§ (2) The trustees of the settlement may elect that this subsection shall have effect in relation to any year of assessment, and if they do so—
- (a) any income arising in that year from the property comprised in the settlement which, apart from this subsection, would be treated by virtue of Part XVI of the Taxes Act (settlements) as income of the settlor shall not be so treated; and
- (b) no sum applied in that year out of the property for the purposes mentioned in subsection (3)(a)(i) of the said section 84 (maintenance etc. of a building or land) shall be treated for any purposes of the Income Tax Acts as the income of any person—
- (i) by virtue of any interest of that person in. or his occupation of, the building or land in question; or
- (ii) by virtue of section 451 of the Taxes Act (sums paid to settlor otherwise than as income).
§ (3) Where income arising from the property comprised in the settlement in a year of assessment for which no election is made under 810 subsection (2) above is treated by virtue of the said Part XVI as income of the settlor, paragraph (b) of that subsection shall have effect in relation to any sums in excess of that income which are applied in that year as mentioned in that paragraph.
§ (4) Any election under subsection (2) above shall be by notice in writing to the Board in such form as the Board may require and shall be made within two years of the end of the year of assessment to which it relates.
§ (5) Where—
- (a) circumstances obtain for part of a year of assessment by virtue of which income arising from property comprised in the settlement is treated as income of a settlor under the said Part XVI; and
- (b) no such circumstances obtain for the remainder of that year,
§ Brought up, and read the First time.
§ Mr. Deputy Speaker (Sir Myer Galpern)
With this it may be convenient to discuss New Clause 77—Extension of the scope of maintenance funds for historic buildings, &c.
§ Mr. Barnett
The clause gives effect to an undertaking that was given in Committee in respect of historic buildings. The point has been made frequently that there should be some relief for the income of maintenance funds. It has been argued that they should not be liable to tax at the highest rate of the person concerned.
This argument was put to me by the hon. Member for Cornwall, North (Mr. Pardoe) some of my hon. Friends and some Opposition Members who, I know, are interested in the heritage and historic houses. I share their concern that we should do everything possible to help to maintain historic houses in the best possible condition and make them available for the maximum number of people so that they may obtain benefit from them.
I am pleased to be able to move the clause, which I hope the House will find acceptable. Its purpose is to give the trustees of a maintenance fund approved by the Treasury the power to elect that income shall be assessed at the basic rate —that is 35 per cent.—and the additional rate of 15 per cent. only instead of, as 811 at present, the owner's highest rate of tax. This is not an insignificant relief. I hope that it will be found helpful in meeting the purposes that we all have in seeking to help historic houses and their maintenance.
§ Mr. Nicholas Ridley (Cirencester and Tewkesbury)
Will the right hon. Gentleman give the House an estimate of what might be the cost to the Revenue of the new clause?
§ Mr. Barnett
That is not possible as it depends on how many people use the idea of a maintenance fund given this additional relief. I hope that many people will use it so that more historic houses can be maintained for the benefit of the country generally. I am sure that the hon. Gentleman understands that it is not possible for me to state the cost. I do not expect that it will be all that much in terms of the amounts of money that we usually discuss. The size of the funds will depend on how much money is available from the owners of historic houses. I do not expect the cost to he a great deal.
§ Mr. David Howell (Guildford)
I ask the right host. Gentleman a preliminary question, namely, how many maintenance funds have been set up since the concession was introduced a year ago?
§ Mr. Peter Rees (Dover and Deal)
The right hon. Gentleman has come back to the debates that we had on this issue last summer. He will recall that at that time I outlined the difficulty about the perpetuity provisions, namely, that on the whole it is not possible, except in the case of a charitable settlement, to prolong them beyond 80 years. As we hope that our historic houses will survive for much longer than that, there may be only limited benefit. I am not trying to make the right hon. Gentleman sound ungenerous, but has he applied his mind to that problem? Is he prepared to deal with it in respect of this clause, or anywhere in the Bill?
§ Mr. Barnett
As the hon. and learned Gentleman will know, that does not relate directly to the clause but to the whole concept of setting up a maintenance fund. The clause seeks to give additional relief 812 to those setting up such funds. I am aware of the argument that the hon. and learned Gentleman has raised previously about the problem of perpetuity legislation and the 80-year provision. I do not think that it relates directly to the additional relief that is now being given. I think that the clause is reasonably self-explanatory but I shall be happy to answer any questions that arise.
