Question (8 July) again proposed, That the Bill be now read a Second time.
[Relevant documents: A statement on behalf of the promoter of the Bill in support of the Second Reading of the Bill is available on the Bill’s webpage and in the Vote Office; and, a supplementary document additional to the Explanatory Memorandum on the face of the Bill is also available on the Bill’s webpageand in the Vote Office.]
I beg to move, That the Bill be now read a Second time.
I am delighted to present this Bill on behalf of one of our great national institutions, the Corporation of the Hall of Arts and Sciences, known to most of us as the Royal Albert Hall. I do so as someone who has enjoyed many performances in the hall, ranging from artists like Muse and Eric Clapton to acts such as Cirque du Soleil, through to the Last Night—and many other nights—of the Proms concerts. I also speak as a previous trustee of the hall, a position I was appointed to between 2018 and 2020, having stepped down as Secretary of State for Culture, Media and Sport; it was a great pleasure to take on the role of trustee, and I was disappointed that I then had to give it up because I was reappointed to the position now held by the hon. Member for Rhondda and Ogmore (Chris Bryant), the Minister for Creative Industries, Arts and Tourism. Nevertheless, I have maintained a close interest in the affairs of the hall, and I strongly support the measures that are being brought forward tonight. As a trustee, I was able to see in detail how the hall operates and how it pursues its charitable purposes.
It is worth saying a word about the hall, because it is a unique organisation. It was the brainchild of the late Prince consort, Prince Albert, before his death at just 42 years of age in 1861. The corporation was established by royal charter not long afterwards, in 1867, under the chairmanship of the Prince of Wales. The foundation stone of the hall was laid by Queen Victoria in 1867, when she apparently announced without any prior warning that it would not be called the Central Hall of Arts and Sciences, as had been proposed, but would instead be known as the Royal Albert Hall of Arts and Sciences.
Since that time, for more than 150 years, the hall has been a beacon in the cultural life of our nation. It is a place of celebration, entertainment, enlightenment and indeed commemoration. It is one of the most recognisable and famous venues in the country, and attracts thousands, if not tens or hundreds of thousands, of visitors to the United Kingdom every year. I know that the Minister, who represents the interests of the creative industries and the arts, will also be aware of that fact in his capacity as the Minister responsible for tourism.
The building of the hall was not without difficulty. Initial funding came from the commissioners of the Great Exhibition of 1851, who also provided the site, but the actual cost of construction still needed to be raised. The remaining balance was raised through public subscription, which worked by selling seats in the hall prior to it being built; the potential seat owners agreed to invest their money in the building of the hall and, in exchange, would own a seat in the hall for a lease of 999 years. I understand that over 1,000 seats were sold for roughly £100 each on that basis, 20 of them being taken up by Queen Victoria herself.
While I recognise that a lot of the seats have been bequeathed down through the generations, a lot of them are now sold on the open market for much more than what that £100 would fetch in today’s money, keeping pace with inflation. They are now assets because of the amount of money that can be gained from reselling them on the open market.
Of course, the hon. Lady is right. Essentially a seat in the hall is a property asset—in the same way, if one’s grandfather purchased a property and the descendants eventually decided to sell, it is highly likely that they would receive an amount of money way greater than the original investment. That is a very important point. These are essentially property assets, without which the hall could not have been built. It was built on that understanding and on a 999-year lease, and those who own that lease are entitled to do what they wish with it.
As for those who buy seats in the hall, in my experience of talking to many of them during my time as a trustee, they did not regard it as a financial investment to obtain a huge return; they love the hall in the way that many people do. They wanted the pride of owning an asset while at the same time contributing to the upkeep of the hall. As I will come on to explain, I think that seat holders contribute far more towards the upkeep and maintenance of the hall than they might ever get in return for selling tickets, and they have their right to the use of that seat for events where they are able to do so.
On that basis, if it is not about making money off their assets, would they not therefore return the tickets to the hall for the hall to resell, which they can do? There is also a conflict of interest if they are a seat holder as well as a trustee of the hall. Would it not be better for the ticket to be returned to the hall for the hall to sell, which is what this Bill seeks? They would still get their face-value money back.
I think the hon. Lady raises two separate points. There is the ticket return scheme, which the hall itself has put in place, but that operates on a basis where the sales are all pooled together and then distributed among the seat holders. A lot of seat holders prefer to use that, but they take a slight risk because it may be that not all the seats will be sold, and therefore they will not get the face value on their seat.
