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My mind boggles when I think of pensioners, the most vulnerable people in this issue, scrambling up to the counter to get a broadband connection. They will be thrilled when somebody says, “You can have broadband from the post office”. Will my noble friend look at how an integrated Post Office could finance itself and save putting the public purse at risk all the time? It could be done; all it needs is the political will.

Lord Truscott: My Lords, I thank my noble friend for his intervention. I must respect his views on the development of the Post Office, although I do not always agree with them. I shall make two points. The first is about our commitment to a universal service. The Government want to maintain a universal postal service and retain a social network. We are putting considerable resources into doing that. However, my noble friend must bear in mind that patterns of usage change. The Post Office is a venerable institution that served the country very well and will continue to do so. However, people increasingly use the internet and bank accounts. They do not always pop down to their local post office to purchase stamps and, if they do so, they do not necessarily do it in the numbers that make that post office commercially viable. Some post offices have a very small turnover.

My second point is that all parts of government and the economy try to ensure that they get services at the most competitive price. The decision on TV licences was made not by the Government but by the BBC in the interests of its licence fee payers. There are pressures on the Post Office, and rather than returning to the 1960s or 1970s and unlimited government subsidy, the Post Office must reform and adapt. However, at the same time, we will retain the core of the Post Office and maintain the all-important social network to support rural areas and deprived people in villages or urban centres.

Lord Skelmersdale: My Lords, I accept the Minister’s words that the Post Office needs to reform, but it also needs more products to service/sell at its post offices. Reformation is not helped by the current demand of the post office unions, which, I understand, is something like a 27 per cent rise this year. In this climate of suspicion between management and unions, what positive steps are the Government taking to ensure that the Post Office sells more products?

Lord Truscott: My Lords, the noble Lord is correct that the Post Office needs to look at more commercial opportunities. Even now, any business that wants to supply new products to the Post Office can do so. There is a process that they can go through to develop the sale of new products or franchises. As we were debating earlier, the Post Office is concerned that it retains its core business because it does not want to undercut the principle of a universal service. There are opportunities to develop new products—I gave the example of broadband—and that is happening. Relations between the unions and the management are a matter for Post Office Limited and Royal Mail. The management and the trade unions need to work together to ensure that the Post Office becomes even more competitive because, in the modern world, it has to stay competitive to survive.

Lord Watson of Invergowrie: My Lords, I suspect that I am not alone here today in renewing my television licence, driving licence and so on online rather than through the Post Office in the way that most of us used to do. That said, when I do go to a post office, whether in London or Edinburgh, it tends to be busy, and it is unusual not to have to queue. However, that is clearly not typical.

I am more concerned about the situation with the sort of rural post office that the noble Lord, Lord Redesdale, referred to earlier. That fits in with what my noble friend Lord Clinton-Davis said about people less able to make their own way to a post office. How will they be accounted for in the consultation? It will be difficult for the Minister to reconcile his comment about post offices having a valuable economic and social role in the community with the announcement that has just been made if maximising business is to be the main criterion. How will he put that into effect in the consultation?

There is a practical aspect of the consultation process. I know from experience as an elected Member in another place and in the Scottish Parliament that in previous post office closure announcements, when consultation took place it was little more than a sham. There were rarely any changes to the original plans, which made local people cynical, particularly if, as I have seen, the six-week period straddled a holiday month—July in Scotland or August in England and Wales—or even the Christmas and New Year period, without being extended. Can I have an assurance that that will not happen in this case?

Lord Truscott: My Lords, I agree with my noble friend that the consultation process must be real, people must be given an opportunity to have an input into it, and we should be wary that it does not take place when it is difficult for people to have their say. I will certainly take on board what my noble friend says in that context to ensure that people have their say in local consultations.

We have done an awful lot of work on deprivation. We proposed that protection should apply to the 10 per cent most deprived urban areas. That was our initial thought—and this is how consultation can make a difference. In the light of responses to the consultation we decided to extend this provision to ensure that the 15 per cent most deprived urban areas are protected. So, as a result of consultation, the number of deprived urban areas to be covered has gone up from 10 per cent to 15 per cent. That means that the 15 per cent most deprived urban areas across the UK will be covered.

A blanket 15 per cent application across each nation would not be equitable or reflect the relative needs of each country. However, we have built on the approach we developed for the application of stamp duty relief and have sought to apply the same protection to each nation as that experienced by its most comparable English region.

