Examination of Witnesses (Questions 120
- 139)
WEDNESDAY 20 MAY 1998
THE RT
HON TOM
CLARKE, CBE, MS
BARBARA PHILLIPS,
MS JANET
EVANS AND
MR CHRISTOPHER
DAWES, OBE
120. I hope not "due" weight. If it
is due weight you will not give it any attention. What I suggest
is that you give it the weight which the subject requires.
(Mr Clarke) I am sure that is the case.
121. Thank you very much indeed; we are most
grateful to you for your replies. It has been a very valuable
session.
(Mr Clarke) May I thank you too for hearing
from us but also for your very kind words last week. I have learned
in politics that what people say behind your back is much more
important than what they say when you are actually there. Thank
you very much.
Chairman: It is widely known, except
in a few limited quarters, that my name is courtesy.
Examination of Witness
THE RT
HON CHRIS
SMITH, a Member of the House,
Secretary of State for Culture, Media and Sport, examined.
THE RT
HON CHRIS
SMITH
Chairman
122. Secretary of State, we should very much
like to welcome you here this morning. We are delighted to see
you again. I take this opportunity of congratulating you on your
new book and congratulating you on your choice of publisher too.
If you have a brief opening statement which you would like to
make to us we should be delighted to hear it and then we shall
proceed to questioning.
(Mr Smith) Thank you very much indeed
and thank you for the opportunity to appear before the Committee
during the course of this inquiry. I know you have already taken
evidence from my new Permanent Secretary, Robin Young, and from
both Tony Banks and Tom Clarke. There is little for me to add
by way of introduction except to emphasise, as Robin Young did,
that the Department for Culture, Media and Sport, although it
is far and away the smallest of all government departments, nonetheless
is an increasingly important component of the overall work which
government does. Since we came in to office on 1 May, I have tried
to establish four broad themes for the work of the Department.
First the theme of access, that the things of quality and enjoyment
which the Department is all about should be available to the many
and not just to the few. Secondly, the theme of excellence and
innovation, because one of the prime reasons for governmental
support in these areas is to ensure that excellence is maintained.
Thirdly, the importance of education and the importance for both
culture and sport as part of education, not just in the formal
education system but for lifelong learning. Fourthly, the value
and importance of the creative industries to the economy of the
country. That of course is very much the theme of the book to
which you have just very kindly referred. We can obviously touch
on many of these issues in the questions you may like to ask.
You will have seen the annual report which the Department has
produced and which does set out what we believe to be our principal
achievements in the course of the past year and some of the way
forward. We are also, as you will be aware, in the midst of our
comprehensive spending review, as is the whole of government,
and we are looking in a root and branch fashion at everything
we do and particularly at the value for money which we obtain
for each pound we spend of exchequer and taxpayers' money. Of
course the views of this Committee will be extremely welcome as
we come to the concluding stages of that comprehensive review.
Mr Fearn
123. An emphasis is now being switched for the
Lottery funding to go towards revenue funding rather than the
capital which is a good thing. As a local councillor I can see
that coming through. At the same time I can see in local government
that when budgets are prepared they are going to say this will
possibly be coming from the Lottery and that they will not be
doing the schemes which they can use the ratepayer, the council
taxpayer for. Is this going to be a danger, that those items will
not now be included in normal local government budgets and they
will wait for something else to come from the Lottery?
(Mr Smith) There is a danger that some
people in local government, although they would be foolish to
do it, might see this as an opportunity to cut existing local
government responsibilities for, for example, local theatres and
say the Lottery will take the strain. The Lottery will not take
the strain in cases of that kind, for two reasons. The first is
that the principle of additionality remains very firmly in place
and that principle is that Lottery money should not be used to
replace existing public expenditure, be it coming from local government
or coming from central government. We remain very firmly committed
to that principle. The second reason is that Lottery money by
its very nature has to be a one-off contribution. What Lottery
money cannot do is commit year on year on year funding. Therefore,
whilst we want to see a shift in Lottery expenditure, which everyone
in the world of the arts and sport and elsewhere has been asking
us for, from exclusive concentration on bricks and mortar to support
for people and activities, it has to be able to happen in a one-off
fashion. It could be for example by means of a stabilisation grant
or it could be by means of the wiping out of a historic deficit
or the funding of a particular start-up initiative. These are
things which Lottery money can usefully and sensibly do. What
it cannot do is commit a forward programme year after year.
