Orders of the Day — Arts (Funding)

Part of the debate – in the House of Commons at 9:25 pm on 26th March 1985.

Alert me about debates like this

Photo of Francis Maude Francis Maude , North Warwickshire 9:25 pm, 26th March 1985

I have been there several times and have seen many good productions.

The west end theatres have survived without subsidy successfully for many years. When we debate this subject, many people say that the subsidised theatre is essential because it brings tourists to the country and is a great money-earner. Of course, that is right. It generates revenue, but the unsubsidised west end theatres generate just as much revenue. Indeed, they generate more revenue because they do not have the original public subsidy to begin with. Some argue that the west end theatre is fertilised by productions from the subsidised theatre. Of course, that is right. The argument is that if we cut off subsidised theatre, we cut off that fertilisation. I do not accept that, because the west end theatre has a product to sell. If it cannot get new and good quality productions from the subsidised sector, it will develop those productions from elsewhere. It has something to sell, and it must have products. I have no doubt that the reduction of the subsidy to theatres would have no bad effect on the ability of west end theatres to continue in business.

What of other theatres which can survive without subsidy? For example, Glyndebourne survives completely without subsidy, except for a small subsidy for its touring operation. It has one or two new productions every festival, which compares favourably with the heavily subsidised Covent Garden and the Coliseum. The Chichester festival is also completely unsubsidised. It is successful, and is never shy of putting on new productions which test the frontiers of the arts. In recent years there has been an enormous growth in privately run, specialised museums, which is a development of sponsorship and of commerciality in the arts.

As a replacement for direct subsidy, I should like to see tax incentives to encourage individuals and companies to increase their sponsorship of the arts. This has increased from virtually nothing 10 years ago to quite a substantial proportion. However, the proportion of private sponsorship to public subsidy in Great Britain is almost exactly the reverse of the situation in the United States. In the United States it is roughly 10 to one, but in this country it is about one to 10. This happens in the United States because tax incentives are offered.

The Select Committee on Education and the Arts suggested concessions on private sponsorship three years ago. Eventually, in January last year, the Government produced their response to that suggestion. Effectively, they said that this could not be done and should not be done. The reasons are fairly sketchily set out, but they are worth looking at. They raised a number of interesting points. The Government said: To exempt business companies from tax on a percentage of their profits on donations to the arts would be a concession that it would be difficult and inequitable to confine to the arts. That is nonsense. In the United States it is done perfectly successfully. As for how difficult it would be to justify confining it to the arts, that is a matter of pragmatism. It is acceptable to raise money to use as tax concessions to act as a catalyst to encourage certain desirable activities. This may not be necessary in the long-term, but it is necessary in the short term to develop this activity.

The Government's answer went on to say: Moreover, the gain to the arts would not necessarily be in respect of a wide range of deserving cases, while the loss of revenue would mean substantial falls in the substantial sums within the Government's direct control. That is not the robust voice of my right hon. and noble Friend the Minister for the Arts. That is the authentic voice of the arts establishment, which sums up in a sentence all that is worst about the system of direct subsidy to the arts.

The gain to the arts would not necessarily be in respect of a wide range of deserving cases"— Who is to decide that? Is it to be the drama panel of the Arts Council? What a poor fist it has made of that in the past. Why should companies not decide which should be deserving cases, or the audiences? Are we to assume that the drama panel of the Arts Council, the committee sitting isolated from the public, is a better judge of what is a deserving case than the public? That is an intolerably arrogant attitude.

The Government's reply said: the loss of revenue would mean substantial falls in the sums within the Government's direct control. If that is the result, good, so much the better. We want to see much more control over the way in which money goes to the arts in the hands of companies which can make decisions and of the public who take decisions to go and fill seats to see performances.

The argument set out sketchingly in the paper put out by the Office of Arts and Libraries does not meet the case. It has dismissed sponsorship lightly, but this matter would repay much closer consideration. I hope that when my hon. Friend the Under-Secretary winds up the debate he will hold out some hope that the Government will reconsider this matter as the only long-term solution to this problem.

The argument is that sponsorship will always go to the safe and cautious projects, but that has not been shown to be the case. Initially it was so, and was bound to be, but it is an activity that is developing. As it becomes more and more ingrained in society, and into the business community that it is a good thing to do to sponsor the arts, sponsorship will become more and more adventurous. There are a number of encouraging examples of business sponsoring adventurous projects. For example, BP gives substantial subsidy to the Edinburgh Festival Fringe, which is not a particularly cautious or unadventurous project. It is good to see a big establishment, a multinational company, going in for that. IBM sponsors the Scottish Museum of Modern Art. Again, that is a good development. The award scheme run by the Association for Business Sponsorship of the Arts and the SundayTelegraph singles out imaginative and adventurous schemes. There is a growing tendency for sponsorship to move away from safe and cautious art, which will always predominate. If there are signs that private sponsorship is moving into more adventurous areas, that must be welcomed.

Direct subsidy of the arts is not the only aspect that worries me. The Treasury accepts works of art and property in lieu of tax. Parliament imposes capital transfer tax, thus forcing people to sell their properties to pay the tax, in lieu of which the Government accept works of art for the nation. I hope that my hon. Friend the Member for Bristol, West (Mr. Waldegrave) will make representations to the Treasury about the malign effect of this tax on the arts generally. The redistributive effect of capital transfer tax is negligible, its yield is slight, its collection cost is heavy, but its indirect effect upon the arts is considerable. Abolition of capital transfer tax would not only discourage the export of works of art and reduce Government intervention, but would open the way for wider patronage of the arts by individuals. There would then be a return to the occasionally eccentric, occasionally dotty patronage of the wilder types of artistic endeavour that took place in the past. It would be better if such patronage came from private individuals rather than from the public purse.

I hope that my hon. Friend will consider favourably the introduction of tax concessions for sponsorship of the arts and that eventually the abolition of capital transfer tax will revolutionise the funding of the arts. Eventually I should like taxes to be so low that the public could exercise their own choice about how they spend their money. That would be much more desirable than the extraction of involuntary contributions from taxpayers, which amount to one third of average earnings, thus forcing them to subsidise against their will those who are usually much better off. I hope that my hon. Friend will consider this point.