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Lord Falconer of Thoroton: My Lords, before the noble Lord sits down, he opened his remarks by a rather unfair reference to a lack of focus on the Thames. Does he agree that various offshoots of the Millennium Commission or the Lottery Fund have regenerated Somerset House, the Globe, Bankside, Southwark Cathedral, the "Wobbly Bridge" and Hungerford Bridge all in the course of this year? Many millions have been spent in enhancing those buildings on the Thames.

Lord Marlesford: My Lords, I am happy to agree in relation to Somerset House and many of the other fine buildings. But we should be doing much more. I am complaining that this Government, above all governments--rather like the failure of Melina Mercouri, the Greek Minister for Culture, who allowed so many awful things to happen in Greece--to protect the Thames and make full use of it throughout its length in London. That is my complaint.

6.47 p.m.

Lord Grabiner: My Lords, as has been said by a number of noble Lords, hindsight is a useful forensic tool. Indeed, the noble Lord, Lord Sharman, made a distinguished professional career almost exclusively based upon making himself an expert on the subject. It enables the investigator, with the benefit of perfect

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vision, to examine the relevant sequence of events and then to provide an expert opinion as to what went wrong.

In relation to the Dome, hindsight has taught us a number of important lessons. First, the successes of the Great Exhibition of 1851 and the Festival of Britain of 1951 were entirely irrelevant precedents. In those days there was no competition for a pay-to-visit attraction. Today the public have extremely sophisticated requirements.

People have been to Disney in Paris, Florida and California. If they want to, and I have no doubt a number of noble Lords have done so and will continue to do so on a daily basis, they can play console games such as Nintendo 64 and Playstation. They can play Internet games with limitless numbers of players or opponents. That is the reason why it has proved so difficult to create the so-called "Wow!" factor; or the notion in the minds of the public that the Dome is a "must-see" attraction.

Secondly--and on this point I entirely agree with what was said by the noble Lord, Lord Sharman--we now know for sure that if the private sector will not touch a proposition, then it should not be touched by governments with a barge pole. Certainly, they would be well advised to tread with great caution.

In the case of the Dome, it was plain as early as June 1996 that the private sector would not accept the risks. Nevertheless, in January 1997 the then Conservative government decided to deliver the project in the public sector using the vehicle of a limited liability company whose sole shareholder would be a government Minister accountable to Parliament. I am confident that we shall never see such an absurd and (to borrow the noble Lord's expression) Byzantine structure again.

Thirdly, this is not a case of serious miscalculation on the expenditure side. The current forecast is that expenditure will be about 5 per cent over budget. The real problem is that all the sums and the key decision to award a lottery grant of £449 million in 1997 were done, or made, on the basis of 12 million visitors to the Dome in the year 2000. We now know that the actual figure will be about 6 million. It is the shortfall in visitor numbers which has given rise to the problem.

I should like to deal with the target of 12 million. The facts are that in January 1997 the Millennium Commission adopted a plan with a visitor target of 10 million. In May 1997, just five months later, the New Millennium Experience Company produced a business plan which assumed that there would be 12 million visitors and that the budget would balance with about 11 million visitors. The commission promptly asked Deloitte & Touche Consulting Group to review the figures which had been forecast by the company. It concluded that 12 million was at the upper end of the range and, as the noble Lord, Lord Sharman, rightly pointed out, that the worst case scenario was 8 million. The noble Lord did not refer to that figure specifically, but that was the range anticipated by the experts. In the event, the company

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stood by its target of 12 million. That was the basis of the business plan and budget which were duly approved by the commissioners. With hindsight, we know that there were not enough visitors, which turned out to be the critical point.

The Dome is the most successful pay-to-visit attraction that we have ever had. It has easily beaten the previous record set in 1999 by Alton Towers. Further, in exit polls the overwhelming majority of visitors said that it was a satisfactory experience. Mr Gore may have his own views about exit polls, but that is another matter.

There are one or two other aspects of the story which need to be emphasised because they are of importance in arriving at an overall judgment about the whole episode. First, the site at Greenwich was selected as long ago as March 1996. The choice of Greenwich was in part driven by its historic association with time. It was also chosen because it was recognised as an area badly in need of economic regeneration. It had previously been the site of a gasworks: it was derelict and contaminated. The strategic objective of the commission was the regeneration of the whole of what became known as the Greenwich peninsula.

