Wednesday 16 May 2018
Arrangement of Business
My Lords, good afternoon. If there is a Division in the House, the Committee will adjourn for 10 minutes.
Skills for Theatre (Communications Committee Report)
Motion to Take Note
My Lords, I am delighted to introduce this debate on the report Skills for Theatre: Developing the Pipeline of Talent. This resulted from an inquiry by your Lordships’ Select Committee on Communications, which I had the honour to chair at that time. I am grateful to noble Lords who are here to participate in this debate and I place on record my appreciation to the members of the Communications Committee, which included real experts with invaluable experience in the theatre and related creative arts. I am delighted that so many of them are speaking in today’s debate, including my successor, the noble Lord, Lord Gilbert.
On behalf of the committee I thank our clerk Theo Pembroke, who brought our report together, our policy analyst Helena Peacock and our committee assistant Rita Cohen. She was Rita Logan when she did this work but she is now Rita Cohen and I congratulate her on that change. Our thanks are also due to our specialist adviser, Professor Jen Harvie, professor of contemporary theatre and performance art at Queen Mary University of London, whose input was immensely helpful. I declare my own very modest interest as vice-patron of York Theatre Royal.
Sadly our inquiry had to be cut short, as did my term in the chair, when the unexpected general election was called last year. We could not conclude our task in the normal way, with a set of conclusions and recommendations. Instead, our report represents a summary of the evidence we received from six sessions with expert witnesses, from visits to the Royal Court and the National Theatre, and from a session with Matt Hancock, then Minister of State for Digital and Culture and now Secretary of State at the Department for Digital, Culture, Media and Sport.
The first conclusion which anyone looking at this country’s theatre will swiftly reach is that it is a huge cultural and economic success. Its quality is world-beating. It is one of the big attractions for visitors to the UK. Theatres in London last year sold a record of over 15 million seats and box office receipts topped £700 million. We heard how,
“more people go to shows in our venues than go to all league football games in the UK”.
Our successful film and TV industries feed off the theatre industry’s content, artists and technicians and theatre plays a key supporting role for the country’s wider commercial creative industries, including advertising, design and crafts. Yes, theatre in this country—especially in London—is flourishing. However, our witnesses also expressed serious worries about the future. They identified a number of hazards which, together, point to a “leaking pipeline of talent”. Will there be a continuing flow of talented individuals to sustain the brilliant success of this industry in the years to come?
The first reason for concern was around education policy. Schools in the private fee-paying sector are likely to have excellent drama facilities and teachers, and will ensure that children experience out-of-school visits to the theatre. But our witnesses worried that state schools have downgraded arts subjects, with the emphasis of the EBacc on the STEM subjects of science, technology, engineering and mathematics. Cuts to extra-curricular activities have meant children in many state schools never encounter theatre and drama. We noted that the number of students taking A-levels in performing arts and drama had declined over recent years. Although Matt Hancock told us that the number of GCSE entries had risen, there is a clear perception that the pipeline of talent is becoming ever more dependent on the affluence of parents. Tuition fees for higher education, the concentration of opportunities in overpriced London, reliance on networks of family and friends and an expectation of starting work for very low pay or no pay—despite progress by Equity in ensuring that the national minimum wage is paid—all conspire against those from less affluent households.
We heard how those barriers were compounded by a “woeful” lack of career advice on jobs in the theatre. The opportunities range from the obvious roles of acting and directing to technical areas—lighting, sound, design, wardrobe, carpentry, even wig making—and administrative areas such as stage management, accountancy, IT and fundraising. Those many and varied work opportunities in the industry were not being promoted.
Then there were the worries on the training side. Apprenticeships have not proved as helpful as the industry would like. Greater flexibility was called for, with apprenticeships needing to be tailored to the special characteristics of theatres as small, niche employers. As the committee heard, if the apprenticeship system can be made fit for purpose, it can be a great leveller. It should be a way into the theatre for a much more diverse group of young people than just those with parents who can help with tuition fees, poorly paid internships, and indeed London rents.
Many of today’s leading figures in the industry have come from less privileged backgrounds, such as John Tiffany, awarded best director last year for his Harry Potter production, who told us of his pride in his working-class roots and of his concern that, educationally and financially, opportunities were diminishing for the next generation of people like him.
Inevitably, the issue of funding was also raised with us. The contribution of the Arts Council has held up pretty well, but hard-pressed local authorities, with core services to protect, have significantly reduced funding to local theatres. Public funding remains vital for the big national companies, in effect as their R&D, enabling them to take risks. Alice King-Farlow of the National Theatre explained how famous productions such as “War Horse” and “The Curious Incident of the Dog in the Night-Time” were only possible—often to the benefit of the commercial theatre too—because of public subsidy.
We heard a catalogue of examples of regional theatres having to close, or being on the verge of closing. In other cases, they had stopped developing new work and putting on new productions—using locally employed actors and producers—and had become “receiving only” theatres with productions that came in and then moved on. These regional theatres play a key role in the local economy as well as in the cultural life of the communities. However, we noted how regional theatre feeds into the London scene as well, not least as the starting point for people’s careers. Sir Ian McKellen cut his teeth at the Bolton theatre, Hugh Bonneville at Colchester’s Mercury Theatre, and so on. Diminishing the role of regional theatre threatens the ecosystem for the industry and, we were told, will eventually undermine UK input into productions in the West End, on Broadway, on TV and in cinema.
We noted the hazards facing the theatre world and, since we reported, problems have of course been uncovered around sexual harassment—as highlighted by the #MeToo and Time’s Up movements—from which theatres have not been exempt. However, the committee also heard good examples of theatres compensating for financial constraints through efficiencies, fundraising and cross-subsidy from their commercial productions, as with the Royal Shakespeare Company’s hit musical “Matilda”.
The world of theatre is also seeking to counter the shift, about which we heard so much, from being an egalitarian industry in times past. The Royal Court is taking on paid trainees. The National Theatre has a target of 25% of performers from black, Asian and minority ethnic backgrounds. The RSC has its Next Generation outreach scheme with 10 regional theatres across the country. The noble Lord, Lord Lloyd-Webber, has funded a bursary in Liverpool, and I noted last week that Benedict Cumberbatch has said that he was acutely aware that he was a white male public school boy but was determined that his new production company, SunnyMarch, would in its staffing and work make a real difference in diversity in all its forms. The call from so many of our witnesses is for central government in its education and training policies and local government in its funding policies to support the efforts in the industry to draw in the talent from all our communities, to the great benefit of the cultural economy of the whole country.
Theatre in the UK is a fantastic success story and, for sure, that success has been based on attracting and sustaining homegrown talent. We hope that our report draws attention to possible stumbling blocks—educational and financial— to maintaining that flow of talent. I very much look forward to hearing the Minister’s response. I beg to move.
My Lords, it is a pleasure to follow the noble Lord, Lord Best, and a privilege to succeed him as chair of your Lordships’ Communications Committee. He was a very effective chair of a highly experienced and expert committee. I know that noble Lords are very grateful to him for his chairmanship. It typifies his dedication to public service and to the House.
As we heard evidence about the breadth of talent in the UK creative industries and the contribution it makes to our lives and economy, I reflected on the extraordinary contributions in this field of a number of my committee colleagues. I was struck by the passion and commitment to using their own experience to improve the lives of others. It is the capacity of the theatre industry to improve well-being, provide opportunity and drive our economy forward that led us to this inquiry in the first place.
The theatre industry is more important than ever in our national lives. As we leave the EU and face the challenges of automation and the rapid development of artificial intelligence, the creative industries are rightly a critical part of government industrial strategy and are powerfully championed in government by Matt Hancock—the Secretary of State—and my noble friend.
Wherever you sit on the Brexit debate, we are all pretty much agreed that we want an open Britain, one that is welcoming of talent, vibrant and outward-looking. We want to play a confident role in the world, as we always have, not retreat into ourselves. There can be no doubt that our creative industries are at the heart of that vision. In these times, they are an increasingly important part of our economy, as the noble Lord, Lord Best, outlined, employing 3 million people and growing at four times the rate of the wider economy. But it is the nature of these jobs that makes the industry so important and presents it with serious challenges.
As some jobs in our economy disappear, whole industries will fundamentally change and career paths vanish, but many of the roles in this sector will survive and flourish. The creative industries will provide some of the most satisfying, enriching and fulfilling work in our future economy. That is an exciting opportunity, but places more responsibility than ever on the industry to ensure that these jobs are open to all. At the same time, the industry faces challenges from Brexit. It is an industry dependent on global talent, often freelance and needed at short notice in this ever faster-moving, smaller world.
Looking at all these issues—projecting a global Britain, providing future-proof jobs in doing so fairly, enriching our lives as we have more free time—we come back time and again to people, talent and skills. The central role that data plays in the wider creative industries makes it an excellent focus for examining many of the issues facing the wider creative economy. Incidentally, our committee’s next inquiry was into the UK’s advertising industry—a hugely successful global industry. Looking at these two inquiries together, we saw the interdependence of the creative industries and the vital role played by theatre in providing a pipeline of talent, as well as many other shared issues.
Let us start with access to the industry. We were concerned with equality of access not just to performance roles, but to the wide range of non-performance roles too. To succeed in the future economy, young people will need a melding of skills. I am certain that a strong focus on STEM subjects is important and that the Government rightly emphasise the importance of digital and other technical skills that have been neglected, but it must not be exclusive. Resilience, self-confidence and adaptability are key attributes and the instilling of these soft skills, which come with a rounded education, is vital. The teaching of arts subjects is not just about—maybe not even mainly about—equipping talented young people to succeed as artists, performers and writers. It is about equipping all young people to work in multidisciplined teams and to open their horizons so that they see the opportunities that lie ahead in a broad range of careers. We should examine whether it is still appropriate for children to specialise so much at an early age.
Like the noble Lord, Lord Best, I was struck by the evidence suggesting how difficult the industry finds it to attract young people who have a good grounding in STEM subjects into roles in stage management, automation systems, carpentry and, as he said, even accounting. State schools need to do better at footpathing this career route to young people. Again in its report on the advertising industry, the committee called for government and industry to act. Given the interdependence of the creative industries, the highly successful advertising industry could take some greater responsibility for a wider campaigning approach that highlights the range of roles in the creative industries and to provide resources to help introduce pupils from all backgrounds, parents and teachers to roles in the wider sector.
In taking evidence we found enthusiasm for the principle of apprenticeships and the opportunity they offered to widen the pool of talent coming into the industry, as the noble Lord, Lord Best, outlined. We found some success stories, but there was a widespread feeling that apprenticeships are not working well in the sector—that the scheme is not sufficiently flexible for the demands of the industry and not well suited to SMEs, which make up a big part of the industry. As the Government continue to review the apprenticeship scheme they need to address the peculiar demands of the creative industries in general and theatre in particular.
The theatre industry, like others in the sector, has much work to do to attract the widest range of people to work in it and to watch its performances. I have no doubt that the industry gets this and is working hard, particularly in the area of performers and audiences. The greatest creativity comes from drawing on the widest possible pool of talent and backgrounds so that theatre has an interest in constantly improving diversity. But there is a wider responsibility on the whole sector to be open, welcoming and proactive in attracting young people from a range of socially diverse backgrounds to the careers of the future, which cannot continue to be disproportionally open to a fairly narrow section of society.
However hard we work to teach the skills and attract young people to our global creative industries, often through the career pipeline of theatre, there will always be a need to attract workers from around the world. As Britain leaves the EU and meets the challenges of the rapidly changing economy, we need to be nimble and fast-moving as well as open and welcoming, so a visa regime that serves our national interest will have a focus on providing the skills needed in theatre and other similar industries speedily and with minimal bureaucracy. There needs to be a provision in the visa system for rapid project-based freelance visas. The Government should seek reciprocal arrangements for the industry with other countries.
I have not touched on resources. I know that other noble Lords will. There have been many calls for public spending and there was particular anxiety about funding from local government. Maybe it is time to uprate in line with inflation that old adage about public spending: a few billion here, a few billion there, and pretty soon it adds up to serious money. There is an argument for more public funding of the subsidised theatre sector, which plays a vital role, as the report evidence suggests, in developing the pipeline of talent that feeds not only commercial theatre but our highly successful broadcast and TV industries, advertising, event production and many others. But there is a role for these commercially successful industries to contribute more to funding the development of skills in the theatre industry, from which they benefit, and a whole-sector approach is called for.
In committee, the noble Baroness, Lady McIntosh of Hudnall, who knows a thing or two about this subject, admonished me when I often mistakenly referred to “creative” versus “non-creative” roles. She rightly told me that the distinction I was trying to make was between performing and non-performing roles, and that many of the off-stage roles I was talking about were highly creative. She was completely right.
We have great creative industries full of great creative people. They will drive our economy, improve our lives and strengthen society. As human beings, we are blessed with different talents and skills but—whether we are performers or not, whether we are highly creative or not—our lives will be enriched if the opportunity to take part in or enjoy and appreciate creative endeavour is open to us, which is why resolute focus on opportunity for all starts here.
My Lords, I thank both the noble Lords, who I would like to call my noble friends although I cannot do so formally, who have chaired the committee during my time on it. They have set out the issues in this report so comprehensively and lucidly that, frankly, there is little left for the rest of us to say—but it ain’t gonna stop us, is it?
I start by declaring my interests. Currently I am deputy chair of the Royal Shakespeare Company. I am a former executive director of the Royal National Theatre, and I have form going back many decades, both as an employee and a board member, of many other theatrical enterprises. I concede that the noble Lord, Lord Gilbert, is right that I know a thing or two about the theatre. Whether what I know is still relevant will emerge as my remarks go on.
I endorse everything that both the noble Lords, Lord Gilbert and Lord Best, have said. I particularly light upon the remarks of the noble Lord, Lord Gilbert, on access, which I am not going to concentrate on but we have to take special note of. It is becoming more difficult for people to access the kinds of jobs that the theatre offers. As he said, that is partly because not enough is known about them, but also because getting into them requires a kind of determination and, sometimes, some economic support that is not open to everybody. We must try to do something about that.
I want to concentrate on the theatre not just as a place within which certain kinds of skills are needed, but a place or places within which skills are developed. That goes to the point that the noble Lord, Lord Gilbert, said somebody would raise—and they will—on resources. How we support theatre as an innovator and developer of skills, as well as how much it needs the skills it can usefully take from other areas, is not very much discussed.
