with the Commission".
§ Lord Lyell
My Lords, I am a simple accountant. Perhaps we can discuss the matter at the bar. Perhaps I may finish my own speech. The issue to which I refer is on page 71. We have heard a great deal about a 5 per cent overrun. Can the noble and learned Lord explain this to me? In the business plan there was due to be a shortfall of £199 million. Is 5 per cent of that to be £10 million or thereabouts? How is that figure arrived at? What is this figure of 5 per cent over budget? I am not entirely clear.
I conclude—I am sure that that will give the noble and learned Lord much pleasure—that the contents of the Dome have not given entire satisfaction. Paragraphs 3.23 and 3.25 demonstrate that the contents of the Dome have not been entirely what the public wanted. I do not know whose fault it was. Perhaps the matter goes back to April 1997 or the year 1996.
I have taken two sets of visitors round your Lordships' House. They would have paid a great deal more to go round the House than the cost of entry to the Dome. One visitor was the wife of the head of the Australian army. The others were a bunch of "Miss World" people. They had never seen anything like it.
I have a great deal of sympathy for the noble and learned Lord but if he can be of help I shall be grateful.
§ Lord Grabiner
My Lords, I do not want to detain the noble Lord any longer, because we have already had 17 minutes from him. I apologise to the House, but 1415 I cannot resist asking him a question. He drew our attention to paragraph 2.52 of the report and appeared to criticise my noble and learned friend because one sentence in that paragraph says that it was estimated that the company might need an additional £45 million. The next paragraph says that an application was very promptly made for £53 million. Paragraph 2.58 records the fact that on 4th August, an additional grant of £43 million was made. I do not understand the force of any criticism that he may be seeking to make.
§ 8.20 p.m.
§ Lord Sawyer
My Lords, I have a simple point to make and I shall try to make it simply and briefly. I congratulate the previous Conservative government on having the vision and foresight to build the Dome. Their decision was right in principle and they were right to choose the Greenwich site, which will now fulfil its potential as an important and vibrant part of our capital city. They were right to make decisions about senior management and business planning. With hindsight, those decisions were not perfect, but they had vision and took us forward in the right direction. They were right to take decisions about lottery finance and to be bold about visitor projections.
The previous government took risks to achieve a big vision. Nothing of significance has been achieved on that scale in our history without risks being taken to achieve a big vision. My party was right to take the project forward in government. Yes, we should have changed course sooner on a number of aspects, such as visitor projections, management structures and financial control, but we were right in principle to keep going and to take forward the procedures that had been put in place by the previous government.
The politicians and the journalists who used the management failures to undermine public confidence in the project were wrong, not the people who chose to take it forward—and they were wrong in a major way. There is another side to the balance sheet or the story of the Dome, which has been ignored by most of those who have spoken—with one or two notable exceptions, such as my noble friend Lady Gibson—or distorted by the Conservatives. That is due to the under-representation in the Chamber of the millions of people who have had a damned good day at the Dome and will remember it for the rest of their lives.
The figures have already been given, but I do not mind repeating them, because repetition is a requirement for political success. The latest figures, produced by MORI between August and September, show that 88 per cent of visitors were satisfied with the Dome, 68 per cent thought that it was something that they should be proud of, 79 per cent would welcome a day at the Dome and 94 per cent enjoyed the millennium experience. Those figures should be on the record, along with the contributions made by the doubters, the managers and the accountants. The 1416 Dome debate has been dominated by cynical journalists, point-scoring Opposition politicians, accountants and businessmen. There needs to be a little balance. We should remember that most of those who went to the Dome loved it and enjoyed the experience. Their voices have been absent.
The trade union movement organised a day at the Dome—on May Day, understandably. Some 35,000 trade union members attended on 1st May this year. That is not quite the same audience that the noble Lord, Lord Jacobs, might find attending the Tate Modern. They were working class families from all over Britain who travelled by train and coach. Their comments are important and need to be on the record: John Churchill, "Excellent"; Carolyne Burten, "Fantastico"; Julie Underwood, "Excellent; better than was told"; Cameran Day, "At last"; Valerie no surname, "What a day"; Mary Whelan, "A wonderful day"; Annie Thompson, "Get better pens—hope York Health is better"—she must have worked in the National Health Service; Rosalind Alexander, "Keep up the good work"; June Thomas, "Super day—super way to get the message across. Well done".
Those voices and many more of them need to be on the record, so that when we come to pass our eminent verdict on the Dome, the people's verdict of, "Thank you and well done", is not forgotten. When the people's verdict is recorded, of course they will note the failures in leadership and financial management, but they will not condemn one person for those failures. They will rightly hold the negative attitudes of opposition politicians and all their journalistic courtiers responsible for much of what went wrong. I think that they will hope against hope that the next time that we need to mark a momentous occasion in our history, there might just be a possibility that the classes who govern, manage and comment on our affairs will for once pull together and make a success of something that the people love and enjoy.
§ 8.26 p.m.
§ Baroness O'Cathain
My Lords, when I saw the speakers' list for the debate, I had a feeling that it was going to be a long, hard night with endless repetition and recrimination. There has not been too much repetition, but there has been quite a lot of recrimination, some of it misplaced.
If I am listened to at all in this place, may I make a plea that we try to get away from the insidious and demeaning blame culture that is so much a part of our civilisation nowadays? I am sorry that the noble Lord, Lord Puttnam, is not in his place, because I pay tribute to him for mentioning the same point.
The blame culture is one of the most disfiguring aspects of what we like to think of as civilised society. I have always thought that ever since, as a small child, I was told that the worst sentence in the English language was, "It broke". I am determined not to be a practitioner of the blame culture. Trading insults has never had any place in our House and I hope that it is not being introduced. I gently suggest that the Minister might think again about saying that the Tories have no 1417 financial sense and no honour and show gutless hypocrisy. I do not think that he really meant that. He is too honourable a man for that The four aspects of the Dome that the debate is intended to focus on are its planning, management, operation and future. I shall try to stick to those headings and not talk about the great developments in Greenwich, including the widening of the local road, improvements in existing houses and the uprating of the skills of the local population. Such comments have been impressive and informative, but do not relate to the planning, management, operation and future of the Dome.
Looking at those four headings makes me realise that the Dome started with a huge disadvantage. That list contains all the rational, tactical processes of big businesses, but I suspect that it is not the normal tactical process list of governments. Can governments of whatever political persuasion produce experts in the planning, management and operation of a massive project? Almost certainly not. I know that the French have a successful record of grands projets, but France has a very different training and career structure in its public service. At the upper echelons of the French civil service are people who have been commercial engineers, financiers or marketing experts. That is not true in this country. The Minister has already acknowledged that by saying that the lesson that governments cannot manage such projects has been learned.
We all have the benefit of PhDs in hindsight. I guess that many people, besides those who have already mentioned it in your Lordships' House this evening, now say that such a large and complicated project should not have been driven primarily by the public sector.
When the project was first mooted, many were sceptical, particularly from a planning point of view, but I fear that scepticism is a national characteristic. As the project gained momentum, another problem emergecl—one that most of those involved still do not want to talk about and one that I have never seen described in the endless acres of newsprint about the Dome.
The problem was the attitude of British business. British business was leaned upon in the most heavy-handed way to support the Dome. Both the previous government and this Government were determined that British business should play a major role in the financing of the content of the Dome. I looked on aghast when I saw the huge sums of money involved and felt that, in all conscience, shareholders' money was not going to be well spent.
For some of our huge global companies and our big and prosperous national companies the monies involved were not a large part of their profits. However, the pressure applied was something else. A hundred and sixty million pounds of sponsorship was given grudgingly and thousands of man-hours of senior management time were wasted in trying to justify the amount of money spent by interfering in the 1418 content decisions. At a rough estimate, I believe that the cost to British business was probably at least £200 million.
Why was British business so gullible? I believe it is a fact that business has always been closer to the Conservative Party than to the Labour Party. There were some difficult moments when in May 1997 business began to realise that it had few friends among the politicians who were now in power. That, of course, is a generalisation. But every business needs to have good relationships with those close to the policymakers, if only to have a "way in" to ensure that it can get its message across. Requests to stump up large sums of money to sponsor the Dome were gulped at but acceded to. I firmly believe that an amount of arm-twisting went on. That was not good enough but it was not resisted.
My personal view of all that is that not enough thought was given by business to the requests. Business should have realised that the attendance figures could never materialise at the high entrance price. The Dome never had more than four times the pulling power of Alton Towers. Therefore, business should been much more forthcoming in saying, "We don't think you'll make it and therefore we could not justify £160 million plus masses of senior management time just to put our name before 4.6 million people". I am taking the noble and learned Lord's figures of 5.6 million, less the one million schoolchildren. However, businesses wanted to curry favour. They were seduced.
Perhaps I may ask the Minister a question. Whatever happened to the great fund-raising abilities of IMG? Did it get paid handsomely for its efforts? As I recall, we had quite a skirmish on the Floor of this House when the announcement about the IMG involvement was made, but there has been no mention of it since. I fear that the Government must have been encouraged by the monies pouring in from big business. They probably believed that a huge wave of enthusiasm was being generated for the Dome. As a result, they went on planning blithely. That was obviously a mistake.
The second issue in the wording of the title of this debate is "operation". The operation of the Dome is a completely different area, and I am absolutely sure that all involved did their level best with great enthusiasm. However, the marketing of the Dome left a lot to be desired. The noble Lord, Lord Sharman, has already referred to that. I simply wonder when large companies will resist the urge to become famous TV stars by allowing fly-on-the-wall documentaries to be made about their organisation. One has only to think of the harm done to the Royal Opera House and St Paul's Cathedral. The fly-on-the-wall documentary about the Dome was not good news. It must have put off very many people and contributed to the "anti" feeling that abounded right from the opening of the place. I wonder where the marketing director was when that decision was made. I hope that he is not still in place.
Those points have not been aired. Both may seem inconsequential but they did nothing to endear the project to potential visitors. Perhaps I may remind 1419 your Lordships that responsibility for both those actions does not lie at the feet of the Minister. They happened long before the Dome opened and before he loyally took on the job that none of us would have wanted.
Many contributors this evening have concentrated on the subject of finance. I shall not add to the points already made.
The fourth area to be debated relates to the future of the Dome. I cannot understand how any of us has the vision to say that this, that or the other should happen. I only hope that whatever happens, it will be successful. By the law of averages, it should be. There could hardly be more catastrophe around that site.
I ask the Minister what will happen to the exhibits. Are they to be sold or destroyed, or are they to be returned to the sponsors to be sold or destroyed? Many of them could embellish a local amenity in other parts of the country. It would be good if a place outside London could finally benefit from part of the expenditure entrusted to the Dome, bearing in mind that much of that expenditure was contributed to by men and women throughout the country through the National Lottery.
§ 8.35 p.m.
Lord Bruce of Donington
My Lords, I say at the outset that from the beginning, and until and including now, I speak to your Lordships as a supporter of the building of the Dome and of the establishment of the various facilities, and so on.
In another place in the late 1940s and early 1950s I had the experience of being present during the establishment of the Jubilee Exhibition on the other side of the Thames. I well remember that at that time there was a good deal of furore about the amount of government expense involved. Government expenditure had a certain significance, even in those days. Yet, many of us felt—I believe that the feeling was common throughout the nation—that, after the experiences that we had all endured in one way or another during the war, we were entitled to have a celebration. The economic grounds really did not matter so long as we could celebrate.
It is a fact that the 1951 exhibition was a success. I spoke to the Minister, Peter Mandelson, about this only a few months ago when we were discussing the role of his grandfather, the late Lord Morrison, in the establishment of that particular celebration. He was surprised to learn from me that Herbert Morrison, as he then was, took very much for granted the success of the Jubilee celebrations. He always regarded as the most important thing in his career the building of Waterloo Bridge. That was an extraordinary thing, but it shows what the climate of opinion was in those days.
Now we come to the Dome. Although the title of the debate concerns the various events that have taken place, I gather that by common assent it has been agreed—unofficially or otherwise—that it could provide a debate upon the report of the Comptroller 1420 and Auditor General which has been widely quoted this afternoon, and rightly so. Perhaps I may say that, although the accusation may be made that the National Audit Office has made observations on the basis of hindsight, in the circumstances it is very difficult to know on what other basis they could be made. Anything that happens after the event is hindsight.