The site was duly purchased for £20 million in February 1997 and the structure was completed in February 1999. I have seen figures to suggest that over the next seven years approximately 30,000 new jobs will be created as a direct result of the Dome project. Perhaps when he comes to reply my noble and learned friend Lord Falconer can confirm the accuracy of that prediction and tell us something about it. I believe that the regeneration of Greenwich and the new jobs represent real social gains with which we should all be pleased.

I should like to comment on the involvement of my noble and learned friend Lord Falconer. My noble and learned friend has been the target of some criticism by the noble Lord, Lord Crickhowell, who I note is not in his place. My noble and learned friend became the shareholder in January 1999. He specifically did not have responsibility for the day-to-day management of the Dome, and paragraph 26b of the report of the National Audit Office is to that effect.

There are two important sentences in the report of the Comptroller and Auditor General which bear directly on this part of the story. The first is as follows:

    "19. Once the Dome had been constructed and much of the project cost already incurred, the room for manoeuvre in the face of low visitor numbers was very restricted".

The second states:

    "20. As the financial situation deteriorated the only options, short of closing the Dome and liquidating the company, which in the light of knowledge about the company's commitments would not have made financial sense during the year of operation, were to rely on receipts from the planned sale of the Dome and further grant from the commission".

Next, reference has been made to solvency. I leave aside the technical point that my noble and learned friend was not a director but shareholder and so had no day-to-day responsibilities for the affairs of the company. However, on four occasions in the course of

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this year additional awards totalling £179 million were made by the commission to support the project. The accounts were regularly and independently audited, insolvency practitioners were retained and the commission's own auditors were sent into the company. My noble and learned friend was at all times in receipt of advice from outside professionals. I believe that he was perfectly entitled to conclude that the money would be forthcoming, and it was. I also note that no criticism is made of my noble and learned friend in the report of the Comptroller and Auditor General.

What emerges from all of this? I believe that I can summarise it in three short propositions. First, it should be borne in mind that we now have the benefit of hindsight. It is very easy to be judgmental after the event, especially when the critical events cover a very short and fast-moving period of time, as was the case here. Secondly, this was a cross-party initiative and attempts to point the finger at my noble and learned friend in order to make him a scapegoat are entirely misguided and utterly unfair. Thirdly, the report of the National Audit Office makes it quite plain that by the time my noble and learned friend became the shareholder in January 1999 the die was cast and there was little or nothing that he could have done about it.

6.58 p.m.

Baroness Greengross: My Lords, we must all acknowledge that there have been failures and disappointments with regard to the Dome. Certainly, the Dome has not met our very high expectations, some of which may have been unrealistic in terms of visitor numbers. That was a mistake. I should like to underline the importance of regeneration, to which several noble Lords have already referred. We are all aware of the dire consequences of urban decay and neglect and what happens to very unfortunate members of society who live in such areas. We have already heard about the number of jobs which have already been created and are predicted. For once, we got the infrastructure right with the introduction of a very good transport system that will be of immense benefit to the whole of London and beyond.

There are other important points about the site. The site provides excellent access for disabled and older people. Such access has been neglected in the past. The Dome also provides a very good example of what may be called customer care. The mainly young people looking after visitors to the Dome have been exceptionally good at caring for people who are sometimes marginalised. I hope the future will provide opportunities for many of those marginalised people to benefit from the experience and that new avenues of employment and entrepreunership will include them in the future business park and development site. It is terribly important that they are included. In IT development it is especially important that the over-fifties and disabled people are targeted to benefit from the development.

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The opportunities that are available, and will become more available as the years go by, would not have existed without the decision to go ahead with the Dome.

7.1 p.m.

Lord Lea of Crondall: My Lords, two years ago the TUC--of which I was then an official--decided to join with Tesco's and others in the creation of the learning zone. The TUC has no hesitation in saying that it is very glad to have been involved.

Three main points have emerged from the debate. First, April and May 1997 was just about the worst time to have received a carefully considered answer to the strategic question. But that is how the cards were dealt. Secondly, it is clear that the National Audit Office is far from lending support to the idea that the Government should have pulled the plug on the Dome half-way through the year. My noble and learned friend in paragraph 20 stated:

    "Closing the Dome and liquidating the company would not have made financial sense during the year of operation".