I make it clear that I am completely and unashamedly parti pris in this debate, because theatre has been my entire professional life and remains a continuing source of delight to me. This is not something everybody who has spent their professional life in a particular area can always say. Perhaps I do not need to say this in this company, but there is a kind of spit-and-sawdust residue of an old language about the theatre that still hangs about, and suggests that theatre is, as it were, the entertainment equivalent of coracle-making—a bit old-fashioned and not very useful and not very many people are interested in it. Actually, the theatre industry today is highly sophisticated and extremely wide-ranging in the skills that it uses and develops, including some cutting-edge digital technologies that are being developed.
I have to talk quite a lot about the Royal Shakespeare Company, I am afraid, because that is where I currently get most of my experience in the theatre. Noble Lords may have seen a production of “The Tempest” last year, in which Simon Russell Beale played Prospero, which used very sophisticated digital technology to create avatar figures for some of the leading characters. That came about as a result of a collaboration between the RSC and leading technology companies that wanted to work with the theatre, including Imaginarium, the company that developed all the technology for the “Lord of the Rings” films, particularly for the wonderful character of Gollum. Those of you who have seen the films will remember it.
The business of putting on a stage production has always been complicated, and it is very much more complicated now than it used to be. What lies behind the performances that we see as audience members is a network of very highly trained professionals, including the directors, who create the work with the performers, but also the stage managers, who run the shows, technicians operating lights and sound and changing the stage picture in a variety of ways—and, behind them, producers, who know about raising and managing budgets. That is not a glamorous activity, and certainly not one that makes them popular; they also know about ensuring through marketing how to get audiences through the door. It is also true that most theatre companies these days do far more than just present shows. They are involved in education, in community work and sometimes in healthcare. When you put all that together, you have a very rich mix of very diverse skills.
I just want to give noble Lords a couple of examples, mostly from the Royal Shakespeare Company, to point out what I mean. At the moment, the RSC has a project called Stitch in Time to refurbish its costume workshops, which sounds like people sitting and making tiny stitches under awful lighting. Indeed, that is exactly what it has been like at the RSC for quite a long time, because the facilities have not been great. The project is to create much better facilities for these very highly skilled people, who make costumes using the skills of cutting and sewing, which are certainly traditional but are diminishing. Very few people have them any more, but they are highly necessary within the theatre. The noble Lord, Lord Best, mentioned that they are also evolving very sophisticated ways in which to create wigs, and there is make-up and all that stuff. Those are old-fashioned skills being done in new and important ways. The Stitch in Time project is creating within a heritage building new facilities for people to do those old skills even better. To do that, they will need the skills of a highly trained building industry that knows how to work with heritage buildings. In that one little project, you have a range of skills that the theatre requires and draws upon and is developing.
The second thing I want to mention, which also concerns the RSC, is a partnership that it has recently developed with a pioneering technology company called Magic Leap. This partnership, which was announced recently, will explore creative technologies to make theatre—specifically theatre using special computing. I am no expert in this area, but I saw some of what is involved and it is quite extraordinary. For example, you can scan your ticket across your mobile phone, or whatever, and you will get 3D images of the show concerned, or the programme. This is all in development, but it is being developed in an almost SME way within the RSC—it has managed to create a new partnership to take these technologies forward for the benefit of the theatre and more widely.
The last kind of skill that I want to mention is perhaps slightly different; I will not point to the RSC so much as far as it is concerned. This is the evolution within theatres of social skills—the kinds of skills young people need to become effective and rounded citizens. As it happens, the RSC has an education department and does an awful lot of work in that area, including the creation quite recently of a company of young performers drawn mostly from people who would not normally get access to this kind of training. They will present some of their first work quite soon.
I also want to point to the work of a company that I am not formally connected with but am very impressed by—Chickenshed, based in north London, which I have mentioned to your Lordships before. It works with young people of all abilities, from an early age. Some go all the way through their time at Chickenshed and pick up a BTEC, or sometimes a degree-level qualification, as part of their work there. Through the process, they acquire skills that they might find hard to acquire by other means. Many of these people—not, I have to say, including my granddaughter, who also goes to Chickenshed—are people who would not normally find themselves working in the theatre. It is important that this kind of work, which is helping to develop the well-being of a lot of the people involved, is remembered and celebrated.
I am in danger of going on too long and I do not want to do that. I will finish by saying that theatre can, and does, make a very extensive contribution to our social and economic culture, as has already been said by my two chairpeople. This is why theatre needs a workforce of wide-ranging creative and technical ability, and why the current education system, and the policy that lies behind it, is in danger of letting the theatre down. The system does not encourage schools or other educational institutions to see and understand the opportunities available in this kind of environment. In my view, it focuses much too narrowly on examination results and does not see the need to join up various kinds of educational discipline to create people whose education experience equips them for a new world, within which they will be required to be many different kinds of person—all within the same person.
This also applies to apprenticeship schemes, as the noble Lord, Lord Gilbert, said. The Magic Leap partnership with the RSC creates fellowships to bring two young people on board to learn these skills. I hope the Government are listening on this subject. They are not hearing it for the first time. I hope that, by the end of this debate, the Minister will be able to give us a little encouragement that they have taken on board how important this is.
I am sorry to go on, but I have one last thing that I want to say to the Minister. He will not be ready for it and I am sorry that I have not had a chance to tell him about it. There is a problem that the theatre industry is now facing and it concerns the European Commission’s Directorate-General for Energy. How boring does that sound? However, it has the potential to have a devastating—I use that word advisedly—impact on one of the most creative aspects of theatre, which is lighting. I see the Minister nodding, so I will not take up the Committee’s time by explaining it. I simply say to him that if he is not able to give the Committee an answer today about how the Government intend to prevent this very damaging initiative going forward—or indeed to tell the noble Lord, Lord Grade, when he asks a Question about it in a couple of weeks’ time—can he please consult his colleagues and write to us?
In the meantime, I thank everybody who has been involved in the committee’s report and I apologise for taking so much time to say what I have said.
My Lords, I thank the noble Lord, Lord Best, for his exemplary chairmanship, not least for being willing to take on this subject. I think that we took a bit of persuading but he then took it on with gusto.
“The stage is not merely the meeting place of all the arts, but is also the return of art to life”.
That was brilliantly put, not of course by me but by Oscar Wilde, and I think that it brings together a lot of what we have already heard from the previous speakers. We Brits are good at this creative meeting place and we have a thriving theatre sector. Our writers, directors, craftspeople, producers, performers and technicians practise their talents across the British Isles and across the globe, and are showered with appreciation and awards. However, as the noble Lord, Lord Best, mentioned, this report reveals concerns that certain issues could lead to serious problems if they are not addressed.
All of us here know that the creative industries are the fastest-growing sector of our economy yet, despite the fact that at the moment there are 17 creative roles on the Government’s shortage occupation list, creative subjects are being squeezed out of the school curriculum. I am sorry that I have to repeat what your Lordships have already heard.
As Grayson Perry presciently observed:
“If arts subjects aren’t included in the Ebacc, schools won’t stop doing them overnight. But there will be a corrosive process, they will be gradually eroded … By default, resources won’t go into them. With the best will in the world, schools will end up treating arts subjects differently”.
He was right—they are, despite it being a fact that schools that provide high-quality cultural education get better academic results across the board, and despite it being a fact that private schools entice parents with access to culture. Thomas’s Battersea offers specialist teachers in art, ballet, drama and music. This is the school chosen by the Duke and Duchess of Cambridge for their son. Surely what is offered to a prince should be offered to all.
It is a fact that the current Secretary of State agrees. He said it himself to our committee:
“Our message to people who lead schools is that the arts help in what they would think of as the core subjects and with life chances. The evidence is pretty strong that music helps you with maths. I would say that drama and theatre helps with your English”.
He goes on for longer and I urge noble Lords to read what he said. To my mind, it is absolutely conclusive that he believes in STEAM, not STEM. It is a fact that for most young people and for a disproportionate number of those from less affluent households, theatre is first encountered in schools.
It is suggested that it is up to individual schools to choose what is on their syllabus, but there is no incentive to offer creative subjects. There are 119 accountability measures that a state secondary school has to consider and not one pertains to the arts. As Amanda Spielman, the current chief inspector of Ofsted, commented in a recent Ofsted report:
“School leaders need to recognise how easy it is to focus on the performance of the school and lose sight of the pupil. I acknowledge that inspection may well have helped to tip this balance in the past”.
Does the Minister not agree that a requirement of the Ofsted inspection process should be to ensure that no school can simply drop creative subjects? As it seems that both the Secretary of State and the chief inspector of Ofsted back STEAM not STEM, does the Minister not think it best for the Government to listen to the noble Lord, Lord Baker—Kenneth Baker, once a Tory Secretary of State for Education—and his Edge Foundation’s baccalaureate? It suggests delivering a stretching curriculum that provides a solid academic core, alongside creative subjects. Does the Minister not agree with that aspiration?
The career advice on offer comes to the point about access or lack of it from the noble Baroness, Lady McIntosh. As the committee was told, the perception of a career in the theatre is associated with insecure employment. “Low pay or no pay” was the way it was put to us. Actual careers advice is poor. We are not just talking about encouraging careers of so-called talent. I will not mention wigs, because they have already been mentioned twice, but carpenters are also needed. As Bryan Raven from the National College for the Creative and Cultural Industries told us, there is a lack of awareness of the careers available in the creative industries. Take carpenters; make them aware that there is a whole career associated with making sets—and maybe coracles, I say to the noble Baroness, Lady McIntosh; I do not know. Julian Bird of Equity said that it is important
“to inspire people who may have technical abilities in other areas that our industry needs”.
This lack of careers advice exacerbates the problems faced over diversity. Low pay or no pay is an assumption, as Christine Payne from Equity told us, that a job in the theatre is not proper work. It dissuades parents, teachers and careers officers from encouraging young people from less affluent and culturally diverse backgrounds to pursue careers in this area. That takes us back to the curriculum and the disparity in access to art subjects between children in state and private schools. Many witnesses who came before us felt that the consequence of this is a pipeline that is becoming ever more dependent on the affluence of parents. The knock-on effect is a lack of mobility, reflected both front of stage and backstage.
Sir John and Frances Sorrell’s National Saturday Clubs provide schoolchildren with an environment in which to learn from industry experts for free. They help young people gain qualifications and give them an understanding of career opportunities in this wonderful world. Does the Minister not agree we need more of this kind of collaboration between businesses and schools?
Our committee heard that the theatre sector is impressive in its outreach work, as touched on by the noble Lord, Lord Best. I have experienced this personally at the Lowry, where the learning and engagement team programme brings in harder-to-reach young people from the community, not just as spectators but as participants and creators. I recently heard that the National Theatre is using new technology to stream their productions into state schools and help them put on their own productions. We have heard some wonderful stories from the noble Baroness, Lady McIntosh. There are many examples. We heard concerns from those who spoke to us that these are being eroded because funding is being squeezed, particularly at local government level. In some areas, the local authorities have cut extra-curricular provision of arts education in half.
In his acceptance speech for the BAFTA rising star award, Daniel Kaluuya was clear:
“I am a product of arts funding in the UK. I want to thank people who support that, mainstream arts and grass-roots levels. Thank you for letting me think different”.
Role models such as Daniel are needed to inspire others.
Of course there is also funding from the EU; my fellow committee members know that I cannot speak without mentioning Brexit. I think another noble Lord is going to mention Brexit but I will not mention lighting, because that has already been done. Our creative industries have benefited massively from our membership of the EU, so can the Minister confirm that where access to EU funding is lost, the Government will maintain investment through UK-based schemes? Will he confirm that they will maintain future involvement in Creative Europe and Erasmus? Without the right deal on the movement of talent and skills, our theatre industry will face big challenges. Can he give us an assurance that the Government understand the need for the continued ability of people to move freely between the UK and the EU for creative activities?
I will end where I began, with education. Rufus Norris, the artistic director of the National Theatre, wants an answer to this question. He said:
“What … explanation can there be for the baffling disconnect between”,
“industrial strategy, which prizes the creative industries as a priority sector, and an education policy that is deliberately squeezing creativity out of our children’s learning?”
I, too, begin by thanking both chairs of the Communications Committee. Committee work contributes so hugely to the work of the House and, speaking personally, I have always relished and continue to relish Tuesday afternoons.
I struggled a little with what I wanted to say this afternoon, as the question of the arts in schools is something I feel passionately about. So too is a pipeline for talent, beset by problems of class, diversity and lack of access outside London; the undervalued reputation of the creative professions; and, as in every one of our conversations at the moment, the question—or should I say the cost—of Brexit to an international and open industry, which holds a unique place on the world stage.
However, as luck would have it, last night I went to the theatre. I saw “The Inheritance”, which, in a spellbinding seven hours over two evenings, managed to give a detailed account of the AIDS epidemic of the 1980s, a history of homosexuality over four generations of Americans and a truly masterful account of love and loss. It raised a challenging question, which I am sure everyone in this Room has considered at some point: is it possible to love honestly across the political divide? I was reminded of our witness who said that,
“the NHS looks after us physically but theatre looks after us spiritually”.
It is on that theme of the theatre ecosystem and its importance to our civic life that I wish to address my remarks.
I draw your Lordships’ attention to my interests in the register, in particular as president of Voluntary Arts, a membership organisation that represents 63,000 organisations in the voluntary arts sector—please note that number—and to say that my husband is a playwright.
Politicians and policymakers have become very comfortable with asserting that resources are finite, so we must adhere to a utilitarian hierarchy. While I have yet to meet a Minister or government spokesperson who did not profess the importance of arts and culture, their declarations of personal attachment to Welsh choirs, Shakespeare’s tragedies or “The Angel of the North” are almost invariably followed by the assertion that the demands of our cultural life must be seen through the lens of other, indisputably more important matters. While there is maths to teach and there are criminals to catch, the burden of social care and the health of the nation at stake, the arts must wait patiently in line.
However, culture is not confined to exhibition or performance. It is the way in which we explore who we are and our values, challenge and record our histories, consider how we live with one another and how we invent our future. Culture, and theatre within it, happens when people, with their ideas, skills and imaginations, find opportunities to engage with one another—opportunities that require money, equipment, time and place, and opportunities that can be created or be snuffed out by a lack of political understanding and will.
The Society of London Theatre reported £1 billion in ticket sales across the UK in 2017. Subsidies account for only 14% of all funding in the theatre sector. Venues and companies contribute ticket sales, workshops, cafés, education schemes and sponsorship to a vibrant mixed economy. Also clear from our witnesses was that industry professionals flow seamlessly between television, film, commercial and digital content, honing their skills and sustaining their incomes. Theatre, indivisible with the broader arts economy, is worth £7.7 billion annually.