§ Mr. Robert Cooke (Bristol, West)
I think that it will come as a relief to the Government to know that I shall not repeat my Second Reading speech, which was directed especially to this issue. However, nothing has changed for the better since then. I am prepared to wager that the clause will do nothing to prevent the rapidly accelerating loss of the national heritage, including building, landscape and works of art.
Capital transfer tax, as it affects the heritage, is still a killer. It is true that after long and weary debates the Government agreed to exempt in exchange for public access to outstanding buildings, their settings—that is, gardens and unproductive scenery and historically related contents.
§ Dr. Jeremy Bray (Motherwell and Wishaw)
On a point of order, Mr. Deputy Speaker. Is this anything to do with capital transfer tax?
M. Deputy Speaker
Indirectly it is. It relates to New Clause 42. I hope that we shall not go into that matter in any great depth.
§ 4.30 p.m.
§ Mr. Cooke
I hope that I shall be allowed to conclude my brief remarks and I am sorry that the hon. Member for Motherwell and Wishaw (Dr. Bray), who has never agreed with me about anything, takes exception to them. Nothing effective has been done to provide the resources required to maintain and give access to these homes. It is no use tinkering with the problem, as has been the case in recent years. The pages of new clauses and amendments, selected or unselected, in past debates have all sought to tinker with the existing impossible taxation system.
The heart of the matter is that we must leave the owners of our heritage with the resources—capital and income—to maintain it and to make it accessible to a wider and wider public. Until this is done we 813 shall be faced with what before long will become a veritable avalanche of disasters. Nobody could doubt that truth of this assertion in view of the events of the past three months.
One good thing has emerged from all this. Yet more people have a real understanding both of the nature of the problem and the means for its solution. There is immense enthusiasm and it runs right across party lines. We all know what needs to be done—and some of us have shown the Government the way to do it.
§ Mr. John Pardoe (Cornwall, North)
I welcome the Government's New Clause 42. It honours a commitment made in Committee by the Government to accept the principles enshrined in a new clause which I moved in Committee and which obtained support there.
The questions that were asked a little earlier by the hon. Member for Guildford (Mr. Howell) and the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) show what a miserable lot the Conservatives are, because in their fascination by adversary politics they disagree with everything.
For once we have reached all-party agreement, as the hon. Member for Bristol, West (Mr. Cooke) will agree—although I doubt whether a small group of Labour Members who are nearer to Moscow than to London will endorse that agreement. We ail agree that the heritage matters and that it is far better administered in the hands of private owner-occupiers than by curators on behalf of the State. This agreement was reached in the Select Committee on the Wealth Tax, and that agreement has now spread across the House, with a few exceptions.
I do not suppose the Chief Secretary can put his hand on his heart and give figures showing that there is an enormous number of maintenance funds of this kind. The reason is that so far the position of such funds has not been all that attractive. I do not know whether this clause will make such funds more attractive.
The advice I have received from the heritage lobby, if I may so call it, is that this clause will make it more attractive to set up maintenance funds. In the case of the smaller and less important houses, which are still a vital part of our heritage, 814 this provision will certainly make the situation more attractive. I hope that as a result of these new provisions we shall see an increase in the number of maintenance funds. In a year's time we shall probably be able to assess progress and, if necessary, make further changes.
§ Mr. Ridley
The hon. Member for Cornwall, North (Mr. Pardoe) has made his usual condemnation of adversary politics. It extended to his taking a nasty swipe at my hon. Friend the Member for Guildford (Mr. Howell) and myself for daring even to ask questions on this clause—questions that were not meant to be hostile. He also took a nasty swipe at hon. Gentlemen now absent who are a little further Left of the spectrum than is the hon. Member for Cornwall, North.
I find his idea of adversary politics somewhat extraordinary. He brings that phrase to mind when people are rude about him, but he never thinks of it when he is rude about other people. That is one of the odd things about the Liberal Party: sin is only evident when it is inflicted by others on the Liberals. One well remembers Lord Rosebery's comment about the "fly-blown phylacteries" in the Liberal Party. We have had all kinds of philosophies trotted out on those lines. It shows the instability of Liberal thought in matters great or small.
