Examination of Witnesses (Question Numbers
240-259)
MR DAVID
MOBBS, MS
RUTH JARRATT
AND MR
STEPHEN LLOYD
8 JULY 2008
Q240 Chairman: Well, Kelvin is our
opera buff, the only one amongst us who can afford your prices
as well!
Ms Jarratt: I think I gave you
some numbers there that maybe would make you revise that!
Q241 Kelvin Hopkins: I must say,
I keep wanting to answer your questions rather than ask them!
Ms Jarratt: Do!
Q242 Kelvin Hopkins: I do not need
any convincing about the public good of opera and, I may say,
I recently saw Salome at the Royal Opera House, I had never
seen anything so bloodthirsty and gory in my life, but, on the
other hand, it gave wonderful insights into the behaviours of
dysfunctional people when you put them all together, and I think
everybody could understand that, but there we are. I do not think
there is anything wrong at all with subsidising the arts. The
arts should be subsidised, all societies have always done it.
It used to be the Church and then it was the rich, and monarchs
and whatever, and in modern times it has been the State and business.
But they have always been subsidised and all civilised societies
have to subsidise the arts because they would not exist without
subsidy, but the question to be asked is how the subsidy is applied.
In Eastern Europe, it was the State and they had heavy subsidies
indeed. I attended the Prague Opera House and had the best seats
in the house for £4—though it has maybe gone up a bit
now—and ordinary people went to see it. It is whether charitable
status is appropriate or useful? What do you think?
Ms Jarratt: I think charitable
status is particularly useful in the sense of generating particularly
philanthropic monies. About 17% of our income last year was generated
by memberships, gifts, arts sponsorship, but the vast majority
of that is from individuals and, if there was not the tax effectiveness
in those gifts, it would not only lose a substantial amount of
money, the gift aid equivalent, but I think the whole nature of
giving would feel far less comfortable to people. I think the
thrust of the guidance is interesting where there is an encouragement
to generate philanthropic monies in order to increase access,
increase services, whatever, and I think that is a good emphasis,
but, without the charitable status, it is hard to think how you
would encourage philanthropy to the arts.
Q243 Kelvin Hopkins: Some people
might argue, people on the Left might argue, that higher taxes
on the rich and a much bigger direct state subsidy would be an
easier way to do it. Would that be another possibility?
Ms Jarratt: That feels very political
and I am not sure, I would need to see the numbers. What is good
about an individual is that they can follow a passion and they
do not have to be following a party line, it does not have to
fit with some great, grand manifesto, if you see what I mean,
but they can just feel in their souls, they can work to the intrinsic,
and you hear people talk a lot about the intrinsic value and instrumental
value in the arts. If it is government funded, I think there has
to be, rightly, a huge amount of mind to give to the instrumental
purpose. Is it regeneration? Is it giving kids something to aspire
to? Is it helping them to do their maths, whatever? It is hard
maybe, therefore, for a government to fund under the banner of
it is just life-enhancing, it is for everybody. In other words,
I do believe, sitting between America and Europe, that we have
this amazing mixed economy, I think it gives us just about enough
money to be experimental. In Europe, the arts can be much more
experimental and there are more new operas and there are more
new ballets because they have more money to play with, to be quite
honest. In America, they can end up in a terrible danger of trotting
out the same stuff all the time because there is not that flexibility
within the system. It is hard to manage and you need very skilled
people and I think, if I can put a plug in here, my boss, Tony
Hall, is a very skilled manager in making those things all balance
out, but it is not a bad regime.
Q244 Kelvin Hopkins: This is what
worries me—this spectrum between Europe, where there is
much heavier state subsidy, and America, where it is much more
business subsidy. Is there a tendency not to be experimental,
not to be exciting, not to be adventurous.
Ms Jarratt: And often we have
to call upon our philanthropic gifts to really help us to do that
more experimental work, whether it is bringing on young artists,
and our young artists' scheme, which includes singers, directors
and conductors, is privately funded and often we have to bring
in sponsors to develop new work.
Mr Lloyd: I think there is a really
important point of principle here, which is this: that, where
the State gives money directly to any organisation, be it a charity
or not, it is perfectly entitled to lay down requirements as to
how that money is spent, and direct access, diversity, all these
sorts of things quite naturally go with the way in which that
money is given, the terms and conditions of grant, no problem.
When it comes to charities, there is a subsidy in some cases from
the State via the tax reliefs that we were talking about earlier,
but what the State has not said is, "We will only give those
subsidies on certain conditions". The rule that relates to
that state subsidy is at the moment that they just have to be
applied in accordance with charity law and charity law does not
necessarily give the direct implications and results that, if
you like, some people might think it should give if they approach
this with the mindset of, "Well, we're giving money, we're
giving a grant and, therefore, we can lay down, eg, requirements
for access", but actually charity law is a rather more subtle
thing than that. If you think about it and take an organisation
set up to protect the environment, it is very difficult to say
that poor people benefit from that, or to protect animals, if
you could save the tiger in India, does that save any poor people?
