I welcome the opportunity to bring before the House the funding of the Arts Council and the Royal National theatre. As the House knows, the National theatre was a vision which took many years to become palpable. The House will wish to recognise the immense contribution made by Lord Olivier, by Lord Goodman, by the late Lady Lee and more recently by Lord Rayne.
The House might regard the Royal National theatre as currently thrice blessed in having my hon. Friend the Member for Exeter (Mr. Hannam) as one of its directors for the last nine years, and in having Lady Soames as its recently appointed chairman. There is no one in the country whose personal dynamism could better lead the Royal National theatre into the future. Her only conceivable drawback is that, were she to appear before the audience, she would upstage—nay, eclipse—every known leading lady, past, present and future.
The third blessing is in the combination of Richard Eyre as director and David Aukin as executive director. Those who saw Richard Eyre's directions at the National theatre of "Guys and Dolls", "The Beggar's Opera" and more recently the electrifying production of "The Changeling"—indeed, those whose theatrical memories go back as far as the Cambridge run of "Expresso Bongo" in the 1960s—will have recognised that here is a man of unusual genius and vision, with the capacity to evoke something unique and special from all involved in his productions.
With the help of Government, local authorities and private sponsors, and through much hard work, a unique national institution has at last been created with which a massive number of people, at home and abroad, identify. The Royal National theatre is the jewel in the crown of the British and, I believe, the European theatre. It exists, in the words of Richard Eyre,
to do work which either by content or by execution, or both, could not be performed or would not be initiated in the commercial sector. It provides continuity of investment, of employment and of a theatrical tradition, and this requires a subsidy to supplement the revenues from the box office.
Composing the content of the repertoire will always be a balancing act between adventure and caution, between known classics and the unknown; recent plays and new ones. But the spine of the work will always be the classics which are our genetic link with the past and our means of decoding the present.
Every age sees its own reflection in these plays. We find in them not the past throwing a shadow on the present, but an image of ourselves. The classics survive, not because they are relics venerated for their age, but because of what they mean to us now.
But we have to keep rediscovering ways of doing the classics. They do not have absolute meanings. There is no fixed frozen way of doing them. Nostalgia is a powerful, but slow acting poison and it can cripple; the life of the theatre should always be in the present tense.
I will speak of the present. The institution that now exists consists of three separate and distinct theatres—the Olivier, based on the classical Greek theatre; the Lyttelton theatre, based on the proscenium arch theatres of the last three centuries; and the Cottesloe, based on the Tudor inn yards. They are modelled on theatrical designs from the three greatest periods of western drama.
Crucial to the experience of visiting the theatre is the front-of-house area which, in contrast to the cramped conditions of much of the commercial theatre, encourages people to relax and gives them room to do so. Sir Denys Lasdun's building has not met with universal praise at all times, but neither has St. Paul's cathedral. I believe that the Royal National theatre, on one of the most beautiful sites in London, will be seen by history as a far-sighted and brilliant extension of traditional theatrical ideas.
The front-of-house area is like a fourth auditorium, where people can browse at bookstalls, look at exhibitions, eat and drink, or sit and chat. Important, too, is the National theatre studio, financed by private sources and housed in the Old Vic annexe. There the National theatre refines and extends its skills and generates new writing and experimental work. Regular studio nights are held in the Cottesloe, when examples of work in progress are shown to the public for one night only.
Important, too, is the education department which links up with schools and colleges, and takes specially created productions on tour. Touring at home and abroad of main house productions, never in greater demand than now, is an important aspect of the theatre's work. I know that that importance is recognised by my right hon. Friend the Minister of State and by the Arts Council. The theatre also provides facilities for visiting theatre companies, both from Britain and abroad.
I shall speak shortly about money, but I begin with quality. Productivity, cost-effectiveness, profit margins and so on are vital when we talk of accountability for public funds. At the end of the day, the case for the subsidised theatre is made on the stage, and the important questions, as Richard Eyre has said, are what is on the stage, is it any good, and what does it mean to the people who watch it? The recent excellent box office receipts of the Royal National theatre derive directly from the quality of the productions and the atmosphere of the theatre. A priceless national asset has been created which is going through an immensely exciting period, and it deserves every possible support that the Government and the House can give it.