Even in small matters such as this the Liberals show no consistency. The hon. Gentleman tabled an excellent new clause in Committee—I think that it was New Clause 121—which sought to extend the principle in regard to designated lands to support part of the case for historic buildings. However, when it came to a vote the hon. Gentleman was silent. I wonder why? Perhaps the Chief Secretary can enlighten us about why the hon. Gentleman did not pursue his voice with his vote in Committee. Is the answer that his famous pact was working upstairs? No doubt we see the fruits of that pact in the form of New Clause 42.
I repeat that my hon. Friends and I were merely trying to see how ripe and sweet the fruit was. The Chief Secretary said that this provision would probably cost very little—in which case it will probably do very little good. That surely must follow.
§ Mr. Pardoe
The hon. Gentleman is not mathematically correct. The money 815 in terms of total intake of taxation may be little, but in terms of the number of people likely to own country houses it might be a good deal. He knows that the total yield from tax in this category is small, but for a limited number of people who pay it it can amount to a considerable sum.
§ Mr. Ridley
It is expensive to maintain historic buildings, and this country is blessed with a large number of them. If anything can be done to maintain our historic homes, it should be done. However, I must conclude that this minute concession—and I have in mind that I am wearing my public expenditure hat—will not do much to put the matter right, and I emphasise that I speak with a great love of historic buildings.
There are difficulties in this line of country in the context of the Government's overall capital taxation and income tax policies. The difficulty is that we shall create a special category of people who own or who have owned beautiful houses. I feel sorry for those who happen to own ugly houses. Not only is that a disadvantage in itself, hut this clause will not apply to them. We must also bear in mind the millions who do not own any large houses, beautiful or otherwise. We must be careful not to create anomalies ard difficulties for the future.
I wonder whether the real evil is the level of taxation itself and whether it should be possible for people to e in splendid houses without being given the caretaker status that we wish upon them. Should we not think again why it is that practically only foreigners can afford to buy one of our historic houses, but that those who now live in them cannot afford to stay there. That must be wrong. The taxation system is getting so much out of line that the only advantages that exist are gained by those who live in Arabia or in the United States.
We are pleased that we have been generous to the owners of historic buildings through this new clause and at the same time we are busily assuring ourselves that it will cost practically nothing. There is something strange about this non-partisan attitude which the hon. Member for Cornwall, North is so pleased to find in the House. Nevertheless, I give this new clause a grudging welcome, 816 both because it costs too much and because it costs too little.
§ Mr. Ridley
The hon. Member for Cornwall, North has never done anything but head in both ways. I seek to emulate his skill in these matters. In supporting the new clause may I ask the House to think about whether we would not be better off if we amended capital transfer tax so that the citizens of this country could afford to live in their own houses?
§ Dr. Bray
I have followed with growing incredulity the retreat by the Government into these immense housing subsidies for the super-rich. I must ask my right hon. Friend whether any wealth or high-income family can now afford to be without their stately home. Will my right hon. Friend tell us how much it would cost those paying the top rate of income tax to set up a trust, with the benefit of this clause, to maintain a home attracting the full tax relief to which they would be entitled, which, as far as I can sec, must run into many millions of pounds since there is no ceiling on the relief given? It can surely amount to the total cost of relief on the most expensive of stately homes—Knowle, Blenheim, and the rest. Is it the intention that there shall be no limitation as to scale?
This puts the stately home market Into the most extraordinary state. If no one can afford to be without a stately home what will my right hon. Friend do to increase the supply in response to the market? What controls is he placing on the scheduling process? I understand that there are 3,000 stately homes that qualify for relief under this clause. Is he taking any control over the listing of further stately homes?
Why should he discriminate between dead and living architecture? Why is he prepared to subsidise the architecture of the past yet not prepared to give anything to subsidise some of today's domestic architecture? If he follows this line of argument—
§ Mr. Ridley
Would the hon. Gentleman agree that Centre Point should qualify under the provisions of this new clause? There is no reason why it should not do so. It does not have to be an ancient building. Centre Point seems to be an apt subject for the subsidy.
§ Dr. Bray
I agree with the hon. Member. I am totally perplexed by the criteria in the Government's argument. The only explanation is that the whole subject of tax relief is so infinitely boring and tediously complex that none of my hon. Friends has bothered to investigate the matter.
