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Lord Lyell: My Lords, perhaps I may I continue. The figure was accepted by the noble and learned Lord with alacrity. Perhaps he had the number 15 jersey at Twickenham; or perhaps one of his predecessors accepted the figure. But the noble and learned Lord is a traditional lawyer; I am not. I leave the matter there.

I was somewhat scared when I found on page 52 of the National Audit Office report a note addressed to "Dear Charlie". I suddenly thought, "Good heavens, is that something I should have answered?" However, I was delighted to note that at the top left-hand corner of the page the letter is addressed to "Lord Falconer of Thoroton QC". My noble friend Lord Crickhowell pointed out that the third paragraph of the PWC report makes salutary reading. However, a slight bruising of my little toe was caused by page 53. The second sentence of the reply of the noble and learned Lord to the noble Earl, Lord Dalkeith, states,

This is nearly nine months into the year. I hope that I am not being impudent; it was perhaps at the end of a holiday season when matters in Whitehall tend to ease off somewhat. Perhaps the noble and learned Lord had other matters to consider. He made a fair statement in July. If the noble and learned Lord had used the word "startled" I might have understood but he says that he was "shocked" to receive the news. It seems odd that no one in his department had presented to him those serious figures relating to the budget. That startled me and caused me some amusement.

The noble Baroness, Lady Gibson, made a valid point, as did the noble Lord, Lord Harris of Haringey, with regard to London. It is excellent stuff; I enjoy it greatly. However, I travel about the furthest distance to this House. The Official Report of today's debate may go down well in the glens of Angus, Kirriemuir and Forfar. The reports I have received from those who have visited the Dome have not been too harsh. Nor have they been as glowing as those of that eminent institution in the north-west referred to by the noble Lord, Lord Dubs. I wonder whether the noble Baroness and the noble Lord, Lord Harris, are suffering from a case of what some call "BSE"--blame someone else. I hope that that statement is not over the top.

At paragraph 3.23 on page 44, noble Lords will note that in February 2000 the company reviewed its marketing approach, and so on. The original reason for setting the level of budget was,

    "that ticket sales would be driven by: massive free media exposure; word of mouth recommendation; [and] a traditional fascination with 'Expo'-style events".

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I am fascinated by paragraph 3.25. It states that the company considered that several factors had not helped the finances. First, there was,

    "negative media coverage which undermined people's confidence ...; word of mouth had not spread the message to the extent anticipated".

That is somewhat at variance with what the noble Baroness, Lady Gibson, said. It states thirdly that,

    "the Dome's content had not been explained",

and so on, and that,

    "there was a perception that travel costs were high and travel times long".

That was referred to by the noble Lord, Lord Jacobs. The report is from an austere, correct, middle-of-the-road organisation. It is not from the Conservative Party; it is not from this side of the House. I hope that I can align myself as a simple accountant. I do not think that all the people who have not visited can be wrong all of the time. That may be carping. It is in the past and perhaps should justifiably remain there.

The Minister may have much to say in winding up. Perhaps he will write to me. The word "May 1997" is written in large letters on page 71.

Lord Tomlinson: My Lords, if the noble Lord wishes to quote the whole of the report, perhaps he would like to cite the final paragraph on page 75. He has nearly reached it, but in case he missed it, it states:

    "It is unsatisfactory that procurement processes operated in October to December 1996 did not conform to those agreed with the Commission".

Lord Lyell: My Lords, I am a simple accountant. Perhaps we can discuss the matter at the bar. Perhaps I may finish my own speech. The issue to which I refer is on page 71. We have heard a great deal about a 5 per cent overrun. Can the noble and learned Lord explain this to me? In the business plan there was due to be a shortfall of £199 million. Is 5 per cent of that to be £10 million or thereabouts? How is that figure arrived at? What is this figure of 5 per cent over budget? I am not entirely clear.

I conclude--I am sure that that will give the noble and learned Lord much pleasure--that the contents of the Dome have not given entire satisfaction. Paragraphs 3.23 and 3.25 demonstrate that the contents of the Dome have not been entirely what the public wanted. I do not know whose fault it was. Perhaps the matter goes back to April 1997 or the year 1996.

