Catering and Retail Services in the House of Commons - Administration Committee Contents


6  Revenue raising

Retail

160. Reducing the subsidy required by the Catering and Retail Service can be done by increasing revenues as well as by cutting costs. In addition to catering for Members, staff and so on, the service is responsible for the external banqueting service and for the sale of souvenirs. As part of its contribution to the House's savings programme, the service has put forward several ideas for income generation.

Souvenirs

161. At present, souvenirs are sold only within the confines of the Parliamentary Estate, by both the Lords and the Commons. In part, this is because of restrictions imposed on use of the crowned Portcullis badge, but it is likely that those could be loosened by negotiation with the Queen's representatives. The experience of other substantial but traditional tourist attractions in recent years suggests that there is considerable potential for income generation from widening the market for such souvenirs, as, for example, the Royal Collection has demonstrated.

162. The House's retail operation is one of the profitable parts of the Catering and Retail Service's work. The Catering and Retail Service believes that an additional £400,000 might be generated in income from 2012-13 by selling via a high street outlet, which is based on the proposition that the current £1 million or so of sales could be doubled.[106]

163. The Director of the Catering and Retail Service told us that experts in this area advise setting up a high street outlet before considering online sales of souvenirs.[107] The House already possesses such an outlet, which currently functions as a bookshop on the corner of Bridge Street, selling books of parliamentary interest and official papers. The use of that shop is currently under review; although it falls outside our direct remit as it is not a service provided to Members, we have been interested to watch developing thinking on widening both the variety of material on offer there and raising the commercial profile of the shop.[108] We fully support moves to raise additional revenue by widening the sale of souvenirs, and in particular moves to sell a full range of souvenirs through the Parliamentary Bookshop. We also suggest that the name of the shop be changed to reflect such wider use.

164. It has in the past been suggested that there was some cachet in keeping the House's souvenirs "exclusive". This argument relies on the idea that visitors or those who receive gifts personally or, for example, as prizes for a constituency raffle might not so much value something easily obtainable on the high street. We doubt whether there is much value in this argument, but if some exclusivity is thought desirable, it would be perfectly possible to retain some items for internal sale, as, for example, the Marylebone Cricket Club (MCC) does.

165. The other significant risk in selling more souvenirs is the accusation that they are 'tacky' or inappropriate. The external witnesses to our inquiry were united in dismissing this fear. Duncan Ackery said "it's down to integrity of product. That's all it is. If the product has integrity and if you sell it in a well thought through and considered environment, I do not believe that you in any way belittle or undermine the brand".[109] Rupert Ellwood, who was once involved in the sale of souvenirs for the House of Lords, added "It is about selecting quality products that match the surroundings. [...] There are things, like the whiskies and champagnes, that are quality products and people love".[110]

166. Whisky and champagne are, in fact, among the best selling items currently sold within the Estate, as is demonstrated in table 23.Table 23: Top-selling souvenir lines by sales value

Item Selling price No. of sales
1HoC Whisky £20.503,516
2Dark Chocolate Mint (large) £6.957,159
3Dark Chocolate Mint (small) £3.7511,632
4HoC Champagne £23.001,766
5Speaker Whisky £28.50906
6Diary £3.996,127
7Guide Book £5.006,373
8Big Ben Pencil £1.5013,453
9Hoc Vintage Port £13.501,435
10Luxury Chocolate Box £11.001,836
11Pen £6.952,140
12Torch Key ring £2.954,072
13Christmas Mug £15.00830
14Bridge Set £8.001,417

Source: Catering and Retail Service

Internet sales

167. One obvious further outlet for souvenir sales is via the internet. The Director of the Catering and Retail Service told us that profitable returns on such sales are not likely to be achieved within the first three years of setting up such a system, and it may well make sense from that point of view to concentrate first on expanding the existing sales through a shop unit.[111] On the other hand, if it takes three years to create a profitable on-line business, then it also makes sense to get started as soon as possible if on-line sales are thought worthwhile. Since any proposal to do this would involve new expenditure, it is more a matter for the Finance and Services Committee to consider than it is for us. The Commission has already tasked the Finance and Services Committee with considering the long-term potential of online souvenir sales as it continues its work on the redesign of the House's services.