My right hon. Friend must address his mind, remembering his financial responsibility, to the wisdom of presenting tax proposals to the House without being able to give any estimate of the costs. In proposing this new clause he ought to be able to say, in relation to the limited number of these houses—I pressed him on this point in Committee so he has had plenty of time to discover the answer—what is the income and wealth distribution of the owners of these 3,000 houses and the value of these tax reliefs.
I know that Tory Members are right to be concerned, as I am, with the preservation of these houses, but it is a curious procedure to make all the public resources that are available for the preservation of these houses in no way related to the architectural, historic or social interest of a house but merely to relate them to the wealth and income of the owner of the house. It is a crazy system.
My right hon. Friend must also say, if he is giving these massive reliefs for the owners of very inferior property, what he will do about the extreme cases where houses of great interest are being maintained by families who are totally incapable of maintaining them but who, nevertheless, wish to remain in possession for perfectly understandable, sentimental, family reasons. I do not see that my right hon. Friend's policy is adding up to a coherent protection of our heritage any more than it is a socially just policy. I beg my right hon. Friend to think again.
§ Mr. Esmond Bulmer (Kidderminster)
When I inquired of the Financial Secretary last week whether he felt that our artistic heritage was threatened as never before by inflation and taxation he referred me to this clause. I share the reservations expressed by the hon. Member for Motherwell and Wishaw (Dr. Bray) about whether the Government have a coherent policy for the defence of our heritage. Certainly this clause is like offering a fire extinguisher to a man 818 whose house has been burning for hours. The effect of inflation is there for all to see.
I speak as a member of the Executive Committee of the National Trust, although I do not speak for the Trust. One has only to look at the cost of quite ordinary chattels to see how expensive maintenance can be. The cost of upholstering a chair has risen to about£25. Restoring a mirror costs£1,000. Restoring a chandelier costs£2,000. To repaint a house like Blenheim costs about£25,000. To re-roof a major house may take£250,000, while a major renovation, such as that at Erddig, costs nearly£1 million. The Treasury has only to look at its own figures for Hevingham and Audley End to understand how inflation is threatening what we wish to preserve.
The National Trust cannot accept any property unless it can see that the endowment is sufficient to ensure that the house will not be a drain on the Trust's resources. This exercise is a chilling experience for those who have to undertake it. If one were to graph the costs as they have increased over the past four or five years and to graph any foreseeable increase in income it can be seen that it will not he many years before the largest trust fund becomes inadequate.
We have to be grateful for any crumbs that drop from the Treasury table, and this clause, to the extent that it makes endowments more attractive, so that people will be more ready to take them out, is welcome. I very much accept the point made by my hon. Friend the Member for Bristol, West (Mr. Cooke) and the sense of his amendment, seeking to widen the scope of the clause to include objects, gardens and other features which are intrinsic parts of a house.
Certainly it is the experience of the National Trust that what the public desires above all to see is the house in its entirety the contents as they have been acquired over many years. If there is an eccentric owner mounted on a penny-farthing, so much the better. Sir Alexander Glen in his evidence to the Select Committee on a Wealth Tax made it clear that the English country house had a unique appeal to the tourist. He contrasted the situation with that in France where the chateaux of the Loire have been denuded, their appeal much 819 diminished and the number of tourists much reduced.
Indeed, if the contents are sold it may be that the Treasury is called on to provide even more money. Ministers will know what the Drouais and Parmigiano have cost. By forcing owners to sell major chattels to maintain their property, the Government can be increasing public expenditure in the short term.
There are, perhaps, some 1,400 houses at risk at present. It seems to me to be the crudest common self-interest for the State to try to keep house, contents and owner together. Tourism currently earns this country over£1 billion a year. Again, Sir Alexander Glen gave the country house as one of the three most attractive features for the tourist, and estimated that if it were to cease to be available for tourists when they come to this country, the loss of revenue—this was in 1975—would be about£200 million a year.
Certainly the effects on the regions would be even more severe, because the contribution that the country house makes in the regions is proportionately that much greater, and for many people living in the regions it is their only chance to see works of art of a standard otherwise available only at a considerable distance.