124. I mentioned training previously. How does
the Lottery, through your Department, or how does your Department
fund training?
(Mr Smith) Our Department obviously has
its own internal training programme for its own staff. Amongst
the grants we give to the directly funded organisations, primarily
obviously the national galleries and museums, is money which they
allocate to training programmes and that is part of the annual
agreement which we have with them. In addition to that—and
I believe Tom Clarke touched on this in his answers on tourism—one
of the things we are doing is very strongly encouraging the tourism
and hospitality industry to take up the opportunities of the New
Deal. That is not just the opportunity of a job but the opportunity
of training as well within the tourism and hospitality sectors.
There is a range of different ways in which training is being
supported by the work we do.
125. Nothing direct into local government?
(Mr Smith) No direct support for local
government because that is not our role, that is the role of the
DETR.
Mr Fabricant
126. You said in your opening remarks that yours
is a small department and really the Spending Review is key, is
it not? You have already mentioned the question of additionality.
Some would argue, you would disagree, that the question of additionality
has already been breached regarding the Lottery because money
is being spent on health and education projects which in the past
have come out of taxation. Now there is another threat on the
horizon, a threat not of your making, and that is from the Treasury
where they are hoping to bring in resource accounting. As you
know, resource accounting is the mechanism whereby assets held
by government departments are charged to that department at a
notional interest rate. To begin with, that was being discussed
in the Treasury before the last election and that is not a contentious
issue. However, last week your Permanent Secretary, Robin Young,
was telling us that the Department was opposed to this proposal
for the assets which you hold, for quite logical reasons. One
of the assets you hold is Trafalgar Square. How does one value
that? There is no income derived from that. Where are we now in
the negotiations between your Department and the Treasury regarding
this? If this were to take effect, this would reduce your available
funds even more dramatically.
(Mr Smith) May I first just observe that
the discussion on additionality in relation to the new opportunities
fund has been a matter of considerable debate in the Standing
Committee on the Lottery Bill and I suspect will continue to be
a matter of some debate. I view it as a very clear principle on
not replacing exchequer expenditure which is not in any way being
breached. However, the burden of your question is on the heritage
assets and resource accounting. The position is very much as Robin
Young explained last week. This is not just a matter for us, it
is obviously a matter probably of more importance to us than any
other department but there are other departments, including Scotland,
Wales and Northern Ireland, including the Ministry of Defence,
including indeed the administration of the House of Commons and
the House of Lords, to whom this issue is of very substantial
concern and interest. Discussions are continuing between all the
departments directly involved and the Treasury. We will not know
the outcome of that for a few weeks yet but nonetheless we are
making our case very robustly on this. It is not just things which
are obviously inalienable, like Trafalgar Square, but for example
if you take the entire contents of the National Gallery there
is no intention whatsoever on the part of me or any part of our
Government to dispose of the assets of the National Gallery.
127. That is a relief.
(Mr Smith) They obviously do have enormous
value and yet how you can sensibly account for that within a resource
accounting framework is a matter of very considerable interest
to us and it is a matter we are continuing to pursue with the
Treasury.
128. Moving on to tourism, this is one of the
largest areas of money generation within the United Kingdom and
I think is now the biggest dollar or export currency earner for
the United Kingdom and that is no bad thing. That is still the
case in the United States of America; it is the biggest overseas
earner for the USA as well. When the Department was first renamed
it was pointed out by many that the name tourism was conspicuous
by its omission. In your recent publication, Creative Britain,
apparently there is no mention of tourism, although there are
two mentions of Cool Britannia. Discuss.
(Mr Smith) There are three mentions of
Cool Britannia, in each case in disparaging form. There are also
some mentions of tourism. The book is not primarily focused on
the tourism and hospitality sectors, it is focused much more on
the artistic and cultural sectors, although of course the spinoff
effect from those into tourism is very considerable. Tourism is
of enormous importance to the country: something like £40
billion of economic activity related to tourism and hospitality;
somewhere in the order of 1.7 million people employed in tourism
and related activities. It is growing. There has been a slight
dip in the last quarter in numbers of visitors coming into Britain,
which is partly due to the strength of the pound but more importantly
due to the crisis in South East Asia. Nonetheless the prognosis
for the future is of a steadily growing industry. We place enormous
importance on it. It was not included in the title of the Department
simply because we cannot include everything in the title of the
Department. We have been working very closely with the tourism
industry and if I might I would just quote as evidence of that
a letter just recently written about three weeks ago by the chief
executive of the British Hospitality Association, Jeremy Logie,
to the Chancellor. In this he wrote that they are working very
closely with the Secretary of State for Culture, Media and Sport
and the Minister for Film and Tourism on many of the challenges
facing their industry. Indeed he is fortunate to be a member of
the team which is helping the Secretary of State to develop an
exciting new strategy for hospitality and tourism. This will highlight
the opportunities facing us and suggest solutions to help this
large industry to develop its potential to the full. There is
a lot of work going on. We are giving it enormous importance.
