Millennium Dome Sale (Hansard, 27 July 2000)

§ Baroness Anelay of St Johns
My Lords, I beg leave to ask a Question of which I have given private notice, namely:
To ask Her Majesty's Government whether an agreement to sell the Millennium Dome has been reached; and, if so, to whom and on what terms.

§ The Minister of State, Cabinet Office (Lord Falconer of Thoroton)
My Lords, Dome Europe has won the competition to take over the Dome when the Millennium Experience ends on 31st December. It has now signed heads of agreement with the Government. We believe that its proposals will deliver a high quality, innovative and economically sustainable long-term future for the Dome of which the people of Greenwich and the United Kingdom can be proud. In supporting the Dome's transition from the current Millennium Experience to another visitor destination, Dome Europe proposes to create an urban entertainment resort through a combination of uses inside the Dome and on adjacent land. The latter will include hotels, a convention centre, commercial leisure, restaurants, residential units, offices, retail and community facilities. Although all of the proposals are subject to the granting of planning permission and much work remains to be done to complete the sale of the site, we are confident that Dome Europe's proposals will deliver an exciting contribution to the continued regeneration of the Greenwich peninsula.
Further, the Government have decided that of the overall consideration from the sale of the Millennium Dome, some £53 million should be paid to the New Millennium Experience Company from total expected early payments of £105 million. In the agreement with Dome Europe there is also provision for additional payment for land value in certain circumstances and a share of profits if and when the business changes hands from Dome Europe. The balance of that total amount, after the payment to NMEC and meeting third-party commitments, will go to English Partnerships.
In reaching this view, we took account of the benefit to the Greenwich peninsula and the Thames gateway in terms of continuity of jobs and assured future private investment in the site, building on the substantial public investment already made—more than £1 billion—towards major environmental, transport and other improvements on the peninsula. The Dome company's agreed entitlement to that share of the proceeds of sale means that it will continue to operate within its approved lifetime budget of £758 million. The Millennium Commission has agreed to consider how it may assist the Dome company in realising its share of the proceeds of the sale to underpin the company's finances in the period before Dome Europe take over the Dome.
The Government have always supported and believed in the long-term legacy which will be achieved on the Greenwich site because of the investment of lottery funds in the Dome. The Millennium Dome has brought benefits to the national and local economy. It has been a hugely innovative public sector enterprise that has harnessed private sector money. It is a project which will be a model for future regeneration schemes, with £160 million of private sector sponsorship secured.
During 2000, over 5,000 people will be employed at the Dome, and 6,000 long-term jobs will be created through all of the peninsular developments. The Greenwich Millennium Village will provide 1,377 mixed-tenure homes and a further 1,600 elsewhere. 582 The first people will move into the new houses by the end of the year. Greenwich council estimates that 30,000 jobs will be created as a result of the Dome.
Successive governments and the Millennium Commission have always supported and believed in the long-term legacy which will be achieved on the Greenwich site because of the investment of lottery funds in the Dome. We are delighted that a successful outcome has been achieved and that it has been possible to unlock the new value in the site as a result of the commission's investment. This good result means that the Dome has secured its future and can plan and deliver the next five months with confidence.

§ Baroness Anelay of St Johns
My Lords, I thank the Leader of the House for allowing me to table this Question. I also thank the noble and learned Lord for coming to the House to reply. First, can the Minister tell the House how much of the proceeds will reach English Partnerships? From the response of the Minister, it sounds as if English Partnerships, which represents the taxpayer, is at the end of a very long queue of creditors. Secondly, from the response of the Minister am I right to believe that in order to stay open until the end of the year the Millennium Commission is being asked to make available either a loan or a facility to keep the Dome project afloat until Nomura takes it over at the end of the period?

§ Lord Falconer of Thoroton
My Lords, as to how much English Partnerships will receive, for reasons of commercial confidentiality I cannot set out in full the details of the agreement reached with Dome Europe. However, I have indicated that early payments of £105 million are to be made. Of that, £53 million will go to NMEC and the remainder to English Partnerships. The amount that goes to English Partnerships will be totally unencumbered and will reflect a fair split of the money with the Dome company. The Dome company and English Partnerships each owns part of the Dome, and there has been a sensible and fair split between the two.
The noble Baroness asked whether for the Dome to stay open the Millennium Commission is to provide a loan facility. The present position is that the Dome company has the asset; namely, the expectation that it will receive its share of the proceeds. The Millennium Commission has indicated that it will agree to consider how that asset may be realised between now and when Dome Europe takes over.

§ Lord Harris of Greenwich
My Lords, is the noble and learned Lord aware that we welcome his Answer today which is a very satisfactory outcome, remembering as we do that the whole Dome project was conceived with all-party support? Is the noble and learned Lord also aware that what has been, and will be, done in Greenwich will do a great deal to assist the local economy?

§ Lord Falconer of Thoroton
My Lords, I am very grateful to the noble Lord for reminding the House of the all-party support for the scheme by successive 583 governments. I am also very grateful to him for reminding the House of the very substantial contribution that the Dome has made to the regeneration of Greenwich and the whole Thames gateway. We are all aware that that was one of the reasons why the Millennium Commission decided to go ahead with the Dome project and place it there.

