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Mr. Maclennan: I concede the point that the right hon. Gentleman makes, but I think that I am correct in saying--if I am not, I am happy to give way again--that if one takes into account his Department's expenditure as a whole, it roughly restores the position to where it was in 1992-93.

Mr. Smith: The reason for the difference is that the Department's responsibility for voluntary organisations

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was transferred back to the Home Office so, given the Department's responsibilities, that enhances what we are able to do.

Mr. Maclennan: On that I congratulate the Minister, although it is not a bonanza, and I do not think that he would claim that it was. Moreover, it might not be worth while. I take the point made by Sir Peter Hall, which the right hon. Gentleman quoted, about the value of investment in the cultural industries and how that money fructifies in the sector when it is invested. In considering the settlement, it is necessary to recall just how little money we are talking about in terms of Government spending as a whole. During the last financial year, the Government's cultural spend was one third of 1 per cent. of total Government spending. The new injection will increase that total by 0.03 per cent. per annum during the next three years.

Britain has the balance wrong when it spends so little. If our expenditure on the cultural industries is compared with that of other countries--that is difficult because there are different parameters for measurement--we do not seem to be doing as well as other western European countries of comparable wealth. That fact has been brought out recently in some new research which has not been challenged; that should lend support to the Secretary of State's efforts to enlarge Government spending on the arts in Britain.

Looking at the structural proposals for the arts, whose purpose is similar to those for the tourist industry, in that the Secretary of State is trying to slim them down, I must question whether the right hon. Gentleman has got it right. First, however, I strongly agree with him on a number of things. In the case of the arts, the right hon. Gentleman is entirely right to recognise that the regions are the appropriate level at which public funding should be spent, and I applaud the increased emphasis on the regional bodies. But it is not entirely satisfactory that they should be predominantly appointed, if that is his intention, by the Department or by himself. I would hope that the regional bodies would be more home grown.

A second structural change that I think would help the arts is the introduction of improved planning arrangements, along with three-year funding settlements. Uncertainty about the future has forced many arts providers to devote a disproportionate amount of time to financial planning, particularly to the justification of planning applications before a proper outturn can be seen.

I must question the Secretary of State about a number of other proposals. He said that he recognised the importance of the Arts Council as an advisory body--I think that should be its principal role--but qualified that by saying that he did not want it to have an adversarial relationship with the Government. The Secretary of State must surely acknowledge that, if advice is freely given, it may involve free criticism from time to time. I do not think that criticism from that body, or indeed from any body that is charged with giving advice, should be inhibited by the Secretary of State's talk of partnerships. I do not like the idea of a partnership between advisers and Government; I find it too cosy. I think that it would be sensible to enhance the independent aspect of the Arts Council's advisory role.

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Here I enter more controversial territory. I feel that it is time to question fundamentally the arm's-length principle to which the Secretary of State has at least paid lip service. In fact, I think that he has embraced that principle. I am puzzled. Most of the elements in the package of measures proposed on Friday struck me as being designed to increase accountability--through the right hon. Gentleman's Department, ultimately--for strategies and policies set by the Department; but, at the same time, the right hon. Gentleman wants the arm's-length principle to apply to the delivery of those measures. I find that odd. Is the Secretary of State saying that his Department is not capable of making assessments of how money is being used? If he is making such a self-critical judgment, he ought to beef up his Department so that it is capable of ascertaining whether its strategies and policies are being implemented, rather than commissioning others to perform the task or seeking to fulfil its role of accountability in another way.

There is one oddity--one innovation--in the package of proposals: the proposal for a powerful watchdog. I am not sure what that means, if it does not mean another tier of bureaucracy. I hope that the intention is not to sideline the work of the National Audit Office where it is responsible for such matters, or that of the Audit Commission where it is responsible for local government activities in this context. As the Secretary of State knows, such action certainly would not take the attention of the Public Accounts Committee away from the Department's activities.