It probably actually hurts them because the tiger might go and
steal some of their food or children, but, nonetheless, that is
recognised as a charitable good. I think there is a real danger
of, if you like, a drift between a mindset that says, "With
a subsidy, quite rightly, a direct subsidy, we can lay down terms"
and, if you like, this indirect subsidy via the tax system where
the State has never said, "In return for this subsidy, we
expect these outcomes", and Parliament has never legislated
for that.
Q245 Kelvin Hopkins: I accept the
point, but the Arts Council helps. I have one final question really.
There is this barrier between many ordinary people and opera—it
is seen to be socially elitist. I do not think, once one is there,
that it feels like that at all, but my late father-in-law, for
example, listened to his Mario Lanza records at home, but never
went to the opera. Now, how are you going to get more people like
my father-in-law, an ordinary working man, into the Opera House.
It does not have this elite atmosphere, and charitable status
would seem to be more meaningful because a lot of ordinary people
would go? Where there are many more opera houses in Europe, many
more ordinary people do go to opera and it is not seen to be so
elitist. In Italy, for example, with much local opera, people
go.
Ms Jarratt: History is history
and you cannot change your country's history, and I think it is
our country's history that has landed us in this place, but I
think there are two fundamental things we are doing. One is what
I was describing before with the educational work, where we do
schools matinees which fill up the House six times a year with
school pupils whose teachers have already come on some sort of
insight course, so they go back, they work with the students and
they bring them in. When you listen over the tannoys which we
have around to the applause and the almost booing and hissing,
as it were, that happens when you have the kids in, it is quite
amazing. So, one strand is that you try and get as many kids in
and, believe me, we struggle and we do everything we can, and
again private funding helps with that to subsidise, say, for £6
a seat the same costs of putting on the opera, if you like, that
is one route. The other route is, okay, you take the stuff to
them where they are comfortable, so, if people are happy to go
to a cinema to watch a Hollywood blockbuster, it is the same cinema
that they will go to to see a really genuinely fantastic experience
or indeed the first taste in a free environment with a glass of
wine, if the local authorities allow it, in front of a big screen,
so that is our dual approach. It is to try and get people in,
but also to take the art, take the stuff to where they are. Obviously,
there has always been a long tradition of broadcasting our material
on the BBC, which is fantastic, and we fight hard to retain that
presence and it is very, very important typically around Christmas,
but at other times, or radio equally, so we try every route we
can to make sure that everybody can enjoy what we do. There is
just one other thing, I do not know quite where it fits in, but
I am determined to mention it because I am so proud of it, which
is that we have started a programme of Citizens' Juries where
we directly engage with people. We have done one in London and
we have done one in fact in Manchester, so further out of London
for people who would not normally be physically coming into the
building, to understand what the place means to them. Interestingly,
it goes beyond even "whether I might ever come" and
"whether I like opera", but it is "I'm really proud
we have one; it's a national treasure" or, "When I go
to other countries, they have got one and it's good to know we
have got one" or, "When I go to other countries and
theirs is no longer used, our one is not only there, but it is
used for what it is meant to be used for", these sorts of
things and these are totally intangible, but it is very wonderful
to hear from the citizens of Britain that they think it is good
that we have one. Just as a separate note, but rather related
to that is that the Royal Ballet has just finished a tour to Beijing
and on to Japan, and to have a presence of a major British company
in Beijing in the run-up to the Olympics when, at the return match,
hopefully there will be a similar involvement from such an organisation.
These are goods to the country, if you like, in addition to goods
to individuals, which I think are wonderful, important and again
hard to quantify.
Q246 David Heyes: Is it possible
for either David or Ruth to give us a sense of what charitable
status is worth to you in monetary terms, in direct financial
benefit, putting aside the encouragement of philanthropy and so
on, the saving that accrues from the rating, different rating,
gift aid, relief from corporation tax, those sorts of things?
Can you put numbers to it?
Ms Jarratt: Yes. In the last financial
year it was worth about £1.6 million to us, of which about
£800,000 is gift aid, £500,000-£600,000 business
rates relief and about £200,000 in corporation tax advantage.
Mr Mobbs: The last time we calculated
it, which was in 2004, it was worth £18.5 million. I think
it is probably more than that now, probably approaching £20
million, but we have not calculated it since.
Q247 David Heyes: In your line of
business, do you sense the same sort of indirect financial benefit
that Ruth described, for instance, enhanced philanthropy?
Mr Mobbs: We do not really receive
many donations. We receive them on the odd occasion. I can add
to Ruth's point about the equity in the charity brand. I actually
believe having the status of a charity gives huge amounts of reassurance
to people that you will always do things in the right way and
I think in healthcare that is priceless.
Q248 David Heyes: It is tempting
to talk about that as the potential cost of the loss of your charitable
status, but from what Stephen tells us, your interpretation of
the law is that they could not lose their charitable status. It
is not technically possible for their charitable status and therefore
either for those benefits to be removed or for them to decline
to continue to have them. Can you say a bit more on this?