Is my hon. Friend aware that in what he says on this issue he has the full support not only of my hon. Friend the Member for Battersea (Mr. Bowis) and me, who are present, but of Members in all parts of the House, and that we wish him every possible success in this debate?
I am grateful to my hon. Friend, who is a great, loyal and effective supporter of the theatre.
In his introduction to his last report as chairman of the Arts Council, Lord Rees-Mogg said:
those responsible for the distribution of public monies to the arts must never lose sight of the goal of excellence. The word fell into disuetude as the Arts Council, in collaboration with the Regional Arts Associations, developed policies which had the central aim of increasing the accessibility of the arts to all sorts and conditions of men and women. The Council was right to adopt this course, but must always take care not to be seen to abandon those on whose daring and skill—the painters, sculptors, actors, composers, film makers, writers, musicians, dancers—the whole great enterprise culture depends.
Unfortunately, the recent history of funding by the Arts Council and its current proposals give exactly the wrong
message. I am not suggesting that my right hon. Friend, in asking Lady Soames to become the chairman of the Royal National theatre, offered her a poisoned chalice, but her Ladyship may be forgiven for having woken up wondering whether the contents might not have been a trifle corked.
The current running costs of the Royal National theatre are in the region of £17 million, of which about £8 million comes from Arts Council subsidy. In 1987–88, the subsidy was not increased at all, during a year when inflation was over 4 per cent., and the grant from the Treasury to the Arts Council increased by nearly 3 per cent. In 1988–89, the subsidy from the Arts Council to the Royal National theatre increased by 1·35 per cent. at a time when inflation was nearly 3·5 per cent. and the grant from the Treasury to the Arts Council increased by 9·4 per cent.
It is now proposed by the Arts Council that for the next three years—that is, from 1989–90 to 1991–92—grants of 1·8, 2 and 2 per cent. respectively should be made. In other words, while inflation as measured by the RPI will have increased by 30 per cent. in the period, and the total subvention by the Government to the Arts Council raised by nearly 24 per cent., the Royal National theatre's grant will have increased by a mere 7·3 per cent. over the same five-year period.
In the last two years, the theatre survived its real reduction in subsidy through a number of methods—by continued excellent housekeeping, by holding pay awards down to the movement of the RPI, by keeping high audience attendance targets, by holding back capital expenditure and building costs—a policy which cannot be continued indefinitely, given the cracks and corrosion and the necessities for renovation that are now all too apparent —by implementing the recommendations of the Rayner report and by exceptional receipts from the exploitation of productions such as "Amadeus", "Single Spies", and "A View from the Bridge" in the West End and the United States, and from the film and video sales of the productions.
The theatre also generated new private sector income from sponsorship and patronage—£400,000 two years ago, with a target of nearly £1 million this year. Those achievements enabled the Royal National theatre to build up a fallback reserve, but the continued erosion of the theatre's grant led inexorably to a budgeted deficit for 1988–89 and the virtual elimination of the reserves by March 1989.
The three-year funding budget which the theatre submitted was based on an average inflation rate throughout of 5 per cent. a year, but that now looks too low. The board can balance its budget for the current year only by a series of undesirable devices: by cutting the artistic programmes to a level which puts at risk expectations from the box office—a counter-productive way of proceeding—and by increasing the target for private sector funding to about double that achieved in the previous year—and that, in a market place heavily crowded by arts organisations chasing sponsorship, is an optimistic assumption. It is the view of the board that it would now be unrealistic to rely on private sources as a means of making good the shortfall, by including a rate of inflation that is now out of date and by continuing to hold back capital projects.
Annual building running costs payable by the company, which does not own the building but occupies it on a 21-day licence from the South Bank theatre board, are currently £3 million. Substantial contingent liabilities on necessary capital expenditure, against which the Royal National theatre company has no reserves, have now built up. Those are dangerous procedures in terms of prudent long-term management and a board of directors with limited liability.
Two years ago, the theatre was forced by Lambeth council, under threat of closure, to refurbish and re-equip the main kitchen. At that time, there were reserves, but it could not take such action today. I do not need to remind the House of the closure of the Cottesloe theatre in 1985.
The present budget also assumes the maximum possible award under the incentive funding scheme. I know that the board would like an assurance that the maximum sum 0allowable, of £250,000, will be available over the next two years. The budget submitted probably could not be met without a substantial fall in the general rate of inflation.