Essentially there is a matter of principle involved. If someone owns a property, it is certainly my view that they are entitled to do with it as they wish. The hon. Lady has rightly championed the cause against the exploitation of consumers through secondary ticket sales. I share her concern about bots buying up all the tickets for an event and those tickets appearing on a secondary ticket site 10 seconds later, but that is not the same thing. What we are talking about in this instance is tickets that are already under ownership. They have not been bought up in a primary market; they are owned by the seat holders, and the seat holders can choose how they handle them. As I say, a large number will choose to use the ticket return scheme, but one should not require them to do so. First, that would fly in the face of the principle that these are property assets belonging to the individuals. Secondly, it undermines the operation of the way in which they support the hall.
I want to continue setting out why the hall is such an invaluable institution to this country. It has about 500 employees. Some 400 events take place each year in the main auditorium and many more in other parts of the hall. As I said, there are something like 1.7 million visitors each year. The hall makes itself available on very favourable terms to a wide range of other organisations, such as Imperial College for graduation ceremonies, the Royal Navy for the Mountbatten Festival of Music, and the Teenage Cancer Trust for its fundraising concerts. It also has an engagement programme that reaches out to some 180,000 people of all ages in local communities and schools, giving them opportunities to learn about performing arts and experience live music.
I am thrilled to follow the right hon. Member for Maldon (Sir John Whittingdale), who I would like to call my right hon. Friend. We do a lot of work together on the Organisation for Security and Co-operation in Europe. He is a former leader of the British delegation—that role has now passed to me—and we still attend delegations together. He made a good opening speech in support of the Bill.
As Members will know, since 2010 I have served as the co-chair of the all-party parliamentary group on ticket abuse, which I also set up in 2010. As the right hon. Gentleman highlighted, I have also fought tirelessly against touts scalping tickets away from fans to sell at massively inflated prices online. I was therefore horrified when tickets for events at the Royal Albert Hall—one of our country’s most recognisable and cherished institutions—started appearing on sites such as Viagogo. That included, to name but one, Ed Sheeran tickets being listed online for just under £6,000 per ticket. I was even more horrified when I learned that those tickets belonged to seat holders, some of whom also sit on the council of trustees.
As we have heard tonight, and all know well, the Royal Albert Hall was opened in 1871 by Queen Victoria in commemoration of her husband Prince Albert and the furtherment of arts and sciences. As a thank you, some of the wealthy benefactors who financed the hall’s construction were gifted seats in the hall on a 999-year lease to attend as many events as they wished. Those seats have passed down through the generations.
Fast-forward to today and things are very different. Seat holders can sell their seats for huge amounts of money—I will come to that in a moment—and sell their tickets for events they receive as seat holders but do not wish to attend personally. They could give those tickets to friends and family to use at no charge, and I know that some do. Many choose to return their tickets to the box office via the hall’s ticket return scheme, receiving the face value of the ticket minus a small fee that goes towards the hall. That would obviously be the preferential option for the hall, because it would make a little bit of money from that. Increasingly, however, seat holders are choosing to sell their tickets through third party websites such as Viagogo and Hoorah Tickets—in some cases for sums that are many, many times their face value. This includes tickets for Roger Daltrey’s annual Teenage Cancer Trust fundraising concert being sold for seat holders’ personal gain.
Marking its 150th anniversary in 2021, the Royal Albert Hall continues not only to host world-class performances but, as my right hon. Friend the Member for Maldon (Sir John Whittingdale) mentioned, to do a tremendous amount of outreach work and to do so, crucially, without drawing on public funding for its operational costs—other than in the covid situation, which of course was exceptional. That is something for which it should certainly be commended and celebrated.
This Bill seems to have been going round and round for some time. I know that I was trying to deal with it when we were in government. It has been promoted by the hall, as we have heard, and seeks to provide legal clarity to an existing arrangement in which members, who own rights to approximately one quarter of the hall’s seats, forgo their right to attend events and, when not attending, make those seats available for sale. As we have heard, the hall argues that without statutory backing, this arrangement remains vulnerable to legal challenge, which could have acute impacts on its financial stability.
During its consideration in the other place, the Bill attracted extensive scrutiny and was amended, as we heard. Concerns were raised by a number of Members, including Lord Hodgson of Astley Abbotts, particularly in relation to the governance of the hall and the role of seat-holding trustees. He noted that although the hall has held charitable status since 1967, the current arrangements may allow some trustees to benefit financially from the reselling of tickets on the open market—sometimes at significant profits, as the hon. Member for Washington and Gateshead South (Mrs Hodgson) said.