Mr Lloyd: Absolutely. Say you
had a situation where the Charity Commission decided an organisation
was not delivering appropriate public benefit. Stage one would
be to engage the trustees to say, "What are you doing?",
and this is what would happen, I am sure. It may be that their
objects are out of date. They need to expand their objects, to
have a bigger charity footprint to be able to deliver public benefit
over a wider area, both possibly geographically or in other areas.
That is number one. If the trustees refuse to do anything, if
they say, "No, we are going to be dog in the manger. Go away,
Charity Commission. We have got nothing to do with you, the wretched
State imposing its things upon us", then the Charity Commission
has very wide powers to dismiss trustees and appoint new ones,
so what I suspect it would do at that point would be to appoint
new trustees who were more amenable to working with the Charity
Commission to try and deliver more tangible public benefits. Say
those trustees found actually they were completely constrained,
they were operating on a small site with a small clientele. The
best example, and I know we are not here to talk about it, would
be a small, rural based independent charitable school, possibly
a prep school, with a small roll, a small building, not much in
the way of sports facilities, can't really do very much for the
community with those resources. That organisation might find itself
hard pressed in the future to deliver sufficient public benefit.
If that were to be the case, probably the next stage would be
for the Charity Commission to say, "Why do you not amalgamate
with another school so you get a wider footprint?", or something
like that, or they might come to the end of the road and say,
"Look; you cannot do it. Why do you not sell the asset and
apply the money for charitable purposes?". There are all
those stages to go through. Does that help?
Q249 David Heyes: Yes, it does, but
at no stage could it be a decision of the charity trustees or
directors of the organisation to de-charitise themselves?
Mr Lloyd: No. That is not part
of the armoury. They cannot just walk away.
Q250 David Heyes: I understand that
there are some organisations that have the appearance of being
charities but actually only a small part of their operation is
charitable. For instance, the assets, the property, the buildings,
the equipment, could be separately owned and not be part of the
charity. Is this a significant part of the sector? Are there many
large charities that operate in this sort of way?
Mr Lloyd: I have acted for charities
for 28 years and my firm acts for a huge number of charities and
I have to say that is a division I have never come across. I have
come across now and again organisations, indeed the Museums and
Libraries Council used to recommend it, where you would have one
charity that operated a museum, for example, and another that
owned the collection, so in case the operation went bust the collection
did not have to be used to pay off the creditors, but I have never
come across major charities which separate all the assets into
a non-charity but have a charity as a sort of operating company.
Q251 David Heyes: Presumably, in
the case of the Opera House and the Nuffield, all of your assets
are entirely owned within the charity. Is that the case?
Mr Mobbs: Yes, unless we have
a lease of a premises or something like that.
Q252 Paul Flynn: Mr Mobbs, what percentage
of your patients are treated for cosmetic surgery?
Mr Mobbs: About 4 or 5% overall.
Q253 Paul Flynn: So a great deal
higher than in the National Health Service for cosmetic surgery?
Mr Mobbs: I do not know what the
National Health Service figures are for cosmetic surgery.
Q254 Paul Flynn: But you would agree
that yours is higher, you have a higher percentage of patients
on cosmetic surgery and other elective surgery than the National
Health Service?
Mr Mobbs: Yes.
Q255 Paul Flynn: What other elective
surgery?
Mr Mobbs: Obesity surgery, for
example.
Q256 Paul Flynn: And other vanity
surgery?
Mr Mobbs: I am not suggesting
all cosmetic surgery is vanity surgery.
Q257 Paul Flynn: No, neither am I,
but generally it is. It might well be psychological.
Mr Mobbs: There is a small proportion
of vanity surgery included in cosmetic surgery.
Q258 Paul Flynn: Okay, but does this
mean that the fact that you are dealing with priorities that are
vanity in many cases, lifestyle choices means that you are competing
against the Health Service where the priorities are there for
people with life-threatening illnesses? Is that not true, that
your top priority is how much the patients have in their pockets
to pay you? The priority of the Health Service is life saving
and providing the best service. Is that not the essential difference
between you and the NHS?
Mr Mobbs: I think it is a question
of degree. I believe that our priority is to improve people's
health. We may not offer many life-saving procedures because we
do not operate accident and emergency departments, but across
the whole remit of our services, we focus on how we can improve
people's health, right from the point of preventing the problem
from occurring in the first place, to fixing it at the other end.
Q259 Paul Flynn: You see the difference
that I am trying to make, do you, between the fact that your existence
is likely to distort the health priorities of the nation? We started
off when the Health Service was set up 60 years ago now, with
the idea of providing free health services at the point of delivery
need for those who required them most. The service you provide
for obesity and for people who are wanting face lifts and so on
is distorting those priorities, and if that is so you are catering
for people who can afford to pay but why on earth should you be
a charity?
Mr Mobbs: Again, I think you are
talking about a very very small proportion of what we do, and
when we talk about cosmetic surgery—
|
