Royal Opera boss demands tax breaks for philanthropists

The cash crisis facing arts organisations nationwide can only be solved by changing tax rules for philanthropic giving, says the Royal Opera House's chief executive, Tony Hall.

Responding to Culture Secretary Jeremy Hunt's unveiling last week of an £80m package to boost philanthropic giving to the arts, Hall bemoaned the politician's lack of a substantial announcement on tax reform.

"It was a start but there is an awful lot more to do," said Hall. "Jeremy Hunt was right to focus on fundraising but fundamentally we have got to look at changes in tax arrangements to help people see the advantage of giving. There is going to be a review but we need some concrete ideas that can work and will work."

Hall, who is also the chairman of the 2012 Cultural Olympiad, said that donors needed to be encouraged to fund arts organisations over several years to give institutions greater security.

He called for benefits during donors' lifetimes if they intend to donate assets upon their death. "We should look at the benefits people should get from giving which are quite circumscribed at the moment in tax terms and see whether that can be improved."

Hall's views echo those of Alan Davey, the chief executive of the Arts Council England, and the British Museum's director Neil MacGregor, both of whom have recently emphasised the importance of tax reform. The Government is believed to be in favour of tax breaks for "lifetime legacies", where donors receive an income stream during their lifetime before an asset is transferred to an institution upon their death. The current system of claiming back tax on donations has been criticised for its bureaucracy, meaning approximately £750m goes unclaimed every year.

Hall defended his high salary of over £390,000 a year, revealed in a recent report sent by the Opera House to the Charity Commission. The income is almost double the amount earned by individuals occupying similar positions at the Tate and the National Theatre.

"I don't set my salary," he said. "I came here from a different world, and I took a pay cut to come here, and the board determine what I get paid. I don't ask for pay rises. The board looks at international comparisons, and in the US and mainland Europe people in my position are paid roughly what I am paid. My pension is rolled up into it as well, and I make charitable donations to things I believe in."

The chief executive said that despite the recent rise in VAT, his aim was to lower ticket prices over the next two years. He said he reviews prices at Covent Garden every two months instead of announcing prices for the entire year in order to more closely monitor the situation. Ticket prices vary widely, though stall seats can currently cost in excess of £200. "I am doing all I can to keep seats as a low as I can," he said. "But it's hard." He ruled out prices being increased to replace revenues lost to the public funding cuts.

He denied that performances dumbed down in times of hardship in order to buoy attendance levels.