Beyond the known theatrical professions, as the noble Baroness, Lady McIntosh, mentioned, lies an army of secondary services, from accountants and agents to theatrical dry cleaners, that all benefit from and intersect with the sector. Far from being a burden or government subsidy being a free cheque for theatre luvvies, it is an investment that brings a palpable net economic benefit. As the Arts Council reports, for every £1 of salary paid by the arts and culture industry, an additional £2.01 is generated in the wider economy.
But theatre offers two separate accountings: the economic contribution and the creation of public good. Even here, one thing is indivisible from another. Theatre—or, more usefully, drama—takes place in three interconnected spheres: the commercial, the subsidised and the amateur. Many of the commercial theatre makers, while unashamedly set on raking in the cash, also offer a public good—for example, by exploring contested subjects, such as in “Miss Saigon” and “The Book of Mormon”, offering creative excellence, as in the current Pinter cycle, or even making political waves, such as by casting a black Hermione in Harry Potter. All are deeply commercial endeavours.
Similarly, subsidised theatre may well be experimental or for a minority audience, but just as often it offers the space and resource to create work that ends up as a commercial hit. “War Horse”, “The Curious Incident of the Dog in the Night-Time”, “Matilda” and “The Ferryman” are just a handful of the shows that would not or could not have found their feet in a purely commercial setting.
Meanwhile, more than 5,000 registered amateur theatre companies are in the UK, paying copyright fees that sustain writers, act as a driver of audience development, particularly in the regions, and contribute to the economic activity and popularity of festivals and local community venues.
This same 14% also covers drama, very often of extraordinary quality, that reaches parts of the community that would otherwise be overlooked. Examples include the award-winning women prisoners theatre company Clean Break, the Big House, with its young participants who have been through the care system, the Beyond Borders festival of refugee and asylum stories in Sheffield, and “Inside Out of Mind” from the Meeting Ground Theatre Company, which goes from care home to care home playing to the families, carers and sufferers of Alzheimer’s. There are scores of companies that make our country vibrant, help the vulnerable find a voice and, I would argue, spread considerable joy while they do so.
For young people, school drama is often the first cultural activity that a child participates in, and a school visit to the theatre is the first professional art they see. It can be transforming, impacting on self-development, cultural understanding and educational outcome. I hope that I will be forgiven for saying that I know this because I am married to someone whose school production of Brecht was the first step to a life in the theatre that has to date included youth theatre, university drama, subsidised theatre, regional theatre, West End theatre, Broadway theatre and beyond—a life made possible only by the vision of a drama teacher in a Newcastle school.
We are not shy of saying that the Greeks, the Spanish golden age, Elizabethan theatre and mid-century Broadway have offered the world a great deal more than entertaining distraction. We have understood the importance of meeting in public to tell the stories of our day, respond to the demands of a public and offer visions of possible futures. With only a little timidity, I would suggest that we are in our own golden age; since the mid-1950s, our playwrights, directors and actors have told stories so important and compelling that they have travelled the world. They dominate the creative industries globally; they are showered with awards, the Nobel Prize for literature among them. It has been a continually fruitful, sophisticated and extraordinary time and, as the world has moved inexorably towards the pre-eminence of the individual, I would argue that theatre has remained a crucial expression of our civic life, challenging our perceptions of politics, narrative and form, and it is not something that we can afford to lose.
The threats to the sector have been set out admirably by other noble Lords, so I will add only that the current health and brilliance of the theatre sector is not proof of its longevity. Yes, it is wonderful now, but this generation of practitioners are based on the policies of a generation ago. What we are doing now is starving the practitioners of the future. Without a healthy sector, without solving the education issue, the pipeline of which we are all speaking will have nowhere to land.
I finish by offering my thanks to all those who gave evidence for their wisdom and phenomenal commitment, and by making four practical suggestions. First, we should put art subjects, including drama, in their rightful place in the school system. Drama offers the exact skill set outlined by the OECD, the European Union, the Global Learning Alliance and UNESCO as being essential to the 21st-century workforce and society more broadly. Collaborative working, critical thinking, project based, iterative and interdisciplinary—it ticks all the boxes.
Secondly, as we have argued often in this House, we should ring-fence money for cultural activities in local authority funding. The swingeing cuts to local authority budgets have hurt the most vulnerable parts of the theatre ecosystem—the regional, marginal, amateur and the young. Thirdly, we should take the VAT money from theatre tickets, estimated last year at £107 million from London box office alone, and reinvest it in the subsidised sector. It will create growth. Fourthly, noble Lords should go and see “The Inheritance”. If nothing else, you may learn to love across the political divide, or not.
My Lords, as the first speaker this afternoon who was not a member of the committee, I extend my thanks on behalf of the guests to not just the noble Lord, Lord Best, but all the previous speakers for their work as members of the committee. The 2017 general election truncated not just the Conservative Party’s more grandiose ambitions for political dominance but more regrettably, perhaps for me at least, the work of the committee on this report. Despite that, it has come to five very important and clear conclusions, which I unequivocally endorse.
Listening to the noble Baroness, Lady Kidron, talk about her husband’s formative experience at school made me think about my performance as Macbeth, aged 12, which my father—a very kind but an even more honest man—described as the most monumental piece of miscasting he had ever seen. That has perhaps spared me from the need to declare interests that are rooted in real knowledge and experience of the theatre. But among my interests in the register are two particular ones to which I should, perhaps, draw your Lordships’ attention: first, as a trustee and past chair of the Esmée Fairbairn Foundation, which funds a number of theatres and theatrical ventures and is referred to by National Theatre Wales in giving evidence; and, secondly, as a newly appointed trustee and vice-chair of the London Academy for Music and Dramatic Art, which is better known as LAMDA.
The first section of the report talks about the importance of the theatre industry, both in its own cultural and economic right and, as noble Lords have already stressed, as the seed from which other more recent industries, including film, television and digital, have grown and flourished. I thought there was a striking, if not revelatory, quotation from Julian Bird, the chief executive of UK Theatre and the Society of London Theatre, when he said:
“Hollywood is packed with British technical and creative skills, 90% of which have come through regional theatre”.
Although the report is about developing the pipeline of talent—implicitly, I think—into professional theatre, it is important to recognise that developing that pipeline in schools and at school age will also drive the stimulation of cultural, social, educational and communication benefits and skills for many times more people than will ultimately enter the profession.
There has already been discussion this afternoon of the education environment, the trends in schools on EBacc, the emphasis on STEM and the horrifying divergence in the provision of drama and theatre between state and independent schools. It is important to emphasise that this is not just in terms of the curriculum but, almost more importantly, in terms of extra-curricular, external theatre visits, for which there may not be funding even if the regional theatre is within travelling distance.
On higher education—I suspect because the committee’s deliberations were cut off in their prime—there is relatively little discussion of the role of the drama schools and conservatoires. Given the interests that I have declared, I would like to spend a little time talking about them. One of the challenges is how best to describe them. I guess that, in the era of fervent Brexiters, the term “conservatoire” sounds altogether too foreign and too French. However, the more technical description of them as small, specialist higher education institutions seems rather dull so, with your Lordships’ permission, I shall continue to refer to them as conservatoires. The conservatoires are at the top of the tree, but they are not and should not be elitist. When Nicholas Hytner attended the ground breaking ceremony at LAMDA for its wonderful new building with the Sainsbury Theatre, long before I was a trustee, he said: “Without LAMDA, there would be no National Theatre”.
In looking at what the committee discussed in relation to drama schools and conservatoires, I was a little concerned by the quote from Sue Emmas of the Young Vic when she said:
“We are not getting the diversity of talent that we need through … the drama schools, which is a blockage in the talent pipeline”.
Without being complacent or saying that there is not still room for improvement, I was looking at the statistics for the past couple of years at LAMDA. In the current academic year, 23% of undergraduate students are from a black, Asian or minority ethnic background. It was 20% in the previous year. Before there is a boorish intervention by the dyspeptic theatre critic of the Daily Mail, I should say that I do not believe that this reflects primarily the efforts of LAMDA to make access as good as possible. It really reflects the intensity of talent that exists in those communities. Twelve per cent of students have a declared disability; 38% of BA acting students come from households with an income of less than £26,000 a year. LAMDA gives bursaries or scholarships to 20% of all students. The disparity between that 20% and the 38% of students who come from households with income levels that low is a constant reminder of how much we at LAMDA still need to do to increase funding for bursaries and scholarships.
Sitting suspended for a Division in the House.
If I may have a couple of minutes’ grace, I want to give one other statistic from LAMDA because it confirms one of the points made by the committee relating to careers advice for technical and stage management. LAMDA graduates from technical and stage management courses have a 100% employment rate in the first year, yet the applications are proportionately massively lower for that course than for the acting course. While the glamour of acting might account for some of that, there is strong evidence that career advice could be more helpful in that respect.
Where does this point? I think of the educational side as a pyramid, with the specialist conservatoires at the top then, in other higher education, the universities’ drama departments and then the schools. Then there is the theatre sector itself and the creative industries. Not to make this the Venn diagram from hell, but these have to intersect. One of the challenges is to get all the different parties to pull in the same direction. That, of course, requires money at every level: government money, central and local—I totally endorse the comments of the noble Baroness, Lady Kidron, about ring-fencing local authorities’ arts budgets—philanthropic funding, which can never replace yet can complement government funding, and commercial funding.
To conclude, if this is not a guest being more outspoken than he should be, I find it extraordinary that, a year after the publication of the report—quite a slim one, for the reasons discussed—there has been no government response. It is very hard not to draw the conclusion, for all the distractions that other unmentionable events pose, that that is an implicit statement of priorities. I very much hope that the Minister, in winding up, will do something—perhaps more than something; a lot—to reassure your Lordships that this is a priority for the Government.
My Lords, I declare my interests. I am a West End and Broadway producer in the theatre. I will get the plug in now. I currently have “Chess” running at the Coliseum and “42nd Street” at Drury Lane. See me after for tickets, anybody who is interested.
I suspect that this is less a debate than a unanimous declaration of fear for the future of this precious sector of our creative endeavours in this country. I welcome the report. It is timely, valuable and worthy of the attention of the Government and the sector. I hope that, as a result of this debate today, it gets that.
I fell in love with the theatre in 1948, when I sat on a bucket in the wings of the now-gone Finsbury Park Empire watching my aunt, the dowager Lady Grade of Elstree, playing principal boy in “Babes in the Wood”. That love affair has lasted a lifetime. I did tread the boards once. I never quite made the lead in the Scottish play, I have to say. I thought I had better try it out, because it was in the family. At my posh school, age 13, I auditioned for a part in Gogol’s “The Government Inspector”. To my delight, I landed the part of the sergeant’s wife. Soon after the first performance, I hung up my bra and decided that I was not cut out to tread the boards.
One of the joys of the theatre sector is that it is digital-proof. It has survived every form of technological development known to man from movies to television and radio—you name it. There is no experience that you can create on a screen to equate, or get anywhere near, to sitting in a theatre in rows of seats watching the magic in the creation and realisation of great works for the theatre. Some are not so great, but you have to try. It may be digital-proof but it is not skills-proof, which is why this report is so very important.
Successive Governments, to give them their due and full credit, have recognised this and there are tremendous supports for the theatre. Obviously the Arts Councils could do with more money, as they always could; there is no limit to the good works they can do. In a note to the Treasury, I would say that a little money in this sector goes a very long way. I hope that that message will go back.
We must encourage theatre and drama training, as so many of my noble friends have said, to be part of what schools do. There are some worrying figures showing that fewer and fewer schools are offering drama at GCSE and A-level. This should be a worry to us all, not only because it is in these lessons that the world of the theatre is opened up for many—a world they may not feel was their world—but because of the skills in communication, teamwork and being creative that drama enriches within people’s lives, and indeed their spirits. The news is currently full of reports of an alarming increase in young people’s negative mental health. What a worry this is. Drama and theatre in schools is proven to be an essential subject where youngsters can find a way to express themselves, explore their imaginations, and develop their sense of themselves and empathy for others. There is nothing like learning drama in schools to help kids. We should be absolutely certain that schools are supported to have drama and theatre at the heart of their curriculum.
I have apologies from my dear friend the noble Lord, Lord Puttnam, who is going to a creative industries’ graduation ceremony outside London. He would otherwise have spoken and he asked me whether I would be kind enough to express his full support for what I am saying here. We must encourage a drama curriculum that is active and vocational: not just Shakespeare read in English literature classes. I hear recently of schools not having time to do a school play, where the school stage is being turned into science labs or where other subjects are now so much the—perfectly proper—priority that head teachers feel that plays and theatre are the extra, the add-on and the dispensable. They are not. We would not be training the most exciting actors and stage crews in the world if this view came to dominate. We must understand that to keep the pipeline of theatre talent of all kinds open—on stage, backstage and front of house—we must encourage schools to have theatre at their heart. The kids absolutely love it.
Last month, I visited one such school that has theatre very much at its centre. I speak of the BRIT School in Croydon, a free state-funded performing and creative arts school for 14 to 18 year-olds. I spent the day there and was blown away because it was absolutely eye-opening. It is known as the school that taught many of the world’s leading music performers including Adele, Amy Winehouse, Katie Melua and Leona Lewis. I am told that its former students have sold a staggering 140 million albums since it opened just over 25 years ago—what a record. It has produced numerous actors—none of them posh, I hasten to add—who are part of our cultural landscape today. But along with Olivier award-winning performers from “Hamilton”, “42nd Street”, “Everybody’s Talking about Jamie” and “Follies”, the school has a technical theatre course for aspiring costume designers, producers and prop makers.
We need the backstage staff—the technicians of tomorrow—to be encouraged and trained from as early an age as possible if our rich history of creating the world’s best is to continue. As well as the high standards of professionalism, what struck me most about the school were the levels of independence, confidence and belief that the students had. Many did not possess any of those characteristics when they arrived at the BRIT School.
These were young people going places. Although they were likely to enter the world of work in the creative industries, they also had skills that would set them up for life. Over the past five years, the BRIT School has seen a decrease in its funding of over 20%. It currently has an annual shortfall of £1.25 million. The demand is there. For some courses there are 10 qualified applicants for every place. I am not talking about flaky kids who say: “Wouldn’t it be nice to go to the BRIT School?”, I am talking about kids who have talent, who pass the auditions or the qualifying standards. The average is four to one: four kids for every place it can offer. The school has had to cut and reduce courses and, of course, the classes are getting bigger.
The funding shortfall must be fixed. I know this is not a matter for the DCMS but for the Department for Education. However, it is symptomatic. Here is a joyous place, which is contributing more to social mobility than any other single institution anywhere in the country. Many of these kids come from troubled backgrounds—they may be kids who have dropped out of school but who have suddenly found a talent they can pursue at the BRIT School, and they go on to get jobs in the sector. The creative sector is a fantastic engine for social mobility, probably the best we have ever had. I remember talking to Sir Ridley Scott—still an A-list Hollywood director, whose father was a riveter in the shipyards of the north-east, and he was very proud of getting as far as he had from such a humble background—who told me that his mother was interviewed after he and his late brother, Tony, became very successful and when the journalist asked her: “What did your husband do?” she said: “Oh, he was in shipping.”