In addition, the theatre is under serious pressure from the unions. At the moment, claims are at the rate of 25 per cent. from the musicians, 32 per cent. from equity stage management, 14·5 per cent. from equity actors and 15 per cent. from the Broadcasting and Entertainment Trades Alliance. Following the theatre's policy of linking pay awards to the rate of inflation when it was low over the past few years, rates in the outside market are now higher, and the theatre faces the risk of losing valued staff and industrial unrest.
The nature of a theatre's business is unpredictable. Running a £17 million operation with no realisable assets, with an overdraft facility limited to £150,000 and no reserves, is a hazardous exercise. The budget for 1989–90 is based on revenue assumptions which are necessarily uncertain, and very much on the high side. The inflation assumptions are no longer valid and the reduction in the artistic programme may well put at risk the box office income. It is the considered view of Richard Eyre and David Aukin that any further cuts in the programme could lead to a spiral, in which diminishing activities were followed by diminishing financial returns. The House cannot contemplate such a prospect with equanimity.
By penalising the success of the Royal National theatre in increasing its box office returns and its sponsorship by reducing grants in real terms, the Arts Council is not only abandoning the daring and skill of those who make the National theatre work, but threatening the theatre's very existence. The Royal National theatre lives on a financial knife edge. If, by cutting back on educational and production expenditure, the sale of seats should fall, the council will have started the theatre on that downward spiral from which it will be difficult to recover.
Elsewhere in his valedictory introduction, Lord Rees-Mogg says:
the Arts Council is proud of its traditional commitment to judgment by peers. Our panels, boards and committees are well-stocked with distinguished representatives from the arts professions. Their advice, although central, is not sufficient. The voice of the public must also be given due weight. This is the fundamental reason why I support the Council's objective to reduce the Art World's reliance on State subsidy to lower the proportion, not of course the absolute amount, of grant, to the overall turnover of arts organisations. The way in which the public discriminates is through its willingness to pay for its pleasure.
The National theatre has passed that test with flying colours. Every night of the week, 52 weeks of the year, the National theatre puts 2,300 seats for sale in the market place and depends for its survival on the sale of at least 1,750 of them. Box office receipts have increased by 20 per
cent in the past 18 months and it is extremely short-sighted that such success should be met with a withdrawal, in real terms, of its funding.
Elsewhere in the Arts Council report, Mr. Luke Rittner writes:
there is one constant factor in every annual report of the Arts Council, and it is money. It almost goes without saying that we believe that the Government will see huge benefits if it decided to increase its investment in the Arts. We shall certainly continue to put that case to the Government.
He goes on to say:
no-one on the Council wants to see the National companies held back, nor do we want to stifle the Arts in the Metropolis. However, unless there were a dramatic increase in overall funding, it is difficult to see how we can ever really get the balance more equitable.
What is needed is an increase in the grant for the next three years. The company is not asking to be feather-bedded—far from it. It is proving itself in box-office terms and hopes to continue to do so. It has a very ambitious target of sponsorship, and keeps a close eye on costs, but it has to recover lost ground, invest in fabric and amenities—the lavatories have been described as a public disgrace—and improve revenues from front-of-the-house sales. Failing this, the Royal National theatre will be headed for insolvency and closure.
Although this may sound over-dramatic, I should remind the House that in 1985 Lord Rayner concluded a report, following the Coopers and Lybrand investigation into the theatre's affairs, in which he said:
it would be a mistake if Government and the Arts Council were to use the evidence and conclusion of this Report to contain or reduce further its funding of the National theatre…continuing Government funding at or above its present level in real terms will in my view be essential".
That authoritative view has not been heeded and the theatre is that much nearer to the brink of a grave financial crisis. I urge my right hon. Friend to give serious consideration to this matter in his discussion with the Arts Council on the funding of the theatre.
I am not here suggesting radical solutions such as direct funding of the Royal National theatre, the dismemberment of the Arts Council, or even the privatisation of the South Bank theatre board. What I am suggesting is that a highly prized national institution should not be put at risk, contrary to the advice of the Rayner report, by a real reduction in core funding at a time when a substantial increase would yield enormous dividends, both financial and artistic.