I have taken two sets of visitors round your Lordships' House. They would have paid a great deal more to go round the House than the cost of entry to the Dome. One visitor was the wife of the head of the Australian army. The others were a bunch of "Miss World" people. They had never seen anything like it.

I have a great deal of sympathy for the noble and learned Lord but if he can be of help I shall be grateful.

Lord Grabiner: My Lords, I do not want to detain the noble Lord any longer, because we have already had 17 minutes from him. I apologise to the House, but

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I cannot resist asking him a question. He drew our attention to paragraph 2.52 of the report and appeared to criticise my noble and learned friend because one sentence in that paragraph says that it was estimated that the company might need an additional £45 million. The next paragraph says that an application was very promptly made for £53 million. Paragraph 2.58 records the fact that on 4th August, an additional grant of £43 million was made. I do not understand the force of any criticism that he may be seeking to make.

Lord Lyell: My Lords, I have said enough. My remarks rest.

8.20 p.m.

Lord Sawyer: My Lords, I have a simple point to make and I shall try to make it simply and briefly. I congratulate the previous Conservative government on having the vision and foresight to build the Dome. Their decision was right in principle and they were right to choose the Greenwich site, which will now fulfil its potential as an important and vibrant part of our capital city. They were right to make decisions about senior management and business planning. With hindsight, those decisions were not perfect, but they had vision and took us forward in the right direction. They were right to take decisions about lottery finance and to be bold about visitor projections.

The previous government took risks to achieve a big vision. Nothing of significance has been achieved on that scale in our history without risks being taken to achieve a big vision. My party was right to take the project forward in government. Yes, we should have changed course sooner on a number of aspects, such as visitor projections, management structures and financial control, but we were right in principle to keep going and to take forward the procedures that had been put in place by the previous government.

The politicians and the journalists who used the management failures to undermine public confidence in the project were wrong, not the people who chose to take it forward--and they were wrong in a major way. There is another side to the balance sheet or the story of the Dome, which has been ignored by most of those who have spoken--with one or two notable exceptions, such as my noble friend Lady Gibson--or distorted by the Conservatives. That is due to the under-representation in the Chamber of the millions of people who have had a damned good day at the Dome and will remember it for the rest of their lives.

The figures have already been given, but I do not mind repeating them, because repetition is a requirement for political success. The latest figures, produced by MORI between August and September, show that 88 per cent of visitors were satisfied with the Dome, 68 per cent thought that it was something that they should be proud of, 79 per cent would welcome a day at the Dome and 94 per cent enjoyed the millennium experience. Those figures should be on the record, along with the contributions made by the doubters, the managers and the accountants. The

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Dome debate has been dominated by cynical journalists, point-scoring Opposition politicians, accountants and businessmen. There needs to be a little balance. We should remember that most of those who went to the Dome loved it and enjoyed the experience. Their voices have been absent.

The trade union movement organised a day at the Dome--on May Day, understandably. Some 35,000 trade union members attended on 1st May this year. That is not quite the same audience that the noble Lord, Lord Jacobs, might find attending the Tate Modern. They were working class families from all over Britain who travelled by train and coach. Their comments are important and need to be on the record: John Churchill, "Excellent"; Carolyne Burten, "Fantastico"; Julie Underwood, "Excellent; better than was told"; Cameran Day, "At last"; Valerie no surname, "What a day"; Mary Whelan, "A wonderful day"; Annie Thompson, "Get better pens--hope York Health is better"--she must have worked in the National Health Service; Rosalind Alexander, "Keep up the good work"; June Thomas, "Super day--super way to get the message across. Well done".

Those voices and many more of them need to be on the record, so that when we come to pass our eminent verdict on the Dome, the people's verdict of, "Thank you and well done", is not forgotten. When the people's verdict is recorded, of course they will note the failures in leadership and financial management, but they will not condemn one person for those failures. They will rightly hold the negative attitudes of opposition politicians and all their journalistic courtiers responsible for much of what went wrong. I think that they will hope against hope that the next time that we need to mark a momentous occasion in our history, there might just be a possibility that the classes who govern, manage and comment on our affairs will for once pull together and make a success of something that the people love and enjoy.