Therefore, when my hon. Friend the Member for Ludlow (Mr. More) introduced his excellent National Heritage Bill on a land fund the other day, he made a plea for a more comprehensive approach. He also numbered the Treasury among the philistines. I am prepared to give the Treasury the benefit of the doubt.
§ Mr. Bulmer
My hon. Friends believe that the matter is in some doubt, but certainly I hope that within the Treasury, even if it is not apparent to us, significant work is being done to see how our heritage can be preserved in its entirety. To the extent that the new clause goes even an inch towards doing that, I welcome it.
§ Mr. Cormack
I, too, welcome the new clause. I think that it goes a very little way towards achieving what we want to achieve.
820 I endorse what has been said by my hon. Friend the Member for Kidderminster (Mr. Bulmer). If one forgets the aesthetics, I think that it is a case of what is probably the biggest growth industry in the country, tourism, bringing not£1 billion but£2 billion a year into the national coffers, and contributing about£620 million to the balance of payments every year. The tourists do not come here for our weather or our cuisine. They come for our tradition and history, which are intimately bound up in and expressed by our historic buildings. Among the most important of our historic buildings are our country houses. I deplore the term "stately home" because it conjures up an era that is no longer here.
Most of those who live in so-called stately homes live in circumstances of acute discomfort, and they probably live in conditions that most hon. Members would not willingly tolerate or accept. However, the fact is that they are doing an extremely important job, and doing it much more economically than could any paid custodian or national body, even such as the National Trust. That body has to have a bureaucratic superstructure which accounts for a very large percentage of its income. I am in no way decrying the National Trust, which I much admire and we all applaud. However, the fact is that the noble Baroness, Lady Birk, who was so intimately involved with the Mentmore fiasco, has repeatedly in recent months stressed the fact that the Government believe, and they are right to believe, that the most economical way of keeping our stately homes intact is to encourage their owners to live in them. A recent conference held at Woburn, organised by the British Tourist Authority, was addressed by both the Minister responsible for the arts and the noble Baroness. Both made and underlined again and again the point that the best way of keeping our stately homes, our country houses, was to encourage the owners to live in them.
When one considers that most of them do not live in the state apartments the tourists flock to see but in rather small and often cramped quarters, keeping the rest open for people to enjoy, one must consider that the least that the State can do is to allow them to offset a substantial proportion of their maintenance costs 821 against tax. In so far as the new clause recognises and, indeed, extends the precedent established last year, we welcome it. However, I hope that the Chief Secretary does not think that he has gone far enough. I hope that he will readily acknowledge that there is very much more to do.
The one thing with which I would agree in the rather extraordinarily bizarre speech of the hon. Member for Motherwell and Wishaw (Dr. Bray)—it reminded me of his engagingly eccentric resignation letter of some years ago—was his saying that the Government have no coherent strategy or policy for the defence of the heritage. The point I make to the Chief Secretary is that this is very much an all-party matter in this House. Many Labour Members are just as concerned and just as worried about it as Conservative Members. I refer the Chief Secretary to such lion. Gentlemen as the hon. Member for Harlow (Mr. Newens), who has repeatedly badgered the Treasury in recent months to do something rather more coherent than it has done in the past.
I very much hope that the Chief Secretary will acknowledge that this is but a faltering and a halting step, and that the Achilles heel of the whole current maintenance structure is the 80-year perpetuities rule, which militates against people taking advantage of such small concessions as the Government have already afforded. A great deal needs to be done if the shutters are not to go up in many hundreds of houses and if the tourism, earning potential of this country is not to be significantly reduced.
The Chief Secretary ought to take a little time off, if he can, during the next two or three months and go to the Victoria and Albert Museum to see the current exhibition there, "Change and Decay: the Future of our Churches". He should consider that in the light of the exhibition three years ago of the destruction of the country house, which so graphically illustrated the plight of the country house. If he adds the two things together he will realise that the magnets that attract tourists to Britain are rapidly disappearing and in increasing danger and that at very little national cost—miniscule cost as compared with what we pour into Leyland and other such yen- 822 tures—this greatest of all our national assets can be safeguarded for the future.
Like my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), I welcome the new clause, but I can give it only a grudging welcome because it does not go far enough. If only the right hon. Gentleman would substitute the new clause submitted by my hon. Friend the Member for Bristol, West (Mr. Cooke) he would be doing far more for the heritage than he is at present. However, with those comments, I at least thank the right hon. Gentleman for what he has done, hoping that he will do more in the future.