Social mobility is one of the great prizes of the creative industries, most particularly in the theatre. I know that the department is very supportive of the BRIT School and that the Government are very supportive of the creative industries. But a small amount of money goes a long way in our sector. In summary, I ask my noble friend: does he agree that taxpayers would get a better return from their investment in the theatre, and in the education of youngsters, than from spending millions on Leveson 2?
My Lords, there was at least a touch of controversy in the last remark, which has knocked the very large consensus there has been in this debate so far, but most of the points made by the noble Lord, Lord Grade, are ones which I shall echo in my own remarks. Like the majority of your Lordships who have spoken in this debate, I am a member of the committee that drew up the report. At the time that it was drawn up I was listed as having no relevant interest. I should perhaps say that, since that time, I have an appointment in the cultural sector as chair of the strategic board of Tyne and Wear Archives and Museums. Although that is not directly part of the theatre industry, it is part of several regional partnerships in which the theatre industry is represented and is very active.
I would also like to join others in the tributes that have been paid to our former chairman, the noble Lord, Lord Best. It was a pleasure to be part of his team as a member of the committee and I am glad that the current chair, the noble Lord, Lord Gilbert, has also been present at this debate and has spoken.
At this stage, so many points have been made that I would simply like to reinforce one or two matters which I am keen to stress and, perhaps—in mentioning my connection with the north-east—to use the north-east as something of a case study, to reinforce some of the points made.
One point that should be stressed is that in our report we concentrate on theatre skills, but what we say about them is relevant to many other parts of our creative industries. Some of the comments in our report and some of the evidence that we received have an obvious read-across to other parts of the creative sector.
Let me give one example. Concern was expressed by several people giving evidence and by members of the committee about the quality of careers advice in schools regarding careers in the theatre, but of course it was about careers not just in the theatre but in the whole of the creative sector, and the importance of careers advisers knowing about the huge variety of jobs available in that sector—from the most obvious, such as acting, to all the technical jobs which are very important in terms of both technology and scientific innovation. In that sense, although I totally support the comments made about STEAM rather than STEM, there are subjects in the STEM curriculum which are very relevant to the creative industry sector.
An issue that I and others have been very concerned about is access to employment in the theatre for those from less affluent backgrounds. I rejoice in some of the examples that the noble Lord, Lord Grade, gave of those who have done spectacularly well from non-traditional backgrounds—to put it mildly—but none the less, great concern was expressed to us in our evidence sessions that the trend is rather negative at the moment. It is therefore important for Government to take great notice of this issue. Obviously, when we were talking about people from less affluent backgrounds, we were also talking about the need to encourage people from a diversity of backgrounds into the theatre sector.
There was a regional aspect to this issue, particularly given that, understandably, there is so much theatre activity in London. It is difficult, because of the cost of accommodation in London for people from less affluent backgrounds from the regions to access those jobs, particularly when they are of the no-wage or low-wage variety. That is a real disincentive for people to move from the regions to get that experience in London, and then perhaps move back to the regions subsequently.
In response to a question that I asked a representative from the National Theatre about how many apprentices had come from areas outside London, I had the reply, “I think there was one from the West Midlands some time ago”, which I must say was not totally reassuring. The Minister giving evidence to us, who is now the Secretary of State for Culture, showed himself to be very sympathetic on the subject. I urge the Minister here today to pass on to the new Secretary of State his commitment to us when he said:
“Further work on the diversity of workforces in theatre is important”.
I hope that the Minister can assure us that such work is being carried forward.
The educational angle has been fully covered in this debate, but I have talked to representatives of some of the theatres in the north-east, and they have found that there has been a reduction in school visits to theatres. It has been a combination of financial difficulties—schools have not wanted to hire buses or cover the cost of tickets and so forth—and an issue referred to by the noble Lord, Lord Grade, and others: time. There is so much concentration on the core curriculum that it is very difficult to find time to fit in these enormously valuable—indeed, life-changing—activities. That is something that we cannot stress too much.
Local authority funding and the pressures on it is a subject that has been raised by many people. That is certainly the experience I have had in talking to local authorities in my own part of the country. On this issue the Minister was less sympathetic. He said that he felt it was a “political choice” to decide whether to support the theatre and the creative sector. But local authorities have had some terribly difficult choices to make when it comes to funding, particularly if we are talking about making a choice between funding the care and social care sector, which is vital, and the theatre sector. It is an extremely difficult choice to make. The funding angle needs to be looked at more sympathetically by government.
My noble friend Lady Bonham-Carter and I probably vie with each other as to which of us is most exercised by Brexit on our committee. It is almost impossible to have any debate that does not mention it. In addition to the issues that she quite rightly raised, there is a general worry in my part of the world, arising partly out of the Government’s impact assessments of Brexit on the different economic regions of the UK. The impact assessment seems to show very clearly that under whatever outcome—even the Government’s preferred outcome—the north-east, with its strong reliance on exports to Europe, particularly in the automotive and pharmaceutical sectors, would take a substantially greater hit than most other areas. Obviously if the economy of the region is hit, that will affect all sectors. It has been mentioned to me by people in the region that they are concerned about this and that they hope it will not affect the vibrant cultural sector we have in terms of attendance at theatres, box office receipts and so forth, and of the links with Europe that have been built up in recent years.
However, I do not want to end on a gloomy note because I share our committee’s enthusiasm for our theatre industry and its tremendous reputation at home and abroad. I hope the ideas and issues raised in the report will be treated very seriously by government.
My Lords, we are having this debate soon after it was announced that “The Ferryman” will transfer to Broadway in October with much of its original cast—the continuation of something of a tradition in recent times. In the English-speaking world this is by no means one-way traffic. Many of us are indeed still waiting to see “Hamilton”.
I do not believe that there has since the late 1950s, when Harold Pinter, whose plays I love, and others arrived on the scene, been a single moment when British theatre has not been interesting. This has been not accidental, but a result in part of this country opening itself up to the world, including Europe, but also of the state trusting in that long-term artistic development. In that light, this is a disturbing but much-needed report, so ably summarised by its chair, the noble Lord, Lord Best. Although our debate is a year on from its publication, it is even more relevant now.
The five key concerns are the right ones, to which I could only add a year later as a sixth the effects of Brexit and how it might affect young emerging talent. I will deal with that first. A production that has stuck in my mind over the years was one I saw in Berlin back in the 1990s, “The Unanswered Question”, a work by the Swiss director Christoph Marthaler, who included within his company a number of young British performers—actors and singers—working alongside fellow Europeans. It is the possible loss of the European cultural context, the chance for young workers to come and go freely within Europe and collaborate on artistic productions, that would be so damaging. The chance to work in companies abroad will, without a doubt, become significantly more difficult and costly if, in particular, we leave the single market, when every theatre worker from most other European countries will not suffer that potentially huge disadvantage of the loss of free movement.
The report correctly talks about tuition fees as part of its third key concern. This should not just be about costs per se. By effectively monetarising and commercialising higher and further education, we discriminate against both arts subjects and students from less-privileged backgrounds, creating what could be termed a negative multiplier effect, because of the increased significance that is given to whether the arts are a reliable career as a source of income. This effect was referred to by the noble Baroness, Lady Bonham-Carter. This is notwithstanding the irony that the creative industries are now worth £92 billion. I for one believe that we should return to a grant system.
There is also the application of audition fees for entrants to drama schools, a particularly scandalous extra cost that will inevitably deter less-privileged students. Factor in multiple auditions, because students apply to a number of drama schools, and follow-up auditions, not to mention travel costs, and the whole process can cost several hundred pounds with no guarantee of being accepted at the end of it. Audition fees should be scrapped and, if necessary, made illegal. Liverpool Theatre School removed these fees earlier this year, and all other drama schools should as well.
On secondary and primary education, it may be more than three years since the then Education Secretary Nicky Morgan said that arts subjects could “hold” pupils,
“back for the rest of their lives”.
We are still inhabiting that same political culture, although the Government, in contradictory fashion, profess to believe in a rounded education. Around me I see others who have been fighting the EBacc battle for some years. The only benefit that time has bestowed on us, if the Government would take notice, is in the amount of evidence that has built up. Last year alone, GCSE entries in drama fell by 9%, on a par with music, art, dance, design, film and TV. The Cultural Learning Alliance reports DfE figures from last June that show a fall in drama teacher numbers by 17% and hours taught by 13% over the period 2010-16. I will say again what many of us have been saying in the House: the EBacc should be scrapped. I would say the same for Progress 8, since that measure is firmly contained within the EBacc frame.
A properly rounded education is not just a good in itself or empowering for students making career decisions, it would also allow subjects to talk to each other within schools on equal terms. This is particularly important for theatre, because it is an activity that draws on so many different skills, including STEM skills, as the report makes clear and as referred to by other Lords. A single school production can, for example, draw on students’ contributions in many areas—fine art, set design most obviously, printing, fashion and textiles for props, film, computing, design, technology and engineering. Some schools do this, but too many state schools seem to keep subjects in their boxes. Particularly at a time when funding and resources are depleted, this kind of interaction will be the last thing on departments’ minds.
In an ideal environment, the opportunities for apprenticeships, which the report admirably treats in detail, would properly come into focus within the school setting. Interested students, no doubt inspired by musical theatre and performance generally, wish from an early age to learn a wide number of skills, not just acting but singing, playing musical instruments and dance in a variety of styles. The noble Baroness, Lady McIntosh, mentioned many more skills that theatre employs. That demand cannot possibly fit into an education system so rigidly controlled by the EBacc. We need to be much more flexible.
The report rightly gives space to the issue of diversity. The actor Eddie Marsan, who is passionate about this concern, kindly provided me with a statement for this debate. There is unfortunately not time to quote it in full, but he says that
“if you don’t give access to this profession to people from diverse and multicultural backgrounds then you can never fully express the true nature of that world. No matter how well-meaning people from a more privileged background will be in writing and producing work that encourages a more benevolent and fairer society, it will always be from a limited perspective. Sometimes you need a writer, artist or actor from a certain community to not only challenge our perception of that community but to also challenge the orthodoxies inherent in that community”.
I would certainly agree with that.
The regional theatres, theatre companies and the associated projects such as the Royal Court writers’ groups, which the committee visited, are important in their own right. They are important, too, as the seedbed of the West End but also, as the report notes, they are where most theatre workers start their careers. Yet, as Nicholas Serota said in his first speech last year as chair of the Arts Council—we have quoted this before in the House, but it is even more worth quoting now,
“the loss of local authority funding … is now the most pressing issue, day-to-day, for many cultural organisations across the country”.
I would add that that is particularly true for regional theatres. Local authority funding cuts urgently need reversing and, in terms of this debate, in theatre as in many of the arts, the relevant effects are fewer opportunities and less creative risk-taking alongside the additional concerns of maintenance and building repairs.
The report does not mention fringe festivals, such as the Edinburgh or Brighton festivals, which are often where young performers get their breaks and provide work for many others. Their success is threatened not just with the loss of state funding but with the danger, too, of sponsors pulling out in part as a result of the climate over Brexit.
This is an excellent report. I shall just end with something that Richard Eyre said earlier this year in an interview with the Guardian on supporting the arts in Britain, in a week, too, when Germany has announced further increases to its annual arts funding deal. He said,
“government and education must and should play a part … It’s not a question of feather-bedding. It’s just part of the responsibility of a modern state”.
My Lords, I am grateful for the opportunity to speak briefly in the gap. I had better declare my interest as chairman of the St Martin’s Theatre company, which puts on “The Mousetrap” at the St Martin’s Theatre, the world’s longest-running play and unashamedly commercial, I am afraid. I am also honorary governor of the Royal Shakespeare Company. I quite agree with what the noble Lord, Lord Best, said in his opening remarks about the success, national and international, of British theatre. However, unlike the noble Baroness, Lady Quin, I end on a very gloomy note.
What is coming down the road is the EU Commission’s eco-energy working plan 2016-19. This means that every single theatre in Britain, whether it is the National Theatre, the RSC or the regional theatres that we have heard so much about, will have to change all its lighting without exception. The total cost of this has already been estimated at £1 billion across the country. The National Theatre thinks that it will have to spend £8 million to redo all its lighting. What that means for St Martin’s I have no idea, and I do not want to know yet, but for smaller theatres it means that they will have to close, if these proposals become law.
In case noble Lords think that I am exaggerating, I have a couple of quotes here. Paule Constable, who is responsible for designing “War Horse” and “The Curious Incident of the Dog in the Night-Time” says that she will not be able to continue to do her work any longer if this regulation comes into force. She says:
“I can’t do my job”.
Equally, Nick Allott, the managing director of Cameron Mackintosh Ltd, which has given us “Les Misérables”, “The Phantom of the Opera” and “Hamilton”, even warned that it might be curtains for those big, long runs altogether. He is quoted as saying:
“I can’t see a situation where we'd allow flagship productions to carry on in a simpler visual state”.
He adds, rather touchingly:
“We’re not being luvvies about this”.
This regulation is due to come into force on 1 September 2020 at the moment, which is after we leave the EU in 2019—there are about 318 days to go, I think. It seems possible—the Minister may be able to enlighten us—that when we leave the EU, we might not have to bring these regulations into British law. That would obviously, at a blow, save these theatres due to the lighting not being a problem.
Equally, I fear, like Cassandra, that there is a proposal to fast track these regulations to get them into law in October 2018. Again, perhaps the Minister can enlighten us on this, if not today then in writing, placing something in the Library with copies to all Members of the Committee and anyone who has spoken this afternoon. Perhaps he could also indicate whether the Government intend to put these regulations into law once we have left the EU, having regard to the extraordinarily damaging consequence of doing so. I look forward to his reply in due course.
I am so pleased that the noble Lord has brought that to our attention. I was not intending to speak on this but it is more serious than has been recounted. The lighting that will pass muster under the new regulations is completely useless for the theatre. Perhaps you could do “A Shot in the Dark”, but basically no lighting that passes the new regulations will be useful in the theatre. Therefore, it is not just a matter of the cost of replacement; the fact is that there are no replacements—it is an absolute catastrophe.
My Lords, having braced myself to declare my own humility in the presence of such luminaries and experts, not only not being a member of the committee but not being a member of the theatrical world at all, I am delighted now to be on my feet among such distinguished company, although the note of gloom that has just been cast upon us will possibly be the note that we all go away with.