8.26 p.m.

Baroness O'Cathain: My Lords, when I saw the speakers' list for the debate, I had a feeling that it was going to be a long, hard night with endless repetition and recrimination. There has not been too much repetition, but there has been quite a lot of recrimination, some of it misplaced.

If I am listened to at all in this place, may I make a plea that we try to get away from the insidious and demeaning blame culture that is so much a part of our civilisation nowadays? I am sorry that the noble Lord, Lord Puttnam, is not in his place, because I pay tribute to him for mentioning the same point.

The blame culture is one of the most disfiguring aspects of what we like to think of as civilised society. I have always thought that ever since, as a small child, I was told that the worst sentence in the English language was, "It broke". I am determined not to be a practitioner of the blame culture. Trading insults has never had any place in our House and I hope that it is not being introduced. I gently suggest that the Minister might think again about saying that the Tories have no

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financial sense and no honour and show gutless hypocrisy. I do not think that he really meant that. He is too honourable a man for that

The four aspects of the Dome that the debate is intended to focus on are its planning, management, operation and future. I shall try to stick to those headings and not talk about the great developments in Greenwich, including the widening of the local road, improvements in existing houses and the uprating of the skills of the local population. Such comments have been impressive and informative, but do not relate to the planning, management, operation and future of the Dome.

Looking at those four headings makes me realise that the Dome started with a huge disadvantage. That list contains all the rational, tactical processes of big businesses, but I suspect that it is not the normal tactical process list of governments. Can governments of whatever political persuasion produce experts in the planning, management and operation of a massive project? Almost certainly not. I know that the French have a successful record of grands projets, but France has a very different training and career structure in its public service. At the upper echelons of the French civil service are people who have been commercial engineers, financiers or marketing experts. That is not true in this country. The Minister has already acknowledged that by saying that the lesson that governments cannot manage such projects has been learned.

We all have the benefit of PhDs in hindsight. I guess that many people, besides those who have already mentioned it in your Lordships' House this evening, now say that such a large and complicated project should not have been driven primarily by the public sector.

When the project was first mooted, many were sceptical, particularly from a planning point of view, but I fear that scepticism is a national characteristic. As the project gained momentum, another problem emerged--one that most of those involved still do not want to talk about and one that I have never seen described in the endless acres of newsprint about the Dome.

The problem was the attitude of British business. British business was leaned upon in the most heavy-handed way to support the Dome. Both the previous government and this Government were determined that British business should play a major role in the financing of the content of the Dome. I looked on aghast when I saw the huge sums of money involved and felt that, in all conscience, shareholders' money was not going to be well spent.

For some of our huge global companies and our big and prosperous national companies the monies involved were not a large part of their profits. However, the pressure applied was something else. A hundred and sixty million pounds of sponsorship was given grudgingly and thousands of man-hours of senior management time were wasted in trying to justify the amount of money spent by interfering in the

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content decisions. At a rough estimate, I believe that the cost to British business was probably at least £200 million.

Why was British business so gullible? I believe it is a fact that business has always been closer to the Conservative Party than to the Labour Party. There were some difficult moments when in May 1997 business began to realise that it had few friends among the politicians who were now in power. That, of course, is a generalisation. But every business needs to have good relationships with those close to the policymakers, if only to have a "way in" to ensure that it can get its message across. Requests to stump up large sums of money to sponsor the Dome were gulped at but acceded to. I firmly believe that an amount of arm-twisting went on. That was not good enough but it was not resisted.

My personal view of all that is that not enough thought was given by business to the requests. Business should have realised that the attendance figures could never materialise at the high entrance price. The Dome never had more than four times the pulling power of Alton Towers. Therefore, business should been much more forthcoming in saying, "We don't think you'll make it and therefore we could not justify £160 million plus masses of senior management time just to put our name before 4.6 million people". I am taking the noble and learned Lord's figures of 5.6 million, less the one million schoolchildren. However, businesses wanted to curry favour. They were seduced.