§ Mr. Nick Budgen (Wolverhampton, South-West)
I had no intention of taking part in this short debate until I heard my hon. Friend and neighbour the Member for Staffordshire, South-West (Mr. Cormack) saying that this was an all-party matter. It is no all-party matter. Indeed, I respectfully suggest that there is much that is intellectually discreditable about the way in which the aristocracy and the owners of these beautiful houses are seeking increasingly to make for themselves some form of all-party lobby by which they can lull all Members of Parliament into giving them special concessions.
There is in reality no difference between the desire of a great duke and the desire of a scrap merchant in Wolverhampton to leave their assets to their children. It ought not to be an all-party matter. It ought to be one of the great issues to be fought across the Floor of the House, and it should be pointed out that the Tory Party is the party that believes in low taxation and low capital taxation. We believe in it for everybody, not just for the aristocracy.
§ 5.0 p.m.
§ There is, I suggest, something discreditable in attempting to justify special concessions for those who happen to have beautiful houses. I want beautiful houses to be preserved, but we shall achieve the worst of all situations if we are not careful. We shall see these beautiful houses bought for their tax concessions in the same way as in the past, for instance, agricultural land was bought for its tax concessions. We on this side of the House should be saying not that we want to make it an all-party matter, but, that 823 most of all, we want to make it possible for people—
§ Mr. Cormack
En the regettable and deplorable speech which my hon. Friend is making does he not agree that it is a good thing on occasions to have unanimity of view and a common desire to preserve things which are of real worth?
§ Mr. Budgen
All things are of real worth. I do not attack those who want to retain for themselves and for the nation things of beauty. I regret the making of special categories. If we go too far along this particular road, we shall create anomalies and even more resentment.
Mr. Eric S. Heifer (Liverpool, Walton)
Will the hon. Gentleman not accept the logic in the argument that if there is a danger of these old houses and all the lovely pieces of art being destroyed, they should be taken over by the nation? I am assuming that the hon. Gentleman does not like that idea, either. But it has to be understood that these works of art were produced in the main by ordinary working people. In the old days an apprentice to a painter was a working man. The aristocracy and the workers have a common interest in preserving these works of art.
§ Mr. Budgen
I accept the logic of the hon. Gentleman's statement. He states clearly and honestly the attitude of those who sit on the Labour Benches. But that is not an attitude which can be papered over by an all-party Committee. Still less am I prepared to say that the desire, for instance, of a scrap dealer in Wolverhampton to leave his business to his son is different from the desire of the Duke of Marlborough to leave Blenheim to his son and the desire of everybody to acquire some capital asset and leave it to his children is a noble discipline in the lives of many people.
We on this side of the House should be wary of creating any more different categories. The idea that everybody has to leave something to his children is a noble thing. It is not something in which the scrap dealer or the grocer or the candlestick maker is any different from the aristocrat. We are all the same. We all have the same desire. Whether we leave the most ugly possessions or the most beautiful, we all want to leave 824 something more than a corpse rotting in the grave.
§ Mr. Jasper More (Ludlow)
The only scrap dealer that I know in Wolverhampton bought a very large late Victorian house, which is now the Mount Hotel. I strongly recommend all parliamentary colleagues if they happen to be in Wolverhampton to pay a visit to it. It is an object of great architectural and historical interest, having been built in about 1893. I am sure that it will be in the Blenheim category in a short time.
I apologise to the Minister for having been away at a meeting which prevented me hearing him introduce the new clause, which I want very much to support. At the same time, I believe that it should be extended by the introduction of New Clause 77 in the name of my hon. Friend the Member for Bristol, West (Mr. Cooke).
I must declare an interest, as the owner of a small house of some architectural character. I should also like to declare an interest as a member of the aristocracy, but I think that I am only upper middle class. My wife and I live in the state apartments in our house because it is so small that it would not otherwise be really habitable.
