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Noble Lords: No.

Baroness Anelay of St Johns: My Lords, I notice that the word "new" seems to have been dropped from

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most of the hoardings at the Labour Party conference this week, but the project was Labour's reflection of new Britain. It was a project on which they said that their competence could be judged. Today the Minister asks the jury to wait a little longer before returning its verdict. Is it not a fact that the jury has long since returned its verdict and the judgment on his management of the project is that he has failed utterly?

Financial monitoring has been negligent. Although the Minister has told the House that he saw the Dome company's papers and was getting weekly trading figures on his desk--indeed, that he attended board meetings and has been in constant contact--nobody even knew what the assets of the company were. It missed its trading targets by millions and millions of visitors--targets that were set and agreed by this Government after a thorough review of the circumstances surrounding the Dome project. They were agreed by the Cabinet in June 1997.

This summer, the Dome has been shown to have been trading insolvently. I welcome the Minister's comment today that he has approached PricewaterhouseCoopers and asked for permission for its report to be placed in the Libraries of both Houses. Many of us have already read most of it, because it was posted on a website by the Sunday Times recently. Will the report that the Minister publishes include the missing section on page 39, headed "Implications for Directors", which includes shadow directors?

The Minister has referred to the fact that one rescue deal has collapsed--the deal that he told the House on 27th July had secured the future of the Dome. In his Statement he referred to the fact that on 5th August the Millennium Commission agreed to provide a further £43 million, which was drawn down out of the £53 million receipts expected from the sale of the Dome. What happens now? The Millennium Commission gave out money to be received from a sale that we are now told will not take place. What is the position with regard to that £43 million that has been handed over?

There has been contractual chaos throughout and two chairmen of the company have been sacked along the way. The project has been a fiasco, but the sole shareholder--the Minister--sails blithely on. When will he accept his responsibility and go?

When the Minister told me on 27th July that the Dome company was trading solvently, I trusted him, as I had always trusted him. Today, when he read the Statement, he said that he gave me that answer on the basis of the views of the company. I expected better than that from a Minister whose duty it is to carry out a thorough review of the spending of the public's lottery money--now £629 million of it. As a Minister, did he receive independent advice? If not, why not?

When did the Minister first notice that the Dome company had failed to do something as basic as construct an asset register? When did he notice for the first time that it had offered open-ended contracts without any fixed liability, so that certain contracts

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could not be cancelled without the possibility of vast sums being incurred in compensation? When did he first notice that the company had failed to calculate the simple costs of closing the exhibition? As sole shareholder, it was his responsibility alone to safeguard the use of the public's money. After all, if such a huge project had been in the hands of the private sector and had been so spectacularly mishandled, one thing is certain: the person in charge would have gone long ago.

The noble and learned Lord is well respected in this House. He has been and still is a popular figure when he comes into this Chamber. Many people suspect that he is acting as a type of air raid shelter for the Prime Minister and other leading members of this Government who made the decisions early on and who have driven the project from day one.

Can the Minister say whether he has ever offered his resignation to the Prime Minister and, if so, whether it has been refused? Of course, it may be an honourable position to stand by your friends. However, will he accept that it would be far more honourable and add to the respect in which he is held if he now accepted ministerial responsibility for what his colleague, Clare Short, has called the "disaster" of the Dome and lay down the office that he currently holds?

3.20 p.m.

Lord Harris of Greenwich: My Lords, I am grateful to the noble and learned Lord for having taken this step as soon as the House was recalled. I believe that the one thing on which we can probably all agree is that today we are talking about a fine old mess. I understand that we shall soon have the benefit of a debate on this issue. Therefore, today I want to make only a few preliminary observations.

I want to put one specific point to the noble and learned Lord concerning Nomura. Apparently, Nomura claims to have asked for detailed figures. It claims that it was not given those figures. I find that extremely puzzling, so perhaps the Minister can explain why that was so.

I do not propose to become involved in a finger-pointing exercise about who has the major responsibility for the problem that we are discussing today. Speaking as an individual, I cannot pretend that I was unduly enthusiastic about the Dome when it was first announced by the previous Conservative government. However, once the project had also been backed by the new government, I, with many others, I am sure, hoped that it would prove to be a success.

Unfortunately, others were just as determined that it should be a failure. We have only to study the speech of the former Deputy Prime Minister, Mr Michael Heseltine, delivered in the House of Commons on

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21st February this year, to see the difficulties that he and the former government encountered as a result of the hostility of a number of tabloid and other newspapers.

Noble Lords: Oh!

Lord Harris of Greenwich: My Lords, I am surprised that the Conservative Party is demonstrating doubts on that matter. I am referring to what the former Conservative Deputy Prime Minister said.

Although it would be sheer humbug for me to pretend that I was one of Mr Heseltine's most passionate admirers when he was a Minister of the government in which so many Members of the Opposition Front Bench in this House served, I always considered that his record in Liverpool and subsequently in Docklands was absolutely first class. The Docklands project is one of the most impressive developments in Europe. For that, Mr Heseltine deserves enormous personal credit. As he said, the 300 acres of dereliction and contamination, now known as the Dome site on the other side of the river, now represent an area of huge potential. It has made a major contribution to the economy of south-east London and to its infrastructure.

Therefore, it is very sad that we have arrived at the situation that we have today and that we must recognise the failure--indeed, the substantial failure--of the Dome project. Some of the errors are now fairly obvious. Estimates for the number of visitors were wildly optimistic; and there was something even more fundamental. It would have been far better if from the start Ministers had kept an arm's length relationship with the project. However, that was not done. I believe it was a serious mistake.

