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Paul Holmes:
Could I add just one note of caution as regards the all-party consensus on such an approach? There is a danger in pinning the whole answer on an easy option such as unclaimed assets. The hon. Member for Sittingbourne and Sheppey talked about
the pensioners who lost £125,000. I have been campaigning for them for six years, since autumn 2001, when their company first went bust in my constituency. This is not a question of an easy option of saying that the analogue spectrum or unclaimed assets are available. The principle is that the Governmentthe Treasuryshould find funding for the Olympics, in this case, without devastating areas such as arts and heritage. The Treasury should find the funding. The detailed mechanics of where it comes from are for the Treasury to sort out. Any cross-party approach should not pin its hopes on one simple solution.
Mr. Foster: My hon. Friend is right, and has obviously been looking at my notes, because I was going to give the hon. Member for Sittingbourne and Sheppey a few additional suggestions for putting cross-party pressure on the Government to do something about the problem. I should be interested in the Ministers reaction to the couple of suggestions that I have.
I want to suggest to the Minister that, as money is being removed from lottery distributors or funds, there may be a way in which, without taking money away from the Treasury, we could help them to grow the money that they have available. I suggest two ways in which that could be done. The first would be a change in the tax regime: at the moment the lottery is taxed on its turnover, but I am assured that switching the taxation on to profitsso-called gross profits taxwould allow Camelot to invest more of its revenues in growing the business. That, in turn, going by its evidence to the Select Committee on Culture, Media and Sport, would raise an additional £50 million per annum for lottery good causes. We should be well on the way to making up the loss. That would require a change in the taxation regime, but the figures show that it would happen in such a way that not only would the Treasury not lose money, it would gain a little, which, in turn, it could contribute to paying for the Olympics or meeting the shortfall of the arts, heritage and cultural sectors.
The other approach, which would entail no difficulty or cost to the Treasury, would be to clamp down on the legal grey area of so-called lottery-style games. Those are causing leakage of moneysome estimates suggest as much as £45 million per annumthat would otherwise have gone to the national lottery. Those two suggestions would go a long way towards supplying the shortfall that currently exists. I hope that the Minister will respond to those, or will at least be prepared to discuss them with the Treasury.
I have a small third suggestion to add, because the hon. Member for Sittingbourne and Sheppey will obviously be anxious to draw up a long list for his all-party grouping to take to the Treasury. It does not cost a lot, but it is bizarre that alongside the special Olympic lottery game an Olympic lottery game distributor has been set up. Why do we need a body, which costs money, to allocate the money, when we could just give it to the Olympic fund, and reduce the take?
I am at a loss as to why the Government have done something that the hon. Member for Sittingbourne and Sheppey calls bad politics, and which causes those on the Government Benches acute embarrassment, when
there are other ways to proceed, and when we know that it will cause deep difficulties in the arts, culture and heritage sectors: they are critical to ensuring the legacy of the games that the Prime Minister has described as crucial.
In a note on this issue, the head of heritage services in my council area, Stephen Bird, said:
The supreme irony of the loss of Lottery funds to London 2012 is that museums will now have less opportunity than they might have had for contributing to the Cultural Olympiad. This also means that the much-vaunted legacy will not be a rich one but an impoverished one.
That is right. The Governments decision is fundamentally flawed and they should seriously think again.
Mr. Edward Vaizey (Wantage) (Con): It is a great pleasure to be speaking under your chairmanship, Mr. Bercow; it is the first time that I have done so. I congratulate the hon. Member for Chesterfield (Paul Holmes) on securing todays important debate. I think that he and all hon. Members present would agree that it is sad that more hon. Members are not present to debate a hugely important aspect of what is happening to the arts and heritage sector. I also congratulate the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) on coming to the debate in a spirit of cross-party consensus, and proposing possible solutions, and my hon. Friend the Member for Tunbridge Wells (Greg Clark) on his important contribution on the voluntary sector. Finally, of course, I congratulate the hon. Member for Bath (Mr. Foster) on his ebullient and pacy speech setting out the Liberal Democrat position.
Figures on the cuts to the lottery, and therefore to arts and heritage, have been bandied about, and at one point I thought it might help if a whiteboard were put up in the Chamber, so we could write them down and reach some agreement on their significance. What we know is that £675 million is going from lottery good causes to the Olympics. With specific reference to arts and heritage, we know that the Arts Council of England will lose £112.5 milliona huge and significant sum when one considers the total arts budgetand that the Heritage Lottery Fund, another incredibly important distributor, will lose £161.2 million. We can add to that the fact that the arts in Northern Ireland, Wales and Scotland will lose £25 million and the Film Council will lose £28 million. Pretty soon a huge sum is reachedsomething like £1 billion in total.
As has been mentioned, it is also necessary to take into account the new Olympic lottery games. The hon. Member for Bath pointed out that those games will cannibalise the existing lottery: the people who play them will not play other lottery games, so their money will not go into the lottery. I can update him, because, as I understand it, the National Audit Office has considered the matter and increased the estimate of the cannibalisation effect from the Governments figure of 59 per cent. to 77 per cent., which equates to £575 million. That is the kind of money that will no longer be available to good causes, and it should certainly be added to the figure. Probably about £1.5 billion will come out of good causes overall. That is a huge impact.