For myself, I wish to congratulate the Comptroller and Auditor General and his staff. Although full of findings as to fact and certain guarded observations as to opinion, they have produced a report of such validity and neutrality as to make it very difficult for any political party, including my own, to make capital at the expense of its opponents. Voices more skilled than mine can give an opinion on that. However, it is quite clear that they sought to present a report which was as objective and as free from political partisanship as it possibly could be.
Your Lordships will not be surprised to learn that I have not been to the Dome. Unfortunately, a physical affliction in my spine has prevented my walking more than a few yards to the end of the other place. Undoubtedly, I shall go to it in due course. But I must say that there has been an extraordinary outburst by, I regret to say, some of my own people—and I still regard them as my own people—as to the cost of all this. Estimates have been made that we may lose some £900 million. How enormous. Indeed, the noble Lord, Lord Trefgarne, who is unfortunately not in his seat at the moment, thundered to your Lordships that this was public expenditure and there had to be the utmost examination and rigour applied to the application of public funds. I regard the amount of public funds involved in this as peanuts.
I have good reason to say that. Why should I be indignant about it? I hope that there will be no groans when I say that for the past 20 years, I have been drawing your Lordships' attention to fraud and irregularity on a massive scale in Europe. As my reward, I have received somewhat unwelcome observations as to my advancing years and how they may have affected my judgment, observations about my partisanship, my ignorance and so on. And yet I was ultimately proved to be right after some 20 years.
Perhaps I may make this observation on a topical matter about which, no doubt, I shall be reproached again and again and again. At this time we are really tearing our hair out about the possible loss of as much as £900 million. And yet only three days ago the Court of Auditors' report on European finances in the year ending 31st December 1999 announced losses of £5 billion without any outrage spreading anywhere in the House.
That strikes me as being slightly incongruous. Of course, the £5 billion that we have lost in that regard and many billions in the years before is irrecoverable. But it is virtually certain that the £900 million, which has been mentioned this afternoon with some accuracy, and more, will be recovered for the very reasons which have been brought to the notice of your Lordships' House by the noble Baroness, Lady Gibson, and my noble friend Lord Sawyer.
1421 The amount that we shall lose, about which there is all this outrage, will be recoverable and will be recoverable again and again and again whereas what has been lost and what your Lordships in your wisdom have chosen to ignore when I have mentioned it—the various losses through fraud and irregularity—is irrecoverable.
Therefore, I believe that we are approaching the matter from a slightly dishonest standpoint if we try to make any party capital out of it at all. I am a good party man, I think, and to my credit, I have many years of complete loyalty to my party, which I joined in 1935. That is longer than some of your Lordships have been alive.
What can we learn from the report? As your Lordships would expect, I have read the report two or three times. It mentions two rather new phenomena. It mentions the degree of reliance which managers of business and even civil servants—or should I say more particularly civil servants—place on the services of so-called experts.
One of the leading matters on which they were advised—whether they were in the Tory government of the time or Labour is quite immaterial—was an estimate of £12 million turnover per year. It was accepted thereafter that that was at the higher end of the advice of the expert management consultants—note the word "expert" and note the words "management consultants".
Those who have been in the accountancy profession for a long time, as I have, know perfectly well that there is certain information the accuracy or near accuracy of which is vital; that is, the estimate of future business. Everything depends on it. Once you have determined a reasonable view, then your capital investment follows; your whole apparatus of trade follows; your whole profitability follows; the entire effect of your financial circumstances in terms of required finance and phasing all depend on that.
Why, oh why, oh why did those responsible or those who succeeded them accept the higher estimate of 12 million turnover? Why did they do that? That is one of the mysteries which that most admirable report does not seek to address.
There was an additional difficulty which any prudent management, whether it be Tory, Conservative or maybe Liberal, might care to take into account. The proposed exhibition in the Docklands, the Dome, had to be so phased that the phasing, once fixed, remained fixed.
In the 1951 exhibition, for example, if the weather forecasts, such as they were, had predicted anything like the inclement weather and deluges which we have had in the earlier months of this year, the project could have been moved forward. But the Dome had to be tied to an anniversary—1st January 2000, for the millennium year. All had to be phased accordingly. There was no room at all for variation.
When I mention that, I trust that the House will agree with me—and I am quite sure that the Minister will agree—that we owe a lot to Miss Jennifer Page for having delivered the Dome on time. For whatever 1422 reason she may have been discharged, and I am not quite sure about that, nobody can blame that upon her.
What is the lesson? The lesson is that we can all make mistakes. We must all admit the feasibility of error, even those dogmatic among us, including possibly myself.
Lord Bruce of Donington
My Lords, we must all accept the feasibility of error. From that it flows once again, as though it came from Aneurin Bevan himself: the experts should be on tap, never on top.
For my part, I wish the Dome every success. As soon as the doctors have manoeuvred me enough, I hope to be able to go and see it. In the meantime all of us, including myself, can pray that we ourselves will never make any larger mistakes either in our business, professional or political careers.
§ 8.52 p.m.
§ Baroness Noakes
My Lords, one of the most shocking things that I have heard during this debate is the noble Lord, Lord Bruce of Donington, commenting that £900 million is peanuts and, furthermore, going on to make a wholly unsubstantiated forecast that the whole of it will be recoverable many times over.
The noble Lord is a member of the Institute of Chartered Accountants, of which I was president last year. As a much honoured member of my institute, I believe I shall have to recommend him for continuing professional development so that he can get straight in his mind matters relating to numbers. We are talking about very large sums of money.
I read the NAO's report with incredulity. If we found the levels of financial and operational expertise that seem to have existed in NMEC in any commercial company, that company would have imploded or, to be more technical, would have gone into insolvent liquidation. I want to touch on one or two of the financial aspects of this matter.
The NAO report, somewhat inaccurately, tells us that the financial difficulties were largely as the result of shortfall in income. Today we have heard much about those shortfalls in income. Remember that ticket sales and associated visitor income will fall short of the original budget by a staggering 70 per cent. We are talking about large orders of magnitude in terms of getting estimates wrong.
I shall not go through the sequence of the 10 million and the 12 million, although I support the noble Lord, Lord Bruce, in being surprised at the figure of 12 million being adhered to notwithstanding that a prudent estimate of a lower figure—namely, 8 million—had been produced. We can all view matters with hindsight, as a number of noble Lords have mentioned.
In business one learns that success or failure often comes down to how well risks are recognised and managed and not how well the predictable parts of the business are managed. Identifying risks and managing 1423 them effectively is part of modern corporate government. At the time that these forecasts were being used for the purposes of approving significant sums of lottery money being handed over, there appeared to be a lack of appreciation of the fact that there should have been significant contingency planning around an area of major uncertainty; namely, visitor income.
There was still much to play for. We knew that the content was not settled; access was not settled; marketing plans were not settled; and pricing was not settled. People should have been focusing on many matters in a detailed way. Sound business planning and sound business management are about identifying those areas, thinking the unthinkable in terms of what could go wrong and producing sound plans in response; not waiting until the year starts and we find that advance sales have fallen massively short of budget and saying, "There is not much we can do about it". Much should have been done a lot earlier.
I do not believe that it mattered that the plan was dated April 1997. The fact is that it was not submitted until after April 1997 and, therefore, no government decision could have been made until May 1997. When that plan was submitted for decision it should not have been approved and the project should not have been given the go ahead as it was without serious consideration being given to detailed contingency plans. My reading of the NAO report, and anything else that I have read, does not display that there was ever any appreciation that this was a major risk area which should have been dealt with. The project was simply given the approval to go ahead. That is not a decision made by the former government; it is a decision made by the current Government.
I shall now say a little about directors and the role of directors in NMEC. My noble friend Lord Trefgarne talked about whether proper accounting records had been kept and there was a query raised by a noble Lord on the Benches opposite. If one looks at the PricewaterhouseCoopers' report—project Mozart—one will see that the systems were poor, did not record all the liabilities and some of the assets were not really assets at all. We have learned that the company did not have a proper asset register. I suspect that one could not have said that the financial position of the company could have been disclosed with reasonable accuracy and, therefore, proper accounting records could not have been kept. That is one important area of the responsibilities of directors under company law, and this is a company that comes under company law.
Another point is that directors must not trade while insolvent. The PricewaterhouseCoopers' report reported that in August 1997, as we have heard, the company was insolvent. The NAO report says that—
§ Lord Falconer of Thoroton
My Lords, the noble Baroness will be aware that the reason why the PricewaterhouseCoopers' report said that was because of the unidentified wind-down liabilities. She will also agree that the directors would have been bound, as a matter of law, to continue trading until they made the 1424 application to the Millennium Commission because that would be in the best interests of the creditors. She will also agree that within four days of making that application, it was granted.
§ Baroness Noakes
My Lords, I hear what the noble and learned Lord has said. Perhaps I can continue. The NAO report also gives the view of the current chairman of NMEC that the company was probably insolvent back in February 2000. The question is: was there a responsibility on the directors to respond once they knew about that? There are bigger questions about when the directors should have known that the company was insolvent. If the company had been insolvent for most of the year, the grant applications—
§ Lord Falconer of Thoroton
My Lords, I apologise for intervening again. The noble Baroness is making quite significant allegations against the directors, who are not here to defend themselves. To be fair to them, she should perhaps speak to the following matters: first, the PWC report identified the company as being insolvent because of the unidentified liabilities; secondly, the directors would be bound to go on trading until they made the application to the Millennium Commission; and, thirdly, the Millennium Commission granted the application within days.
§ Baroness Noakes
My Lords, the most important point is the view of the company chairman that the company had been insolvent for most of the year. One has to query whether any of those grant applications were properly made in order to deal with that matter.
§ Lord Falconer of Thoroton
My Lords, the people against whom the noble Baroness makes those allegations are not present. It is important that she answers my point.
§ Baroness Anelay of St Johns
My Lords, will the noble Lord give way? Members on the government side may care to reflect upon the way in which we normally conduct our debates in this House. The Government are here to answer questions. When a Member of the Opposition makes a point, and when he or she is able to check the facts outwith the House, I am sure that he or she will wish to write to the noble Lords concerned. If the noble Lord, Lord Grabiner, wants to ask a question of my noble friend, perhaps he will give her the courtesy of the opportunity to make another point first.
§ Lord Grabiner
My Lords, with great respect, whether or not the noble Baroness wishes to give way is a matter for her. My understanding is that she did give way.
§ Lord Trefgarne
My Lords, the noble Lord is a comparatively new Member of your Lordships' House. His intervention is not in accordance with the traditions of this place.
§ Baroness Noakes
My Lords, perhaps I may continue. Under company law, if it is proved that 1425 directors have traded while insolvent, or not kept proper accounting records, there are penalties. However, it is unlikely that that would ever now be a relevant issue because we have heard that the Government have given full indemnity to all the directors for any civil liability, including for wrongful trading. Indeed, the noble and learned Lord gave an undertaking that there would be no actual insolvency, which is what usually triggers such examinations, because the Government would bail out the Dome company one way or another.
I am trying to make the point that the Government have totally excused the directors for their part in governing the company's affairs.
§ Lord Falconer of Thoroton
My Lords, the Government have given no indemnity in respect of wrongful trading. As the noble Baroness knows full well, wrongful trading involves knowing that one is trading wrongfully and no such suggestion is made here unless the noble Baroness is making it. If she has material to suggest that such indemnity has been given, she should point to it.
§ Baroness Noakes
My Lords, my understanding was that the indemnity that was given in the earlier part of this year covered all such matters.
§ Lord Falconer of Thoroton
My Lords, the indemnity did not cover knowingly trading or fraudulently trading in a way that one knows to be wrongful. The facts are important.
§ Lord Falconer of Thoroton
My Lords, it is a much more fundamental point than simply fact. It concerns ensuring that what one says when referring to people who are not here is accurate.
