The arbiters of cultural taste are ready to deliver their verdicts. But has the prize industry gone too far?
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"AND THE winner is..." You may hear these words a lot over the next few months. The arts prize season is upon us - and writers, painters and musicians everywhere are hoping that theirs will be the name that pops out of the envelope. Meanwhile, the public has to try to make sense of a cultural scene in which credibility seems to depend more and more on the whim of a judging panel.

Figures from ABSA - the Association for Business Sponsorship of the Arts - show that in the last three years business support for the arts through prizes and awards has risen by pounds 1m to pounds 3.5m; some, like the Creative Britons Award (courtesy of Prudential) offer pounds 200,000 in prize money. Apart from businesses, there are private foundations such as the Jerwood, sponsoring a variety of awards; its painting prize alone is worth pounds 30,000.

The next few weeks are the high season of this prize culture. Tomorrow, the best of the 1,247 artists who entered the Jerwood will go on show. On Thursday the shortlist for the Booker Prize, literary fiction's holy grail, is announced. The following week, another foundation, the Paul Hamlyn, releases the names of its five favourite visual artists at the British Museum. National Poetry Day, on 8 October, offers bards up and down the country their laurels: card manufacturer Simon Elvin sponsors the young poets, Forward Publishing promotes the Forward prizes. There are prizes for interior design (the Andrew Martin), for fashion (Smirnoff), for crafts (Jerwood's Applied Art). Important judging panels are presently presiding over the entrants for the Whitbread and the Turner. The Booker Prize is even entertaining the literati to two parties this year: one to commemorate its 30th year, the other to announce the grand prize (pounds 20,000 and instant fame).

The niggling question always posed by cynics is whether, say, DH Lawrence would have won the Booker, or even Turner the Turner; there are so many prizes, so the argument goes, that the whole enterprise is devalued. We have no way of knowing if they are a fair reflection of taste and excellence, whether they offer up such dignitaries as the older Prix Goncourt in France, won at different times by Malraux and Proust (the money remains the same as it did in 1903: 50 francs, or about pounds 6.50).

GEORGE WALDEN, chairman of Booker judges in 1995, expresses doubts about the abundant prize culture: "The Booker has tried to maintain its standards, but it becomes a problem if you get into the situation we have in schools, where everyone must win something.

"Prizes like the Turner are totally discredited; it's all hilariously low-grade, provincial, derivative and kitsch. It exists for staid, middle- aged people to promote artists they find excitingly rude. Within five years you just know there will be a couple copulating in public."

Others remain more idealistic. Jan Dalley, a former judge of, for example, the Faber, Booker, Encore and Whitbread prizes, says: "There are fantastic benefactors. I'm very keen on prizes. Of course there are endless injustices, but the prizes breathe life into the system and give a leg up to a lot of younger writers and artists." (Many prizes have age limits.)

Dalley sees judges as cultural arbiters, leading the public to the quality needles in the cultural haystack. "If you're hugely busy, working long hours, you need some sort of guide. The shortlist acts as a sort of selection for the general public, filtered through the media; there's nothing wrong with that. We can't pretend we live in a world in which hype doesn't matter."

No one can doubt that there's a lot of philanthropy involved. Alan Grieve is chairman of the Jerwood Foundation: "Prizes have an electric factor, a spark about them. They promote interest in a given art form, and give incentives to the practitioners." Awards such as the Smirnoff in fashion - judged by Helena Christensen among others - have offered vital hand- outs, this year giving Elena Zarubina from Russia pounds 10,000 and the opportunity to study at Central Saint Martin's College of Art and Design.

The impact on sales is also immense. Rumours go that within five minutes of Arundhati Roy's The God of Small Things winning last year's Booker, the printers, Clays, were rushing off a reprint of 20,000. Three days later a second reprint was ordered. Philip Gwyn Jones, the editorial director of HarperCollins' literary arm, Flamingo, was the man responsible for publishing the book: "The sales indexes for those who win are massive. The Roy [incident] is very rare, because she had already sold 50-60,000 copies before the award, but sales still tripled thereafter. Like the Oscars are for films, it's the one annual focus, the point at which the public takes interest."

Brian Perman is the executive director of the Book Trust, an educational charity to encourage a wider use of books. "Prizes," he says, "are now having a major impact on reading. A knowledge of awards like the Booker is important if you're going to go to dinner parties throughout the land. There's a shared canon of contemporary literary classics which critics and professors have in effect chosen for you."

Beneath the laudable ideals, the skulduggery of judging adds valuable publicity. "The Booker Prize is a very cleverly managed thing," says Ian Jack, another former judge. "There are a lot of genuine controversies and the administrators understand the need to involve the media in those." Bust-ups, such as Malcolm Muggeridge walking out of the judging process, "nauseated and appalled" by the submissions in 1971, and Kingsley Amis being shortlisted by his wife in 1974, have given literary debate a valuable frisson.

Winners, lavished with praise by some, are ridiculed by others (Simon Jenkins called James Kelman, winner in 1994, "an illiterate savage"). And politics is never far from the surface: this year's chair is Douglas Hurd who, like the former chairmen George Walden and Lord Gowrie, is a Tory grandee; in 1988 Michael Foot backed Salman Rushdie's Satanic Verses, allegedly because the author was a member of the Labour Party.

The drawback of the prizes' glamorous fall-outs in the Guildhall is the false impression they give of creative communities. "The picture of affluent, smug people," says Gwyn Jones, "dressed up in frocks and dickey bows troughing away ... the acerbic people in the studios, slagging people off, it all makes for rather strange television, full of self-loathing."

WHILE RUMOURS have rumbled on and book sales risen, the name of Booker, a wholesale food distribution company, has become famous. This practice of posting a rich name on a glittering award, like naming a football stadium after a cigar-sucking chairman, can look like the coarse, corporate equivalent of old-fashioned patronage; ABSA talks of Orange's successful "title branding" and of the Turner Prize as a mutual "promotional vehicle" for Channel 4 and the Tate Gallery.

Quite why a petroleum company such as BP wants to ally itself to portrait awards isn't always clear. Jeremy Nicholls is head of the company's community affairs unit: "Petrol is a commodity not a luxury item, so it's not about product placement. The benefit for us is reputational: our research shows that the public recognises us as a supporter of the arts and a contributor to the community."

The real winners in the prize industry, of course, are the people who pick up the cheques. But even that is fraught with difficulty. Suzi Feay, one of the Whitbread judges this year and literary editor of this paper, says: "Straight off, it's an impossible task. You're given 43 books to read over a period of two months, without any guidelines. It's entirely up to you whether you go for literary fiction, crime or a historical novel." Ian Jack agrees: "The trouble with all these things - like Granta's collections - is that you have to be pretty arbitrary to hit on the notion of 'the best'. There's no proof, it's not a science."