What depresses most hon. Members is the fact that much of that additional funding has been taken to cover the Governments embarrassment. The hon. Member for Sittingbourne and Sheppey rightly took the realistic and common-sense view that one makes a bid to win, and that sometimes the figures that one presents, just as with any business plan, do not necessarily exactly equate to the way the figures will turn out. However, one is entitled to ask how on earth the budget for the Olympics can effectively triple in less than two years. That is an appalling indictment of how the Government went about bidding.
There are two very clear reasons for the enormous increase in the Olympic budget. First, no provision was made for VAT in the original Olympic bid. That is a sum of £840 milliona pretty big slug with respect to money coming out of the lottery. There is also the new contingency fund of £2.7 billion, another cost that was not put forward in the original budget. Those two clear mistakes made by those who made the bid for the Olympics, involving huge sums that were not put into the original budget, are mistakes for which our arts and heritage sector must pay.
It is important for the Minister to understand, if he does not already, the enormous anger that is felt in the arts and heritage sector about those raids. I do not think that that is because people feel that they should not necessarily make any contribution. It is the way in which the situation has come about. On 6 March, 500 or 600 people were dragooned to Tate Modern to sit at the feet of our Prime Minister during his legacy tour. Having not made a speech on the arts for nigh on 10 years, he decided to share his views on the arts with the arts world and to claim the credit for what he called the arts renaissance. People sat there listening to his fine words, which referred to a golden age for the arts. Just 10 days later, the Secretary of State for Culture, Media and Sport stood up in the House to tell the arts world that its golden age was over, and that, as far as she was concerned, it existed simply to fund the mistakes made in bidding for the Olympics.
Still the Government carry on blithely as though nothing had happened. The Chancellor of the Exchequer, who a few months ago sent letters to all arts organisations asking them to budget for 7 per cent. cuts in the comprehensive spending review, had the chutzpah to announce at the Brighton festival:
I do intend to make sure that what happens over the next period is not detrimental to the arts and will not allow the fact that we are having an Olympic Games to come in the way of the arts.
How does one square that statement with the fact that about £1.5 billion is being taken away from the arts?
Is it any wonder that those who have been working in the arts or have cared about them feel passionately about the subject and able and willing to speak out? It is no wonder that the former Secretary of State for Culture, Media and Sport, Lord Smith of Finsbury, said in the other place that
I absolutely recognise the deleterious impact that the recent decisions about lottery funding have had, particularly on the arts, heritage and, importantly, on community sport. It is difficult to overestimate the impact that these decisions have had on the cultural sector.[Official Report, House of Lords, 17 May 2007; Vol. 692, c. 342.]
Is it any wonder that the former Under-Secretary of State for Culture, Media and Sport, the hon. Member for Stoke-on-Trent, Central (Mark Fisher), tabled an early-day motion that condemns the Government and the redirection of up to £675 million of national lottery funding to meet increased infrastructure costs, and which
notes that such a diversion will lead to profound funding cuts for the very culture that the Prime Minister hailed as a key reason for the UK's successful Olympic bid; further notes that such cuts in Arts funding threaten to tarnish what the Prime Minister recently called this Golden Age' of British arts.
Is it any wonder that so distinguished a Labour backbencher as the hon. Member for Sittingbourne and Sheppey should find the time to come to this debate and call the Governments decision bad politics and incredibly embarrassing? As the hon. Members for Bath and for Chesterfield pointed out, numerous practitioners of the arts have had their say.
There is a spectacular lack of logic in using money earmarked for the arts to plug holes in the Olympic bills. The money raided from the lottery will largely affect small, innovative, experimental organisations and individuals who are the lifeblood of creativity in the UK. Pulling the carpet out from under them and nobbling their money is undermining the future of our major arts institutions.
Liz Forgan, the chairman of the Heritage Lottery Fund, said:
This is bad news for the nations heritage...It will impact on our ability to invest in the nations heritage at exactly the time that it is being showcased to the world.
Peter Hewitt, of the Arts Council of England, said that
£63m will need to be found over four years from 2009 and will sadly impact on the arts at local level in every corner of England - with very many youth organisations, festivals, dance and theatre tours, exhibitions, concerts and other activities being turned down for funding.
I could go on, although you will be delighted to know that I will not, Mr. Bercow.
Mr. Rob Wilson (Reading, East) (Con): Is my hon. Friend aware that there are 53,000 voluntary arts groups in England, for which the only accessible Arts Council funding comes from the grants for arts lottery fund, and that the diversion of resources to the Olympics will cut by about a third the Arts Council funding for those local community-based groups?
Mr. Vaizey: I am aware of that, and I thank my hon. Friend for bringing it to my attention. It echoes the point made by the hon. Member for Sittingbourne and Sheppey about the bad politics of cutting grants to so many of those voluntary organisations. As I said, I could go on: I could quote Tony Hall, the chief executive of the Royal Opera house; I could quote Jude Kelly, the artistic director of the South Bank centre, a great jewel for the nation that will reopen this weekend thanks to a national lottery grant. The Minister knows all that, and he knows the sheer depth of anger about it.