§ Baroness Noakes
My Lords, perhaps I can turn to the role of the shareholder. The NAO report shows how closely involved the shareholder was in the affairs of the company, attending most of the board meetings, the weekly meetings and receiving all the reports. He got the company to accept the 1 million free visits for schoolchildren to the Dome, notwithstanding that that would put another hole in the finances. The directors seemed to act in accordance with his instructions, which may or may not make him a shadow director and, therefore, fully within the points that I have already raised in respect of the normal liabilities of directors. If one asks where the directors were in looking at what went wrong with the financial affairs of NMEC, we should also ask where the shareholder was, if not because he was a shadow director, because he entered into a very detailed financial memorandum with the company, not all of which appears to have been kept. For example, one of the conditions is that the company has to meet its debts as they fall due. There were certainly instances referred to in the NAO report and PricewaterhouseCoopers' report of that 1426 not happening. The question has to be asked as to where the shareholder and the directors were when all these things were happening. That is what I am trying to establish.
I invite the noble and learned Lord to agree that a model which purports to use a Companies Act company, but then so undermines it that the checks and balances in that framework do not work, becomes a deeply flawed model to carry out this kind of project. It pretends to have the face of a commercial operation but it does not have any of the counterweights. That results in everybody who is involved in the project not bearing any of the responsibilities that would normally be expected to attach to such projects in the private sector.
I should be grateful for the noble and learned Lord's views on the adequacy of this model for projects such as the Dome. I should also be interested in his view as to what the consequences would have been if this project had been carried out by a Government department reporting to a Minister, had the project been as badly managed as it has.
I have two final questions for the noble and learned Lord. I am still unclear about the final financial outcome. Will the noble and learned Lord say how much money he expects to be paid to the company by Legacy and how much will be repaid by the Millennium Commission? Will he also say whether the final drain on Lottery funds of £628 million set out in the NAO report, which I would remind noble Lords amounts to a subsidy of about £140 per paying visitor to the Dome, will be reduced?
Will the noble and learned Lord also explain what expert advice he received before Legacy was proclaimed the preferred bidder, whether that advice was accepted and, if not, why not? Finally, will he explain what further risks remain before this project is brought to a final conclusion?
§ 9.3 p.m.
§ Lord Varley
My noble friend is number 29. I am sure that he will slog a few around when he gets in. Coming in at this stage reminds me of what was reported as having been said by a noble Lord many years ago in a debate with as many speakers as this. He said:Everything has been said in this debate that needs to be said, but it has not been said by me".I do not intend to follow the line of the National Audit Office report. I am quite prepared to wait until the Public Accounts Committee in another place has come to its recommendation. It would be easy to select quotations from the National Audit Office report. It has been done quite often. The noble Lord, Lord Crickhowell, is not in his place. I had intended to say 1427 something about him but I shall postpone it in the hope that he may return. I should prefer him to hear it rather than read it in Hansard tomorrow.
This has been a strange debate. Every speech made from the Conservative Benches, with the exception of that of the noble Baroness, Lady O'Cathain, has looked at this project from the day when the Labour Government came into office; it did not exist before then. The noble Baroness was very fair. She said words to the effect that everybody is to blame.
I should like to make one or two points for the record. The project was conceived by the last government. The Millennium Commission included people from all political parties and none. The Cabinet Committee that took the decision in 1996 to build the Dome included Mr William Hague, the then Secretary of State for Wales, now the Leader of the Conservative Party. The Cabinet Committee agreed the method of funding the financial structure of the company and those to be appointed to it. They approved the site and the way in which it should be designed. They appointed Miss Jennie Page. That was an extremely good appointment. She did an exceptional job while she was there. When the election was about to take place, the Deputy Prime Minister, Michael Heseltine, was so concerned about the future of the Dome that he sought a meeting with the then Leader of the Opposition and asked for his support.
It is strange that we have not today heard a speech from the Conservative Benches mentioning Mr Michael Heseltine. I know that he is now persona non grata as far as the Conservative Party is concerned. He is a bad boy and no one likes to mention him. Only 16 days ago in another place Michael Heseltine said that it seemed reasonable to back expert advice that around to 10 to 12 million visitors were possible. The right reverend Prelate the Bishop of Southwark was right to lambast the press about how they behaved in connection with the Dome. On 13th November, Mr Michael Heseltine said:I have been engaged in the development of many controversial public projects but I have never known one so undermined and vilified by the national press from the moment it was announced".That was a speech made by someone committed to the Dome. I pay credit to Michael Heseltine for the work that he did.
When Labour won the election, there was some hesitation about whether the project should go ahead. But I believe that if they had not decided to go ahead, the cry from the Conservative Party would have been deafening. Perhaps they would have been screaming from the rooftops that this wonderful, imaginative project, on which the Deputy Prime Minister had set his heart, had been abandoned by the Conservative Party. Labour won and the Dome was constructed, employing thousands of people. It became the largest building project in Europe. It was finished on time, unlike the building of the British Library, the completion of which was delayed by many years and cost millions of pounds. I do not make any complaint about that. But nobody has mentioned that and that took place during almost the whole of the period when 1428 the Conservatives were in office. There was no great tirade at that time from the noble Lord, Lord Crickhowell, when he was a Cabinet Minister in that administration. There were no cries from other members of the Conservative Party. The noble Baroness, Lady O'Cathain, is nodding her head to say that she criticised it. Does she want to intervene to say her hands are clean?
§ Baroness O'Cathain
My Lords, I simply wish to say that there was a massive amount of criticism about the project management of the British Library. The noble Lord should go back to the official record. We have a wonderful Library here which will dig up all the stuff for him. It came from all sectors of the House.
§ Lord Varley
My Lords, who resigned over that project? Whose head were they calling for? Who did they pillory? Who did they hound? Nobody. They simply decided that when the Dome came along they would hound my noble and learned friend Lord Falconer. Those are the facts.
§ Baroness Blatch
My Lords, is the noble Lord really suggesting that this Government were so feeble that they were afraid that if they abandoned the Dome, after all the advice they received at the beginning of this project when they took office, the Conservatives might make a bit of a fuss?
§ Lord Varley
My Lords, if they had wanted to abandon it, they could have done so. But the noble Baroness would have been the first person charging up and down the country saying that it had been abandoned. That is my belief. Others would have done so also. They would not have dared not to support the Deputy Prime Minister at the time. I wonder whether the noble Baroness sat on one of those Cabinet Committees with Mr Michael Heseltine. She shakes her head. That is her misfortune. If she had, she would not be making the comment she is making today.
The reason for the controversy which caused this debate is that insufficient people visited the Dome. I only hope that my noble friend Lord Bruce, when the doctors get to work on him, will be able to visit it. I am sure he would enjoy it. I and my family have been. We enjoyed it, particularly my grandchildren. They loved every moment they spent there. Of course, as others have said in the course of this debate, that is in common with the majority of people who have visited the Dome.
All the financial difficulties stem from the shortfall in visitor numbers. The visitor figures on which the financial calculations were made were accepted long before the Labour Government came into office. To blame the present Government alone for the shortfall in revenue, and my noble and learned friend Lord Falconer in particular, is preposterous.
I know that the noble Lord, Lord Crickhowell, is not in his place. But that should not restrain me. I did not ask him to leave. It is sometimes said that Members who come to this place from the House of Commons mellow; they do not enter into the spirit of 1429 politics as they did previously. No such charge can be made against the noble Lord. He is still as nasty and disagreeable as he was when he was in the other place. I am sure that he will not mellow for the whole of the period he is in this House.
The way in which leading Conservatives have behaved is absurd and their antics do them no credit. I know that they are in a bit of difficulty in the country. There were three by-elections last week, all of which Labour won. I do not believe any elector refused to go to the polls until my noble and learned friend resigned. The House will recall that the Conservative Party tried to do the same to my noble friend Lord Simon of Highbury as they are doing to my noble and learned friend. When my noble friend Lord Simon left BP to become a Labour Minister, they went after him in the same way. John Redwood spent every waking minute attacking him. The same happened when my noble friend Lord Sainsbury of Turville became a Minister. Both he and my noble friend Lord Simon came through those onslaughts with their reputations and dignity intact and enhanced.
Those of us who have looked at this matter objectively have every confidence in my noble and learned friend Lord Falconer. He has the confidence of all those who are prepared to look at the facts. He should take no lessons from a Conservative Party that gave us the poll tax, mishandled the BSE crisis, invented Railtrack and caused all the chaos on the railways. My noble and learned friend will come through this period with credit and go on to play a much greater role in government. I wish him every success.
§ 9.14 p.m.
§ Earl Attlee
My Lords, I hope to be a little less aggressive, perhaps even mellow. I am grateful to the noble and learned Lord, Lord Falconer, for introducing this debate and defending his position so spiritedly. I do not intend to speak at great length but shall concentrate on the visitor projections and leave the report of the National Audit Office and other matters to your Lordships.
In answer to the noble Lord, Lord Varley, my right honourable friend Mr Heseltine does feature in my notes. In answer to the noble Lord, Lord Puttnam, who made a skilful speech, I worked on the Greenwich peninsula in the late 1980s and have also visited the Dome. Apparently, I was stunned. I shall not say what stunned me, but I enjoyed the "BlackAdder" film. I was definitely struck by the extravagant design of the structures of each zone. Like many noble Lords, I agree that the Dome itself is, and will continue to be, a very impressive building. I also agree with the comment of the noble Lord, Lord Puttnam, about comparisons with the Sydney Opera House.
I do not profess to be an expert on property. However, like my noble friend Lord Trefgarne, I hope that the Dome will be kept for exhibitions. I believe that it would be wasted if it were used purely as a tent over prefab offices. To knock down the Dome may well be better value for money, but London will be 1430 better off if it is kept. I hope that a comment of that kind from the Back Benches is not too much at variance with the views of my noble friends on the Front Bench.
The Minister referred to my right honourable friend Mr Heseltine. If I inherited a project from my right honourable friend, be it a helicopter or single currency project, I would exercise a certain amount of caution. A target of 12 million people requires a substantial proportion (about 20 per cent) of the population of the United Kingdom to visit the Dome. Some noble Lords have asked at what point the Dome's budget will go into balance in terms of attendance. We must not forget that visitors to the Dome finance the running of the Millennium Experience, not the whole project. Only £200 million of the budget comes from commercial receipts, including visitors. I do not argue with the arithmetic. However, the total budget is about £758 million, which appears to equate to a planned subsidy of about £80 per visitor. That point seems to have been missed by many noble Lords.
My difficulty with the whole project is that most families cannot afford the discretionary expenditure required to visit the Dome. That expenditure includes the cost of travel to the Dome and sustaining them, normally by way of fairly expensive fast food outlets. Think of an ordinary family of four in Newcastle upon Tyne, or some other great northern city. Even if use is made of a family railcard, the cost is £60 per adult and £15.75 per child. In addition, a family ticket for the Dome is £57. Therefore, the total cost per family is £200. I do not believe that many families can afford that discretionary expenditure, and perhaps that is the underlying cause of the lack of attendance. I do not understand why the consultants to the Dome did not foresee the problem.
In addition to travel costs, there is transit time. A family from the north may spend six hours in a train. Young children will become very tired during a journey of that length. For families who travel from northern cities, there must be many places which are easier to reach and perhaps more interesting. The noble Lord, Lord Jacobs, referred to the use of coaches. The problem of tiredness will be made worse with coaches because of the longer travelling time required. It may even involve an overnight stay, which will result in yet further cost. Your Lordships can pop over to the Dome any day of the week. However, would we take the trouble to go all the way to Liverpool or Edinburgh if the Dome was sited there?
The noble and learned Lord said that the Dome was the most successful UK visitor attraction, but with a subsidy of £80 per person it should be.
There is one further difficulty. Two weeks ago I visited the Dome late on the Sunday night. I would certainly not like to go there when it was any busier. There was a 30 minute wait for the journey zone and a 40 minute wait for the body zone. Even with the low attendance figures that we are sadly experiencing I understand that those are not unusual delays. If there were a 100 per cent greater attendance figure at the Dome, the whole experience would be unbearably busy.
1431 Finally, I have a question for the Minister. Can he say whether there are any other visitor attractions in the UK which are subsidised to the extent of £80 per visitor?
§ 9.21 p.m.
§ Baroness Crawley
My Lords, I am grateful to my noble and learned friend Lord Falconer for introducing the debate and for his unending good humour in the face of scurrilous scape-goating and blame-seeking by the media and their friends.
Having listened for several hours today, and not just today, to some noble Lords opposite decrying the Dome, I have come to the not unsurprising conclusion that an unhealthy amount of pleasure is being taken in exaggerating the admitted shortcomings of the Dome project and in minimising its undoubted successes, not least to the wonder and satisfaction of up to 6 million people.
