The hon. Gentleman will realise that I did not appreciate that the Minister intended to answer the debate. The debate would have been better and more informed if the Minister had expressed the Government's views and policy on the subject matter which has been tabled by the official Opposition. We heard four minutes on the predicament of the Royal Shakespeare Company and I fear that that is a reflection of the Government's desire to distract attention from the plight of the theatre. It stems from the consistent underfunding of live theatre over many years. It is symptomatic of a failure not so much to value the arts as to match that valuation with an appropriate cash price.
Of all the art forms in Britain, the live theatre is perhaps the most universally admired, certainly throughout the English-speaking world. It draws visitors to Britain in great numbers not only to see classical works performed with epic splendour, but new plays admirably acted and innovative in ideas.
The Minister properly received appreciation when last autumn the Government decided to increase the budget of the Arts Council by 12·8 per cent., but he must appreciate now, if he did not then, that that was certainly not sufficient to tackle the problem of many years' standing.
The most authoritative independent inquiry into the publicly funded theatre in recent years was that of Sir Kenneth Cork commissioned by the Arts Council and concluded in September 1986. Most of the issues which give rise to the current plight of the RSC, the national theatre and other theatres throughout the country, were considered in Sir Kenneth's report. The central message of that report was that additional funding for theatre development fund with an annual ceiling of £5 million at 1986 prices should be made available and that figure should be adjusted for inflation in subsequent years. No action was taken upon that recommendation and the consequences are not apparent.
The Cork report warned:
If no means can be found to finance the recommendations, it follows that either the proposed developments would have to be shelved or there would have to be some redistribution within the present theatre allocation.
It went on:
The choice without extra funds is stark: either withdraw funding from a national company for the benefit of the theatre of the nation, or allow regional theatre throughout the country to wither and become unviable in order to maintain two national companies.
The dilemma appears to have been recognised by the Arts Council, but if it sought to press it upon the Government then and in subsequent years it was certainly not successful in eliciting the required additional funding.
As the secretary general of the Arts Council, Luke Rittner, reported in the 1987–88 annual report:
We are disappointed that the gap between our funding of London and the rest of the country is still as wide as ever. 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.
If it were not clear then, it is certainly clear now, but the Arts Council was hampered in making its case for what Mr. Rittner called
a dramatic increase in overall funding
by the preoccupation of the then chairman, no doubt reflecting Government thinking, with what Sir William Rees-Mogg called
the Council's objective to reduce the art world's reliance on subsidy and to lower the proportion (but not of course the absolute amount) of grant to the overall turnover of art organisations.
I consider that the years of Sir William Rees-Mogg were wasted. The problem was spelt out in successive inquiries—Priestley reported, Cork reported, the companies warned what would happen, and every commentator who knew anything about these matters drew attention to the fact that merely redistributing the Arts Council budget without taking account of that gap would result either in the closure of a major national theatre or the withering away of the regional theatres. That is what this debate is all about. That view was expressed as long ago as the Priestley report and the 1986 Cork report and has been reiterated by the Minister's own appointee, Mr. Richard Wilding, as recently as October in his published report on the structure of the funding of the arts:
The propensity to spread the butter too thin
already resulted in the grants to the four national companies being pared down to the point at which they can no longer put on programmes of the high international standard rightly expected of them.
The preoccupation of the Arts Council under Sir William Rees-Mogg and the Government with obtaining a balance between public funding and sponsorship has obscured, certainly for the past five years at least, the urgency of obtaining extra public funding to meet the objectives so well set out in Sir Kenneth Cork's report.
During the past six months there has been a partial recognition of the limits of sponsorship in the arts. It has come most notably from the sponsors themselves, who have made it abundantly plain that they do not wish to be involved in the core funding of the national theatres, the national collections or any of the other major national artistic endeavours.
The sponsorship of the Royal Shakespeare Company has been exceptional—more than that of any other company in the country. Their sponsors have allowed some of that funding to be used for core operations but it is not preventing the closure of two of their theatres.
