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Lord Faulkner of Worcester: My Lords, I thank my noble friend the Minister for that understandably reticent reply. I am sure that we all appreciate the speedy and effective response of the Metropolitan Police to this incident. Is my noble friend in a position to give any indication as to who may have perpetrated this attack or the origin of the weapon that was used?

Baroness Scotland of Asthal: My Lords, as my noble friend rightly said, a full scale police investigation is in progress, for which we are grateful. No particular group has acknowledged responsibility for this attack. As I said, the matter is now the subject of a detailed police investigation. The police have made clear that a number of groups could have had access to the type of weapon used. It would be wrong at this stage to enter into any speculation as to which of them might be responsible.

Lord McNally: My Lords, will the Minister confirm that the decision to house the Secret Intelligence Service in this particular building was made during what might be described as Mrs Thatcher's "Ceausescu period"? Does she not agree that it has sent all the wrong messages, both to the staff and to the general public, to have our Secret Intelligence Service housed in such a ludicrously flamboyant building?

Baroness Scotland of Asthal: My Lords, as tempted as I am to be seduced by the noble Lord's rhetoric, this building is located where it is through the choice of a previous government. However, in these days when such a building is likely to be identified anyway, it is not a matter which need cause us any real concern.

Lord Howell of Guildford: My Lords, I hope that it will not sound frivolous if I say that this enormous building, which I believe is often described as a wedding cake, has in the age of the hand-held missile become a sitting duck. I believe that there are serious implications for the future, given high technology's

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ability to smuggle dangerous weapons into the centre of London and aim them at any prominent building. Will the noble Baroness assure us on two matters? First, now that everyone knows where the Secret Intelligence Service is housed, will she assure us that all possible steps will be taken to fortify that enormous building more effectively? Secondly, will she suggest to the mandarins and masters of the Secret Intelligence Service that when they expand further--as no doubt they will--they might consider returning some of their staff to the shabby anonymity of the building over St James's Underground which no one knew about except the bus conductors who always referred to it as "Spys' Corner"?

Baroness Scotland of Asthal: My Lords, I am grateful for that suggestion. If no one knew about it before, they certainly do now.

Any building would be subject to attack. However, I can reassure the House that the expenditure that was engaged in has enhanced the building to such an extent that the attack did not unduly disrupt matters in that building. It was able to withstand the attack with the appropriate robust response. We need not be worried that the effective fortification of this building has been impeached. It has not.

Baroness Park of Monmouth: My Lords, will the Minister confirm two matters? First, I understand that the Secret Intelligence Service did not choose that building. It was built for some other department and it had unfortunately to inherit it. That point should be noted.

Will the Minister also confirm that, since the weapon used is not infrequently in the armoury of various branches of the IRA, one of the best measures the Government might take in future would be to remove from the Police (Northern Ireland) Bill the weakening measures designed to reduce the effectiveness of the Special Branch of the RUC? That Special Branch is our chief protection against such attacks if they are IRA attacks--as they have been and will be.

Baroness Scotland of Asthal: My Lords, I say again that we do not know the origin of the attack. Noble Lords will know that the type of weapon used in the attack was an RPG 22 rocket-propelled grenade. That, regrettably, is a device used by many groups. For that reason the police, with great energy, are trying to discover who is responsible. I cannot concede what the noble Baroness says about an amendment to the Police (Northern Ireland) Bill. Appropriate steps have been taken and will continue to be taken to ensure that our nation remains secure.

Lord Bradshaw: My Lords, will the Government consider including in the review of the incident by the Metropolitan Police the reasons that so many of London's streets and the railway line into Waterloo Station were closed for so long? As well as gaining publicity from hitting the building, there is no doubt

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that terrorists also draw great comfort from the disruption which is caused to the life of the capital by such incidents.

Baroness Scotland of Asthal: My Lords, security is very much an issue for the police. They took the steps which were appropriate at the time to make sure that the area was secure not only for their investigation but also so that members of the public were not put at risk. That must be their first priority. I respectfully suggest that everything done on that day was done in the most appropriate and convenient manner.