It is healthy that earnings from private sector income now play a larger part in turnover of arts organizations than in the past. I pay tribute to the role my right hon. Friend has played in helping to bring that about. I also pay tribute to his introduction of incentive funding and the introduction of three-year funding, which is a significant development. However, as my right hon. Friend knows, it is now in some jeopardy, at least in the case of the Royal National theatre. I applaud the fact that the Government have increased expenditure on the arts by 33 per cent. in real terms over the past 10 years, and on the performing arts by 13 per cent., but I agree with Lord Rees-Mogg and Mr. Rittner that only a dramatic increase in overall funding will bring about the massive artistic dividends for the country which both he, I am sure, and the whole House would wish to see. I think, too, that he would see enormous political dividends from such action. That is not a wholly unworthy consideration.
Lord Rees-Mogg said in his valediction that the voice of the public must be given due weight. I believe that the public, as represented in this House tonight, would give a massive endorsement were my right hon. Friend to bring about a further substantial increase in funding for the arts —an increase which in absolute terms would be minuscule in relation to overall Government expenditure, but which would be of great significance to the future of the arts in this country, not least the Royal National theatre.
I shall leave the House and the Arts Council with some lines from "Expresso Bongo", which I remember hearing sung a quarter of a century ago by the present director of the Royal National theatre, in the role of Bongo Herbert —drum beats echoing between the bridges and banks of the River Cam as now they might from the Thames to Piccadilly:
Oh, oh, oh, don't sell me down the river
If you wanna throw your baby overboard
Then you're gonna have to answer to the Lord. Remember, rivers keep on flowin'
Down on a one way tide,
And some day that's where you'll be goin'
If you take me for a ride.
Later in the libretto come the softer tones of Maisie:
You're the one who can make me or break me
Don't shake me off your tree
For once in your life, take me
Seriously, I mean seriously.
I congratulate my hon. Friend the Member for Eddisbury (Mr. Goodlad) on taking this opportunity to debate the arts and, more particularly, the Royal National theatre, and on the way in which, with his tremendous knowledge of the subject, he expressed his views and anxieties about it.
I am glad to say that this is the third debate of an artistic nature since March of this year. I am also glad my hon. Friend the Member for Twickenham (Mr. Jessel) was able to be here and to intervene. I shall deal with the Royal National theatre in a moment, but it is important to view the position of any one company in the context of Government support for the arts as a whole.
It is our policy to keep up the level of central Government support for the arts—indeed, we have done better; the Arts Council's grant is up by 13 per cent. in real terms between 1979–80 and 1988–89—and to create the conditions in which the arts can develop by attracting additional funds from other sources. Our overall objective is to increase funding by improving self reliance. The Government have encouraged a range of initiatives to help bring that about. In 1984, for example, we launched the business sponsorship incentive scheme, which has now brought in more than £25 million in new money and has attracted 1,000 new sponsors. I presented the 1,000th award in Scotland this week. We have made extra funds available to the Arts Council for its incentive funding scheme, which encourages subsidised bodies to become more self reliant in their development and growth. In its first year the scheme is expected to bring about £13.5 million of new private sector money into the arts, plus £3 million from the Government—a 3:1 ratio, rather than the 2:1 ratio demanded by the scheme.
The cornerstone of my policy is the need to increase access to excellence in the arts. To that end, I asked the Arts Council to earmark a certain proportion of its grant to increase touring in the regions. Its new Great Britain touring fund financed more than 60 weeks of extra touring, including 38 weeks of drama, in its first year. I am glad to see that the Royal National theatre has an ambitious touring programme and has an increased emphasis on access through education.
An important part of the Arts Council's strategy has been to shift more resources from London to the regions. I accept the implication of the remarks of my hon. Friend the Member for Eddisbury that it is difficult for the Arts Council to get that balance right. The council has devolved more of its money and responsibilities to the 12 English regional arts associations. The council's grant to the regional arts associations has doubled in real terms since 1979–80. Expenditure on directly funded Arts Council clients in the regions has increased considerably. However, we must not—and I am sure that my hon. Friend does not—assume that all centres of excellence are in London. We have a vast range of centres of excellence in the regions —for example, the Welsh national opera, the Edencourt theatre in Inverness, the Royal Liverpool philharmonic orchestra and the City of Birmingham symphony orchestra, to name just a few.