In response to the concerns, an amendment was passed that provides that any power to exclude members from the hall under the Bill’s provisions can only be exercised by a sub-committee with a majority of independent members. It also requires that tickets made available under those provisions be sold through the hall’s ticket return scheme, thereby seeking to address concerns over potential personal financial gains by trustees. I also note that Lord Harrington of Watford, a trustee of the hall, expressed the hall’s position, stating that the Bill’s primary objective is to formalise existing practices and mitigate legal uncertainty, rather than to reform governance structures. He also raised concerns that the amendment may place undue limitations on members, including financial disadvantages and restrictions on charitable donations of tickets.
Well, this is a rum old affair, isn’t it? I think we can definitely put this down as one of the recondite moments of parliamentary democracy. A number of people have asked me today, “What on earth is all this about?” and then said, “What is an opposed private Bill?” or “What has the Chairman of Ways and Means got to do with it?” and all the rest of it—so, yes, it is a strange little moment.
It is nice to see the right hon. Member for Maldon (Sir John Whittingdale), who listed about a fiftieth of all the things he has sat on in his time, and it still added up to rather a large number of things that he has been involved in at some point or other, including virtually every committee at the Royal Albert Hall, apart from selecting the music—
Yes—well, it would have been endlessly hard rock, wouldn’t it, if it was just to please him?
Of course, this debate is timely because the Proms are about to start. The Proms are one of the most renowned British cultural institutions in the UK, where the BBC meets the public in a more open way than in any other. The concerts are broadcast all around the world, and everybody knows about them—not just the last night, but the first night, the penultimate night and all the different bits that have tradition attached to them.
Of course, the Royal Albert Hall, as everybody has referred to, is one of the great cultural institutions of the UK. It is a phenomenally versatile space, apart from anything else. People have mentioned concerts they have been to. Dua Lipa, of course, had a wonderful concert there last year. I think my husband has been to see Kylie there—well, he has been to see Kylie nearly everywhere. I have been to see Kylie nearly everywhere, too—it is always nice to live up to a stereotype, isn’t it? What is amazing is that wrestling and so many other different styles of events can take place there—the right hon. Member for Maldon mentioned Cirque du Soleil, for example.
The Royal Albert Hall is a great part of the British cultural sector, and it is unique in the way it is structured financially and constitutionally. I do not think that anybody has said this evening that it is precisely how one would probably want to constitute it if one was starting from scratch. [Interruption.] I noted a slight Gallic shrug from the right hon. Member for Maldon, so I think he is sort of agreeing with me. I think most of the people who own the seats at the Royal Albert Hall would agree that it is not quite what anybody would design if they were starting again today.
It is worth reminding ourselves of precisely what we are doing with a private Bill, because it is different from a public Bill. “Erskine May” does not get to private Bills until page 1,024 or something, so we can tell that they are unusual. It states:
20 of 30 shown
That unique model has sustained the hall throughout the period since. It is a public-private partnership, which is unique to the hall, I think—I certainly do not know of any others—and it has worked remarkably well. During that time the hall has thrived, despite some extraordinary challenges, including obviously the covid pandemic. The way it works is that the seat holders, who are in many cases either descendants or those who have purchased the seats from the original people who invested their money, are an integral part of the support for the hall. They obviously enjoy access to the seats that they have purchased, but at the same time they hold the hall in trust and have shown remarkable generosity in continuing to promote it.
There are something like 5,500 seats in the hall. As of the end of last year, 1,256 of those—roughly a quarter—were privately owned by 315 seat holders. They are people who have either inherited the seats or purchased them from the original owners of the seats. Under the constitution that was drawn up at the time of Queen Victoria, those seat owners are the members of the hall’s corporation. Some may be private individuals, but there are also companies and charities. There is a strong and enduring bond between the hall and those members.
Of the board of trustees, which governs the hall, some 18 out of the 23 are seat holders, as was originally set down. There are five external trustees, one of whom—I was fortunate to hold this position—is appointed by the Secretary of State for Culture, Media and Sport. Then there are the commissioners of the 1851 Exhibition, a representative of Imperial College, another from the Royal College of Music, and another from the Natural History Museum.
As I sought to explain, those who hold seats actually do put a lot back into the hall. Even though they own the seat, they nevertheless contribute on top of it to the maintenance of the hall. The first way is by paying an annual contribution known as the seat rate. This is voluntary but is paid by members every year. An independent committee recommends the amount—I think I sat on the seat committee for a time—and it is roughly a pro-rata proportion of the hall’s maintenance costs. This year the seat rate, which members choose to pay, is £1,880 plus VAT per seat, amounting to about £2.3 million plus VAT.