Those noble Lords who would be first off the starting blocks in calling themselves patriots in a debate on so-called European superstates—I do not refer to my noble friend Lord Bruce of Donington—suddenly lose all sense of patriotism and national pride when it comes to sharing collective responsibility over our major national millennium project, the Dome.
There appears to be a media feeding frenzy of failure when it comes to the Dome—almost an exultation in searching for failure of any kind—which masks three important issues. First, the Dome was the centrepiece for a wonderful range of millennium projects throughout the regions of the United Kingdom. The Birmingham Millennium Point is one such project. Secondly, it masks the fact that the risk venture which is the Dome—many noble Lords here today agree that it is a risk venture and was from the start—had its genesis in the previous Conservative government. Thirdly, there are those who never wanted the project to succeed in the first place and are taking prurient pleasure in a media-fuelled controversy. They see it as an early Christmas present. No wonder people get cynical about politicians.
The Dome was a risk venture. No noble Lord on this side of the House is claiming that it is an outrageous success. But what we are saying is that as the country's number one visitor attraction it has brought considerable pleasure to millions of families across the United Kingdom. Through its exhibits, zones and performances it has redefined what millions of British families can expect in the future from a great day out.
In the cold light of dawn, I believe that the Dome experience will have altered families' expectations of what standards a national visitor attraction needs to reach to ensure satisfaction in the future. That is in addition to all the benefits that noble Lords have identified, such as the strong regeneration benefits and the marvellous employment benefits that the Dome has brought.
1432 Finally, perhaps I may set the accusations that we keep hearing into some kind of context by comparing the records of the Dome with those of our most popular tourist attractions. According to the latest figures from the Office of National Statistics Social Trends publication, the Dome is attracting similar numbers of people to Blackpool pleasure beach, without the candy-floss and the donkeys. It has had double the number of visitors of Alton Towers and the Tower of London and far more than the Natural History Museum and the Science Museum put together. Those are figures to celebrate, not figures to be condemned in negative terms.
While willing to understand and learn the lessons highlighted for the future by the National Audit Office report, the Government are not willing to devalue the experience of millions of families, the exciting benefits of a huge regeneration project on the Greenwich peninsula or the security of employment of thousands of people, especially young people. That is a legacy from the Dome which will endure and of which we should all be proud.
§ 9.26 p.m.
My Lords, I shall try to be brief at this hour, after a long and, I believe, revealing debate, out of which, with the exception of the contributions of a few noble Lords, has come a balanced picture of the successes and failures of the Dome and, even more clearly, an overwhelming endorsement of the integrity of my noble and learned friend Lord Falconer.
The exceptions have been concentrated, to a statistically—but perhaps not politically—extraordinary extent, on the Conservative Benches opposite, whose occupants, with the noble exception of the noble Baroness, Lady O'Cathain, seemed to have approached the issue with a rare mix of condescension towards popular taste and enthusiasm, surprising ignorance and a selective amnesia verging on Alzheimer's of the Ernest Saunders variant. For what it is worth, my own assessment of the project endorses the near universal admiration of the building itself and the recognition of the invaluable benefits of the resulting urban regeneration. If the contents of the building, on the harshest criteria, have scored, overall, as solid performers, rather than smash-hit blockbusters, my noble friend Lady McIntosh has already testified to how creditable that result is in even the best-run creative businesses. At least as important as the quality of the Dome's contents during this year is the decision as to its future. It seems to me that the benefits from a successful new use of the Dome have the capability of dwarfing whatever mistakes and disappointments, as the noble Baroness, Lady Greengross, even-handedly described them, that have arisen in its short life to date.
In that context, I was surprised by the rather deprecating terms used by the noble Lord, Lord Trefgarne, to describe the Legacy consortium's proposed use of the Dome as a science and technology business park. Perhaps that accurately reflects his party's attitude towards the new business on which our 1433 future employment and prosperity depend. Like Southwark Council, I intuitively favour such a use of the Dome rather than as a continuing entertainment venue. I shall keep my fingers firmly crossed that the designation of Legacy as preferred bidder now leads swiftly to a successful sale. I think that the preference of the noble Lord, Lord Trefgarne—and, if I understood him right, that of the noble Earl, Lord Attlee—for an international exhibition centre may have been formed without any awareness of the major new such centre opened close to the Dome in the past few weeks.
Many noble Lords have referred back to the decision in June 1996 by the previous government to pursue the project as a public sector one, following the failure of any private-sector operator to come forward. This, remember, from a government which had elevated the worship of privatisation and the degeneration of the public sector to an ideological fetish. As the noble Lord, Lord Sharman, and others have emphasised, the reticence of the private sector signalled clearly and powerfully one thing: beware, high risk. As the noble Baroness, Lady Noakes, suggested, the identification of risk is a key issue for businesses and indeed all organisations. When the then Conservative government made the decision to proceed despite the signals from the private sector, it must implicitly have acknowledged the high risks of the project. When, in opposition, senior members of the Conservative Party from their Front Benches and Back Benches gave support, and in some cases strong encouragement, to the project's continuation, they must have recognised that those high risks remained.
It is for that reason that the sanctimonious strictures from the Benches opposite—even when they are based on accurate matters of implementation where acknowledged mistakes may have been made—are so offensive to those of us on these Benches.
In looking for lessons to learn, I would be sad if a blanket conclusion were reached that the Government should shun completely the active promotion of popular cultural and entertainment projects, particularly those with significant regenerative aspects. Rather, I believe the cumbersome structure and other handicaps to the Dome's optimal management that other noble Lords have analysed should clearly be avoided if and when future projects are pursued.
The noble Lord, Lord Marlesford, suggested that the Dome was conceived out of hubris. If it was, I find it difficult to attribute that hubris other than to the government in office at the time of the project's conception. In fact, I believe the conception was based not on hubris, but on a brave, possibly excessively brave, aspiration to mark the new millennium on a widespread, popular basis. Since May 1997, and not least since January 1999 when my noble and learned friend Lord Falconer assumed responsibility, a remarkably challenging and difficult situation has been managed with persistence, patience, skill and integrity. We owe him, and all others who have worked on the Dome, a vote of thanks, not of censure.
§ Lord Selsdon
My Lords, I am probably an unnecessary appendix in this debate. When I looked at the list of speakers today I could not understand why there were names of so many noble Lords on the Benches opposite. I suppose it is a Parliament of Crows where they are all cawing together because the senior crow has a wing down at the bottom of the tree.
I wonder whether the Dome may not become the kind of dimpled chad of the Labour party. I know not. I intend to go back a little. I have always ended up appointed to difficult jobs by the Labour Party, because it always appointed hereditary Peers to unpaid jobs. The one I intend to talk about now was when the present noble Lord, Lord Shore, appointed me to be chairman of the Greater London and South East Councils Sport and Recreation body. It was to prepare a plan for sport and recreation for the future.
Tonight I have listened to the biggest example of short-term thinking and short-termism that I have ever heard in this House. People seem to be attacking each other with absolutely no knowledge or understanding. The preparation of a regional recreational strategy was a non-party task. We came to the very simple conclusion that we must look after people when they are not working or sleeping. One needed a very careful plan. We had the help of many trade union leaders and my executive committee of 152, including the Army, the Navy and the Royal Parks. Some wonderful people were involved. There was Clive Jenkins who wrote an excellent book called The Collapse of Work. There was another one called, I believe, The Leisure Shock.
We decided that it was a good idea to make people happy. But, when the report was produced, somebody said, "Wait a moment. You'd better do something about it". But half way through the proposal Michael Heseltine appeared. He then reappointed me. I found myself in the most difficult situation of all, in that we needed a really big venue in inner London for multipurpose activities. This led to one of the most embarrassing moments of my life. I learned later that I had only been appointed because someone had looked me up in Who's Who and found my father instead.
My father had an interesting career in many ways, apart from wartime and so on, and he decided that he would be a boxer and an all-in wrestler for charity down the East End and the Isle of Dogs. It was a very good idea. He was told that he must lose because everyone liked to beat up a Peer. This seems to be what is happening to the noble and learned Lord, Lord Falconer. I thank him for being in his place all day. He has had nothing to eat. Should he wish to leave while I am speaking I shall be very happy that he should do so. I have nothing to say against him personally. As a good Celt—I, too, am a Celt—we have a lot in common, whereas many Members of his own Benches are slightly different from him.
People seem to get hung up with this business called "PR". The Labour Party calls it "public relations", or the presentation of something. The twitters from the Liberal Democrat Party—if that is what a collection of 1435 starlings is called—talk about "proportional representation". I have always used it for the phrase "protecting your rear". I detect that this gathering on the other side has a certain guilt feeling that someone will be unfairly attacked for having done something wrong. That may be the case—but we are talking about the most extraordinary project I have ever come across.
I want to explain my own project. We were asked whether we could find a big, multi-purpose venue. We had a study carried out by very good people and it was decided that it could be at Greenwich, in an old shed at Brooklands in Woking, at the Alexandra Palace or in a banana shed in Docklands. The banana shed in Docklands was chosen.
I was asked—I was young, the same age as the noble and learned Lord, Lord Falconer, and not very experienced in these matters—if I would be chairman of this body. The Government were kindly going to give us the building—the banana shed—and the DOE were going to give us a grant. But we had not got any money to start with and it was back to the business of rooks or crows. As many people know, the Docklands symbol was a crow. We managed to arrange for the marathon to run past this part of Docklands, and my cousins, friends and others, on roller-skates and dressed up in crow uniforms, collected £200—and we formed a charity to start this great event.
The plan was for the structure to be as big as a football pitch inside, with a single span. We had the great and the good there. The company of the noble Lord, Lord Sharman, instead of jobbing backwards after the event, produced the budget. We had the great GEC as one of the partners, and the great P&O Group and the great Grand Metropolitan, who were to manage it. We also had the Sports Council, the representatives of 41 different sports and the London Borough of Tower Hamlets—you name it, they were there.
This was a remarkable achievement. It was going to be on budget; it was practically finished. Then, in 1986, a rival emerged on the scene—a dome. The London dome was to be built. Sponsored in a way by Americans, it was to be a 25,000-seater stadium which looked remarkably like the current Dome. That appeared on the day we were seeking to raise some more money with Kleinwort Benson and it caused a bit of difficulty.
There was then a fire—the Bradford fire. You would not have thought that the Bradford fire would have anything to do with Docklands, but it did. The fire chiefs came along and said, "We are terribly sorry, you cannot have any people in your building. The 10,000 people you were going to have cannot come in. You have got to completely re-roof it". The reason for that was that the building belonged to the Port of London Authority, not to the local authority. Therefore it did not exist. So when the new legislation came in, it had to be deemed to exist and comply with the new legislation.
1436 We liked the London Borough of Tower Hamlets; it was a good Labour council. Peter Shore was the Member of Parliament who appointed me and, although I was never paid anything or received any expenses, I felt that I owed him something, and I owed Tower Hamlets something because that is where my father had lost most of his fights. The London Borough of Tower Hamlets then had a problem—the Labour Party was kicked out. Its recreational strategy, which led to support, was not able to be implemented because it had a young councillor who held the balance of power who was under age. So it was defunct.
Then, much to my regret, the GLC, which was a very good supporter and was going to provide an annual subvention to ensure that we kept our head above water, decided that, as I was a Conservative, I was persona non grata and that unless I voted to retain the GLC it would withdraw its support. It then said that I must stand up and speak in its favour. This was difficult for me because my mother was the Lord Mayor of Westminster and was opposed to the GLC, and my cousin was doing the PR for the GLC. So I went to see the Leader of the House and the Leader of the Opposition. It was placed on record and it was thought that the Sergeant-at-Arms should properly go over the bridge and take the person concerned because he was trying to influence Parliament. But we lost the grant. We then found to our surprise that we had to get full private sector money. With the help of the organisation of the noble Lord, Lord Sharman, a new budget was produced. It was decided to have many more entertainments, in particular pop concerts and music festivals. The ICA was there, promoting new arts. It had headless chickens falling around, and the local Jamaican community got upset and the project lost support.
At the end of the day we had a major problem. We ran out of money and found that there were directors' liabilities. As chairman of the charity, I said that we must go into receivership and must protect the relatively small amount of public money that had been put in. I resigned, but the directors who remained were all disqualified from being directors thereafter.