The limits of sponsorship were recognised to some extent in the Minister's success last autumn in obtaining a 12·8 per cent. increase but it was certainly not sufficient to save the flagship companies, all of which are in deficit at the moment and the Minister did not even mention the fact that the three other companies are also in deficit. It certainly is not sufficient to deal with that continuing problem.
It is clear that the Royal Shakespeare Company, which only six months ago was performing simultaneously 10 different productions in 10 different theatres around the country with the lowest public subsidy of all the national theatres and the highest percentage of self-generated earnings could not keep going. It has tried to do what the Government asked and it has succeeded beyond anyone's wildest expectations. It has brought in more than 1 million people to Royal Shakespeare Company theatres in a year and 65 per cent. of that audience is not in London. It is right that the cuts should not fall on audiences outside London although tours are being cut. But the Newcastle and Stratford bases are being left intact.
No one has seriously argued that it is not an efficient company, though a rather nasty aspersion has been cast by some hon. Members. Nobody has brought forward evidence to suggest that the Priestley findings, which were exhaustive and which were made five years ago, were wrong. It is a unique company with five base theatres. Its self-generated earnings from transferred productions—from "Les Miserables" to "Les Liaisons Dangereuses"—are the admiration of the west end and of Broadway. The company has won the Queen's award for export achievement.
The burden of the Royal Shakespeare Company's case is that the three proposals of the Priestley committee—a committee set up by the Cabinet's own efficiency unit—have not been recognised in full. In his short allusion to the predicament of the RSC, the Minister said that he had never given an undertaking to uprate the provision from the base of £4·9 million of the 1984–85 year. I wonder what language means if the then Minister's statement in 1984–85 that
provision will also be made for subsequent years
did not imply—it was certainly intended to imply—that that base would not be eroded by the passage of time and the growth of inflation.
Mr. Geoffrey Cass, in his subsequent report, clearly said that the Government were not fulfilling their commitment—and that was a repeated statement. I do not know whether the Minister has previously said, as he did tonight, dismayingly, that there was no intention to uprate from that base in line with the Priestley recommendations. If there was no such intention, that fact should not have come out five years after the event. It should have been discussed so that the Arts Council could have openly made the case for the fulfilment of the Priestley intentions. It came as a shock to me to hear the Minister's remarks on that issue tonight.
The financial crisis first became acute as long ago as 1986–87, when the RSC suffered from the downturn in audiences due to the falling off of American tourism that year. There is now no way out other than a substantial increase in the funding of that company. Mr. Ian Rushden, chief executive of the Royal insurance Company—the major sponsor of the RSC, giving more than £1 million a year—said:
If we pare to the bone every last financial commitment, leaving no reserve for the risk which goes wrong, then the world-wide reputation of the British arts will be the poorer. That is the danger of current British Government policy. The strength of plural funding depends on all parties pulling their weight, the Government maintaining their grant levels in real terms, the sponsors maintaining their commitment for the agreed period and budgeted audience figures being set at a reasonable level.
Despite high inflation, a squeeze on personal incomes and an increase in the price of seats, audience numbers at the RSC have remained high—at a level well above that which the commercial theatre would regard as necessary to achieve success. The Barbican is now the highest priced theatre in London, and since 1985 seat prices have increased by 47·5 per cent. There is no scope for further price increases without the charitable objectives of the RSC's charter being infringed.
It is accepted as a matter of fact—the Minister did not allude to it, but I assume that he accepts it—that even with the increase of 11 per cent. in the subsidy of the RSC this year, it is over £1·5 million short of what is needed for the current year, and there is a cumulative shortfall in subsidy of £5·7 million. That will be reduced by only £1·3 million as a result of the closure of the Barbican and Pit theatres.
The Minister owes it to the arts, and to the RSC in particular, to explain with precision what his predecessor meant when he said in 1984–85:
provision will also be made for subsequent years.
I understand that the Arts Council has repeatedly drawn the Government's attention to that commitment in the annual negotiations on its budget, but no account appears. to have been taken of it by the Government in settling the Arts Council's vote.