Millennium Dome

3.3 p.m.

Lord Falconer of Thoroton: My Lords, following events in connection with the Dome over the Summer Recess, I should like to update the House on the developments that have taken place since the House last met.

This Government acknowledge that the Millennium Experience has not been the success that the majority of this House had hoped for. The project was too ambitious given the time constraints of design and build and the one year only operation. The target of 12 million visitors was too ambitious; and it was not appropriate for the public sector to manage a large visitor attraction.

However, this should not distract us from what has been achieved. The Dome is the number one pay-to-visit attraction in the UK, with over 4.6 million visits so far, and number two in Europe--with visitor satisfaction ratings among the industry's highest.

The Dome has been the catalyst for the regeneration of the Greenwich peninsula--one of the Commission's main objectives in its proposal for a Millennium Exhibition. The Greenwich peninsula is now beginning to flourish, with a variety of new developments, community facilities and fresh ideas creating an exciting new urban quarter for London.

The benefits have been felt right across the United Kingdom. Over £300 million worth of construction contracts have been awarded to UK companies; 13,000 employees have gained work in construction and operation of projects on the Greenwich peninsula; and there has been a substantial boost to the UK economy from foreign visitors in 2000. This will benefit the whole country.

There is still a great deal of work to done to secure the achievements of the Millennium Experience project and to secure a long-term future. I am determined to see this project through and secure those benefits.

Despite the setbacks of recent months the workforce remains committed to the project and proud of its achievements. Visitor numbers are encouraging, with around 48,000 people visiting the Dome last weekend.

I can assure the House that there are lessons to be learnt; and we are aware of the lessons to be learnt. However, we cannot put the clock back, and we are

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where we are. The project is three months from its conclusion and there are still vital tasks to be accomplished: making sure that those 283,000 people, including school parties, who have already booked tickets for the Dome and the many thousands whom we expect to visit in the run up to Christmas and the New Year get the day at the Dome to which they have been looking forward; making sure that all those employed directly and indirectly are able to see out their contracts; making sure that the contracts with the sponsors and exhibitors are honoured; in essence, to avoid insolvent liquidation which would be much more costly and damaging than trading until the end of the year; and securing a long-term future for the Dome, which continues to maximise the regeneration benefit to Greenwich, the wider Thames Gateway and London as a whole.

We recognise the disappointments of the project and of the summer. It is important that I now update the House in detail. First, as regards the appointment of David James, on 5th August the Millennium Commission agreed to provide a further grant to the company of £43 million, drawn forward from the expected £53 million receipt from the sale of the Dome to Nomura.

The then chairman of NMEC, David Quarmby, with the support of the board, in consultation with the Millennium Commission, concluded that NMEC required additional corporate financial expertise and that this was required at executive chairman level. Mr Quarmby therefore approached PricewaterhouseCoopers Corporate Recovery Group to carry out an independent financial review of NMEC's finances and also to suggest potential candidates for the post of executive chairman. Mr Quarmby approached David James in early August and he worked on a fee free consultancy basis with the NMEC team and PWC during the review of the company's finances. The report was presented to the board of the company on 22nd August. I have requested PWC's approval to place copies of this technical corporate finance report in the Libraries of both Houses. NMEC appointed David James as executive chairman on 5th September. He has taken on this role on a non-fee basis.

The report indicated that, in order for the company to meet its liabilities, to continue trading until the end of the year and to achieve an orderly wind-down, a further £47 million was required on top of the £43 million advanced in July. (A major reason for the additional grant was the failure of the company to assess its wind-down costs). The report further indicated that, should the Millennium Commission not provide the £47 million, the company would have to cease trading immediately. Insolvent liquidation of the company would have resulted in the immediate loss of up to 5,000 jobs for people directly and indirectly employed at the Dome; creditors would go unpaid; small businesses would suffer; and tens of thousands of visitors and many schools with pre-booked tickets would be disappointed. The PWC report considers in detail whether it would be cheaper

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to close earlier than 31st December. It concluded unambiguously that it would be more expensive to close early than to continue until 31st December. This is because the expenditure saved would not be as high as the revenue lost and the likely claims which would be made in the event of earlier closure. The report indicated that if the company were to honour its obligations then it would be cheaper by some £30 million to £40 million to trade until the end of the year than to close early.