What I am trying to say is that when we are dealing with public money—and 66 per cent of all expenditure is public—the public sector often makes the mistake that it is not a single body but a collection of many bodies, which must obtain the necessary permissions and observe the necessary rules and regulations. One cannot think short-term.
Let us look at what happened. My right honourable friend Michael Heseltine did a remarkable job on inner-city regeneration. But even then there was short-termism. Look at the City airport in Docklands, which very nearly went under. Look at Canary Wharf—the biggest development of its kind—which very nearly went under. Look at Alton Towers, which decided that it would try to take on Battersea power station. That practically killed it. All major projects of this kind need at least 10 years; no profit will be made for five years, and the capital cost has to be written off.
1437 The original proposals for the London Dome were remark ably similar. The project was rejected at the time because of the pollution on the Greenwich site. It was thought that it could be in the Royal Docks. But it was rejected for another reason: it was impossible, without the right infrastructure, to make that kind of project work. At the end of the day, we are not talking merely about a building. The Dome is another venue. We are desperately short of venues in this country. Look at the crap that was around in terms of football stadiums until they were sorted out recently. Look at Wembley. We have fewer facilities than any other country in the OECD. We have always failed to look at the need for the infrastructure that goes with them.
Let us take the simple issue of car parking. One car parking space is needed for each 60 visitors. The Dome would need 3,000 car parking spaces if it were to be a proper venue, accepted internationally and with local planning policy. A project cannot succeed if people cannot get there. I regard the Dome as a remarkable building. It is a brilliant design concept. There is bitching, if I may so describe it—at least, men do not bitch; they do something else—but there is this complaining about each other. We know what happened. This was to be a landmark project on the right site and the design concept was good. The fault lay in the simple fact that no one bothered to work out what would have go inside the Dome in order to make it work. That is the truth. The Dome is not a short-term project—it cannot be. It cannot be made to pay for itself. Incidentally, the subsidy is £102 per person, not £80 as my noble friend Lord Attlee said.
It is a question of what we do. I feel very sorry for the noble and learned Lord, Lord Falconer. He has been left as tail-end Charlie—perhaps that is the wrong phrase; I am tail-end Charlie in this debate. It is difficult to find a solution. I should be inclined to write off every single item of expenditure and start again from scratch. It will be a pity if the Dome is turned into a high-tech business park—the idea applied to any building when it does not work. It needs some thought. It needs the infrastructure that goes with such projects. It is an outstanding building, but it is like so many things that we get wrong: we do not think them through.
I declare an interest in relation to the Tate Modern. I am president of the Anglo-Swiss Society. That building was Swiss-designed at the end and it worked extremely well. The bridge is not as good as the bridge in Newcastle. But if we look at some of the engineering projects that we have advanced in this country—whether it be the Severn Bridge, or others—most of them have not been thought through far enough so as to link up all the infrastructure. It is infrastructure and lack of access that kills many such projects.
I wish the Dome project well; and, indeed, the noble and learned Lord, Lord Falconer. I heard about his success on the Dome in Switzerland, and his role in "Cool Britannia"—which, I gather, is now dead and things are hotting up. The world was waiting and assuming that the Dome would be the symbol of modern Britain. In the end, the outside is; but I do not think that that can be said for the inside of the Dome.
1438 However, the inside does not matter. It is a great building. I hope that someone will find something proper to do with it in the future.
§ 9.45 p.m.
§ Lord Graham of Edmonton
My Lords, it is a pleasure to follow the noble Lord, Lord Selsdon. I have listened to him on many occasions and he is always entertaining. The noble Lord began his speech by asking the rhetorical question as to why there were so many Labour colleagues present in the Chamber sitting behind the Minister. I shall tell him why I am here. Having witnessed the attempt to crucify my noble and learned friend over the past three months at least for matters that he defended excellently tonight, I was determined to be here to show solidarity with him and with what both he and the Government have been trying to do. I believe that he has done that very well.
My noble friend Lord Varley said that there was once a Peer who said, "Everything that can be said has been said, but not by me". I do not intend to go over the ground that has already been covered because I believe that all of the facts have been exposed. But my noble friend also said something with which I completely agree; namely, that the nastiest speech that we heard tonight came from the noble Lord, Lord Crickhowell. He pleaded in aid the fact that the noble Lord, Lord Crickhowell, had changed. I had the experience—I nearly said "the pleasure"—of being in another place. I can vouch for the fact that the nasty, shabby and shoddy speech given by the noble Lord, Lord Crickhowell, is on a par with the speeches that he has made previously both in this Chamber and in another place.
The other speech that I should like to comment upon is that made by my noble friend Lord Puttnam. To me, my noble friend was able to put into a well-prepared case the reason why the Labour Government are proud of what they did. They have learned from the experience. My noble friend painted for me a picture of the practical value of the Dome, as he saw it from his eminent position, to the school children and the communities who have visited it. I have not yet had the pleasure, but I intend to visit the Dome before the year is out.
The noble Earl, Lord Attlee, used as an analogy the fact that it is costly for people to come from Newcastle upon Tyne, which is my home town, to visit the Dome. Years ago, I did what I suggest not many people did: I travelled from Newcastle to see the 1951 exhibition. Wherever the exhibition was sited, there were bound to be people who were disadvantaged. Of course, the costs are greater now than they were at that time. In 1997, the Government were faced with the decision of whether they wished to mark the millennium. All of the available evidence, and the work that had been carried out prior to them coming into office, led the Government to believe that the right decisions had been made as regards the site, the concept and the vision.
1439 In my view, my noble and learned friend has acknowledged where there have been derelictions and where there have been mistakes. However, at the same time, I believe that he has kept us on the straight and narrow as far as concerns the main issue. Members opposite have been champing at the bit for months to have my noble and learned friend before them to defend his case. They would not wait; indeed, the proper time to do that would have been after the committee in the other place had examined the matter. But, no, they would not wait—and they have not stayed to listen to his response.
I do not wish to enter into the issue of criticism because the House must move on. However, our noble and learned friend the Minister has not only done his best—his very, very good best—for his party and his Government; he has, more importantly, also done his best for the people who will benefit in years to come. Indeed, there was similar criticism in 1951 about the whole concept of the exhibition; for example, there we were in the days of austerity spending much public money on remembering the Great Exhibition in 1851 as something of which we could be proud.
Fifty years after the 1951 exhibition I look across at Festival Hall. I remember visiting the Festival Gardens and the South Bank. As the noble Lord, Lord Selsdon, said, it takes a long time for such a project to come to fruition. It discredits the leadership of the party opposite that they should believe that they can manipulate this issue to their credit over the next few months. It is my humble opinion that when the people of this country have all the facts—they do not have all of them yet—and have heard all the debate, they will not only consider that the decision we are discussing was the correct one, but they will also consider that my noble and learned friend Lord Falconer served not only his party and the Government but also his country very well indeed.
§ 9.51 p.m.
§ Baroness Dean of Thornton-le-Fylde
My Lords, I too thank my noble and learned friend Lord Falconer for initiating the debate this evening. It constitutes one step in the long process of the demonstration of his accountability as a Minister. Many noble Lords will be aware of the number of Questions and debates he has replied to on this subject. There have been three debates in this House on the subject, the most recent on 12th July. He was anxious to initiate the debate this evening, which I welcome.
Many positive comments have been made about the Dome. I do not intend to repeat them, as in the debates I mentioned I recognised the regeneration that has taken place in the deprived area of Greenwich where the Dome is located. I hope that the Dome is not pulled down. It is certainly a London landmark whether one flies in or sees it from the road. It stands out like a beacon. It is something to be proud of.
Paragraphs 14 and 15 of the executive summary in the National Audit Office report identify the failure to achieve the visitor numbers and income required and 1440 the complex organisational arrangements as being responsible for many of the Dome's financial difficulties.
I am not one of those who blame the press for things that go wrong, but I think that they do have an influence. Paragraph 23 of the executive summary states:The Company estimates that each time the Dome received tad press' sales enquiries dropped by 30 per cent to 50 per cent in the following week".That is a substantial percentage. Unfortunately, today people believe much of what they read in the press.
The noble Lord, Lord Selsdon, wondered why so many noble Lords were present on this side of the Chamber. I believe that my noble friend Lord Graham answered that point. Many of us who are present this evening have attended not just this debate but have also been present when Questions have been asked and when debates have taken place on the Dome and have attended Select Committee hearings when evidence has been heard on the Dome.
Like others on these Benches, I too wonder why, after the Leader of Her Majesty's Opposition and his supporting shadow Ministers in another place made such a song and dance on this issue, the noble Baroness, Lady Anelay, is so poorly supported in terms of numbers on the opposite side of the House. I wonder whether a reason for that is that some noble Lords opposite are more interested in the vote that is taking place at the Carlton Club this evening on whether women should be admitted as members. Perhaps they consider that that has a higher priority than the matter we are discussing.
§ Lord Selsdon
My Lords, it used to be the practice in this House that only people who knew about a subject would speak on it in Wednesday debates.
§ Baroness Dean of Thornton-le-Fylde
My Lords, I have been a Member of this House since 1993 and from my observation of many of the debates in this House I have never considered that to be a criterion for taking part in one!
When I worked in Fleet Street I was often the only woman taking part in negotiations. When I saw employers and trade union men run for cover when the going got tough and when they might be blamed for something, I developed the theme that the world was full of males but few men! Over the past month that thought came to me time and time again as I heard and read about Opposition spokespeople in another place and some noble Lords in this House trying to paint out their role in the development of the Dome. I agree with the right honourable Member, Mr Heseltine, that it is a role to be proud of. But listening to some of the statements one would think that those people were trying to rewrite history; and that is not possible.
I wonder what the leader of Her Majesty's Opposition thought that he was doing when, in support of the shadow Minister Mr Peter Ainsworth, he said on 7th September, "Shut the Dome, and now". What did the people employed there, the businesses 1441 with investment in the Dome and the people of Greenwich think when that statement was made? I believe that when he made it the right honourable Member the Leader of the Opposition knew that it would cost more to close the Dome then than to keep it open until the end of the year.
The noble Lord, Lord Sharman, was right in his approach. I congratulate him on dealing with the issue by following the traditions of this House. The noble Lord talked a lot of sense. I do not say that in a patronising way. I respect his vast business experience. He was right to deal with the issues that he did. However, he also said that he would not blame any one individual, because it would take all his allocated time in the debate to name all the individuals concerned. He is absolutely right. Mistakes have been made. Much needs to be learned for the future. But the mistakes have not been made by one person or one party. The noble Baroness, Lady O'Cathain, and my noble friend Lord Puttnam are right. We are in grave danger of developing a blame culture in this country. This Government have made mistakes; the Minister admitted that mistakes were made. I just wish that those other males would become proper men and admit their role in the whole process.
Perhaps I may say this in a friendly way to the noble Baroness, Lady Noakes. She mentioned the reference of my noble friend Lord Bruce of Donington to £900 million and said in what I took as a friendly comment that he probably needed some vocational training. The noble Baroness may not call it that but that is how I term it. The noble Baroness is a new Member of the House. When she has been around a little longer she will know that the noble Lord, Lord Bruce of Donington, needs no vocational training on accountancy from anyone—not even, with respect, from someone who was last year the president of a professional institute. My noble friend runs circles around most people when it comes to knowing facts. I congratulate him on his ingenious way of bringing his pet subject into the debate.
Let us get the matter into perspective. Before the debate began, I, with other noble Lords, listened to a Statement about inherited SERPS. It referred not to millions but billions of pounds which people lost because of the policy and inaction of the previous government. So let us get this issue into perspective.
I think that in the longer-term future the inheritance from the Dome will be judged more fairly than by today's generation. It is self-evident that it has contributed a great deal. The figure of £900 million has been mentioned. It is not £900 million down the drain. There are houses, jobs and the regeneration of the whole area. I suggest that the Dome has been a major contribution to the regeneration of the heart of the City, the River Thames. It is a pleasure today to travel down the Thames; it was not so a few years ago. That was because of the vision of the previous government and the courage of this Government to carry that vision forward.
The noble Lord, Lord Trefgarne, said that he thought that the noble and learned Lord, Lord 1442 Falconer, had gone over the top. I do not agree, because, with respect, he and the noble Lord, Lord Crickhowell, before him, who was the first to speak after the Minister's introduction, called for my noble and learned friend's resignation. Some might think that it is going over the top to answer vigorously, but if someone calls for another's resignation they should mean it seriously and we should examine the issues and defend the person who is being attacked, if necessary.