My only interests to declare are that I was a student of English literature, that for many years I taught an undergraduate class on the origins of English drama, and that I am a customer of the theatre as often as I can afford it, which in London is not very often.
Just two days ago, in the concluding stages of the Data Protection Bill, I sat through an impassioned debate which pitted those insisting on maintaining the freedoms of investigatory and innovative journalism against others who depicted the way that journalists had only too frequently abused those freedoms, inflicting serious financial and reputational damage on a wide range of people. Again and again in that debate, I heard speakers—on both sides of the argument, as it happens—declare their conviction that a free press is a vital component of any democracy. It speaks truth to power and holds us all to account.
I want to hold on to the memory of Monday’s debate as I put forward my own argument for the health and well-being of our creative industries in general and for a vibrant theatre sector in particular. I believe that this dimension of our national life plays its own part in keeping individuals and our institutions in check. It was our supreme dramatist—the only one who does not have to be mentioned by name—who gave us not only the fruits of his wisdom in the plays he wrote but the theatrical device of a “play within the play”, as if to second his own motion, or seal his own conviction, about the capacity of drama to get to the heart of things. “The play’s the thing”,
“Wherein I’ll catch the conscience of the king”.
If the press can pass as the fourth estate of the realm, why not, with Arnold Wesker, Harold Pinter, David Hare, James Graham and so many others in mind, consider the theatre as the fifth?
It is a matter of regret that, as we have heard, the House of Lords Select Committee on Communications could not complete its study of the subject before us today. It was cut short in its deliberations by the suddenly announced general election, which, as we now know, brought parliamentary death into the land, with all our woe and loss of Europe. We are now left on the brink of uncertainty about how the future will play out, and there seems no point in hoping that one greater man, or woman, will restore us, or regain our blissful seat.
The report, truncated as it is, highlights two areas of concern echoed widely in so many of the briefing materials I have seen and in so many of the speeches made, as well as voiced passionately by various individuals I have been speaking to. I shall limit my remarks to just two of the concerns raised.
The first repeats material that has been said. I always wonder, when I make speeches and bring in points that have been made, whether to omit my mention of them because they have been made or to increase the passion levels—the Welsh hwyl—in making them to emphasise their importance. The Government’s stated target of entering at least 90% of pupils in mainstream education for the English baccalaureate by 2025 will pose problems for the “pipeline of talent”, the success of which we desire. The emphasis placed in schools on a narrowly defined set of core academic subjects will leave little room in the curriculum for pupils to study creative, artistic and musical subjects. They will remain “cabined, cribbed, confined” in the STEM thicket.
Indeed, the danger is being run of a situation foreseen by CP Snow all those years ago—he called it the two cultures—of recreating the dynamic we all regretted then and have been seeking to put right ever since. The Guildhall School of Music and Drama and the Barbican, which have been my neighbours for many years, fear that this will lead to the marginalisation of music and arts, including drama, in schools, despite the fundamental importance of those subjects. At this point, it is not a question of money. I chair the trustees of the Central Foundation Schools of London—a boys’ school in Islington and a girls’ school in Tower Hamlets. The boys’ school is situated just up the road from the Barbican. Even when we make decent grants out of our endowment—and they are decent grants—to help our schools with creative subjects, we know that we will find ourselves up against the curriculum constraints that will inevitably come our way.
Some 85% of the pupils at our girls’ school wear the hijab in class. It was with some apprehension that I went to see them perform Shakespeare’s “Macbeth” in a school competition. It is a very macho play, and I feared that Muslim sensitivities would make it difficult for them. I could not have been more mistaken. The porter, the courtiers, Macbeth and Banquo, as well as the witches and Lady Macbeth, were all played with energy and commitment. I was sitting among the performers’ parents and I enjoyed the whooping and the laughter, the enthusiasm and the pride of those Muslim parents all around me. I learned how theatre can make its own contribution to community cohesion and the breaking down of cultural barriers. Will the Minister give us an assurance—no, a passionate assurance—that his colleagues in the Department for Education will take this important lesson on board? The education we offer in our schools will be deficient without due attention paid to the proper space needed on the curriculum for the fostering of the creative arts in general and drama in particular.
The second concern we should all concentrate on—the great albatross around our necks just now—is, of course, Brexit, shrouded as it is in uncertainty and sounding a note of potential doom from the wings. The Corporation of the City of London believes that Brexit poses considerable potential challenges to the continued recruitment of talented EU nationals to the creative sector, including to higher education institutions. Twenty per cent of the students at the Guildhall School of Music & Drama are recruited from the EU. They bring around £2 million of income annually and, well beyond mere finance, help to create a culturally diverse, international and outward-facing student body of great benefit to its members. It is vital that we make every effort to continue this.
Unless alternative agreements are negotiated, it is possible that all non-UK students will be charged the same full-cost fees and will be subject to the same visa requirements after Brexit. These measures will inevitably present significant new barriers to EU nationals on grounds of cost and immigration status. The reputational consequences will be alarming, and the world-class standing of our institutions, as well as the supply of skilled students from other traditions and cultural backgrounds, will be diminished. There is already a perceptible lessening of demand from EU countries for places in our drama schools.
People of my generation have been fortunate to have known the flourishing of provincial theatres in many parts of the country. I courted a girl from Newcastle-under-Lyme and was introduced to the work of Peter Cheeseman at the Victoria Hall theatre in Stoke-on-Trent. Not everybody had that pleasure—I mean the pleasure of the theatre, not of courting my wife. At the annual conferences that I went to in Scarborough, which were inevitably filled with duller moments, there was also the opportunity to slip off and celebrate and Alan Ayckbourn’s links with that city. The former chairman of the committee has mentioned his links with York. So we are fortunate to have had, but the “having had” is threatened by the “will it happen any longer?”, or at least with the same quality and the same levels of creativity. We must give this our closest attention.
I have fostered a number of young people from ethnic minority backgrounds with aspirations to enter the pipeline that figures in today’s debate. One of them comes to mind now, as I conclude these remarks. A graduate of the Mountview Academy of Theatre Arts, he joined a community group that toured schools in south London to engage in a discussion with sixth-formers about the big questions they were faced with on the street. Drugs, knives, gangs, relationships and guns all figured in these exchanges. The company then went back and wrote these concerns into bespoke pieces of theatre, which they then took back to the very schools whose views they had canvassed. Once again, in interactive settings, the players allowed their young audiences to objectify the questions they had posed and consider various ways of dealing with the problems they faced in their daily lives on the streets of inner London. More policemen on the beat may be one way of addressing the problem of knife-crime and gang-warfare; more and better theatre is, from what I have seen, certainly another.
We need a copper-bottomed assurance from the noble Lord that he will engage passionately on our behalf in a discussion with the Schools Minister about easing up the curriculum to allow more space for the creative arts, and that he will do so too with the likes of David Davis and Jacob Rees-Mogg about a Brexit agreement that will allow the world of theatre to face the future not only with equanimity but with rabid optimism. We count on him for no less; otherwise, our tale today will have been told by idiots full of sound and fury, signifying pretty much next to nothing.
My Lords, I am delighted to understudy my noble friend Lord Ashton, who cannot be here. I am particularly grateful to the noble Lord, Lord Best, for initiating this debate. I have appreciated reading his Select Committee report Skills for Theatre: Developing the Pipeline of Talent and have noted in particular five areas of concern which I would like to address.
Before I go further, I should declare a conflict of interest of sorts. To misquote Noel Coward, while my daughter is not quite “on the stage, Mrs Worthington”, she does work for the business subsidiary of RADA.
I shall start with some background. As has been said, the UK is a world leader in theatre and the performing arts. It is perhaps an understatement to say that British theatre is respected across the world for its high-quality productions, and skilled professionals both on and off the stage. The noble Lord, Lord Best, expressed its standing particularly well, as did the noble Baroness, Lady Kidron, who did so very eloquently and rather emotionally.
Theatre in England remains vibrant and thriving, with outstanding examples around the country, ranging from the Crucible Theatre in Sheffield, the Chichester Festival Theatre and the Royal Court Theatre in Liverpool to Aylesbury Waterside Theatre, Milton Keynes Theatre and—I am not sure whether they have been mentioned this afternoon—some travelling theatre companies. I was privileged to attend only last night a fabulous and funny production of the “Fingask Follies”, a theatrical review. Theatres are also important to local economies, attracting tourists from around the world and providing entertainment to thousands of people. The arts and culture are a great contributor to the economy, generating £26.8 billion in 2016—those are the latest figures we have. The theatre is a vital component of this contribution.
Theatre can also have a significant impact. The Graeae Theatre Company puts deaf and disabled actors centre stage, challenging preconceptions of disability. I remind the committee that this is Mental Health Awareness Week. I took note of the remarks of my noble friend Lord Grade, who quite rightly mentioned the importance of the theatre in allowing people to express themselves. It is a factor that helps people to improve their health. Altogether, an additional £1.4 billion has been set aside to improve children’s health.
The Arts Council funds a number of organisations working within the criminal justice sector—including Clean Break, which helps to rehabilitate women who have been in prison—or through the wider criminal justice system. I believe the noble Baroness, Lady Kidron, mentioned a similar example and the Geese Theatre Company also presents interactive theatre and drama group work with justice organisations. As the noble Viscount, Lord Chandos, said, it is imperative to engage the young in theatre and the arts. He was right, and this is why we are committed to an ambitious programme of arts and cultural education programmes in our schools.
In April 2018, the right honourable Nick Gibb MP, Minister for School Standards, announced £96 million of funding to give pupils the opportunity to attend top music, dance and drama schools, taking government funding for music and arts programmes between 2016 and 2020 to almost £500 million. I will write to the noble Earl, Lord Clancarty, who raised an interesting question about audition fees. It may be that some of this money could be included, but I am not entirely sure; I would like to write to him about that.
As part of this, the Department for Education is investing in the creative industries and supporting exceptionally talented pupils to attend specialist music, dance and drama institutions. In 2018-20, the music and dance scheme will receive over £60 million; dance and drama awards will receive £27 million and cultural education programmes, including the British film academy, the National Youth Dance Company and national art and design Saturday clubs will receive over £8 million.
I will now address the five concerns raised in the report. I turn first, with some trepidation, to the subject of the EBacc. I can reassure noble Lords that I have listened to the concerns raised today; perhaps I can also reassure the noble Lord, Lord Griffiths, who wanted to be sure that I had listened.
Music, art and design, drama and dance are included in the national curriculum and are compulsory in all maintained schools from the age of five to 14, and pupils then have an entitlement to study an arts subject in key stage 4. Ensuring that children have the opportunity to study core academic subjects at GCSE—English, maths, sciences, history or geography and a language; that is, the English Baccalaureate—remains of key importance to this Government.
The Ebacc subjects are those which, at A-level, open more doors to degrees, according to the Russell group. The noble Baroness, Lady McIntosh, asked a question about the education system, saying that it focuses too much on exams; this is something about which we read quite a bit. We have reformed the curriculum to make it more rigorous and inspiring; this is the case across all curriculum subjects. For example, the curriculum ensures that pupils have opportunities to devise and script drama, as well as rehearse and respond to theatre performances. The new drama GCSE specifies that pupils have an entitlement to experience live theatre.
The EBacc is also important for social mobility. In 2017, only 25% of disadvantaged pupils entered the EBacc compared to 43% of their non-disadvantaged peers. In looking at 300 schools that had rapidly increased EBacc uptake, the Sutton Trust found that pupil premium students benefited most from the changes.
The noble Lord, Lord Best, the noble Baroness, Lady Bonham-Carter, and, indeed the noble Lord, Lord Griffiths, asked a question about pupils from poorer backgrounds being compromised by the EBacc. Again, as part of my listening, I wanted to respond to this. UCL research found that students studying an EBacc curriculum had a greater chance of progressing to all post-16 educational outcomes. However, having said this, I am aware that noble Lords, particularly during this debate, take a different view—that the EBacc may be sidelining the arts. Over many years, I have been aware of the views of the noble Earl, Lord Clancarty, and the noble Baroness, Lady Bonham-Carter, since I was first at DCMS, which goes back about six or seven years ago, I think. I know that they have not changed their views, but I can reassure noble Lords about this. Since the EBacc was announced, the proportion of pupils in state-funded schools taking at least one arts subject has remained broadly stable, and DfE research found that that was the case both for schools whose EBacc entry has seen a large increase and for other schools. The EBacc is designed to enable pupils to study other subjects in which they have an aptitude and interest, including arts and drama. The noble Earl, Lord Clancarty, spoke about teaching hours, and stated that hours for the arts are decreasing. I can tell him that the percentage of time spent by secondary school teachers teaching music, arts and drama has remained stable between 2010 and 2016—and those are the latest figures that we have available.
I turn to the important subject of apprenticeships. High-quality apprenticeships are key to growing the skills that our businesses and economy needs. The foundation of our hugely respected theatre industry is the talented individuals working on and off the stage. I am sure that noble Lords will agree with me that we must invest in nurturing this talent and give people the best start in their careers. In the 2016-17 academic year, 870 apprenticeships were started in the arts, media and publishing sector subject area, under which this industry falls. Of course, there are apprentices in other occupations working in the industry, such as digital, business administration or management. While 870 apprenticeship starts is a beginning, I would like to see that number grow—and I am sure that this Committee would like to see that too.
Employers from all sectors are coming together to design and develop new, high-quality apprenticeship standards in the occupations that they need. This will ensure that their workforce has the specific skills, knowledge and behaviours required. I am pleased that the number of theatre-related standards either approved or in development is growing. I doubt that there are any coracle-making standards, but they include assistant technical director, community arts co-ordinator, creative venue technician, props technician, and puppet making. The noble Baroness, Lady McIntosh, made an important point about the high level of specific skills that are essential to maintain the high-quality nature of our theatre—and she made some very good points on that. I would very much like to see this continue to expand, and for employers in the industry to make use of these standards to train more of their workforce. I can tell that the noble Baroness is well up to date. She was concerned in her remarks in looking ahead to the type of skills and training required for the future.
As well as reforming the quality of apprenticeships, this Government are committed to increasing their number and putting them on a financially sustainable footing. We have introduced the apprenticeship levy for large employers with a pay bill of over £3 million. For non-levied employers, which applies to many of the employers in this sector, the Government pay 90% of the cost of training and assessment. The noble Lord, Lord Best, asked about flexibility of apprenticeships for theatres, particularly as they are in effect small, niche employers, akin to SMEs. The changes that we have made to the apprenticeship system are transforming lives, we believe; we are helping employers to create high-quality apprenticeships at all levels, giving people of all ages and backgrounds the skills that they need. The quality of apprenticeships is our top priority and we must ensure that high quality is a consistent feature across all occupations. The 20% off-the-job training rule, the shift to higher quality standards with a longer average duration and the drop-off in frameworks are likely to mean that, on average, apprentices will get more training throughout their apprenticeship. We want this to be the case for the theatre industry, so we cannot compromise on those quality reforms.