The report also indicates shortcomings in the financial controls in the company. On 22nd August, immediate changes in the executive management of the company were made. David James was appointed executive chairman of the company and John Darlington was appointed as finance director and steps were taken to support them. Overall, the budget is exceeded by only 4.6 per cent. While controls are vital, one should not lose sight of the extent of the overspend.

In evidence to the Select Committee on Culture, Media and Sport on 17th July, and in a Written Answer that I gave in the House on 27th July, I stated that NMEC was trading solvently. I gave those answers on the basis of the views of the company, which has had the benefit of independent legal and accounting advice throughout the year. The PWC report revealed the need for further grant from the Millennium Commission. That was obtained by the company as soon as possible after the shortfall became apparent, thereby rectifying the situation. The answers that I gave on 17th and 27th July obviously did not contain the material subsequently revealed in the PWC report because I did not know it. I have taken the first opportunity to put the record straight in the House.

The events that have evolved over the summer and the additional information that has come to light following the PWC report are, of course, very disappointing, but I trust that noble Lords will agree that the Millennium Commission and the Government have taken the only sensible course of action available to them, consistent with minimising further financial costs and preserving the many benefits that are accruing from the project.

On 11th September, Nomura withdrew from the legacy competition. Subsequently, the Millennium Commission reaffirmed its commitment to the project following Nomura's decision to withdraw. The claims made by Mr Guy Hands of Nomura in his letter of 11th September to the competition director, withdrawing from the competition, have been refuted by Mr David James, NMEC's executive chairman. I am placing a copy of that correspondence in the Libraries of both Houses.

I can confirm that the Government are in discussions with Legacy plc regarding the sale of the Millennium Dome. Legacy plc was the second shortlisted bidder in the competition previously established for the future of the Millennium Dome. Subject to satisfactory progress, Legacy plc could be granted preferred bidder status within approximately one month.

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The Government are also exploring other options for keeping the Dome in parallel with the Legacy plc discussions, but we are not soliciting offers, nor are we in serious negotiation with any other party. I assure noble Lords that the Government remain committed to a long-term future for the Dome.

It was important that Parliament had the true position as soon as possible after I became aware of the true facts. I shall not attempt in this statement to give noble Lords a detailed breakdown of the budget at the beginning of the year and the budget as it now stands. However, I shall place details in the Libraries of both Houses as soon as possible. I can confirm that the current budget is based on 4.5 million paying visitors. As I have already said, we recognise that the original estimate of 12 million was far too optimistic. However, the company has continually revised its visitor target as it has become informed by actual attendance figures. The Millennium Experience has not been as successful as we had hoped and the impact of the drop in visitor numbers and the resulting downturn in revenue has been by far the most significant pressure on NMEC's budget. The enhanced management team is focused on successful trading until the end of the year.

Since May 1997, the Government have answered over 1,100 Parliamentary Questions; there have been numerous debates in this House and the other place and there have been five Select Committee inquiries on the subject, to which the shareholder has always given evidence, as have other Ministers. The government response to the Select Committee report published in July will be published on 23rd October, when the other place returns. Scrutiny has been rigorous and will continue to be so, as is right for a project of such a scale.

In addition, the National Audit Office investigation is progressing. I hope that noble Lords agree that the current investigations should be completed and the PAC's findings published before any judgments are made.

As I have said on many occasions, I am determined to see the project through to the end. The enhanced management team is focused on making the project work until the end of the year and ensuring an orderly wind-down of the business. That is our objective, which I remain committed to seeing through.

3.13 p.m.

Baroness Anelay of St Johns: My Lords, I welcome the fact that the Minister has been prepared to come to the House to make a Statement today, but does he understand that his account of what he refers to as the disappointments--I stress that word--of the summer comes far too late to meet the widespread public anger about how the Government have bungled the handling of the Dome project? It was new Labour's flagship project.

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