I now turn to the Royal National theatre. I listened with great care to what my hon. Friend the Member for Eddisbury said. I am aware that this great theatre faces a number of pressures and problems, which my hon. Friend highlighted so carefully. However, I will re-emphasise and reinforce what my hon. Friend said about its achievements. The Royal National theatre's policy is to present to a high standard and within a balanced programme classic, new and neglected plays from the whole world of drama. I echo my hon. Friend's praise for the theatre. Since its formation in 1963, the company has won 134 awards, which is more than any other theatre company. It was fitting that the theatre be granted the "royal" prefix in October 1988 to commemorate its 25th anniversary. The RNT consistently plays to 80 per cent. of its capacity, which is a remarkably high average. More than 700,000 people saw the company in 1987–88. The RNT's recent productions, under the excellent chairmanship of Lady Soames, and the outstanding management and direction of Richard Eyre and David Aukin, have been of a very high standard. I saw an excellent performance of Ibsen's "Hedda Gabler" there last week, and I remember seeing a superb performance of "The Winter's Tale" in Georgia, performed in plain clothes because the costumes had gone astray amid Soviet bureaucracy. That standard of excellence cannot be achieved without leadership from the top and commitment from every member of staff—from the stagehands to the front-of-house staff.
The theatre receives its grant in aid—more than £8 million this year—from the Arts Council; 51 per cent. of its income comes from private sources. I congratulate the theatre on the launch of its endowment fund initiated by Lord Rayne, the previous chairman. I operate under the arm's-length principle, which has been adopted by successive Governments since the war. I believe that it is essential that the allocation of specific grants and judgments of artistic merit should continue to be taken at arm's-length. The Arts Council exists to distance such decisions from political considerations. That is as it should be. Governments and civil servants should not be arbiters of taste and Arts Ministers must not allow their own artistic inclinations to govern their policies. Let me also make it plain that no one should assume an automatic right to an increase in grant or a certain level of grant. Judgments must be made on merit by the Arts Council and, of course, the regional arts associations.
I see no need to change the present arrangement whereby all the subsidised arts bodies are funded by the Arts Council. Moreover, the terms of reference of the Wilding review of the structure of arts funding make it plain that the arm's-length policy will continue.
The three-year funding has laid new foundations for long-term strategies, which apply to the Royal National theatre as well. Its introduction in 1987—88 included an 8·5 per cent. increase in the Arts Council grant that year and a 17 per cent. increase over the three years to 1990–91. I am fully aware, however, of the problems and pressures imposed by inflation. It is important to remember that it affects everyone, not just the arts organisations. It is, therefore, essential for the Government to defeat inflation, which remains a top priority.
It is for the Arts Council to determine how it should allocate its funds. In recent years the council's priority has been to devolve resources and responsibilities to the regions. I know that Peter Palumbo, the new chairman of the council, is well aware of the particular problems of the national companies, some of our flagships of artistic excellence—the Royal Opera house, the English national opera, the Royal Shakespeare company and the Royal National theatre. Incidentally I look forward to visiting the RNT in July to meet the staff. I know that the theatre is concerned, as always, to achieve the most excellent productions that provide access to the most number of people—the goal of all of us concerned with the arts. It is wrong to assume that it is not possible to reconcile excellence with improving access to the public. Both must be achieved.
I believe that people in all parts of the country have a right to the best of the arts. That is why my hon. Friend drew attention to the importance of touring. The tours undertaken by our great centres of excellence, such as the RNT, are important because people in different parts of the country are thus able to see the greatness of that theatre.
I am most grateful to my hon. Friend for raising this important subject, for airing the concerns of the RNT. of the trusteeship and of the chairman and for clearly putting to me some of the problems that the theatre currently faces.
I take this opportunity to assure my hon. Friend that I will draw his concerns to the attention of the chairman of the Arts Council, Mr. Palumbo. I congratulate my hon. Friend on drawing attention to the increasingly important role not only of the theatre, but of the arts as more a nd more people enjoy them.
Because of the RNT and the rest of the arts, I believe that we can look to the 1990s with optimism—despite the pressures that the arts currently face—especially as more and more people realise that the quality of their lives can be improved by the excellence of British arts.
Question put and agreed to.
Adjourned accordingly at eighteen minutes to Eleven o'clock.