The noble Lord, Lord Gilbert, asked about the apprenticeships policy in addressing the needs of SMEs and the creative industries. I assure him that we will continue to work closely with employers to help them to take advantage of the levy. The Government will invite an employer representative of the creative industries to the Apprenticeship Stakeholder Board to help to shape the future of the programme.
By 2020, we will be investing £2.5 billion in apprenticeships, double what was spent in 2010. As well as apprenticeships, we are developing our new flagship T-level programmes, which will offer another route into skilled employment for young people. There will be T-levels in a creative and design route, including a media broadcast and production pathway, which is planned to go live in 2022. My noble friend Lord Gilbert expressed some concern about apprenticeships in the sector. To give him an example, the National College for the Creative and Cultural Industries at Purfleet opened to its first students in September 2016. It is an employer-led college, providing high-level technical theatre production and live event skills. The founding employers include Live Nation, the Royal Opera House, the BBC, the National Theatre, the Royal Liverpool Philharmonic, Manchester’s Royal Exchange Theatre, White Light and the Association of British Theatre Technicians.
I know there have been concerns expressed that there remains an under-representation of BAME practitioners as performers, directors and writers. To address this, the subsidised arts sector has been making iterative improvements in these areas, but progress is not as quick as we would like. The Arts Council’s Creative Case for Diversity has been a step change in the way that we expect funded organisations to diversify and reflect the wider population. Funded organisations are expected to show that they contribute to the creative case for diversity through the work that they produce and present. The noble Baroness, Lady Quin, raised the subject of diversity in her speech and stated that further work is important. However, Arts Council England now places responsibility on all funded organisations to make their programmes reflect the community. In December 2015, the council announced new funds for diversity totalling £8.5 million. On 13 October, the council announced a further £4.6 million, which will be a considerable further help.
The Arts Council provides targeted support to increase representation, such as Change Makers, a £2.6 million fund to develop black and minority ethnic and disabled leaders through leadership training. It has also allocated just over £2 million into Sustained Theatre, a fund established to support the development of established and emerging black and minority ethnic theatre makers, and to increase the representation of black and minority ethnic theatre makers across the wider theatre sector in England.
My noble friend Lord Gilbert and the noble Baroness, Lady Quin, asked how we were encouraging greater diversity. The Culture White Paper sets out a range of commitments aimed at increasing diversity in arts participation, for example the cultural citizens programme, which I might have mentioned earlier. As part of their existing investment, the Arts Councils already support organisations aimed at reaching out to diverse audiences. I would like to assure the noble Baroness, Lady Quin, that I will pass on her remarks and others made today to the Culture Secretary to be sure that as much as can be is being done in this area.
The important subject of funding always comes up in this sort of debate. It was raised not least by the noble Baroness, Lady Kidron, the noble Viscount, Lord Chandos, and several other Peers. Noble Lords will know that a large part of funding for the arts comes from the taxpayer, whether from the Government via Arts Council England or from local authority support. My noble friend Lord Grade mentioned that such money can stretch a long way. Yes, he is right, but there never seems to be enough. That is a remark that might come from successive Governments.
Between 2010 and 2017, the Arts Council invested over £1 billion in theatre through grant in aid and lottery funding. The Government’s theatre tax relief has supported new work and touring up and down the country, and we have invested £78 million in a new theatre and arts complex in Manchester, which many noble Peers will know of, called the Factory. It will support the local creative economy, including developing the technical skills of young people in the north-west and beyond—an important area to develop. However, the Government cannot do it all, and in 2016-17 theatres in the Arts Council’s portfolio raised £51 million from philanthropic and contributed income, a point raised by the noble Viscount, Lord Chandos. That is 24% of their overall income. It is important that we continue to encourage philanthropists to see the theatre as a sector worthy of their investment.
Many local authorities have continued to invest in arts and culture and have developed new models and ways of working. Local authorities need to recognise the huge benefits that investing in arts and culture can bring. Many already do, building successful partnerships to deliver arts and culture to their communities. We believe that funding decisions should be made at a local level and that local authorities are best placed to decide how to prioritise spending. The Arts Council works with more than 250 local authorities to promote the impact that culture can have.
We are clear that the right balance of funding between London and the regions is important. Some 75% of the Arts Council’s lottery funding is spent outside London. In its current funding round, the Arts Council has increased its portfolio investment outside London by an additional 4%. It has increased the amount of funding available through its national portfolio by a further £37 million per annum.
As the noble Baroness, Lady McIntosh, mentioned, digital distribution is another way to achieve wider access. She is right. The National Theatre Live programme beams theatre performances across the country to the nation’s cinemas, as well as into schools.
Several of your Lordships and the report from the noble Lord, Lord Best, raised the importance of and need for careers guidance. Let me now touch on this. We are aware that young people need information on the range of jobs and careers, and encounters with employers for engagement and inspiration about what they can achieve. Employers and professional bodies in the theatre industry can sign up to “Inspiring the Future”, run by the Education and Employers charity. This free programme allows volunteers to visit state schools and talk to pupils about their jobs in theatre. I am delighted that UK Theatre and the Society of London Theatre are working with “Inspiring the Future” to showcase the range of careers available in theatre to young people.
I am aware that time is slightly short. I know that my noble friend Lord Gilbert mentioned the industrial strategy. I shall skip over that and attempt to answer a few questions, starting with that on lighting, raised by the noble Baroness, Lady McIntosh, and my noble friend Lord Grade, who was supposed to mention it, then did not and then did after the noble Lord, Lord Willoughby de Broke. I read about this last week in my papers and there was certainly concern about it. Perhaps I may provide some initial reassurance to say it is crucial that we protect the rich atmosphere of our theatres. That is why we are seeking to find a solution on lighting that works for everyone. I pledge to write to all noble Lords who have taken part in the debate to give further information, should I have it. It is not quite clear where we are with that, but rest assured that it is very much on the agenda.
Shedding further light, exactly.
The noble Baroness, Lady Bonham-Carter, asked about accountability measures in schools, saying that they do not cover the arts. This is not the case. The Progress 8 performance measure recognises pupils’ progress across all GCSE subjects. Progress 8 is one of the headline performance measures and reported first in the performance tables. She also asked a question about Ofsted, saying that we should include arts in a broad and balanced curriculum. We agree with Amanda Spielman and Ofsted on this. The school timetable allows time for pupils to study core academic subjects, as well as others, for those who are interested in and have an aptitude for the arts.
The noble Baroness, Lady Kidron, asked about VAT from London theatres subsidising regional theatres. That is an interesting one. As noble Lords know, tax policy is a matter for HMRC—that is the message that comes for me. However, the Government have in recent years introduced a theatres tax relief to encourage new and touring productions around the country, which has been welcomed by the theatre sector.
The noble Baroness, Lady Quin, asked about Brexit. In fact, there have been quite a few questions about Brexit. The best thing to do—this is not a cop-out—is to write to answer the questions raised by the noble Lord, Lord Griffiths, and others on Brexit matters, including Erasmus, to aim to give as many reassurances as I can.
With that, I ought to conclude by saying that I have thoroughly enjoyed this debate. The arts and theatre scene in this country is a great success and we must continue to ensure that young people, who are the theatre’s future workforce and audience, have the opportunity to experience the magic of theatre and performance and, if they wish, to have a career in the theatre themselves. I hope the Committee will agree that the education and skills measures I have set out will contribute to a broad and balanced education, empowering young people from all backgrounds to look to the future with confidence.
Can I quickly ask the Minister to write to me about the matter of the drama teachers? I am a bit confused. The figures that I have came from the DfE, so I wonder whether there is a distinction between specialist and non-specialist drama teachers.
My Lords, I thank everybody for participating. This debate unfortunately brings home to me the sad loss of my not being on the committee any longer. It was wonderful to hear my former colleagues, my successor as chair and the quartet of noble Baronesses who spoke, and indeed the contributions from those who were not part of the committee. I think that everybody endorsed the conclusions that we came to in our report. Perhaps the things that we said nothing about but which, a year on, we might have done, are the EU subjects—from the lighting issues to the loss of freedom of movement. The Minister is going to include that and tell us more about it in writing round to everybody.
It is not very often that debates in your Lordships’ House feature such notable things as Gollum from “The Lord of the Rings”, the “Fingask Follies”, “Babes in the Wood” and even bras, coracle makers and of course wig makers—we must not forget them. It was a very wide-ranging debate. All human life is here and it was well worth us rehearsing these issues. The Minister’s response attempted to provide reassurance on all the headings under which we expressed considerable concern in our report: the EBacc, apprenticeships, diversity of representation in the industry and funding, along with careers guidance. I am grateful to the Minister for those reassurances. I think we will need to look in detail at those responses and ensure that we are entirely satisfied.
I could not help but notice that today’s Times, in an article entitled “Children are being turned into mini robots”, noted:
“As millions of children begin GCSEs and A levels this week it has become clear that the number of pupils studying music, art, design, media and drama has plummeted”.
It said that entries have fallen 28% since 2010 and that,
“the number of hours arts subjects are taught has gone down by 17 per cent and the number of arts teachers has dropped by 16 per cent”.
So there are some statistics knocking about and it would be most helpful if we could study the detail of what the Minister said later.
Perhaps I may summarise everything that has been said today with two references to the debate. First, on the positive side, the noble Baroness, Lady Kidron, told us that we are in a golden age for this country’s theatre. I am sure that she is right and it is wonderful to be living in that age and enjoying it. However, as the noble Lord, Lord Grade, said, this debate is a unanimous declaration of fear for the future. We want to keep it the way that it is; that is what our report was about and I am deeply grateful to all those who have contributed to the debate today.
Cash Ratio Deposits (Value Bands and Ratios) Order 2018
Considered in Grand Committee
My Lords, I beg to move that the Committee has considered the draft Cash Ratio Deposits (Value Bands and Ratios) Order 2018, which was laid before the House on 16 April this year. The draft order makes changes to the cash ratio deposits scheme, which is the way by which the Bank of England funds certain functions. Under the Bank of England Act 1998, banks and building societies of a certain size are required to place a proportion of eligible deposits in an account with the Bank of England. In turn, the Bank invests these deposits in interest-bearing assets, namely, gilts. The return on those investments is channelled into the funding of the Bank’s monetary policy and financial stability functions. There is a resultant systemic benefit to the whole banking sector from the sustained and stable operation of these functions, as well as for the wider public. For these reasons, the Government are confident that the cash ratio deposits scheme is and remains the most appropriate means of funding the Bank’s important policy work.
The operation of the scheme means that the Bank’s income generated by the scheme is driven by two factors: first, the yield on gilts; and secondly, the size of deposits eligible for the scheme, which is largely driven by the overall performance of the banking sector. Over the last five-year period, gilt yields and to a lesser extent the growth in deposits have been lower than expected. On average, annual yields were 2.7% versus the 3% expected in 2013. This has caused income to be £70 million lower than was forecast at the last review. A similar shortfall arose in the five-year period leading up to the last review of the scheme that was carried out by the Government in 2013. The Government are seeking to address this problem by recalibrating the parameters of the scheme over the forthcoming review period.
In particular, the Government are seeking to move from a scheme that currently uses a fixed ratio as the measure by which institutions calculate the proportion of their deposits to be placed at the Bank and will instead move to one where the ratio will be indexed to actual gilt yields. Under an indexation approach, the ratio will be calculated once every six months to align closely with prevailing gilt yields. Such an approach should lead to a smoother income profile for the Bank as it will dynamically adjust to the investment environment. It will reduce the risk of a shortfall in income if yields do not perform as expected and reduce the likelihood of future funding deficits for the Bank. The indexation model also has potential benefits to payers themselves. For example, if gilt yields were to increase, institutions would not then be required to place as much on deposit at the Bank.
The Government have consulted on the changes to the parameters of the scheme before us and the majority of respondents have acknowledged and accepted the increased costs associated with the Bank’s functions. Alongside the Bank’s efficiency savings, the changes proposed by the order will ensure that the income generated by the scheme covers the costs of the Bank’s policy functions over the next five years. As the Bank’s costs have increased since Parliament last agreed to this scheme, it has committed to maintaining its costs at 2018-19 levels over the next five years and any subsequent enhancements will be funded from efficiency savings generated elsewhere. These cost-saving measures include a comprehensive programme of cost-containment and reprioritisation. The Bank will also continue to increase transparency around its income sources and the use of income generated under the scheme.
The proposed changes to the cash ratio deposit scheme are expected to increase the Bank’s income over the next five years and generate income that is closely aligned to the Bank’s forecast costs. It is worth noting that the amount that most institutions are required to deposit at the Bank under the scheme is relatively small. In December 2017, 81% of deposits made were by just 20 institutions, with 14 of those contributing more than £50 million. The majority of the contributions are sourced from larger banks and building societies.
The Bank of England Act 1998 sets out that the cash ratio deposit rate can change once every six months and the deadline for amending the rate ahead of every six-month period is 1 June 2018. If the scheme is not amended by this date, the shortfall in the Bank’s funding will continue. The changes proposed by the order before us are sensible and proportionate measures in the light of the issues identified in the 2018 review. The order will ensure that the Bank’s important monetary and financial stability functions are fully funded, and for that reason I commend it to the Committee.
My Lords, I noticed that when the Bank of England consulted on this scheme it received only three responses. That highly recommends that I be brief in my response. Obviously, we as a party very much value the independence of the Bank of England. I am reminded that Vince Cable spoke of it in his maiden speech in 1997, so we have a long history of wanting to see that independence firm and strong. Obviously, that means that the Bank of England needs the required resources to be able to function.
That is provided for under this statutory instrument, which permits both increases in the amount and indexation, which means that the amount can be reset according to shifts in the gilts on a six-monthly basis. That presumably reduces both volatility and risk to the Bank. The amount of money we are talking about is not particularly large. In most banking institutions it is somewhere lost well to the right-hand side of the decimal point.
As one of those who made the effort to respond noted, there is no assurance in any of the paperwork that we have seen that this is genuinely value for money and that the Bank has looked carefully at its expenditure. There appears to be no particular accountability for the way the money is spent. Will the Minister comment on that?
This also gives me the opportunity to raise a second level. Most of us here would agree that we are not really ready to see banks being let off the hook in terms of their contribution to the public purse. One could call this deposit scheme, in a strange way, a version of a hypothecated tax since it is a mechanism for providing funding to the Bank of England. I wonder whether the Government could provide clarity on their policy, because they are cutting the bank levy—a very significant amount of money—and raising this. Is there any relationship between the two? I hope that the Government will never pray in aid this particular increase as an argument that they are continuing to be tough on the banks.