It is not just about money; there is a principle at stake. The national lottery was set up with the clear principle of additionality. The lottery was meant to fund things that the Government would not normally fund. It was meant to create a pot of money on which charities, grass-roots sports organisations, arts organisations and heritage buildings and institutions
could draw. It was a magnificent achievement, which was going to secure long-term funding and capital for those organisations. It was precisely set up with a view to keeping the grubby hands of politicians out of the till. Sadly, the Government, who long ago ceased to pay much attention to the additionality principle, have now thrown it out of the window completely with their raids on the lottery.
Mr. Don Foster (Bath) (LD): I apologise for interrupting the flow of the hon. Gentlemans excellent contribution. I urge him to be a little cautious with his condemnation of the Government on additionality, however. Will he confirm whether the Conservative party included in its manifesto a pledge to raid money from the lottery to pay for its club-to-school sports scheme?
Mr. Vaizey: I praise the hon. Gentleman for his huge attention to the detail of the Conservative manifesto, which exceeds mine by a factor of 10.
Our arts and heritage organisations are astonishingly efficient. Since I took on this shadow role, I have seen that they are among the most efficient public sector organisations in the country. Many of them survive on what is almost peanuts: we are talking about sums of £50,000, £100,000, £150,000. When they see that £400,000 has been spent on the universally acclaimed logo for the Olympics, having pared themselves to the bone to provide first-class arts and heritage services for their localities and for the country, one can imagine how they feel.
Another reason why people feel so angry is that the Governments decision has set the arts and sport against each other. I echo the comments of the hon. Member for Chesterfield and others: sport and the arts should co-exist. The Olympics should be a fantastic opportunity to showcase our arts and heritage to the world, and to invest more in them if we can. Sadly, that opportunity has gone and the arts and heritage now see sport as having robbed them to pay for its activities.
As the Government scrabble about, trying to square circles and pretend that the raid on the lottery is not as bad as it has been, confusion has emerged as a result of the idea that the money will somehow eventually come back. We are told that there is a legacy fund of something like £40 million, of which some £28 million may or may not go back to the arts and heritage. That is described as venture capital. If a venture capitalist got £28 million back from an investment of £300 million, they would be fired pretty quickly.
We are also told that the sale of the land will somehow make its way back to the lottery. We are not told whether the lottery should expect a percentage of or all the profit from that sale; we are not even told the current value of the land. The Minister tells anyone who dares to suggest that he might put an estimate on the value of the land that they should grow up
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. David Lammy): Come on.
Mr. Vaizey:
Or he says, Come on from a sedentary position. We only want more details, because it is no good telling the arts and heritage sector that in five, six
or 10 years timewe do not even know when the land might become available for salethat somehow there will be a pot of money at the end of the rainbow. Such an approach is ludicrous. The Government raised this as an issue and an opportunity, but they now refuse to discuss it in detail because should anyone possibly ask them a question about what they mean, they regard that as immature.
In last months debate in the other place, the Government spokesman hinted that if the contingency fundthe £2.7 billionis underspent, it will come back to the lottery. Will the Minister elaborate on that, and confirm that that is the position?
As the Prime Minister leaves office in the next two or three weeks, having made what the hon. Member for Bath describes as a magnificent speech on the arts, it is sad that his arts legacy is in utter disarray. The Government like to claim that they have invested more in the arts, without saying that much of the investment was to make up for the shortfall caused by withdrawing charging. They have slashed the heritage budget by millions and millions of pounds, have entirely ignored their own report, prepared by Sir Nicholas Goodison, on ways of bringing more money into the artsnot a single Minister, including the one who is present, has bothered to meet Sir Nicholas Goodison, despite his workand now we have the lottery raid.
The Government have no coherent policy on the arts. We need long-term investment, positive support from the Government and a re-examination of the Goodison report. We do not need the Liberal Democrat policy, which I understand is not to build an Olympic stadium in order to save £600 million.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. David Lammy): I am pleased to be replying to this debate and to see you in the Chair, Mr. Bercow. It is the first time that you have been in the Chair when I have spoken in this Chamber.
This debate is important to the arts and heritage sector in this country, and I congratulate the hon. Member for Chesterfield (Paul Holmes) on securing it. There has been concern and discussion over the past few weeks about the nature of arts funding. It had been going on before because this is a comprehensive spending review period. It is right that we have this debate, and I am pleased that passion has been shown across the Chamber and that a consensus has emerged that arts and heritage are vital to the life of this country. On that basis alone, although I cannot agree with all that has been said, I congratulate the hon. Member for Bath (Mr. Foster), my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt), and the hon. Members for Wantage (Mr. Vaizey) and for Tunbridge Wells (Greg Clark) on their participation.
The debate has been a good opportunity to reflect on the achievements of the arts, culture and heritage over the past few years. Culture and heritage in this country are outstanding and are important to millions of people. They impact hugely on our international reputation and are economically vital. Changes in cities such as Manchester, Newcastle, Glasgow and Liverpool have been led by cultural regeneration.
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