§ Lord Shore of Stepney
My Lords, can my noble and learned friend inform the House who is Dome Europe, what it intends to do with the Dome once it has acquired it, and how it managed to acquire such an unfortunate name?

§ Lord Falconer of Thoroton
My Lords, Dome Europe is a wholly owned subsidiary of Nomura. I do not know how it secured its name, but it chose it. As I indicated in my initial response, it proposes to create an urban entertainment resort through a combination of uses. The latter will include hotels, a convention centre, commercial leisure, restaurants, residential units, offices, retail and community facilities.

§ Viscount Bridgeman
My Lords, does the Minister not agree that the recent tattoo on Horse Guards Parade, finishing as it did with impressive scenes of young servicemen caring for children in disadvantaged parts of the world, represented everything that was finest in the traditions and heritage of this country which, by contrast, the Dome has from its inception failed to address? Will the Minister do all that he can to rectify that situation in the future use of the Dome?

§ Lord Falconer of Thoroton
My Lords, I entirely agree with the observations of the noble Viscount about the tattoo. I believe that if the noble Viscount goes to Greenwich and sees the effect that the Dome has had on regeneration, employment and people who previously could not get work, he will conclude that the project is a very worthwhile legacy.

§ Earl Ferrers
My Lords, I congratulate the noble and learned Lord on having got shot of a project which I am sure has been a total anxiety to him and everyone else from the point of view of its capital costs, running costs and disposal. The noble and learned Lord must be very glad to be rid of it, because it has not been a great success, has it?

§ Lord Falconer of Thoroton
My Lords, I have genuinely been proud and privileged to be involved in the project which is now the most popular pay-to-visit attraction in the whole of the United Kingdom. It is a project which the British Tourist Authority believes will bring approximately £1 billion-worth of tourism to this country this year. It is also a project which has transformed the derelict and unusable north Greenwich peninsula into an area which now has hope 584 and the prospect of 30,000 new jobs. I believe that that is a legacy that has been well worth fighting for and sticking by throughout the life of the Dome.

§ Lord Tebbit
My Lords, does the noble and learned Lord believe that the Japanese will make a better job of running the Dome than he and his friends?

§ Lord Falconer of Thoroton
My Lords, the popularity of the competition, and the number of strong commercial enterprises which entered it, indicated that they thought that what had been created was a good commercial operation. I think that they will build on the good progress we have made.

§ Lord Marsh
My Lords, I fully understand that we cannot go into the detail. However, can the Minister tell the House whether there are also warranties and indemnities in the contract?

§ Lord Falconer of Thoroton
My Lords, there are to be negotiations. It would be wrong for me to comment.

§ Lord Crickhowell
My Lords, last Thursday the Minister three times gave absolute assurances of his confidence that the company would reach its financial objectives. Only the next day the annual report spoke of significant risks and uncertainties. One was the arrival of satisfactory funding from the sale. Others were the reductions of costs and maintaining adequate revenue. Can the Minister explain why his confidence was so much greater than that of the company? Will the noble and learned Lord confirm that it will be essential for a significant tranche of that sale, in one form or another, to be available by November?

§ Lord Falconer of Thoroton
My Lords, if the noble Lord had read it, he would have seen that the annual report indicates confidence, and, quite properly, the risks. I remain confident that the Dome will complete the year up to 31st December 2000 within its lifetime budget of £758 million. If it needs to realise before December the asset it now has, namely the sale, the Millennium Commission will consider how best to realise that.

§ Viscount Cranborne
My Lords, will the Government undertake an inquiry into the history of the project? Will the results of that inquiry be published? In particular, will that inquiry cover the question which has exercised a number of us about whether the Government overruled objections from the Millennium Commission about the propriety or otherwise of its continuing to support this project in view of its financial difficulties?

§ Lord Falconer of Thoroton
My Lords, no, I shall not give such an undertaking. The issue was raised the week before last by the noble Lord, Lord Lamont, in an Unstarred Question. In the course of that debate it was established that there have been five Select Committee inquiries, in excess of 1,000 Questions, and a National Audit Office inquiry into the specific 585 question to which the noble Viscount refers. In those circumstances, it does not seem appropriate that there should be any inquiry—far from it. This is an issue which requires parliamentary scrutiny, which it has had.

§ Baroness Blatch
My Lords, with the—

§ Baroness Jay of Paddington
My Lords, we have reached 12 minutes.

§ Baroness Blatch
My Lords, perhaps I may—

Noble Lords
Order!

§ Baroness Jay of Paddington
My Lords, the Companion indicates that a PNQ taken after Question Time normally takes 10 minutes. That is the time for what one might call a fifth Question. In this instance, given the length of the detailed response to the Private Notice Question which my noble and learned friend gave with great courtesy to the House, the Chief Whip and, I believe, the Leader of the Opposition signalled to each other that 12 minutes should be taken. Those 12 minutes have now passed.