I will make one last comment. This is exactly the kind of measure that should be dealt with through statutory instruments. It is exemplary. It is a relatively technical issue and relatively non-controversial. I hope that the Government will take on board that this is the kind of purpose for statutory instruments. They are not a mechanism for driving through policy, which we have seen in so many other areas.
My Lords, I agree that this is clearly a measure that is appropriate for statutory instruments, but I wish that it had not landed on my desk. Of course, we will not oppose this. This will not be the one in 1,000 occasion this afternoon, I am sure the Minister will be pleased to hear. However, after I had taken the trouble to half understand the scheme, I could not believe its bizarre nature. I could not for the life of me see why there was not a straightforward fee-based scheme. The scheme is planned to raise £169 million per annum. Why does the Bank not simply send the banks a bill and raise the money directly? My real fear—which is rather the opposite of that expressed by the noble Baroness, Lady Kramer—is: what if this formula is wrong?
The functions covered by this income are absolutely vital. The austerity programme that this Government continue to pursue would be even more disastrous for the economy if it were not for the monetary measures taken by the Bank of England. This funding supports the MPC and the FPC, which are effectively seeking, through quantitative easing, the bank rate and the controls it puts on the banks, to control monetary policy and create an appropriate stimulus over this period of austerity. I see that the Bank has said that if the money is insufficient, it will reprioritise efficiency savings. I have worked long enough in the public sector to know what an efficiency saving is—it is called a cut in normal language. I cannot think of any area of the Bank’s activity, together with the resolution and recovery regime, that is more important. It is essential that it is properly funded.
The formula set out on page 5 of the Explanatory Memorandum has a number of components which I am afraid I do not understand. The first thing that it assumes is that the income required is fixed at £169 million for five years. Once again, I ask: what if that is wrong? The next factor in the formula is the aggregate eligible liabilities, which are fixed at £2.8 trillion—I hope that I have counted the number of noughts properly—yet the impact assessment assumes, from the various analyses that have been produced, that this figure will go up by 2.9% per annum. Why is it fixed if in fact the Government, in analysing the scheme, assume that it will increase?
In fact, the only real variable in the scheme is what is called on page 5 of the Explanatory Memorandum the “portfolio yield”—that is, the estimate of the yield from investments. It is made up of three parts: 55%, 42% and 3%. The 55%, labelled “a”, seems to be the only seriously variable one. It is a 13-year moving average. Why 55% and why 13 years? The second element, labelled “b” in the formula in paragraph 7.17(c), is calculated on a six-month average, but it is calculated only twice and is then fixed for the rest of the period of this notice. The 3% at the end of the formula is a six-month average calculated every six months. This is a ridiculously complex way to collect a modest amount of money. I believe that the whole system by which this money is collected needs to be reviewed. The fee-based approach would be simple to introduce. You could apportion the burden on eligible liabilities, which have to be calculated with this scheme. My biggest fear would then be coped with. A simple system could guarantee sufficient funds for this vital area.
I am grateful to the noble Lord for delving into the algebra in the formula of “i” over “el” times “py”, which we all know arrives at the answer of the funding that is required. Before dealing with the explanation for that, I will deal with some of the points raised by the noble Baroness, Lady Kramer. She mentioned the consultation. The Treasury ran an informal consultation between 20 December and 15 January, contacting all the eligible institutions. A relatively small number of institutions contributed; 19 responses were received on that part. When it went into the public realm, between 8 and 9 March, three responses were received. One should not be surprised; it is a highly technical measure, as the noble Lord, Lord Tunnicliffe, said. Those were the points raised.
There was a point about what was being done to improve efficiency. There were changes to the way the Bank was to work. Cost-savings measures include a comprehensive programme of cost-containment and reprioritisation, coupled with an increasing amount of transparency, so we can track what is being spent at the Bank. Those elements are commendable.
The total tax burden on banks and building societies from the bank levy is significant. In 2016-17, £3 billion was raised from the Government bank levy above the £1.6 billion from the bank corporation tax surcharge. Those are significant sums contributing to the Exchequer.
The noble Lord, Lord Tunnicliffe, has been, as always, assiduous in the way he has delved into the detail of the Explanatory Memorandum and the order, and raised a number of pertinent points. He says: why not just have a levy, rather than an alternative means of funding that involves this level of complexity? The review considered a range of mechanisms by which the Bank’s monetary policy and financial stability functions could be funded—in particular, whether a move to a fee-based model or levy would be appropriate. The review concluded that:
“Such a proposal was not possible within the scope of the existing legislation and in the current CRD review period. A fee-based model would require more in-depth analysis, starting from first-principles in terms of how costs could be apportioned in a fair and efficient way”.
The noble Lord also asked about the formula: what drives the variables and the weightings attached to them? There are different weightings in the order which reflect the Bank’s long-term gilt holdings and investments over time. The long-term gilt holdings make up 55% of the total pool, hence the weighting of 55% is applied in the formula. Gilts that would be purchased in the coming months make up to 42% of the pool. Additional gilts that would be purchased over the remainder of the scheme to replace those that have matured amount to 3% of the portfolio.
He then asked: what happens if the Bank’s costs are below those expected? Do banks and building societies get their money back? That is a good question. The budget to be recovered by the scheme over the next five years is fixed and reflected in the order. Any surplus generated by the scheme as a result of underspend by the Bank will be retained by the Bank and will build up its capital base. This will in turn support the Bank’s monetary policy operations. Proposed amendments to the scheme seek to ensure that the Bank’s income profile is smoother over the next five-year period. That should ensure that a surplus or deficit does not arise under the scheme. Once again, I thank noble Lords for their questions and support on this. I commend this order to the Committee.
Package Travel and Linked Travel Arrangements Regulations 2018
Considered in Grand Committee
My Lords, I beg to move that the Committee considers the draft Package Travel and Linked Travel Arrangements Regulations 2018, which were laid before the House on 16 April. The purpose of the draft regulations is to update and replace existing legislation by implementing the requirements set out by the 2015 European package travel directive. It may be helpful to give some background on consumer protection and the importance of consumer rights before I explain the changes in detail.
In this country, we have a long history of delivering high standards and strong protection for consumers. That history extends into our time as a member of the EU, where we have been influential in developing the EU’s consumer protections. Indeed, the current framework reflects UK priorities. But in some areas the UK has chosen to go further, providing additional protection for British consumers. For instance, through the Consumer Rights Act, we regulated for the supply of digital content, ensuring that there are clear rights for people buying things such as movies and music online. As e-commerce continues to grow, those protections give shoppers the peace of mind that they need to make a purchase, which is crucial to our prosperity. Household expenditure accounts for around 60% of the UK’s economy, more than a trillion pounds a year. Package holidays form an important part of households’ expenditure. Each household spends an average of £1,200 a year on package holidays, around one-third of their total spending on recreation and culture.
Our recently published impact assessment shows that the new rules we are proposing will protect an extra 10 million UK package holiday trips, bringing those who mix and match their holidays in line with those who opt for traditional prearranged combinations. Last summer we consulted on the idea of a light-touch approach to implementation of these proposals. We published the Government’s response to the consultation and the impact assessment last month. The EU’s deadline for transposing the requirements of the EU package travel directive into UK law was this January, with a further six months for these requirements to be brought into force. The travel industry is aware that we are copying out the directive, which has been in the public domain since 2015. We recognise the concerns raised that the Government are late in implementing the regulations. Therefore, we have engaged intensively in advance of laying the regulations to help the industry adjust, and will continue to work with businesses on implementation after the regulations come into force.
Package travel regulations have provided protection to travellers for many years, but they were introduced in 1992, and much has changed since then. Technical innovations have opened up new ways of buying and selling holidays. This has provided increased choice and flexibility in the travel market, allowing consumers to mix and match components of a holiday to suit their particular needs However, such rapid change has left new methods of packaging holidays outside the scope of the current regulations. The 2018 package travel regulations will address this gap. We are ensuring that people who book package holidays through travel sites online enjoy the same rights as those who book with a traditional travel agent. The draft regulations will introduce a broader definition of package holidays to capture modern booking models.
The regulations will also introduce a new concept of linked travel arrangements, or LTAs. These provide some level of protection for looser combinations of travel services than exist in a package holiday, so they have fewer requirements. We are also making it a requirement that package travellers are given clearer information on what they are agreeing to and what their rights are. In addition, we have strengthened the insolvency protection so that consumers can get their money back or be returned home if the company that arranged a package goes bust.
The United Kingdom is required to designate central contact points to supervise UK-established package organisers that are selling into other EU member states. After careful consideration, we have agreed that from July the Civil Aviation Authority will take on that role. With regard to the enforcement of the regulations, the arrangements will be as before, with the responsibilities being taken on by either the Civil Aviation Authority or trading standards.
The department’s impact assessment, which was published alongside the regulations, estimates a net cost to business of around £100 million a year. However, these changes will level the regulatory environment for all businesses selling travel packages. Businesses which have been providing packages not previously covered will now be subject to the full range of protections under the 2018 package travel regulations, including the organiser taking on liability for all the services provided under the contract and providing cover against insolvency.
All these measures will help to ensure that on the day we leave the EU we will maintain our high standards of consumer protection, delivering the stability and continuity that consumers need. It is also our objective to have effective protection in place for consumers purchasing goods and services cross-border in the future. The way that consumer protection will apply when buying across borders is still a matter for negotiation, but we are determined to co-operate closely with our EU partners on matters of consumer protection.
The regulations will enhance protections for consumers when buying package holidays either through the traditional method or online, and they have been welcomed as a positive step by the travel industry. Throughout the consultation process and the development of policy, we have sought to strike a balance between increased protection for consumers and minimised burdens on businesses. I commend the regulations to the Committee.
My Lords, this updating of the 1992 legislation is welcome, as things have undoubtedly moved on a great deal since then. We now use computers and we travel a great deal more, particularly taking short breaks. The Minister has outlined how important holidays are to the UK public, so I welcome the fact that the definition of a package is to be expanded. Of course, we were prompted to do this by an EU directive, and we have only until 1 July to deal with it. The impact assessment makes it clear that these regulations—and the Minister said as much just now—do not go beyond EU requirements; rather, the EU directive has in effect been simply copied over.
When we discussed this issue last year, in the wake of the Monarch Airlines insolvency, the Minister at the time, the noble Lord, Lord Callanan, made it a point of great pride that we in the UK had the first laws to protect the purchasers of package holidays and that our laws go beyond the protections available in other countries. Given that, my first question is whether this is a conscious change of policy by the Government in terms of consumer law. The Monarch situation revealed again the differing levels of protection available to travellers, depending on how they purchase their holiday and the unfairness that existed between different sorts of purchase. It demonstrated that nowadays relatively few people buy traditional packages for their holidays, although I read recently that declining public economic confidence has started to reverse that trend. People are now looking for more security and are therefore more likely to buy a package. So it is to be welcomed that these regulations are specifically designed to cover other sorts of arrangements.
Just when I thought I had got my head around linked travel arrangements and what they mean, I find that there are two other categories as well. When we discussed this last year, the noble Lord, Lord Callanan, made it clear that the idea of a linked travel arrangement was still in the process of being divined. Looking at the categories, I see that there are prearranged packages, which is the traditional arrangement we are all used to, and dynamic packages, which have the features of a package but allow the consumer to pick and mix, to customise the content of their package, buying from one trader. As a further option, travellers can put together the components of a package themselves—one assumes online—based on specific offers from more than one trader. The Explanatory Memorandum says that, although this has elements of from more than one trader, it comes from a single point of sale. My second question to the Minister is this: what does a “single point of sale” mean?
Last night, I happened to be organising a weekend away. I booked my flight on a holiday package website and then up popped the offer of a car hire. But as I dealt with the car hire, I found myself on a separate website, although it had come to me via the first one. I am interested in how this option differs from other options. I quite understand that, if you walk into Trailfinders, you can buy a variety of things from one point of sale. But what is a “single point of sale” when you are dealing with this on the computer?
Apparently, in addition to and separate from the two forms of dynamic package and the simple prearranged package, there are linked travel arrangements. These are the combination of at least two different travel service for the same holiday but, unlike packages, they involve separate selection and payment for each services and separate contracts. Those are created with a trader and, according to the explanation, a linked travel arrangement is created where the,
“trader facilitates either … the selection and payment of two or more services for the same trip, under separate contracts with individual providers, upon a single contact with a point of sale, or … the separate selection and payment of two or more travel services for the same trip through targeted linked booking processes within 24 hours without transferring the travellers’ payment details. Conversely, if the traveller’s payment details, name and email address are transferred then this would count as a package”.
I understand the last sentence, but I got lost halfway through the rest of it.
The point I am making is that this is hugely complex. How is a person purchasing their holiday to know that it is linked by a trader rather than a link inspired by Google? I get extremely worried when I visit a restaurant, for example, and am then asked to rate it. I have not told anyone I am going there—I have simply carried my phone there—yet, somehow, Big Brother knows I have been there. We are all susceptible to having things promoted to us as a result of our choices, using the computer or simply carrying around a phone. This is so complex that publicity will be essential. It will affect a whole new cohort of traders—the Explanatory Memorandum estimates a one-off cost of £620 million to the industry and an annual cost of £48 million. This is a significant new thing for the industry. So my question is: how are the Government planning to raise awareness within the travel industry?
Secondly, the phrase “ATOL-protected” is publicly well understood. It might sometimes be slightly misunderstood, but the public understand that the phrase “ATOL-protected” is going to give them some level of financial protection. It is a sort of gold star insurance for the more cautious traveller. How are the Government planning to explain these more complex regulations to the general public? The Minister talked about levels of compensation, but how will it be clear to members of the public that they have gone into one form of dynamic package rather than a linked travel arrangement, or vice versa? It is so complicated. It is ironic that we are planning to introduce this now, as we are about to leave the EU. It involves a big benefit for the travel industry, as it involves mutual recognition of insolvency rules. Traders have only to comply with the insolvency regime in the member state where they are established, instead of a multiplicity of regimes.
Finally, I ask the Minister an associated question. When you cancel a flight, very often you have to stand the loss—you might be lucky enough to have insurance; you might have bought a flexible enough flight at a greater price, whatever. But I understand that, when you cancel that flight, part of what you paid is taxation. Whatever the circumstances of your cancellation, you are entitled to a refund of that taxation. It is often a relatively small amount of money in relation to the cost of the flight, but this is not always the case. Am I right about that? If so, what has been done, and what are the Government planning to do, in relation to general consumer law—in relation to travel, and to air travel in particular—to make travellers more aware of that right?