In closing, I urge my noble and learned friend to take no lessons from the noble Lord, Lord Crickhowell, about what he should do and how he should do it. His record on accountability is clear. I remember the noble Lord, Lord Crickhowell, as Secretary of State for Wales between 1979 and 1987. He presided over the biggest job losses and the greatest increase in deprivation that the Principality of Wales had seen for a long time. The people of Wales recognised that, and the action of one of his successors, who is now the Leader of the Opposition, by ensuring that at the following election not one Tory MP was elected from Wales. My noble and learned friend has no lessons to take from the noble Lord, Lord Crickhowell.
§ 10.1 p.m.
§ The Lord Bishop of Lichfield
My Lords, in the four minutes of this gap moment, dare I offer a thought that I hope will encourage us all? I simply remind the House again of the neighbouring, massive cultural assets sited near to the Dome in Greenwich. I have not heard them being underlined. There is the superb Greenwich Park, where Henry VIII went hunting and hawking; there is Greenwich Palace, where Queen Elizabeth I was born and where James I died; there is Greenwich Hospital—latterly the Royal Naval College—which is one of the supreme masterpieces of Sir Christopher Wren, one of the great architects of enduring influence in this city. The painted hall in Wren's complex is becoming a great centre for concerts. In this Bach anniversary year, Sir John Eliot Gardiner and the Monteverdi choir took their orchestra and their cantatas there just the other week. There are wonderful riverscapes and views across the river—such a contrast to the views of the past.
I am a 66 year-old south Londoner whose family was bombed out in 1940, but I have witnessed the regenerative energies of our city. I therefore ask the Minister to assure us that the next occupants of the Dome, whoever they may be, will be committed to joined-up thinking for those other historic assets in the Greenwich area, bringing cultural and spiritual regeneration to that place. We should unite in support of the Government to ensure the Dome's contribution to that future in the richly cultural area of Greenwich. That will be done by joined-up thinking with the other people involved.
§ 10.3 p.m.
§ Baroness Hamwee
My Lords, it is useful to have current problems put into geographical and historical context. I welcome the contribution of the right reverend Prelate the Bishop of Lichfield.
1443 I expected a large number of speakers in the debate. I was startled to see the heavyweight presence on the Government Front Bench at the beginning of the debate. It is highly appropriate that his ministerial colleagues were supporting the noble and learned Lord, who has found himself pitched into such a controversial position. I leave it to the public to judge whether the large number of speeches from the Labour Back-Benches were made out of admirable loyalty and solidarity, as the noble Lord, Lord Graham, said, or whether they might have protested a little too much.
The debate started on a very personal note. The Liberal Democrats have deliberately chosen not to personalise the issue. The Minister rightly started by asking what lessons should be learned. I shall resist the temptation to ask what the Conservatives would have done and when they would have done it had they remained in office. However, at some point I should be interested to know what lessons they might have learned from this exercise.
The Secretary of State, the right honourable Chris Smith, in a debate in another place earlier this month identified what he called "four key lessons". Those were: to adopt a clear management structure; to bring in the experts; to make prudent estimates at the outset; and to improve, he said, everyone's performance on risk analysis. I was glad to hear the noble and learned Lord extend that to the issue of whether governments should try to run projects. I believe that the consensus of this House is that that is a risky business for a government to get into.
However, if politicians are to run projects—politicians, after all, should be particularly nimblefooted—I believe it is a little odd if they do not have a plan B in case things start to go wrong. Of course, plan B may always have been to play Oliver Twist.
As has been pointed out, as early as 1996, or perhaps earlier, it was clear that the private sector would not accept the risks. Why was that not treated, in the current jargon, as a wake-up call, as my noble friend Lord Sharman, who knows Byzantium when he sees it, might have said? As the noble Viscount, Lord Chandos, and the noble Baroness, Lady Noakes, indicated, the risks must have been accepted. That must be the logic.
If the Government run a project—I understand the distinction from managing a company—I believe that it is unbecoming of them to make scapegoats of those who are not politicians. At any rate, it is unbecoming of them to have allowed the succession of postholders, who left their posts in a manner that began to be reminiscent of the programme "Big Brother", to be cast as scapegoats. As the noble Lord, Lord Bruce of Donington, and others said, one of them—Jennie Page—brought the project to fruition. I believe that she deserves enormous credit and praise. It was tough on her that the world seemed to assume that the same talents could be used to run the project as those which were used to complete the project. I am glad that her contribution is now being acknowledged.
1444 Several noble Lords referred to the projected visitor figures fitting the funding required in order to achieve the funding. I believe that my noble friend Lord Jacobs is probably correct that, while that may be our analysis, it will never be acknowledged. However, we know that in June 1997 the Millennium Commission was concerned about the business plan. I cannot understand why later no one said, or at least said with any force, "How can we ever again believe a forecast? Each time a transfusion of cash is requested, the public is led to believe that that is the last transfusion". Were there no conditions attached to each grant? As my noble friend said, perhaps it is a little byzantine.
The National Audit Office report stated that sponsorship income was received more slowly than NMEC expected. Surely enforceable contractual commitments were in place; and, if not, why not? Perhaps I may also raise a point which I do not believe has been referred to tonight; that is, the question of contracts and the payment of contractors and especially small contractors. I hope that the noble and learned Lord can confirm that tales that they have not been paid on time are not correct.
I have had difficulty in believing not only the visitor numbers and the cash amounts required, but also, like the noble Baroness, Lady Dean, the apparent effect on sales figures of what the press said—a drop of 30 to 50 per cent in the following week. I agree with the noble Lord, Lord Puttnam, who talked about the press's obsessive negativity. Members of the press who queued with increasing impatience at Stratford last New Year's Eve have treated that bit of revenge as a dish not only to be eaten cold but to be eaten several times over.
Is there a lesson too in relation to the negotiating skills required? I mention that this evening in particular, given that we now have a single preferred bidder for the Dome. At least I understand that that is the case. I read today that briefly within No. 10 there was a suggestion that it might prove a new home for Arsenal. I am not sure whether the Prime Minister is a Spurs supporter and floated that one. At any rate, we are now left with the Legacy bid.
Before coming to this debate, I was asked what step the Government would take if the Legacy deal falls through. But that is a plan B which I really do not expect the Minister to share with us this evening.
Another question that is in my mind is how best the Comptroller and Auditor-General can play his part. Audit, by its very nature, is after the event. But how effective can it be? The report is intensely interesting but, inevitably, rather late.
The Dome project is, as has been said, not just a national project. It is also a major regional project. I refer, of course, to the regeneration of the Greenwich peninsula. If central government become involved in projects which have both national and regional aspects, a point for the future may be how Ministers will relate to regional government on such issues. I declare an interest as a member of the Greater London Assembly and I know that the noble and learned Lord is sympathetic to having a dialogue with 1445 London's government on the issue, although we have still not resolved how formally and publicly we can do that.
The regeneration is certainly to be applauded, although it has been trumpeted relatively recently. To me, the justification is just a little bit post hoc ergo propter hoc. But I ask: how good is that return? We have heard about the number of jobs and about the housing. But how good is that proportionate to the investment? Will the Minister tell the House what objectives were set for regeneration, both in 1994 and in 1997; how far those objectives have been met; and to what extent the regeneration compares with other major schemes in the sense of the return obtained? The noble Lord, Lord Grabiner, talked about the real social gains but we also need to know about the real cost, so that any lessons in that regard can be applied. Regeneration is expensive, but I should like to know quite how expensive.
The noble Baroness, Lady Greengross, and others referred to transport and the Jubilee Line in particular. That is certainly a success, in sharp contrast to the order in which things were done across the river. But as my noble friend Lord Jacobs said—and the noble Earl, Lord Attlee, also referred to this—there was scope for integrated ticketing and more imaginative transport arrangements.
The right reverend Prelate gave us wise words about employment, skills development and the amount of affordable housing. He referred to the proportion of affordable housing as being 25 per cent. I hope that we shall soon see a higher proportion of affordable housing in the new development achieved within London, including for people on moderate incomes.
Like others, when I see the building, my spirits lift. I love the building. But I am not sure that I can agree with the comparison with the Sydney Opera House whose function was planned from the start. I agree with the noble Lord, Lord Marlesford, that a building without a function is poorer for that. I should feel more comfortable where I knew that the function preceded the form.
The noble Lord, Lord Marlesford, referred to the Thames and criticised the private palaces which have been built on some parts on its banks. That must be due to the planning policies of some, but happily not all, London boroughs. In others, there have been huge successes including most recently, the Thames Barrier Park, which is a terrific facility.
Finally, the NAO report says that there should be a full understanding of the project from cradle to grave. That is an unfortunate expression. Many of us were happy to celebrate 11 months ago, but some of us took the view that the new millennium would start on 1st January 2001. There may be some connection there with what has happened with the Dome but I shall not pursue it. I merely say that I wish the Dome and the Greenwich peninsula well in the second millennium.
§ 10.15 p.m.
§ Baroness Anelay of St Johns
My Lords, my noble friend Lady O'Cathain was absolutely right when she 1446 said that tonight we should not be looking at the person behind the office and attaching blame to that individual, although we should expect high standards of public accountability from our Ministers. I shall concentrate on that aspect. I cannot play fine games with fine words. I simply have to look at what the public outwith this Chamber see; how they understand what has been said here; what has been understood here; and what picture has been painted for them.
It is always interesting to listen to the noble and learned Lord plead a case with the consummate skill of a lawyer even when that case is flawed. Let us get some of the misunderstandings out of the way. Yes, of course, there was all-party support for building the Dome. Nobody has hidden from that fact; no one has run away from it, despite what some noble Lords have said today. The bipartisan support was for the celebration of the millennium in the best way possible, for all that is best about this country and with the regeneration of Greenwich as a welcome consequence. However, that consequence should be within a budgeted forecast, not one that simply happens regardless of cost and regardless of outcome.
The fact that we supported that bipartisan project does not mean that as a result we should be expected to support the financial mismanagement of the Dome that has occurred under the guardianship of this Government. As the Minister said, the Government reviewed the entire project after the election in 1997. We have had a lot of to-ing and fro-ing about who said what and when about particular visitor forecasts.
On several occasions we have been directed to the NAO report and noble Lords disagreed about the month in which a budget was adopted. The simple fact is that in the NAO report there is reference in paragraph 3.1 to the fact that the project was a provisional one that would be amended as time went on. I shall be delighted to give way to the noble and learned Lord. Perhaps he wants me to read out paragraph 3.1 and in so doing extend my speech.
§ Lord Falconer of Thoroton
My Lords, does the noble Baroness eschew the proposition that the figures first offered when the Conservatives were in power were between 15 million and 30 million visitors?
§ Baroness Anelay of St Johns
My Lords, that is an extraordinary question. Why should one dispute what is in the NAO report? I hope that, if ever the PAC comes to a united report, noble Lords on Opposition Benches will accept without question what is in that report. My point is that throughout all this the Government, when they took office, had the figures presented to them. There was a thorough review of those figures and they made a decision, but, as we understand from leaked matters in the press, perhaps the Prime Minister made the decision.
§ Baroness Anelay of St Johns
My Lords, like noble Lords on Benches opposite who are making such 1447 braying sounds, I too suspect what I read in the press and I take it with a pinch of salt. I can report only what I have read in the press.
On visitor numbers, the figures have to be set against the background that my noble friends Lord Crickhowell and Lady Noakes pointed out so well, that the Government made the really crucial decisions after that about what went into the Dome; about the ticket prices, as my noble friend Lord Attlee pointed out, and about the ban on car access. Those were all contributory factors to the low visitor numbers.
We have heard tonight that the management structure that the Government inherited was complex. It says so in the NAO report. Surely, just because a job is difficult to do, it does not mean that it has to be done badly. As far as I can see by watching what has happened within the Chamber—I refer strictly to ministerial accountability within this Chamber—the problem is that the work has been carried out with an element of secrecy. That is a word that at one point even the Minister used on the Floor of the House. I believe that has created many problems and much mistrust here and outside the Chamber.