The second way in which members support the hall—this is the crux of the Bill—is by agreeing to forgo their tickets for events on over 100 days each year. Originally when they purchased their seats way back in 1871, members could attend any event in the hall by sitting in the seat they had purchased, but over time, in order to support the hall, members have agreed to give up that entitlement for a set number of days each year, and that currently stands at over 100 events each year. By giving up the right to use their seat, they give it back to the hall, and obviously those tickets can then be sold. It also helps the hall to attract high-quality artists. Each time, a negotiation takes place with somebody wishing to perform at the hall as to how many events will be held on what is called an exclusive basis, for which seat holders will not have the right to utilise their seats. That method of support for the hall, which has evolved over the years, has been extraordinarily successful.
There is also a review of the constitution governing the hall. A working group has identified a range of potential reforms. The hon. Member for Washington and Gateshead South (Mrs Hodgson) referred in her intervention to the concerns expressed by the Charity Commission that there might be a conflict of interest because seat holders both own seats and sit on the council, but I think that is a misinterpretation of the position. As far as I am aware, there has never been any evidence of seat holders abusing their position. Indeed, there is a committee of the hall with a majority of independent members called the conflicts committee that considers whether there is any potential conflict. I was a member of that committee during my time as a trustee.
The Bill contains reforms to the position, which can be achieved only by Act of Parliament. I would therefore like briefly to run through the Bill’s clauses. First, clause 3 removes the six-yearly cap on the amount that can be levied through the seat rate. In the interests of equivalence, it transfers the voting threshold of three quarters from the six-year cap to the annual seat rate. If anything, the six-year cap has sometimes prevented seat holders from contributing as much as they might—particularly during covid, when members were obviously unable to take up their rights because the hall was not available for public performance. None the less, members continued to pay the seat rate in support of the hall.
Secondly, clause 4 provides a mechanism whereby members can agree to exclusives—performances where they will not take advantage of their ownership of seats—in excess or of a different kind to those originally permitted by the Royal Albert Hall Act 1966. There is already statutory provision to allow some performances to be exclusive where members have given over their rights, but the hall has gone beyond the 1966 Act such that now a number of events above and beyond those covered by that Act are agreed to by members through voting. That is a way in which they have increased their support for the hall.
That has been agreed through the council and a majority of members—it is done by majority. The question as to whether that has a legal basis is what needs to be clarified through the Bill. Three members have commenced a challenge in the High Court, which, if it were to be successful, would prevent the hall from having as many exclusive events. That would obviously have a damaging effect on the income not of seat holders but of the hall itself. If the challenge were to be successful, the hall could either continue with its practice—potentially in breach of a legal challenge—or decide that it was no longer possible to continue the practice, and therefore then lose the benefit, or it would no longer be able to contract some of the most attractive and valuable events that are staged there at the moment. The purpose of the clause is therefore to resolve the issue in order to allow the hall to proceed—as is the current position—without the risk of legal challenge.
The third clause that I want to address is clause 5, which was added to the Bill by amendment in the House of Lords. It was not part of the original Bill as agreed by the members and it was not sought by the hall. It is certainly the hall’s view that its provisions, which cover both a requirement that extensions to exclusive events need to be agreed by a committee not without a majority of seat holders, and a requirement use the ticket return scheme, which the hon. Lady identified in her intervention, demonstrate a lack of understanding of the way in which the hall works and would be detrimental to the hall. It could mean that seat holders will no longer be able to support the Bill, which is an essential requirement if it is to become law. I know that the hall is very happy to discuss potential ways of addressing the concerns identified through the passage of that amendment when the Bill gets to Committee, which, Madam Deputy Speaker, I think you will be involved with.
At this stage, I ask that the House agrees to the Bill’s Second Reading. We can return to address any particular concerns once it has been through Committee.
These seats therefore represent a massive investment, and the seats themselves have been bought and sold over the years, with some individuals or families now amassing over 50 seats. Again, that was not the original intention of those altruistic benefactors funding the hall. Most recently, one 10-seat box was listed online for £3 million. The advertisement claimed that there were 12 seats in the box—pre-empting this Bill, which originally contained proposals to increase the number of seats in a box from 10 to 12, which would boost the portfolio of the box owners. Those clauses have fortunately been removed in the other place.