I personally chair every month the meeting of the strategy group
which is putting the flesh on the bones of this and we are in
no way seeking to diminish the importance of this sector.
Mr Fabricant: When your Department on
14 July did change its name you issued a press release. Right
at the end you said, "Today is only the beginning. We have
a new name. We are now going to enlist the aid of the Design Council
to find the best young designers to help us project what the Department
is all about. I hope to unveil the fruits of this work in the
autumn". To my certain memory, there was no unveiling in
the autumn.
Chairman: Did they say which year?
Mr Fabricant
129. I think the implication was last year.
Furthermore, when one looks at the letterheading of the Department
for Culture, Media and Sport, it bears an uncanny resemblance
to the good old Department of National Heritage, except it has
different words going round the same crest. What happened?
(Mr Smith) The reason for the use of
the same form of logo was an admirable exercise in ensuring we
did not incur unnecessary transitional cost. However, we did indeed
take advice from the Design Council, not just about what should
be on the notepaper but also about how we present ourselves to
the outside world, how our internal and external communications
operate and so on. Following the advice of the Design Council
we invited a number of companies, some of them small, to tender
for the work. We appointed CDT as the company to carry out the
work. They assisted for example with the design and presentation
of our annual report, of which I know at last week's meeting you
expressed some approval.
Mr Fabricant: I wondered who was actually
going to read it at £42,000, but that was another point.
Chairman
130. Not each copy.
(Mr Smith) Exactly. It is actually cheaper
to purchase than last year's annual report was. CDT are now coming
to the conclusion of their work and will be presenting proposals
to us very shortly.
Mr Keen
131. The quality and scope of education in this
country is controlled very firmly by government; rightly so. Most
people regard the library service as part of the education service
but it comes under your Ministry. The cuts in local authority
expenditure have meant that there is a very patchy and unequal
delivery of library services. In my own local authority it has
now passed into a trust and out of the democratic system. How
are you going to tackle the disparity which is developing more
and more?
(Mr Smith) I am obviously aware of the
Hounslow position and we are keeping a very close eye on what
happens there. I have statutory responsibilities which are to
ensure that local authorities provide a full and comprehensive
library service. Wherever there is a suggestion that the degree
of cuts which may have been imposed by a particular local authority
are endangering that statutory responsibility, I, through my officials,
will intervene to seek further information, to find out what further
plans are afoot and to find out whether the local authority is
indeed performing its statutory responsibility. Secondly, we are
now agreeing annual plans with each library authority about their
forward intentions for their library service. This is something
which has never been done comprehensively before. We are not putting
that in place, so every library authority will submit to us a
proper plan about what their intentions to their library service
are. We will use that as a tool for ensuring that I can exercise
those statutory responsibilities I have. In addition to that we
are also looking—and you will have been aware of the publication
of the Library and Information Commission report on new technology
in libraries—to see the public library as a real hub for
the new ways of discovering and exchanging information. That is
why we have ensured that £20 million is being allocated from
the new opportunities fund to the training of librarians in the
use of new technology; it is why we have also ensured that £50
million is being allocated to the digitisation of content and
material which can be transmitted across the Internet and other
forms of new communication and it is also why we are continuing
with the Wolfson Challenge Fund, which has already produced a
number of major initiatives from particular library services.
We are assisting the library service generally to come into the
new century, not forgetting the traditional book service of course
but alongside it developing new forms of communication.
Mr Green
132. Congratulations, Secretary of State, on
using an appearance before the Select Committee as a subsidiary
book launch. This shows extreme commercial shrewdness and I only
hope your PPS is sitting on a pile of copies which you can sign
on the way out for those of us who want to buy them.
(Mr Smith) It is a bargain at £7.99.
133. There is a widespread fear, of which I
am sure you are aware, that the one area of the Department which
is being downgraded in importance under your stewardship is the
heritage. Is that because it does not fit in with the general
ethos of Cool Britannia?