To some extent at least, I can understand why Ministers were so deeply involved. The previous Conservative government decided that they had to raise approximately £150 million from private sector sponsors. At that time, the government were in an extraordinarily weak political position. Therefore, they decided that they simply had to have clearly defined backing for the project from the then opposition. As Mr Heseltine reminded us recently, it was,

    "an all-party concept".--[Official Report, Commons, 21/2/00; col 1317.]

That approach has been perhaps not quite so obvious this afternoon.

I believe that that is only one of the reasons why Ministers became directly involved in the project. It would have been far better to have had a public body of the kind established by Herbert Morrison with, of course, significant private sector representation but with no Ministers of the Crown directly involved.

As I said, we understand that we shall return to this issue within the next few weeks. I hope that on that occasion we shall do our best to limit the kind of rancorous exchanges that do so little to enhance the reputation of British politicians. Serious and, indeed,

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grave errors have been made by a significant number of people over the Dome, but to try to pin responsibility on a single individual is absurd.

3.26 p.m.

Lord Falconer of Thoroton: My Lords, I deal, first, with what the noble Baroness, Lady Anelay, said. Have we bungled our handling of the issue and has the financial monitoring been inadequate? As was touched on by the noble Lord, Lord Harris, this scheme was conceived on a cross-party basis. The Millennium Commission supported and promoted it. It was conceived as a way of celebrating the millennium and regenerating that part of the United Kingdom. When we came to power, we examined the scheme and decided to support it. We took the view that it was right to give the project a real chance because the benefits to be obtained for the standing of the country and for that part of the United Kingdom were substantial.

I am sure that everyone, including the Millennium Commission, recognised that a risk was involved. In very many respects that risk has not paid off and we are paying for it now. However, I believe that it is wrong for people suddenly to say, "Oh, it was obvious right from the start that you shouldn't have taken that risk". I believe that it was a risk worth taking and that it was an honourable risk.

So far as concerns the management, we supported a scheme which involved the setting up of a private limited company with one shareholder; namely, someone who represented the Government. That position was filled first by a number of Conservative Ministers, then by Mr Peter Mandelson and then by myself. The aim was to ensure that the shareholder would be accountable to Parliament but the company would run the operation. That had never been tried before. To the people who conceived it, it appeared to be a good idea. Further examination will reveal whether or not it was. However, as the noble Lord, Lord Harris, pointed out, such a scheme gives rise to very real difficulties as to precisely where the line is drawn in the relationship between, on the one hand, operational management and, on the other, accountability to Parliament.

So far as concerns accountability to Parliament, the one matter of which I am absolutely sure is that I should rely on the professional advice given to the company. I should let the board of directors make the commercial decisions and I should not start to interfere in operational decisions. The one thing that is clear--and that was clear right from the outset--is that a visitor attraction cannot be run from Whitehall.

I am surprised by the suggestions of the noble Baroness, Lady Anelay, that I was not being full and frank in relation to what I said either today or on 12th or 27th July. So far as concerns 12th and 27th July, the views of the board were based on advice which it had received from lawyers and independent accountants. I did not believe that it was my duty to go into the detail to that extent. I was entitled to rely on the advice which

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was being received. Of course, what has happened is disappointing but we must look at the overall picture to see why it went wrong rather than simply focusing on particular matters.

The noble Baroness asked me about the PWC report. In the past few days, we have asked what is the position in relation to that. We have not yet got to the bottom of what permissions we require to place the PWC report in the Libraries of both Houses. We shall deal with that as quickly as possible in the hope that the whole of the report, not just those parts which are on the Sunday Times website, is placed in the Library.

Thirdly, the noble Baroness asked me about the £43 million. She is absolutely right that the Millennium Commission's grant of £43 million--the one at the beginning of August, not the second one--was posited on the basis that the Nomura deal would go ahead and all that £43 million would be repaid. The moment it became clear that that was not the position, the company went back to the Millennium Commission which indicated that it was content to continue with that advance, even though the Nomura deal had fallen through. Of course, if there is a subsequent deal, the matter will be brought straight back to the Millennium Commission for further discussions.

I have dealt with questions about 17th and 27th July. The noble Baroness asked me when I became aware that there was no basic asset register. I did not become aware of it until Nomura mentioned it. She asked when I became aware that there were open-ended contractual liabilities. I am not clear to which particular contracts the noble Baroness refers. The PWC report refers to a particular number of contracts where they may be claims and figures have been put in relation to that.

She asked when I became aware of the total costs of closing. I assume that she means the liabilities after the experience has ceased to operate for the public. They were first identified in full by Pricewaterhouse. That was when I first became aware of them.

The noble Baroness referred to my position. I recognise that I am the Minister responsible for the Millennium Dome. I conceive my responsibility in relation to it to be to see it through to the end. In the context of the Millennium Dome, I am talking about procuring a legacy for it and protecting the rights of the people who have dealt with and worked at the Dome. Those interests and the interests of the public purse are best served by somebody staying on to the end. Mr David James, who is now the executive chairman of the company, has expressed the same view.

I have covered most of the issues raised by the noble Lord, Lord Harris. He referred to a debate in this House. It is not for me to say whether or not there should be a debate in this House. I say only that the appropriate time for a debate is after the National Audit Office and the PAC reports are available, which I understand will be some time in October and

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November when the matter can be debated in full. Whether or not and when that debate takes place is a matter for the usual channels.

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