Some of us who have not been the greatest enthusiasts for the Dome and all its works have concluded that the attacks on the handling of it in recent months--in particular on the actions of my noble and learned friend the Minister--have been way over the top.

The third point is to refute the fallacy that 12 million as a visitor plan assumption is a recent act of madness. Even today we have heard the noble Lord, Lord Crickhowell, saying that, with the logic of hindsight, the figure is four times higher than any other visitor attraction, as if any fool could have seen that the figure of 12 million was wrong. But, going back to April 1997, if that figure was then a "tent of fools", we were all of us in the same tent.

Talking of tents--big tents in particular--it is the Labour Party which has found itself occupying this big tent, but it does not mean that the Conservative Party would not have happily occupied it themselves. Indeed, at the present time I suggest that if the Conservative Party could find any big tent to get into they would be in it like a flash.

It is a well-known phenomenon to all noble Lords who have tried to run a village fete when not enough people have turned up and one has spent £400 to hire the marquee. Many people around the country can identify rather precisely with this situation at a number of levels. The British people will not have much difficulty in seeing that there is an upside to the matter. The local village fete does not give one the immense spin-offs that we are now realising will come out of this.

Let us go back to the beginning, to Michael Heseltine. He was the one who supported--I come from the north of England originally--the idea that Liverpool and many other places should have a regeneration idea on which to work. It is very important that they do. I should be happy on a different occasion to argue--I have argued this before--that there is a regional question here. Let us stick to the Thames gateway for a moment. It was

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Michael Heseltine's imagination that led to the London Docklands Development Corporation and the emerging new reality of the Thames gateway for the whole of the estuarial area. We must give credit where it is due.

Perhaps I may also say in a non-partisan spirit that some of the Labour local authorities in east London, and to some extent in south London at that time, were rather parochial in not accepting the need for strategic growth points in the whole of east London. We need strategic growth points in London. The same argument would apply with west London, if Brent, or some area like it, could pose itself as an alternative to the Heathrow airport economy for the west London corridor.

The aim of the project partners, with the full backing of the Government, has been to ensure that the regeneration of the peninsula delivers a high quality environment that is suited to people's needs and which is innovative and sustainable, both environmentally and commercially. Construction contracts worth £300 million have been awarded as a result of the Dome. The vast majority of those have been to UK companies: 13,000 employees have gained work in construction and the operation of projects on the Greenwich peninsula. There has been a boost to the UK economy which has benefited the whole country.

The transport strategy has been very important. The transport access to the Dome is a model of integrated public transport. These days that is something that is not often said. It provides access to the Dome via a variety of public transport. The North Greenwich Underground station adjacent to the Dome--one of nine new stations on the new Jubilee Line extension--has not only encouraged the use of public transport to the Dome but also provides a major boost for east London as a whole. There is the Millennium transit link which was constructed to take state of the art guided buses from Charlton and Greenwich mainline railway stations to the Dome. Finally, there is the new £2 million pier to the east of the Dome, helping to bring the Thames back to life and become one of London's main transport arteries again. There has also been the construction of a river walk and cycle way right the way around the peninsula which links into the existing river walkway and the expanding national network for cyclists.

We can look forward with confidence. We can look to the news, which we hope will come to fruition, that Legacy plc is at an advanced stage of negotiation. We can look to an exciting future for the Dome, with £1 billion investment expected in the area as a whole. That will further change the mindset. That is why public investments are not the same as private sector economics. We have changed the whole mindset towards the Thames gateway. That is not something one can measure on a narrow private sector accountancy approach. I see that the noble Lord, Lord Sharman, is nodding in agreement.

Just as when we rescued Canary Wharf--I say "we" because it was the public sector, through the diversion of the London Transport investment plan towards

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building the extension of the Jubilee Line in preference to CrossRail, which had the greater return--I predict that north Greenwich too will join Canary Wharf as a £400 million jewel in the Thames gateway corridor.

7.9 p.m.

Baroness McIntosh of Hudnall: My Lords, I intend to keep my remarks brief not least because, at this stage in the debate when so much of substance has been said, it is difficult to avoid the possibility of repetition. I hope I will be forgiven if some of what I say has already been said by other noble Lords.