I fear that this could constitute a fifth wheel--or worse, an alibi enabling the Department to seek to avoid responsibility for the outturn of the strategies and policies that it is embracing and, indeed, requiring other bodies to have in mind when spending public money. Any such move would be a failure. It is becoming increasingly unacceptable for the Department for Culture, Media and Sport, alone among the great Departments of State--for I think of it as a great Department of State--to be able to wash its hands of the way in which its strategies and policies are being implemented, and say, "That is not for us, because of the arm's-length principle".

The arm's-length principle was dreamt up--probably by that liberal John Maynard Keynes or one of his friends--in the mid-1940s, against the background of the abuse of Government power with respect to culture by Nazi Germany, fascist Italy and, indeed, the Soviet Union in the 1920s and 1930s. There were legitimate and understandable fears about Government involvement, Government meddling, Government dictation to the arts, and about the abuse of power. Today, however, we live in a very different world. If a Government sought to meddle in decisions about which play should be staged by which company, or about which composer was acceptable, or sought to burn the vanities, there would be--given the multi-media outlets that we have in this country--howls of abuse. I think that the time has come to dispose of the mantra about the arm's-length principle, and to recognise the reality that Ministers are expected to intervene when there is a problem.

The Conservative party recognised that in government. The Conservative party saw that it was important to give English National Opera more stability by providing it with a home in the Coliseum. Mr. David Mellor did not hesitate, just before a general election, to ignore the arm's-length principle and provide ENO with the

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Coliseum. Similar provisions were made by the Conservative Secretary of State for Wales to help fund Welsh National Opera when it was touring England. Again, the arm's-length principle was simply forgotten--rightly, in my view.

There is now no case for distinguishing between the approach of Government to the funding of great national companies from that applying to, for instance, the British Library. There is no interposing body deciding what sort of money should go to the British Library; there is no "arm's-length" argument, although it would be possible to present such arguments. I think that the time has come to be frank, and to say that the Government are dealing with these matters and should be judged accordingly.

Responsibility for wider funding of the arts, in which the issues are not so much national as local or regional, should be delegated to other bodies--preferably elected bodies--which should be judged according to their response to the perceived needs of regions and localities. That would build up a degree of competition in provision, which would be very healthy. East Anglia, for instance, is almost the only region not to have a resident orchestra. Although I do not think that it would be sensible for central Government to tell East Anglia that it should have a resident orchestra, I do think that the regional tier of government should consider the matter. That has been done in other parts of the country.

I am not saying that, having abandoned the arm's-length principle, the Secretary of State should intervene at every level of decision-making, although what I am saying could be interpreted in that way. I believe, however, that the Secretary of State should be responsible for the future of major companies--responsible, as effectively he is, for the future of major museums and libraries. That would get rid of many illusions about what is needed, and would avoid the fantasy that, if the Royal Opera House gets into difficulties, it is all because of personal problems between its director and the chief executive of the Arts Council--or something or that sort. If tens of millions of pounds of public money are being spent, the Government must be involved.

I do not want to speak for much longer, as this is a short debate; but I want to raise a specific structural issue. I hope that the Minister will look again at his proposal to graft the Crafts Council on to the new arts body that will replace the Arts Council. The Minister acknowledges in his paper that the Crafts Council commands widespread support among its clients. Its function is somewhat different from that of the Arts Council. It is closer to the Design Council in some respects, in that it assists people who seek to create little businesses trading in the decorative arts or crafts in which they are engaged.

Scotland has experience of a unified body which the Minister might like to examine. I make no criticism of how the matter is handled in Scotland, but there has been a feeling in the Scottish crafts world that English crafts people were advantaged by a separate and separately run Crafts Council. No doubt the Crafts Council will consider the matter and make recommendations in due course.

The Secretary of State has one of the most important portfolios in the Government. There has been a long gestation period for the proposals and I hope that we shall soon reach conclusions so that the structure for dispensing public money can be settled to enable people to get on

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with the job. In framing that structure, it is important to bear in mind the fact that if artists and art providers have to spend too much time checking whether they are fulfilling strategies, meeting criteria and devising or contributing advice on new criteria, there will be much less time for the activity that is at the core of the arts and the work of artists. For that reason, a bloated bureaucracy is to be avoided.

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