The main point is that, as a result of our consultation, 15 per cent of urban areas in England and Scotland will be defined as urban deprived as will 30 per cent in Wales and Northern Ireland. If I gave the impression that we would be looking only at commercial aspects of the future structure of the Post Office, I did not intend to do so. We will be looking closely at deprivation and ensuring that vulnerable groups are properly served by the Post Office network.

Baroness Byford: My Lords, perhaps I may press the Minister further. I am equally disappointed with the Statement. It says that public transport will be taken into consideration. Who will make that decision? Will the local community have the overriding say or will it be the Post Office system? That is not clear in the Statement.

The Statement talks about outreach. I would like the Churches—or at least those with the greatest presence in villages—to be considered for inclusion. The Minister talks about free use of an additional 4,000 ATMs. How many will be situated in rural communities and how many in urban communities? If they are all situated in urban communities it will not help the rural communities.

Finally, perhaps I may push the Minister on compulsory closures. He referred to the involvement of local communities. If the Post Office decides to close an office compulsorily but the local community wants one still to exist, is there any reason why that community could not reinstate one itself? Again that is not clear from the Statement.

Lord Truscott: My Lords, I do not have the information on the division of ATMs between rural and urban areas, but I will write to the noble Baroness on it.

My understanding is that there will be 50 to 60 local consultations, after which Post Office Ltd will announce the result. Clearly, that will have to be done in line with the established criteria.

We are working with different groups on outreach outlets, and in many areas we will encourage churches to work with post offices to deliver outreach services. Those 500 outreach outlets will be chosen on the basis of local need; there is not a list of 500 outreach outlets at the moment.

Baroness Miller of Hendon: My Lords, as so many noble Lords have taken part in this debate on the Statement, perhaps the Government will consider giving proper time for a debate to explore this in much more detail.

The noble Lord said that 2,500 replied to the consultation. How many thought that this was a great idea?

Lord Truscott: My Lords, I do not have to hand the breakdown of percentages. I am not sure that we have them. People often give qualitative rather than quantitative responses, so sometimes it is difficult to break down answers in terms of “yes” and “no”. Some people are in favour of some aspects and not others. I will do my best to look into the matter and write to the noble Baroness.

We are out of time. I will write to noble Lords whose issues I have not had time to cover.

Olympic Games 2012: Heritage and Arts Funding

2.36 pm

Lord Baker of Dorking rose to call attention to the effect on heritage and the arts of the transfer of lottery funds to the 2012 London Olympic Games; and to move for Papers.

The noble Lord said: My Lords, on 16 March this year, Tessa Jowell, the Culture Secretary, transferred substantial funds from the lottery funds to the Olympics. Combined with the money that was transferred a year ago, the total transfer now amounts to £675 million—a huge sum. Ten days before her speech, the outgoing Prime Minister made a speech in the Tate Gallery on the arts. He had not made a speech on the arts for the past 10 years—his last brush with the arts was “Cool Britannia”. In that speech at the Tate, he made a statement with which no one in this House could disagree. He said that the arts were,

“of fundamental importance to the country”,

and that there would be no more “boom and bust”. Yet 10 days later, the Culture Secretary slashed support to the arts and heritage. So when the Prime Minister says boom or bust, it is boom for Tony and bust for Tessa.

The trouble with the Prime Minister is that, when he stumbles on the truth, which he does from time to time, he picks himself up as though nothing has happened. When I read and hear his speeches, I get a feeling that here is a man who does not often open a book of poetry or go to the theatre or opera—or even open a book at all. In fact, his first confrontation with a novel may well be the fiction choice of the month, his own memoirs.

Whatever I say about the Prime Minister is left at the post by the Master of the Queen’s Music, Sir Peter Maxwell Davies, who referred to,

“an utterly philistine government, whose Prime Minister recently read a platitudinous speech about the ... arts in Britain, when his own horizons are rock and pop”.

We know that the outgoing Prime Minister likes Liam Gallagher and that the new Prime Minister likes the Arctic Monkeys—not much of a regime change there, I suggest to the House.

What I object to particularly in Tessa Jowell’s statement was that she referred to this massive transfer of money as a loan. It is not a loan; it is an act of larceny. Any Cabinet Minister should be able to distinguish between a loan and larceny. She went on to say that it would unlock the ambitions of young people. It will not for those in the arts or those who work in voluntary heritage activities.