From its inception, the Dome was always liable to be controversial because new and interesting things very often are, as my noble friend Lord Puttnam eloquently pointed out. The Government have, as is proper, accepted responsibility for what has been by common consent a complex and difficult project. My noble and learned friend the Minister is the man left holding the parcel when the music stops. That is usually a winning position, but I hope he will not mind if I suggest that on this occasion it has been something of a mixed blessing. Let us not forget that there were a number of others in this game when it began back in 1996 and decisions taken then are still reverberating.

Unlike other noble Lords, I can claim no expertise in project management on this scale. But I do know a little about the entertainment industry and from that perspective I want to make two points about, as it were, putting on a show. First, making an accurate and robust assessment of the likely capital costs of a major creative enterprise is exceptionally difficult. I spend a good deal of my life trying to do that in a small way. Getting the project within 5 per cent of original estimates and on time, as has been achieved with the Dome, is fairly sharp shooting, as any producer of a big West End musical will testify.

Secondly, a great deal has been made in the press and in the House of the fact that 12 million visitors were predicted and only 5 million will have been. Five million sounds like a hell of a lot to me. I am sure that I would be grateful for that number of visitors. The most vexed issue with regard to putting on any entertainment, regardless of the kind and scale of that entertainment, is whether anyone will come. Almost everyone in the theatre business would admit to having occasionally miscalculated--sometimes quite significantly--the likely appeal of something which they believed on quite reasonable grounds would be popular. Initial estimates of potential visitor numbers to the Dome were clearly optimistic, but they were not imprudently so, as my noble friend Lord Lea of Crondall pointed out.

The implication lurking behind a good deal of the discussion on this issue--that any fool could have predicted that 12 million was an unachievable target and that no one in his right mind could have imagined that 12 million people would want to see what the Dome had to offer--is misguided. It is really not that simple. An audience of any kind for any event is a strange and recalcitrant beast, as I know to my cost. It sometimes resists what it has liked before and often goes where no one has tried to lead it. The gift of

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discerning accurately in advance what will please is given only intermittently even to the most successful of cultural entrepreneurs. The fact that well over 5 million people, many of them young, will have been to the Dome by the end of the year is a major achievement, particularly in view of the relentless negativity of the press comment about the Dome. The great majority of those who go like what they see. That is a lot of satisfied customers, something of which everyone concerned should be proud.

Finally, I join those who have already called attention to the remarkable qualities of the building itself. It is architecturally and aesthetically innovative and very beautiful, particularly at night. In fact, it is beautiful at all times of the day. It makes a distinguished and distinctive contribution to our urban landscape and it has brought in its wake the regeneration of a formerly blighted tract of land. I hope we can agree that at the very least the vision it represents and the courage of those of all persuasions who backed it deserve to be celebrated and built upon.

7.14 p.m.

Lord Trefgarne: My Lords, like many noble Lords, I came to the debate with a considerable degree of sympathy for the position of the noble and learned Lord, Lord Falconer. Many of us have been in the position of receiving a constant barrage of criticism for some task that we have undertaken in public life. The noble and learned Lord said that he had been asked 1,100 parliamentary Questions on this matter. I remember receiving 650 parliamentary Questions on one defence procurement project from one Member of the other place, who is now a distinguished Member of your Lordships' House and sits on these Benches. Answering those Questions involved a great deal of work and I dare say that the noble and learned Lord has been similarly preoccupied.

However, I must confess that my sympathy for the noble and learned Lord began to evaporate as I listened to his speech, which, frankly, was a little OTT. The speech of the noble Lord, Lord Puttnam, was slightly in the same vein. Perhaps one point has been overlooked. Whatever may have been the inspiration behind the project--no doubt well intentioned inspiration--the plain fact is that public money was being used. Some people say that it was not public money; that it all came from the lottery and that is not public money. It is public money. It is subscribed by the public. I agree that a certain amount of corporate money was used to support some of the attractions inside the Dome, but basically it was a public money project. That is why the criticism has been so intense, and rightly so.

I intend to moderate my criticism on this matter and deal with just four points. First, the estimate of 12 million visitors was by any standards optimistic. When intervening towards the end of the speech of my noble friend Lord Crickhowell, the noble and learned Lord, Lord Falconer, said that the estimate came from the business plan of April 1997. That is not so.

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Paragraphs 1.30 and 1.31 of the NAO report state that the business plan was approved in the following month.

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