Perhaps I may ask the Minister a question. Whatever happened to the great fund-raising abilities of IMG? Did it get paid handsomely for its efforts? As I recall, we had quite a skirmish on the Floor of this House when the announcement about the IMG involvement was made, but there has been no mention of it since. I fear that the Government must have been encouraged by the monies pouring in from big business. They probably believed that a huge wave of enthusiasm was being generated for the Dome. As a result, they went on planning blithely. That was obviously a mistake.

The second issue in the wording of the title of this debate is "operation". The operation of the Dome is a completely different area, and I am absolutely sure that all involved did their level best with great enthusiasm. However, the marketing of the Dome left a lot to be desired. The noble Lord, Lord Sharman, has already referred to that. I simply wonder when large companies will resist the urge to become famous TV stars by allowing fly-on-the-wall documentaries to be made about their organisation. One has only to think of the harm done to the Royal Opera House and St Paul's Cathedral. The fly-on-the-wall documentary about the Dome was not good news. It must have put off very many people and contributed to the "anti" feeling that abounded right from the opening of the place. I wonder where the marketing director was when that decision was made. I hope that he is not still in place.

Those points have not been aired. Both may seem inconsequential but they did nothing to endear the project to potential visitors. Perhaps I may remind

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your Lordships that responsibility for both those actions does not lie at the feet of the Minister. They happened long before the Dome opened and before he loyally took on the job that none of us would have wanted.

Many contributors this evening have concentrated on the subject of finance. I shall not add to the points already made.

The fourth area to be debated relates to the future of the Dome. I cannot understand how any of us has the vision to say that this, that or the other should happen. I only hope that whatever happens, it will be successful. By the law of averages, it should be. There could hardly be more catastrophe around that site.

I ask the Minister what will happen to the exhibits. Are they to be sold or destroyed, or are they to be returned to the sponsors to be sold or destroyed? Many of them could embellish a local amenity in other parts of the country. It would be good if a place outside London could finally benefit from part of the expenditure entrusted to the Dome, bearing in mind that much of that expenditure was contributed to by men and women throughout the country through the National Lottery.

8.35 p.m.

Lord Bruce of Donington: My Lords, I say at the outset that from the beginning, and until and including now, I speak to your Lordships as a supporter of the building of the Dome and of the establishment of the various facilities, and so on.

In another place in the late 1940s and early 1950s I had the experience of being present during the establishment of the Jubilee Exhibition on the other side of the Thames. I well remember that at that time there was a good deal of furore about the amount of government expense involved. Government expenditure had a certain significance, even in those days. Yet, many of us felt--I believe that the feeling was common throughout the nation--that, after the experiences that we had all endured in one way or another during the war, we were entitled to have a celebration. The economic grounds really did not matter so long as we could celebrate.

It is a fact that the 1951 exhibition was a success. I spoke to the Minister, Peter Mandelson, about this only a few months ago when we were discussing the role of his grandfather, the late Lord Morrison, in the establishment of that particular celebration. He was surprised to learn from me that Herbert Morrison, as he then was, took very much for granted the success of the Jubilee celebrations. He always regarded as the most important thing in his career the building of Waterloo Bridge. That was an extraordinary thing, but it shows what the climate of opinion was in those days.

Now we come to the Dome. Although the title of the debate concerns the various events that have taken place, I gather that by common assent it has been agreed--unofficially or otherwise--that it could provide a debate upon the report of the Comptroller

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and Auditor General which has been widely quoted this afternoon, and rightly so. Perhaps I may say that, although the accusation may be made that the National Audit Office has made observations on the basis of hindsight, in the circumstances it is very difficult to know on what other basis they could be made. Anything that happens after the event is hindsight.

For myself, I wish to congratulate the Comptroller and Auditor General and his staff. Although full of findings as to fact and certain guarded observations as to opinion, they have produced a report of such validity and neutrality as to make it very difficult for any political party, including my own, to make capital at the expense of its opponents. Voices more skilled than mine can give an opinion on that. However, it is quite clear that they sought to present a report which was as objective and as free from political partisanship as it possibly could be.