(Mr Smith) No, we are not downgrading
it and no, there is no question about its not fitting in with
this ethos which you wrongly describe as Cool Britannia. Indeed
if you have a look at my book when you have a chance you will
find there is an entire chapter on the importance of heritage.
I believe that looking to the modern, the innovative, the cutting
edge of development of cultural activity, does not mean in any
way abandoning respect for and pride in tradition and heritage.
Indeed it builds very much on the tradition and heritage we have.
That is why I have for example spent a considerable amount of
my time over the past year in trying to make progress with some
considerable success on the future of Stonehenge. It is why I
intervened personally to ensure that Newstead Abbey was not going
to be undermined by coalmining. There is a whole series of ways
in which we have demonstrated very clearly that we are very much
attached to the importance of our heritage and we have no intention
whatsoever of downgrading it.
134. You will be aware of the huge worries about
the future of English Heritage and in particular that its national
central role is being explicitly downgraded so that it will have
less of a strategic function in future but it may well continue
at a local level. This is being regarded as a symbol that this
is now the Cinderella of the Department.
(Mr Smith) No, it is not. The national
function, the national advisory and advocacy and standard setting
function of English Heritage will remain very firmly in place.
They are developing at their own instigation a strong regional
structure as well to ensure that there is a presence on the ground
where in some of the detailed work which English Heritage do it
is sensible to do it on a regional basis. You will have observed
that because of the Euro-PES requirements to cut money from the
Department's budget in the course of the December spending round
I had to cut £2 million from the English Heritage allocation.
This was something which they said they could happily live with
because their income from their properties, from their marketing
and merchandising was rising so rapidly and they have performed
so well on that in the course of the last two or three years,
that it would not mean they would have to affect the activities
they carry out.
135. "Happily" is an interesting word
in that context of an NDPB having its budget cut. On one other
issue, the Sports Minister last week before this Committee with
his characteristic refreshing honesty said that he did not believe
in the arm's length principle and that frankly the more direct
intervention politicians made in the matters covered by him, but
also by implication by the whole Department, the better. Was he
not, with his usual honesty, expressing what is now a reality
in the way the Department operates?
(Mr Smith) No, and I think he made it
clear he was expressing a personal view when he made those remarks.
Obviously one thing—and we touched on this in some detail
when we had our discussions about the future of the Royal Opera
House some months back—it is necessary and proper for government
to set is the broad framework of policy. That is what we are elected
to do and we are accountable to the public and to Parliament for
doing so. It is also necessary for government to ensure that there
is proper value for money being achieved where grants are being
made available. There is no arm's-length as far as the setting
of principles, the setting of overall directions and the accountability
for public money is concerned. Where the arm's length principle
is of great value, is where subsequent individual allocations
of grants are made. In the case of English Heritage or in the
case of the Arts Council for example, where a block of money is
made available by government, the individual decisions about precisely
how that money is then disbursed are rightly made by the expert
body itself. I do not believe that Government Ministers have either
the time or the expertise to make such detailed decisions. That
is where the arm's length principle is still very much in being
and should be.
136. It is defining the arm's length principle
in a way which makes the arm much shorter when all the other bodies
were persuaded to give up money for the millennium celebrations.
It is clear that what you regard as the distinction between a
strategic view and a detailed view has been pushed further down
the line, that you can if necessary dip into their budgets and
take them away. That will have a clear effect on the individual
decisions they can make simply because they will have less money.
(Mr Smith) The millennium festival is
actually quite a good example because that was an area where yes,
there was governmental urging of the various distributary bodies
to contribute to the common pot for the millennium festival celebrations
and indeed they all decided that they were prepared to make contributions.
137. There is a surprise.
(Mr Smith) Once that fund is established,
the £100 million which is available for celebrations during
the course of the millennium year up and down the country, the
distribution of that £100 million is not something into which
the Government would intervene. Those are decisions which the
millennium festival organisers themselves, made up of the different
distributary bodies, will make.
138. Can you officially, as I know you wanted
to, declare Cool Britannia dead and stop all other parts of the
government machine which have been promoting this from doing so?
(Mr Smith) I will officially say that
Cool Britannia is a flawed phrase. It does not properly and accurately
describe the ferment of artistic and cultural excellence which
is going on in Britain at the moment. I much prefer the title
Creative Britain.
Chairman
139. It is also the least edible of all Ben
and Jerry's ice-creams.
(Mr Smith) I think the line has now been
withdrawn.
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