I understand that the Royal Albert Hall has said that it needs this Bill to pass in order to make necessary changes to its constitution and safeguard the future of the hall economically. The hall holds charitable status and received a £20 million loan out of public money as part of the covid-19 culture recovery fund, which I am aware it is paying back at the rate agreed. Part of this legislation would reasonably allow the hall to increase and formalise the number of exclusive events from which seat holders are excluded, which the right hon. Member for Maldon spoke about. The hall can then make that vital profit from all the seats, instead of the seat holders selling them on the open market. Obviously, I support that.
However, the main reason I support this Bill is the common-sense amendment introduced in the other place by my very good friend and namesake—although no relation—Lord Hodgson of Astley Abbotts, supported by a cross-party majority of Lords. As the right hon. Member for Maldon explained, the Royal Albert Hall is controlled primarily by a council of 25 trustees, a majority of 19—equivalent to 75%—of whom, including the chairman of the board of trustees, must be seat holders, according to the hall’s governance statutes. The council has a say over which acts are booked and decides how many and which events will be for the exclusive benefit of the hall. The seat holder majority of trustees, whether this has happened or not, can therefore prioritise booking and securing tickets to events that will maximise their income.
Those in the other place have taken the reasoned view that charity trustees must not benefit, or be seen to benefit, from decisions they take as trustees. Lord Hodgson’s amendment first sets out that any power to exclude members from the hall can be exercised only when
“approved by a sub-committee of the council of which the independent members of the council will form a majority”.
Secondly,
“any tickets for seats received from the exercise of the power to alter the number of events from which seat holders are excluded must only be sold by the trustee or relatives of the trustee through a ticket return scheme operated or approved by the Corporation.”
I believe that this is a moderate change that still gives seat holders a lot of freedom to resell their tickets. However, those who wish to govern the hall will receive only the face value of their tickets.
I genuinely believe that this is a vital step in bringing the hall into line with every other reputable charitable institution. There are obviously those at the hall who oppose this Bill, and it would be massively shameful if they took this opportunity to withdraw the Bill. Like many others, including the right hon. Member for Maldon, who spoke of it so fondly, I hold the hall in high esteem and have many fond memories of times enjoyed there. I really want it to survive and to thrive for future generations, so I hope that this serious conflict of interest in the running of this beloved charity comes to an end, and that the Bill is given safe passage.
In the light of these developments, it is evident that the Bill faces significant challenges in its current form. It also raises a broader issue relevant to many historic charitable institutions: the difficulty of updating foundational documents and governance arrangements under existing legislative mechanisms, which often require the introduction of private Bills. It may also beg the wider question of how many of our great establishments, which were founded in the Victorian era, can operate in a more modern era, but I accept that these are not easy issues to address.
In conclusion, although His Majesty’s Opposition absolutely support the aim of securing operational clarity for the Royal Albert Hall, the concerns raised about governance and potential conflicts of interest are of some significance. We will therefore be abstaining on Second Reading. I know that this will certainly be an interesting Bill in Committee. I look forward to following it with great interest, and I hope that some of the concerns that are legitimately being raised can be ironed out.
“In giving any bill a second reading, the House approves the general principle, or expediency, of the measure. There is, however, a distinction between the second reading of a public and of a private bill. A public bill is founded on public policy, and the House, in agreeing to its second reading, accepts and approves that policy; whereas the expediency of a private bill is founded upon allegations of fact which have not yet been proved, so that the House, in agreeing to its second reading, affirms the principle of the bill conditionally, subject to the proof of such allegations before the committee.”
I am sure the Committee stage will be interesting, as the right hon. Member for Daventry (Stuart Andrew) said, because these allegations of fact will have to be proven. That takes us to the several points made by my hon. Friend the Member for Washington and Gateshead South (Mrs Hodgson), who is one of the most redoubtable experts on the issue of ticket sales in this country. I very much hope that we will be able to put the biggest smile on her face later in this Parliament when we come up with legislation to tackle the issues around the secondary ticketing market, which we are determined to do.
I take issue slightly with something that the right hon. Member for Maldon said. He said, “Private property is private property and we never want to interfere with it.” In one sense I agree with him, of course, but when it comes to the sale of tickets, I am not sure that that quite applies as cleanly as it might in other forms. If the value returns to the artists or the venue, I do not have a problem, but when the value from the secondary ticketing market simply disappears into the trousers of online touts and bots, many of which are not even based in this country, I think that that is a problem.