I conclude by saying that this is good for consumers—it will encourage travel and will, therefore, be good for the travel industry—but it introduces complex new definitions. If consumers are to benefit, rather than to be hoodwinked or lulled into a false sense of security, we need a big government information campaign.
My Lords, I have no personal interest to declare on this matter though, as a fellow of the Institute of Travel and Tourism, I have some degree of affection for the subject before the committee today. Having been appointed way back in 1992 as a transport spokesman in the other place, I think it was the first directive I actually dealt with from the then Opposition Front Bench. As far as I remember, it amounted to about five pages in those days. It included the Explanatory Memorandum. It is a measure of how far we have come—whether forwards or backwards I leave to the Committee to judge—that the legislation before us is 41 pages with a 47-page impact assessment. As the noble Baroness, Lady Randerson, said, things are a lot different these days compared with 1992. In a way, the Minister was being too modest when he talked about the Government’s involvement in this package. I do not often find myself in a position of praising Ministers and accusing them of undue modesty, but it is true to say that the British Government have led the field, as far as the EU is concerned, on consumer protection in this area. The Government should be commended for that.
There are three main advantages to the instrument: as has been said, it widens the definition of a package holiday; it will enable British companies to sell across the EEA; and it guarantees repayment if any aspect of a holiday package fails. Will the Minister confirm that the implementation date is July this year? He might have said that in his speech. If he did I beg his pardon, I missed it.
Although the industry feels that there could and should have been a little more time for consultation, it appreciates the consultation that has already taken place. Indeed, I spoke to Mr Steven Freudmann, the chairman of the Institute of Travel & Tourism, about this legislation a few days ago. He expressed his view on behalf of a substantial chunk of the travel industry that this legislation goes a long way to increasing consumer protection and is to be widely welcomed.
As far as the linked travel arrangements are concerned, praise ceases there. Indeed, when I read and reread the linked travel arrangements I was, like the noble Baroness, completely baffled as to what it meant. Indeed, I was so baffled that I got the ITT to pass me the name and telephone number of a lawyer who specialises in these things. I rang him with some trepidation. Noble Lords will be aware that ringing lawyers is never a very wise thing to do. It is inevitably followed by a whacking great bill that makes the bank manager blanch, but on this occasion the information I requested came gratis.
I hope I can go some way to addressing the noble Baroness on the situation she outlined. Having booked one aspect of a package holiday, namely the flight, she asked whether other aspects booked separately were covered under the legislation. My point to the Minister and the noble Baroness is that as far as I can see, and as far as the legal advice I have had is concerned, no part of the package is, in fact, covered other than the first part. If she makes a mistake, if that is the right term, in booking the flight and then returning to book a hotel, hire a car or whatever subsequently, that aspect of her package will not be covered under the legislation. I am sure the Minister will be able to tell me whether I have that right or wrong, but it indicates a weakness in the legislation. If we are to have these welcome packages that assist holidaymakers and package bookers, it is of some concern that the difference in treatment is not immediately apparent between those booking their package straight off and those booking parts of the package, albeit at the same time.
I repeat that there appear to be no benefits as far as the second service is concerned. I would be grateful if the noble Lord will tell us whether we have it right. If we have, what is the department prepared to do about it? The travel industry generally welcomes the legislation and the proposed consultation. I ask the Minister to see that the travel industry is properly consulted if any difficulties arise and that its views are heard following the implementation of the directive. It is welcome, with a caveat about the weakness of the linked packages and the baffling nature of the legislation which, quite frankly, I did not understand. I am sure that the Committee, like the travel industry, will give a cautious welcome to this legislation.
My Lords, I thank the noble Baroness, Lady Randerson, and my noble friend Lord Snape for their comments. They have eased the amount of ground I have to cover because they have raised issues that I would otherwise have dealt with.
Although I welcome the regulations, I join the noble Baroness, Lady Randerson, in saying how confusing they are—certainly the latter part on travel arrangements. However, I am comforted by what my noble friend Lord Snape said, not least because he is on my side for a change. Normally when he speaks in debates, he attacks me from the Benches behind, but this time we are on the same page and singing from the same hymn sheet. We think that these regulations will do a lot for consumers and we are grateful for that.
That is what I meant. Perhaps I may deal, first, with the date of implementation, which I am sure will be entirely in line with the Minister’s expectations. This measure has been in genesis for a number of years. We knew that it was coming from about 2015, so waiting until 1 July 2018 to implement it seems rather like an overabundance of time, and I wonder whether the Minister will comment on that.
Secondly, why implement this measure in the middle of the holiday season? Changing the regulatory structure and the information for consumers bang in the middle of when they will be taking their holidays is an extraordinary thing to do and does not seem very sensible. It is certainly odd that the expectation was that the regulations would be implemented no later than 1 January 2018, although a six-month extension was allowed. However, we have managed to do it on the very last day possible, which, as I said, is not at a very convenient time, and I would be grateful for the Minister’s comments. I point out to him that, having heard his exhortations to himself to try to do better, we are now in a situation where only one of the last 10 SIs has been implemented on the common commencement date, and even for that one it was the wrong common commencement date. I look forward to a positive response on how performance will improve.
Having said all that, I thought that the Explanatory Memorandum was terrific and I congratulate the civil servants on what they have done. I read it with great interest right the way through. It was convincing and covered all the points that I had in mind. They did a very difficult job very well. It is a very complicated area. I am not complaining about the complications; nevertheless, work was done to try to come up with figures reflective of the changes, and I thought it was very good.
However, what I missed in the regulations was the complementarity of the effect that they will have on consumers. These are the Package Travel and Linked Travel Arrangements Regulations 2018, but they are not to be taken separately from the negative instrument. That instrument will be brought forward by the DfT but I am afraid I could find nothing about it. That may be my fault but I understand that there is to be another regulation which is not under the control of BEIS and therefore BEIS will not be answerable for it. However, as someone who is interested in this area, I, and certainly consumers, would have found it very helpful to have both measures together. I do not know whether the Minister can comment on that but perhaps he can arrange for me either to be informed or to be sent a copy of the negative instrument so that we can see both sides of the story.
The negative instrument, which is coming from the Department for Transport, provides the answer to a number of questions around whether flights booked separately form part of a package. The regulations that the CAA is responsible for come into force because of that instrument and not this one. I think that this is covered in detail in paragraph 4.6 on page 2 of the Explanatory Memorandum. The Air Travel Organisers’ Licensing Act 2017, which was given Royal Assent in November 2017, is the founding legislative form for that.
The other thing that I wanted to pick up was the question of guidance. There are two aspects to that. First, there is the question of how consumers will work out how this is. I would be interested to hear more comments from the Minister on that. Secondly, there will clearly need to be guidance for those in the business who actually operate this stuff. On page 5 of the Explanatory Memorandum, paragraph 9.1 says that BEIS,
“will issue non-statutory guidance for business on their responsibilities under the new Regulations at the same time this instrument is laid”.
As we heard, it was laid on 16 April so presumably that guidance is available. I would be grateful if the Minister could make sure that we get a copy of that as well. I would like to read what is being said by the department to businesses.
Finally, the worry I have about this in practice is that while the regulations for those who take flight bookings, which stem from the DfT, are being organised by one body—the CAA—the actual body that is charged with sorting this out for the package end in the regulations, as I understand it, is trading standards. Trading standards is under considerable pressure for all sorts of reasons, not least the fact that the pressure on local authorities is reducing the amount of money available. I would be grateful if the Minister could comment on that and whether additional resources will be available for those who will have to address any complaints that may come forward.
I thank all three noble Lords for their comments on these regulations. In summary, I think all three were saying that they welcomed them but that the regulations were somewhat on the complex side and they needed some explanation and guidance. The noble Lord, Lord Snape, gave from his own history the example of the first SI that he dealt with in opposition, many years ago back in 1992. He and I do not have to remember it but that legislation was only five pages long and these regulations are somewhat longer. The first thing to say is that things have got more complicated. As the noble Lord knows, the way we buy things has got much more complicated than it was some years ago. The old, simple package holiday is no longer there; we all buy things in a completely different way.
The noble Baroness, Lady Randerson, gave an example of the way that, as families, we sit down in front of the computer and say, “Right, let’s get a flight”. We take many more short holidays and may suddenly think, “We’ve got a long weekend—let’s get a flight”, then up jumps the offer of car hire, hotels and other things. In a sense, we create a package. For that reason, things will obviously be more complicated when putting together the regulations. It is therefore quite likely that they will have to contain more than the five pages that the noble Lord, Lord Snape, remembers so well.
I am sorry to interrupt the Minister but is not one of the Government’s aims here to make sure that people who buy things digitally have the same rights and experiences as those who might walk into a shop and buy them on the ground? I think the point that the noble Baroness, Lady Randerson, was making is that it is actually not being replicated here. There is not quite the same sense of buying, in a shop at a particular time, the package—even though it comes in slightly different forms. That is the issue which is causing concern.
The noble Lord is quite right to highlight that as an issue. The point to make is that when you are buying something slightly different, as a package, it will be quite difficult to put together exactly the same regulations as those remembered so fondly by the noble Lord, Lord Snape, which covered only five pages. To try to give the same sort of coverage when something so completely different, which did not exist in the past, is being bought necessarily makes for more complicated regulations. It is not that we have become more verbose since 1992. It is just harder to do these things.
I was going to offer some thanks to the noble Lord, Lord Stevenson, for his thanks for the Explanatory Memorandum. It is very rare that we get praise of that sort but we are grateful for it.
I am sorry to interrupt the Minister again but, regarding the question of what constitutes a package, set against linkage, it is not just about going on to a computer and booking a flight. What would happen if I went into a travel agent and said I wanted a weekend in Marbella, they had the perfect flight for me from Birmingham, my local airport, at 6 o’clock on a Friday evening, I booked it and paid for it there and then, but then said, “What about car hire at the other end?” Is that covered by the package, or is that regarded as a linked package and therefore not covered, in the way that getting the whole thing together and paying for it all at once would be? I am sorry if that is a bit complex, but I hope the Minister understands what I am getting at.
I will deal with these points when I get on to the different sorts of coverage. I was broadly trying to get across that we were trying to give coverage where there was not coverage in the past. I believe it was the noble Lord who congratulated the Government on being the first to offer these protections, helping to get these regulations and trying to get a degree of protection for the consumer in them.
I will deal with some of the points raised, starting with the common commencement date. My advice is generally that common commencement dates do not apply to the implementation of EU legislation and, in this case, there was no compelling reason to diverge from that position. What we did—I appreciate that we have taken some time over it—was to give a degree of time. I think that has been useful for the industry and this is why we have gone up to the wire, going up to 1 July rather than doing it on 1 January.
The noble Lord, Lord Stevenson, also asked about the other regulations coming from the Department for Transport, which will be negative regulations. I remind noble Lords of how seamless the Government are in the way they operate, with no silos between departments. My advice is that the Department for Transport expects to publish its final ATOL regulations and the formal government response to the ATOL conversation in the coming weeks. At the same time, they will be laid before Parliament and come into force in line with the implementation deadline of 1 July, so the noble Lord has time and we will try to make sure that we can meet this.
I return to the questions, largely led by the noble Baroness, Lady Randerson, on the single point of sale and the complication of the LTAs. Put simply, it is when the same retail premises, the same website or the same telephone service is used to put those together. I appreciate there is a degree of complexity; that is why we hope to provide guidance that will help to explain the concept as far as possible, making it easy for the consumer so they know that they are buying an LTA. Although LTAs do not offer the same level of protection as a package, traders who facilitate putting together an LTA will be required to inform the traveller that they are not buying a package and therefore will not benefit from the protections associated with that package.
We want to make sure that there is appropriate guidance to assist the industry with that concept and, as a result, to assist the consumer and make sure that they are aware that they are buying an ATOL-protected product. The noble Baroness was correct to stress the importance of the initials ATOL.
I am grateful to the Minister for his attempts at explanation. He clearly understands the subject a lot more deeply than I do. The problem with ATOL-protected packages is that they are something that the trader put together. All these other variations, whether it is either sort of dynamic package or a linked travel arrangement, are things you create for yourself. If you choose this car hire rather than that one, you may choose this car hire from the website, but that car hire would be from a different website. Given the average person’s knowledge and understanding of computers and sources of information—most of us are fairly hazy about where we get a lot of information and there will be no label saying, “This is protected”—my concern is how people will know that they are protected and what is the level of protection.
Briefly, because there are so many variations, we are talking about shades of grey. It is now difficult to justify having different levels of compensation depending on whether you create your own package or are given one by a tourism operator.
The noble Baroness is stressing the complexity of what has come into existence over the years. Earlier, she stressed the need to ensure that the industry was properly informed, but she went on to say that it was important that we ensure that the consumer—I always stressed the importance of the consumer—is also protected. What it makes even clearer is that we in the department must ensure that we provide the appropriate protection and compliance. That is why we want to work with the industry and regulators to help them understand all the changes being introduced, develop some guidance and ensure compliance. We will also be working with Citizens Advice to ensure that the guidance helps. I hope that, as a result, we can ensure that consumers are fully aware of what protection they have.
I appreciate that I probably have not got this out as clearly as I should like to all three noble Lords who have spoken, and I will probably end up writing a letter setting it out in some detail—I see from nods that that would be popular and appreciated.
I end by dealing with the noble Baroness’s final point. She asked about the policy change and why, having been the leader in this, we were going only as far as the current directive suggests. We have always been the leader when it comes to the protection of holidaymakers. I was grateful for what the noble Lord, Lord Snape, said at the beginning. Obviously, we will continue to do that whether we are inside or outside the EU but, at the moment, it is vital that we bring the directive into force. That is what we are obliged to do by 1 July.
As the noble Baroness is fully aware, thereafter, it will be open for us to go further, should we wish. The United Kingdom recognises that there is a need at this stage to introduce that stronger consumer protection to address the gap that has been identified and it is important that we implement those changes at this stage irrespective of where we are with our exit from the EU.
The directive is the maximum harmonisation, so there is limited scope at this stage to go beyond it. As I said, I hope to write to noble Lords to set out some of this with slightly greater clarity to make clear what we are doing. I accept that the arrangements are complex, but life is more complex than it used to be and how we buy holiday packages certainly is. I think it is a great deal more convenient and a great improvement, but it means that protections have to be devised in a different way.
I again thank the noble Lord for his welcome for our Explanatory Memorandum—it is very rare that we get such praise, so when we get it, I always like to thank people for it. I commend the regulations to the Committee.
Committee adjourned at 7.30 pm.