The public

168. Perhaps more controversial, within the House, are Catering and Retail Service proposals to widen access to some facilities to members of the general public. Any such proposal inevitably raises questions about conflict with the business of the House, which is, primarily a place of work, albeit one which is also a significant tourist draw. Greater public access to the buildings and their facilities also raises questions of security.

169. The Catering and Retail Service suggests that about £85,000 a year could be raised from enabling members of the public to fill some of the spare capacity identified in the main Dining Rooms at lunch time. It suggests that the Strangers' Dining Room could be opened in this way for visitors beginning or finishing a parliamentary tour around lunch time.[112] Members of the public are allowed to use facilities in many other Parliaments or equivalents: Scotland, the United States and Germany, for example, all allow use of some eating outlets. It is neither feasible or desirable to open the Strangers' Dining Room to the public at times when the House is sitting. We are, however, not opposed in principle, and so long as any concerns raised by the Serjeant at Arms about security can be overcome, to opening the Strangers' and other facilities to the public on non-sitting days, including weekends and recesses, if all costs can be covered and the service offered profitably.

170. The Catering and Retail Service also suggests offering traditional afternoon teas to visitors from Monday to Saturday in the Terrace Pavilion, estimating that more than £75,000 could be raised annually. Such a service might, for example, be included as part of the package for those who undertake a specialised tour of the Palace's works of art or for those who visit Big Ben.[113] Again, so long as any security concern is dealt with, we believe that allowing public access to the Terrace Pavilion for an afternoon tea service for those who have taken tours would raise revenue for the House and contribute in a minor way to the strategic goal of promoting public knowledge and understanding of the work and role of Parliament through the provision of information and access.

Banqueting and events

171. Aside from providing for those who work on the parliamentary Estate, the Catering and Retail Service is responsible for running the banqueting and events service which caters for dinners, receptions and other events hosted by Members of Parliament. This is the single most profitable element of the service. It appears clear that there is potential for greater profit in this area, and the sharp rise in banqueting prices since last October is likely to see considerably more revenue raised in 2010-11.

172. Broadly speaking, we favour moves to raise more income from banqueting, not least because profits made in this area clearly help to cross-subsidise those facilities where business need rather than profitability is the primary reason for their existing. The private sector and contract caterers who gave evidence to our inquiry were unanimous in believing that there is considerable capacity to raise revenue from events held in the Palace.

173. The Catering and Retail Service believes that about £100,000 a year could be raised, for example, from hiring out Westminster Hall for just four events a year, preferably via an approved third party event specialist.[114] Our private sector witnesses unanimously argued that demand for such a prime location would be considerable. Westminster Hall is, of course, a space shared with the House of Lords, and is part of a royal Palace, so considerable negotiation would be required for such a proposal to be put into effect. Once again, though, from the point of view of both revenue and wider public access to a national asset, we support in principle the idea of hiring out Westminster Hall on a limited number of occasions and for events in keeping with the historic character of the location.

174. Three further proposals have been made by the Catering and Retail Service to raise additional banqueting revenues.[115] We accept in principle that banqueting room hire fees should be brought into line with commercial rates and that fees should be charged for all rooms used for banqueting.

175. We have recommended elsewhere that banqueting restrictions be loosened so that members of the public may sponsor and host events at times when the House is not sitting. Regardless of whether that is agreed to, we believe that the current restrictions on Peers should be lifted. We agree, again so long as suitable reciprocal access is offered by the Lords, that all Members of the House of Lords should be able to host events in the House of Commons at off-peak times, and recommend that the Catering and Retail Service identify the times at which this policy might usefully apply.


106   Ev 85-86 Back

107   Q 287 (Ev 48) Back

108   Sales of some souvenirs began in the shop from 28 March, as we were concluding this Report. Back

109   Q 186 Back

110   Q 206 Back

111   Q 288 (Ev 48) Back

112   Ev 83 Back

113   Ev 83 Back

114   Ev 84 Back

115   Ev 84 Back


 
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Prepared 10 May 2011