As long ago as February 1999, my noble friend Lord Peyton of Yeovil asked the Minister to,undertake … to produce a document which will make clear to members of the public the Government's plans … for the cost of the project, its contents, access, parking and traffic".—[Official Report, 8/2/99; col. 2.]My noble friend Lord Luke repeated that request. We got nowhere. We were led to believe that the New Millennium Experience Company was working well and that the finances were fine. We believed the Minister. The unfolding crisis was hidden from the view of the public and Parliament. On 12th January this year, when my noble friend Lord Elton asked what would be the shareholder's position if the Dome were sold at a loss, the Minister's reassuring responses gave no hint of the financial problems to which it now appears he had been alerted. I shall detail those. At that stage he implied that he could personally bear any financial consequences of a shortfall. I have a copy of Hansard with me and should be delighted to quote it to the Minister.
At Question Time on 10th February, the Minister joked about the fact that the Deputy Chief Whip was organising a whip-round behind him among Charlie's Angels to help him pay up if there were a shortfall. Despite all the good humour, the impression that was given was that there were no financial worries, and we were reassured. But we now know that what was happening was very different. We know that on 11th November 1999 the Minister was advised by the Dome company's accounting officer, and on 21st December 2000 by the department's accounting officer, of the probability that the Commission would need to provide further cash flow funding to the company. On 7th January 2000 the department informed the shareholder that there was no alternative but to go back to the Millennium Commission for more money. Having tried to explore other alternatives, they said "We shall have to go back to 1448 them". On 28th January the commissioners were advised by their own staff of a serious concern about the company's solvency. That was discussed with NMEC, a company whose board meetings the Minister attended, as he has told us in this House. While that was happening, we in this House believed that all was well. We were given no indication on the Floor of this House that it could be otherwise.
My noble friend Lord Crickhowell referred to the fact that in February the right honourable Chris Smith wrote to the Minister. He said:Either the Board did not see or it chose to discount the warning signs of the cash flow difficulties. As a result, it seems possible that it failed to take decisive action until after a date when the company became technically insolvent".They are his words, not mine. The right honourable Chris Smith continued:Clearly it is for you and the Chairman to decide what needs to be done to improve corporate governance".The Minister did not reply until 24th March.
In May the board of the company engaged solicitors to advise them on the directors' responsibilities because of the danger of insolvency. I should have thought that that was rather an important point for the shareholder to notice when he attended meetings.
§ Lord Falconer of Thoroton
My Lords, I apologise for interrupting. The noble Baroness will, of course, confirm to the House that it was made public in February, when the first application was made to the Millennium Commission.
§ Baroness Anelay of St Johns
My Lords, I am pleased that the Minister has referred to that. Prior to that application to the Millennium Commission, the Minister had appeared on the Floor of the House on 12th January, knowing that at that stage an application would have to be made, and yet he chose not to make any mention of it to this House. When I later learned of that, I found it quite extraordinary and I felt let down.
§ Lord Falconer of Thoroton
My Lords, the noble Baroness is trying to paint a picture of people not being kept informed. She has referred to the application that was made to the Millennium Commission at the beginning of February. Will she confirm that a public statement was made about that?
§ Baroness Anelay of St Johns
Unfortunately, a public statement was not made to this House. Furthermore, it appears that, until today, no Minister has come to this House of his own volition. Other so-called debates have taken place. One of my noble friends has asked an Unstarred Question; debates have 1449 been raised by my noble friends; statements and Private Notice Questions have been requested by the Opposition.
§ Lord Falconer of Thoroton
My Lords, those allegations are inaccurate; they are not based on fact. Let me take the example that Ministers have only come to this House when called. On 27th September I came here entirely of my own volition.
§ Baroness Anelay of St Johns
My Lords, I am delighted to hear that it was not in response to the letter sent by my noble friend the Leader of the Opposition to the Leader of the House. I was simply aware that the week before, my noble friend Lord Strathclyde wrote to the Leader of the House and requested that there should be a Statement. I assumed that the Statement came as a result of that request.
§ The Lord Privy Seal (Baroness Jay of Paddington)
My Lords, let me confirm what my noble and learned friend said. We offered a Statement on the first day the House returned. My noble and learned friend came to the Dispatch Box, as he has done on a regular basis throughout the year, to volunteer information.
§ Baroness Anelay of St Johns
My Lords, I thank the noble Baroness the Leader of the House for making that clear. To return to the matter, in February it was perhaps unfortunate that at that stage the Minister, after being made aware of the problems already accruing, was able still to joke about the fact, saying that his noble friends would have to have a whip-round to support any shortfall. It is unfortunate that the Minister joked about such matters, and that appears in Hansard.
Perhaps I can progress to other matters. I referred to the letter written by the right honourable Chris Smith to the Minister, and the fact that after the company engaged solicitors to advise them on the directors' responsibilities and the danger of insolvency, we heard nothing about that from the Minister. By 25th May the fear of insolvency was so great that the directors of the NMEC sought and obtained from the Government, on 21st June, indemnities against actions brought against them for wrongful trading.
Dispute across the Chamber arose earlier on that matter. All I can say is that when I read in an NAO report the full account, I could understand what the noble Lord, Lord Grabiner, was trying to achieve by his cross-examination. But he did not quite get the right result. Certainly when one reads the full report, one sees the legal points the noble Lord was trying to make. But this House did not know that any application had been made or granted about anything to do with indemnities. When indemnities are mentioned, people get worried about things like insolvency.
Then the Minister appeared on 12th July in front of the Select Committee. Questions were asked at that time about indemnities. I shall not go into a detailed examination of that because, quite frankly, I do not have the noble and learned Lord's legal expertise. I am 1450 sure that he will be able to show me that in some way what he said was technically correct. But if one is being an accountable, open, frank Minister, and one is asked by a Select Committee of the Commons a range of questions about indemnities, why does one not say in detail what had been granted by the Government to the directors, giving a full explanation? Why not say what happened on 21st June? Why leave the committee in the dark?
On 17th July the Minister wrote to my noble friend Lady Blatch saying,I am confident that NMEC will continue to trade solvently until 31st December 2000".On 27th July he wrote to me saying,the New Millennium Experience Company was trading solvently on Monday 17th July".That was a statement he later admitted was "technically incorrect".
The noble Lord, Lord Grabiner, was kind enough to remind the House that on 14th July the company's chairman had indeed sent the Minister a letter to advise him of the further deterioration in the Dome's finances and that more money would be needed, and soon. It said,[The] Company might run out of money within two weeks and might require an additional £45 million".Unlike the noble and learned Lord, I am not a successful commercial barrister. But even I might have noticed that something was seriously wrong after all those warnings. But, as we have already been told tonight, on 21st September the Minister wrote to Lord Dalkeith at the Millennium Commission, saying,I was shocked by what the PWC report implied about NMEC's financial management and corporate governance".After being warned by his right honourable friend Chris Smith at the beginning of the year, that is extraordinary.
There has been much comment about the budget. It certainly does seem to be a case of, "pick your date and pick your budget". The latest is that we are told by David James that the cost of the Dome may be at least £839 million. I shall be interested to know whether the Minister can comment on Mr James' estimate.
The point is that Parliament was repeatedly led to believe that each extra grant and draw-down would be the last. Can the Minister tonight give the House an assurance that the draw-down in September was the last amount of money that will go from the lottery to the Dome company, either directly or indirectly? We have heard tonight about parliamentary Answers. I have had a Question tabled for six weeks which has not yet been answered. Perhaps now I shall get an answer.
Our experience of the handling of the Dome project by the Government so far means that we must ask whether we can expect better guardianship of it as it winds down and is sold off. I was interested to hear the proposals of my noble friends Lord Trefgarne and Lord Marlesford for the future of the Dome. Whatever is done, there is public concern, expressed recently on the radio by the Minister's honourable friend Diane Abbott—perhaps the Minister does not regard her as 1451 his friend—that in their anxiety to offload the Dome as soon as possible the Government might not have achieved the best deal either for the public or Greenwich by naming Mr Robert Bourne's company as the preferred bidder.
Why has the Minister overruled warnings and advice about the risks involved in Legacy's plans from independent accountants appointed by Ministers to monitor the bid? Will the Government publish the risk assessments that they have made? What are the outstanding issues that need to be resolved with regard to Legacy? How much will be given to the Millennium Commission by the NMEC, and when? How much will go to English Partnerships, and when?
I have trespassed on the time of this House for more than the 15 minutes which are normally allowed, simply because I have given way to other noble Lords on several occasions. However, I should like to make one or two further points. I was intrigued that on 4th March 1999 the Minister wrote to his noble friend Lord Burlison, who I am delighted to see is on the Front Bench:The Government will wish to achieve good value for money from the disposal of the Dome and related land, and will have regard to whether the proposal would generate receipts which at least match those which could have been achieved if the site were clear and disposed of for ordinary commercial development".Tonight the noble and learned Lord tells the House that that deal will deliver only reasonable value for money. Does that mean he no longer seeks good value for money, because earlier he used the word "reasonable"?
§ Lord Falconer of Thoroton
My Lords, I do not intend to make any distinction between reasonable and good value for money.
§ Baroness Anelay of St Johns
My Lords, I am genuinely grateful to the Minister for that clarification. Can the Minister also reassure me that Legacy's bid at least matches what could be achieved if the site were clear and disposed of for ordinary commercial development?
My observations throughout have been aimed solely at what is expected to be Ministers' accountability and clarity in presenting what they do on behalf of the public. At the beginning of the evening the Minister, uncharacteristically, referred to two of my right honourable friends and myself, as a Member of the Opposition Front Bench, as being dishonourable. I take the word "dishonour" very seriously, and I shall remember it. I have made mistakes, and one of them is to believe the honour of this Minister.
§ 10.33 p.m.
§ Lord Falconer of Thoroton
My Lords, I am very grateful to all noble Lords who have taken part in the debate. We have had a good debate, and I believe that we have learnt a lot from it. Perhaps I may draw together a number of the strands. First, a large number of noble Lords have taken part in the debate on the Dome, and for the first time in such a debate not one 1452 noble Lord has said that it should be pulled down. Everybody who mentioned the Dome today said that it was a good building which should remain. I believe that that represents a change in people's views in relation to the Dome.
Secondly, everybody was united in the desire to achieve regeneration of the London Borough of Greenwich and to ensure that there was a proper legacy from the Dome in future. Equally, I believe that everyone in this House paid attention to the speech of my noble friend Lady Gibson, who made specific reference to the voice of Greenwich and what it wanted in relation to the future of the Dome.
Thirdly, everybody appeared to accept that there might be in excess of 5 million visitors to the Dome and that the vast majority who visited it enjoyed their time there. That was not a matter which subsequently appeared to be in dispute.
Therefore, I think we can all agree that there are quite a number of pluses. There was also a genuine consensus that the blame culture, to which my noble friend Lord Puttnam and the noble Baroness, Lady O'Cathain, referred in very powerful speeches, is a debilitating and negative aspect of matters. The fact that one has a no-blame culture does not mean that one should not look to learn lessons from what has happened. It is worth pointing out that everyone was impressed that the Dome was delivered on time as a capital project. The then chief executive, Jennie Page, said that the reason for that was because there was a no-blame culture down at the Dome in the course of the building of that great capital project. Everyone should be proud that we delivered it on time on 31st December 1999.
We have to learn lessons from it. We do not criticise the Conservative Party for supporting the Dome; trying to work out how many people would come; making arrangements for it to happen; and setting up a Cabinet sub-committee to look at the project. We do not criticise them for that because we, as the noble Baroness, Lady Anelay, has identified, reviewed and adopted the project and accepted the figure of 12 million. We made a mistake in so doing. Our difficulty is that the Conservatives now turn around, in what appears on the face of it to be opportunistic politics, and criticise the scheme. That is where the difficulty arises.
The noble Lord, Lord Sharman, asked what was the cost of cancellation at the time when we decided to go ahead with the project. The figure was about £50 million. We were aware of the figures because we had looked at them. They obviously were a factor in our decision, but they were not the major factor in deciding to go ahead.
There are many lessons to be learnt from the project. First, one has to have better risk management; secondly, one has to have better assessments of how many visitors there may be; thirdly, one needs to make provision for contingencies; fourthly, even though it will not be a private sector project, one has to see whether, in effect, one will be competing as a private sector project. One has to recognise that expertise is 1453 needed not just for the capital project but also for the visitor attraction projects. Those are matters that we have learnt from the project. There is a huge amount that we should learn from the project. I, for one, am willing and keen to learn from it because there are lessons that we should take into the future.