In 1992, I was the Home Secretary who set up the National Lottery. I persuaded John Major and Norman Lamont, who were not too keen on it, to create a new source of money for what no Government would be willing to fund, appropriately or sufficiently; namely, the arts, sport, the heritage and good causes. That was the purpose of the National Lottery. In the White Paper, I had a cast-iron guarantee from the Treasury that lottery money would be additional money for public sector projects and not a substitute. That was the promise from the Treasury. I cannot help feeling that a Treasury promise is rather like—I think that it was Jonathan Swift who said this—pie crusts, made to be broken. That promise has been fundamentally broken. The lottery, as it was set up, provided 25 per cent of its funds for the arts, 25 per cent for heritage, 25 per cent for grass-roots sports and 25 per cent for charities. They now get 16.6 per cent. That is a huge change.

I come now to the various activities that have been hit by this decrease. Since 1997, the Government’s record on heritage has not been good. We know that they do not like history. Many new Labour people thought that history started in May 1997—even the Minister is nodding—and had little love for our heritage. There is no doubt about that because, since 1997, there has been a real-terms cut in heritage money, with no advance at all on £97 million. The Minister is looking for confirmation on that from his department, but I got the figures from his department. The substitute for that has been the Heritage Lottery Fund, which became the main funder of heritage activity in our country. The body that pulls them together is Heritage Link. It represents a massive number of organisations— 81 across the country. In the next few years, its money will be reduced from £255 million to £180 million and is planned to be reduced to £120 million. That is a massive cut.

What is at risk? Let me give one or two examples. It so happens that today, in Norfolk, in the fenlands, the Royal Society for the Protection of Birds is opening a visitor centre in Lakenheath Fen, in a remarkable recovery of farmland being turned into wildlife-rich fenland, with reed beds and biodiversity. That is a tremendous improvement of the landscape. That centre was funded by the Heritage Lottery Fund to the tune of £546,000. Fortunately, it is complete and is being opened today, but that is the sort of project for which money will no longer be available. If the money is cut from £255 million to £120 million, there will be lots of noes in future to landscape and other projects.

There are also 1,400 schemes for churches and historic town centres from Gateshead to Great Yarmouth. They involve modest amounts of money and protect and enhance the environment in one way or another, using volunteers. Much of the money comes from the National Council for Voluntary Organisations. The Heritage Lottery Fund also supports our craft industry—lacemakers, for example. It has launched a scheme to create 20 internships in glass-making, making coloured glass for windows. It will not be able to initiate such schemes in future on anything like the scale that it has done.

The fund has also introduced training courses for volunteers on how to maintain places of worship, whether that be a mosque, a synagogue, a temple, a church or a cathedral—training volunteers how to help to maintain the fabric of our nation. Again, there will be much less money to go on those projects. The drop in money is dramatic. This year, there is £261 million. Compared with the money announced last year, £250 million has been taken from the Heritage Lottery Fund and the bit of the good causes fund that goes to heritage.

Let me mention museums, because I am involved in that area. The Minister was involved in it, too. He was appointed by a Conservative Minister to a quango to look after libraries and museums and he did a wonderful job. We recognised his worth before the other party. Museums have not fared well under this Government. Let me give the figures: I have them from the Minister’s department. I asked the Library for them and it produced beautifully tabled figures; they must be right. In 1997, the government national grant to the main museums was £205 million. In 2007, it was £320 million. That is a good increase, £115 million, but in real terms—these are again the figures that I got from the department—it is £53 million, £5 million for each of the 10 years.

The Government boast that more people are going to museums because they have abolished admission charges. In the last year for which there were admission charges for our major museums, as the report from the National Audit Office showed, income was £18 million. What do they get in exchange? Five million pounds. That is not a success story. That is why, in 2005, 60 per cent of our museums said that they could not add to their collections.

I am involved in museum work because I helped to start a new museum during the past two years and I am the principal fundraiser for it. It is the Cartoon Museum, just 100 yards from the British Museum. There, we tell the whole history of one of the art forms that we created, from Gillray, Rowlandson and Hogarth in the 18th century right up to date with Peter Brookes, Steve Bell and Martin Rowson. We had to raise all the money ourselves. There was not a penny from the Arts Council or local government. I do not mind at all. We do it. But if the Minister wants to help a little museum such as ours, I suggest that he gives a dinner at one of the houses that the Government have, such as Lancaster House. I will bring along some sponsors to raise money for the Cartoon Museum. I will give the patter; he can collect the money. The Government have not done well by museums, as every museum director will tell you today.