Your Lordships will not be surprised to learn that I have not been to the Dome. Unfortunately, a physical affliction in my spine has prevented my walking more than a few yards to the end of the other place. Undoubtedly, I shall go to it in due course. But I must say that there has been an extraordinary outburst by, I regret to say, some of my own people--and I still regard them as my own people--as to the cost of all this. Estimates have been made that we may lose some £900 million. How enormous. Indeed, the noble Lord, Lord Trefgarne, who is unfortunately not in his seat at the moment, thundered to your Lordships that this was public expenditure and there had to be the utmost examination and rigour applied to the application of public funds. I regard the amount of public funds involved in this as peanuts.

I have good reason to say that. Why should I be indignant about it? I hope that there will be no groans when I say that for the past 20 years, I have been drawing your Lordships' attention to fraud and irregularity on a massive scale in Europe. As my reward, I have received somewhat unwelcome observations as to my advancing years and how they may have affected my judgment, observations about my partisanship, my ignorance and so on. And yet I was ultimately proved to be right after some 20 years.

Perhaps I may make this observation on a topical matter about which, no doubt, I shall be reproached again and again and again. At this time we are really tearing our hair out about the possible loss of as much as £900 million. And yet only three days ago the Court of Auditors' report on European finances in the year ending 31st December 1999 announced losses of £5 billion without any outrage spreading anywhere in the House.

That strikes me as being slightly incongruous. Of course, the £5 billion that we have lost in that regard and many billions in the years before is irrecoverable. But it is virtually certain that the £900 million, which has been mentioned this afternoon with some accuracy, and more, will be recovered for the very reasons which have been brought to the notice of your Lordships' House by the noble Baroness, Lady Gibson, and my noble friend Lord Sawyer.

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The amount that we shall lose, about which there is all this outrage, will be recoverable and will be recoverable again and again and again whereas what has been lost and what your Lordships in your wisdom have chosen to ignore when I have mentioned it--the various losses through fraud and irregularity--is irrecoverable.

Therefore, I believe that we are approaching the matter from a slightly dishonest standpoint if we try to make any party capital out of it at all. I am a good party man, I think, and to my credit, I have many years of complete loyalty to my party, which I joined in 1935. That is longer than some of your Lordships have been alive.

What can we learn from the report? As your Lordships would expect, I have read the report two or three times. It mentions two rather new phenomena. It mentions the degree of reliance which managers of business and even civil servants--or should I say more particularly civil servants--place on the services of so-called experts.

One of the leading matters on which they were advised-- whether they were in the Tory government of the time or Labour is quite immaterial--was an estimate of £12 million turnover per year. It was accepted thereafter that that was at the higher end of the advice of the expert management consultants--note the word "expert" and note the words "management consultants".

Those who have been in the accountancy profession for a long time, as I have, know perfectly well that there is certain information the accuracy or near accuracy of which is vital; that is, the estimate of future business. Everything depends on it. Once you have determined a reasonable view, then your capital investment follows; your whole apparatus of trade follows; your whole profitability follows; the entire effect of your financial circumstances in terms of required finance and phasing all depend on that.

Why, oh why, oh why did those responsible or those who succeeded them accept the higher estimate of £12 million turnover? Why did they do that? That is one of the mysteries which that most admirable report does not seek to address.

There was an additional difficulty which any prudent management, whether it be Tory, Conservative or maybe Liberal, might care to take into account. The proposed exhibition in the Docklands, the Dome, had to be so phased that the phasing, once fixed, remained fixed.

In the 1951 exhibition, for example, if the weather forecasts, such as they were, had predicted anything like the inclement weather and deluges which we have had in the earlier months of this year, the project could have been moved forward. But the Dome had to be tied to an anniversary--1st January 2000, for the millennium year. All had to be phased accordingly. There was no room at all for variation.

When I mention that, I trust that the House will agree with me--and I am quite sure that the Minister will agree--that we owe a lot to Miss Jennifer Page for having delivered the Dome on time. For whatever

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reason she may have been discharged, and I am not quite sure about that, nobody can blame that upon her.

What is the lesson? The lesson is that we can all make mistakes. We must all admit the feasibility of error, even those dogmatic among us, including possibly myself.

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