Perhaps I may go through the major points raised by individuals in their speeches. First, I turn to the speech of the noble Lord, Lord Crickhowell. I am sorry that the Cardiff opera house was not financed by the Millennium Commission. I do not think that Miss Jennie Page was necessarily to blame for that, as he suggested. I am told that there were flaws in the business plan. The Millennium Commission were keen to help in relation to it, but the flaws could not be put right despite the suggestions made by the Millennium Commission. That is why it did not go ahead.
The noble Lord made the following criticisms. First, he pointed out that I attended a significant number of board meetings. Yes, I did. He failed to point out that the NAO made it clear that I started to attend board meetings in August 1999 when, as the noble Baroness, Lady Anelay, rightly points out, the first financial difficulties began to arise. This body is not like many non-departmental public bodies which have an unlimited life, it is one with a limited life, where what was happening was very important and quick. Therefore, I needed to know what was going on. Therefore, it seemed appropriate to discover what was going on by attending board meetings.
The noble Lord then pointed out that the 12 million visitor figure was obviously and utterly wrong right from the beginning. He made a powerful and impassioned speech to indicate that it must have been obvious to everyone that it was wrong. Regrettably it was not obvious to everyone that it was wrong. There were a large number of experts who told us that it was right. My noble friend Lord Bruce of Donington may be right when he said that one should not pay so much attention to experts. There were many people who were not as clever as the noble Lord, Lord Crickhowell, and did not spot the error at the time. We made the mistake of believing them. If only the noble Lord, Lord Crickhowell, had made his views known so clearly at the time, it would have been of great assistance to the nation.
The noble Lord also referred to the letter dated 7th February 2000 which was sent to me by my right honourable friend Mr Chris Smith. That letter rightly pointed out that the corporate governance had to be improved. Indeed, the Millennium Commission had made it a condition of its grant at that time that corporate governance should be improved. On 12th April, after I had had considerable discussions with my right honourable friend and after he had discussed the matter with the chairman of the company, the Millennium Commission was then satisfied that the condition had been satisfied and it released the balance of its grant. I am slightly surprised that the noble Lord, Lord Crickhowell, did not mention that point in his forensic account of what the NAO said.
1454 The noble Lord then referred to the position in July. He rightly referred to the fact that I had received a letter on 14th July 2000 saying that the financial position was deteriorating and yet in the House on 27th July I said that the company was solvent on 17th July, a point also made with vigour by the noble Baroness, Lady Anelay. Every one of those points is absolutely true. The reason I thought the company was solvent was that that is what the board of directors thought the position was—a board of directors that contained such honourable and eminent men as Sir Brian Jenkins, Len Duvall and David Quarmby; honourable men advised by, as the noble Baroness pointed out, City solicitors and assisted by accountants put in by the Millennium Commission. I was wrong about that, but I would have regarded it as irresponsible to have said at that stage that the company was insolvent when all the people involved in the day-to-day management believed it to be solvent. They were wrong; and they were wrong because there were a number of wind-down liabilities that had not been taken into account which were identified by PricewaterhouseCoopers in its report which was sent to the board at the end of August. I was shocked when I discovered that, because no one knew about those liabilities.
§ Lord Crickhowell
My Lords, I want only to make the point that at Question Time in July I did not ask about the solvency of the company. It was not an issue that I pursued. I questioned the noble and learned Lord about his expressions of confidence that the project would be completed within budget at a time when the company was publishing its annual report setting out very properly the considerable risk as to why that would not be achieved. That was the question I put to him. That was the matter about which I wrote him a letter, to which he replied two months later without giving me an answer.
§ Lord Falconer of Thoroton
My Lords, as to whether the project would deliver within budget, the noble Lord will recall that the budget at that time was £758 million. The question of whether it would deliver within budget is one of whether it would deliver spending only those costs; it is not one of dealing with what was the source of those costs. The noble Lord will recall that the report and accounts specifically identified that an application might have to be made to the Millennium Commission in order for it to deliver within budget.
With respect to the noble Baroness, Lady Anelay, and to the noble Lord, the criticisms that have been made are completely unfounded. They are as much an attack on the board as they are on me. They are completely without foundation.
§ Lord Crickhowell
My Lords, that is a very serious charge. As, almost without exception, every criticism that I made in my speech was a direct quote either from 1455 the National Audit Office report or from the letter from the right honourable Chris Smith, I find that rather difficult to accept.
§ Lord Falconer of Thoroton
My Lords, that is the effect of the criticisms made by the noble Lord. If the noble Lord thought through a little more what he was saying, as the noble Baroness should have thought through a little more what she was saying, that is the inevitable consequence. I believe that on 27th July I answered questions entirely honestly and honourably. I was wrong, as I made clear because of what was disclosed in the report made by PricewaterhouseCooper.
I believe that I have dealt with the questions raised by the noble Lord, Lord Sharman. The right reverend Prelate the Bishop of Southwark congratulated us on the boldness of the vision and hoped that it would be taken through into the future as regards regeneration and jobs for the people of Greenwich. I agree with that sentiment. It would be wrong to impose specific conditions, but one of the factors applied in the competition for judging who is to take over the Dome has always been what the regenerative benefits will be.
I have mentioned the noble Lord, Lord Puttnam. In his speech the noble Lord, Lord Marlesford, referred to hubris. I would not accept that word as being right. I believe that there was real enthusiasm on both sides of the House for a project that we believed we could make work and would bring benefit to that part of London. I do not believe that that is hubris but a perfectly reasonable ambition for both sides of the House to hold.
I do not need to respond to the specific points of the noble Lord, Lord Grabiner. The noble Baroness, Lady Greengross, referred to the infrastructure and the excellent access for older and disabled people. I hope that the noble Lord, Lord Bruce of Donington, heard her remarks that there is very easy access for both elderly people and those who do not find it easy to get around.
The noble Lord, Lord Lea of Crondall, referred to the TUC's support for the Dome. The noble Baroness, Lady McIntosh, who is in her place, referred to the fact that it is very difficult to budget accurately as regards putting on entertainments. Our budget has been exceeded—on the basis that every single penny of the existing grant from the Millennium Commission is used—by 4.6 per cent. It is regrettable that it has been exceeded at all, but I believe that noble Lords should put that in perspective.
The noble Lord, Lord Trefgarne, described it as public money. It is lottery money, but the point is exactly the same. He was absolutely right to emphasise that, because so much lottery money is required, it is important that there should be proper scrutiny. He is right when he said that people are angry about the lottery money, particularly the extra money which has been spent during the course of this year. He said that proper accounts had not been kept. With respect to the noble Lord, that is a totally inaccurate account of the 1456 NAO report. It is right that it made criticism in relation to certain aspects of the record keeping, but nowhere does it say that proper accounts were not kept. If that were the position, the company's auditors would not have been able to give a certificate to the accounts in July 2000 as it did.
The noble Lord, Lord Tomlinson, referred to the fact that the estimate of visitor numbers before 1997 had been all over the place and that the Tories wished to wash their hands of the project. He also made a point about Birmingham, but that is a debate I do not want to become involved in at this moment.
The noble Lord, Lord Jacobs, referred to the fact that the contents were not known. Much has been said about the contents during the course of the debate. The best judges of the contents are the people who have been there. Between 5 million and 6 million people will have visited the Dome by the time the project ends. Independent opinion polls have been carried out and they show that the satisfaction level as regards the contents is very, very high. Noble Lords who go there will find that for the most part it is a very enjoyable experience. Indeed, I very much hope that before the end of the year I shall be able to arrange one more trip for noble Lords of all parties to visit the Dome before it closes on 31st December. No whip round will be required.
The noble Baroness, Lady Gibson, made a very powerful speech which resonated around the House. The noble Lord, Lord Harris of Haringey, was involved in the London v. Birmingham debate. I do not wish to become involved in it.
The noble Lord, Lord Lyell, referred to a number of specific points. He mentioned the letter of 14th July. That letter said that the finances had deteriorated, and that is absolutely right. Indeed, I was very aware of the position at that particular time. Noble Lords will recall that an application was then made to the Millennium Commission and a grant was given to cover the position as regards the deteriorating finances. The noble Lord also referred to marketing. He is right again in saying that there are problems there. They were identified by the noble Lord, Lord Sharman, in his speech and by the National Audit Office.
The marketing strategy was obviously wrong. The difficulty was that everyone involved did not have much experience of marketing domes. Even when an experienced visitor attraction manager was brought in, the marketing process was difficult to get right. That is perhaps not surprising. It is a unique, innovative project which has gone through an experience in the press that very few projects go through.
I join with the noble Lord, Lord Sawyer, in congratulating the previous government on the decision that they made to be bold and for going with that decision.
The noble Baroness, Lady O'Cathain, made a powerful speech, which resonated around the House, about the role and commitment of big business. She asked about IMG. Questions have been answered in the past in regard to IMG and the extent to which it brought in sponsorship. A confidential settlement was 1457 made with IMG and, therefore, I am not in a position to inform the House of the details of the arrangements made. As the noble Baroness is aware, much of the business sponsorship came through the company going directly to business and seeking sponsorship.
The noble Baroness asked what will happen to the exhibits. Some are owned by sponsors—for example, the talk zone is owned by British Telecom and the journey zone is owned by Ford—some are owned by third parties and some are owned by NMEC. I hope that proper homes will he found for them. The faith zone, for example, is a serious contributor to spiritual matters and I hope that a permanent home can be found for it outside the Dome.
The noble Baroness, Lady Noakes, picked up points in the NAO report about contingency planning, which I agree is very important. She seemed to be criticising the actions of the directors during the period between 22nd August and 6th September. That is totally unjustified by the terms of the NAO report. Indeed, the view that has been taken is that the directors were obliged to act in the way that they did between those two dates.
The noble Lord, Lord Varley, gave an impressive political speech, which indicated the strong and powerful position in which we find ourselves. The noble Earl, Lord Attlee, was one of those who enjoyed the Black Adder films—on which I congratulate him. The noble Baroness, Lady Crawley, emphasised the regenerative point.
The noble Viscount, Lord Chandos, spoke about the future. The position at the moment is that Legacy plc is the preferred bidder. There is a way to go before contracts are signed. There are a significant number of issues on which the Government have to be satisfied before they enter into the contract. No decision has yet been made as to the split in the proceeds between English Partnerships and NMEC. The advice that the Government received from the competition team was that they could appoint Legacy plc preferred bidder within the rules of the competition, which is the appropriate course to take. Ultimately a decision will have to be taken by the Government as to whether or not a contract should be exchanged. They will do so in accordance with the rules of the competition and the criteria set out therein.
1458 The speech of the noble Lord, Lord Selsdon, was informative and amusing. He described the project as a landmark project. He spoke favourably about the Dome building and his hope that it will stay there for a considerable time. I express my profound gratitude for the speech of the noble Lord, Lord Graham.
The noble Baroness, Lady Dean of Thornton-le-Fylde, made a significant contribution in relation to the press, particularly drawing attention to the fact that the report shows that every time there is a bad press about the Dome, visitor numbers fall between 30 per cent and 50 per cent in the following week. She also emphasised the point about the long-term future of the Dome and the fact that it will lever into the peninsula a large amount of private money. I think all noble Lords will agree that that is worthwhile.
The right reverend Prelate the Bishop of Lichfield hoped that there would be joined-up thinking between the new owners of the Dome and those who are presently involved in historic Greenwich. One of the criteria in the competition is the recognition of the Dome as an important architectural site. Again, it would be wrong to impose specific conditions, but I entirely endorse the sentiment expressed.
The noble Baroness, Lady Hamwee, made a sensible and constructive speech about the lessons that could be learnt. The noble Baroness, Lady Anelay, made specific criticisms in relation to, as she put it, "secrecy". That is unfair and untrue. I have always answered questions fully and openly in this House. The particulars given by the noble Baroness did not for one moment support such allegations.
The Dome has been a troubled project. Mistakes have been made. The NAO report is a worthwhile report from which many lessons can be learnt. Speaking entirely for myself, the Dome is a project that has had many difficulties, but it has also brought many, many gains which can still be won if we support it as a worthwhile project which has done good rather than bad.
On Question, Motion agreed to.