I now turn to the arts. The general fund for the arts is through the block grant from the Government, but the Arts Council is fundamental for the funding of small activities in the arts. This year, it is suffering a cut of £112 million, as was said in an Answer in the House of Commons yesterday, but the Minister forgot to mention that, last year, it suffered a cut of £63 million as a result of transfer to good causes from the arts. That is quite a cut. It is not £112 million; it is more.

What does that mean? The lottery funds for the Arts Council go to small operations and activities. The budget for those is £83 million. This year, it is £54 million and will then be reduced to £24 million. Ministers say, “We are only going to cut the arts by 5 per cent”. I am sufficiently numerate to know that a cut from £83 million to £24 million is not one of 5 per cent but one of 75 per cent. The sort of activities hit by that are all the ancillary activities across the country—brass band support, handbell ringer support, dramatic societies, operatic societies, dance groups and young actors. Of those grants, 86 per cent are less than £5,000 and go to small local activity groups and individuals.

I had a letter from the Secretary of a Member of this House who is a senior adviser to the Government—this is supposed to be a joined-up Government. She wrote a painful letter saying that, part time, she writes plays and is a director. She said that she is the sort of person who will be hit by the cuts. I am talking about those people at the end of the arts world all over the country—not the great arts institutions—being creative, putting on plays in tiny halls with some of the actors being voluntary, some of them professional, getting by, writing modern plays about the dilemmas of today. Those small organisations are innovative, experimental and imaginative.

Sport is also involved. The Council of Physical Recreation claimed that it had a much bigger rout, with £540 million diverted to the Olympics. That will hit local provision, smaller pavilions and multi-use games areas.

The Minister and I are very old friends; we go back a long way. He once published some of my books, but he has recovered from that. Today, he has to defend the indefensible and excuse the inexcusable. He is by far the most cultured member of the Government and ought to be Secretary of State—I hope that I have not doomed his political career. However, if he is going to say that the private sector should make up some of this money—he is nodding already and will say that Mr Serota went to America last week and raised a lot of money for the Tate—then give us the same tax breaks as Americans have. Let a British citizen who gives money to a charity or to an arts or heritage organisation deduct that from his top level of salary, which is what Americans do. That is a much greater tax break. Every $60 given to a cultural organisation in America is worth $100. For a 40 per cent taxpayer in the UK, the tax benefit today is not 40 per cent if you give; it is about 20 per cent. Therefore, you cannot rely on rich philanthropists, such as Mr Hintze, who has bailed out the Wandsworth Museum. The Government have a big responsibility here.

Yesterday, Tessa Jowell mentioned the cultural fund of £40 million. It is not her money to spend; it comes from the Big Lottery Fund. Does the Minister remember what was said about that fund? The noble Lord, Lord Davies of Oldham, who is sitting next to him, should remember, because when the Bill was going through this House, he said:

“Of course, we all support the spirit. I make no bones about it: we are not going to resile in any way, shape or form from the spirit of additionality”.—[Official Report, 13/3/06; col. 1053.]

The programme announced yesterday is pure additionality; Tessa Jowell has just put £6 million into the £40 million. This is another pie crust broken.

The activities that I have been talking about are subject to a treble whammy. First, there are the cuts of £675 million, which have already been announced. Then there is the lottery game, which must raise £715 million. All these institutions fear that that game will suck money from the rest of the fund. I think that their fear is justified. Then there is the spending round later this year. Most of the arts organisations to which I have talked are planning for a real-terms cut that will probably be substantial. It will be the first test of whether Gordon Brown, who has already agreed all this, really supports culture.

Finally, I ask the Minister to make one specific declaration today. At the end of the day, societies and civilisations are remembered not for their athletics but for their aesthetics. They are remembered for their painting, their music, their drama, their poetry, their architecture and their landscape. That is what marks out the memory of civilisations. I hope that the Minister will say at the Dispatch Box today, “We have taken this money from the lottery but we are not going to take any more”. I would like the Minister to make that pledge. He is scowling already. I make the same recommendation to the noble Lord, Lord Coe. There is a great deal of anger about what has been done to these bodies, which will suffer as a result of money going to the Olympics. The Minister’s reputation is becoming a bit tarnished by what is becoming the great maw of public spending. One way of improving that reputation would be to say, “I am not going to take any more money at the expense of the arts, heritage and good causes”. That would do the Olympic cause some good, and I hope that the Minister will make that announcement today. I beg to move for Papers.

2.52 pm

Lord Smith of Finsbury: My Lords, I congratulate the noble Lord, Lord Baker of Dorking, on securing this important debate. I have some sympathy with a number of the points that he made, although I could not agree entirely with the detail.

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