Those of us who listened to the hon. Member for Motherwell and Wishaw (Dr. Bray) must have felt that there was still the need to sort out ideas about the whole of this topic. The hon. Member for Liverpool, Walton (Mr. Heller) suggested that these houses might be taken over by the nation. This is a pertinent question and it becomes very much more pertinent if one has been, as I have, to countries such as Russia and Czechoslovakia where this is precisely what has happened. It is a wonderful experience to see what has been done, for example, in Russia in restoring the great palaces, which were ruined by the Germans in the war, and also the care taken in Czechoslovakia to look after many modest country houses.
But it is an experience that everybody has to witness, that when one visits these buildings, one is going round buildings empty of inhabitants and sometimes empty of furniture. They are, nevertheless, visited, but they have not the same attraction as houses which are lived in.
If we are to encourage our tourist industry, which is a sensible thing to do, 825 I suggest that we should bear in mind three factors. As was said by my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack), it is more economical, if those buildings are to be preserved, that they should be lived in by private owners.
Secondly, as my hon. Friend the Member for Kidderminster (Mr. Bulmer) pointed out, it is important, if we are to encourage the tourist industry, to try to spread out our tourists. It is already a problem getting into the Palace of Westminster, with so many tourists crowding around it. We need to disperse our tourists over the countryside. My hon. Friend used the term "regions". I personally prefer the term "shires" The dispersal of tourists would be of advantage both to the tourists and to the areas outside London.
I very much hope that we may take a wider look at this problem, because in our legislation we arc not keeping up with the dimensions of the problem, as has been forcefully said by a number of my hon. Friends. Inflation is beating us all the time, and unless we can take a wider and more generous view, the whole of this enterprise will crumble. That is the reason I made a short speech the other day about the National Land Fund.
I repeat my support for this clause, and express the hope that it will be extended by the introduction of the new clause put forward by my hon. Friend the Member for Bristol, West.
§ Mr. Percy Grieve (Solihull)
I agree entirely with everything that has been said by my hon. Friend the Member for Ludlow (Mr. More). I would not have participated in this debate at all had it not been for the speech of my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen). Some of my right hon. and hon. Friends may have difficulty in approaching a concession of this kind because of our reaction to over-taxation as a total problem. I welcome completedly this new clause as a concession which will allow to some extent the preservation of our national heritage, but I deplore the circumstances which make it necessary.
The point made by my hon. Friend the Member for Wolverhampton, South-West about over-taxation in terms of 826 inflation is that anomaly after anomaly is created which calls for concession after concession, which in turn creates anomaly after anomaly. Every increase in taxation, every turn of the screw, every increase in the inflation rate, creates more injustice.
Those injustices have to be remedied. It appears even to the flint-hearted occupants of the Treasury Bench that sometimes a remedy is needed. Concessions of this kind are therefore made and rightly so. If they are made, we should welcome them for what they are, but we should not forget that the whole basic problem of reducing penal taxation must be tackled—and I hope that it will be tackled soon by a Conservative Government.
Penal taxation makes it impossible for people to live in their own homes, whether those homes are beautiful and old or are homes that the owners have built up in their lifetimes. Penal taxation makes it difficult for people to fulfil the elementary human duty and desire of providing for their widows and children.
§ Mr. David Howell
This has been a short but revealing debate on a subject of great importance. My hon. Friends are right not to make too much of the concession. There is very little in it to make anything of. In Committee I was taken to task by the hon. Member for Cornwall, North (Mr. Pardoe) for calling it a very limited concession, indeed. I shall be most interested to learn from the Chief Secretary how many people have set up funds which would benefit from the concession.
It is arguable that as a result of the concession a long queue of people wanting to set up these funds will now form. However, 1 have heard it suggested—perhaps the Chief Secretary will correct me if the suggestion is wrong—that nobody has so far set up such a fund. A concession that applies to nobody is probably the most limited concession one could have. However, perhaps in the future better things will come of it.
We took the view in Committee that we should like to see a lower regime of capital taxation. We have always regretted the way in which capital transfer tax was brought in and the damage that it would do in a variety of areas, whether to family businesses such as the scrap 827 merchant referred to by my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), or to beautiful homes. We have always argued that we need a lower rate of capital transfer tax, and we shall be advancing arguments in support of that belief An due course.
In Committee we argued that in the meantime if the Government are to continue with a rate of CTT so high that it accelerates the growth of dangers that are crowding around our historic homes and threatening that within a generation some of these houses could become derelict, we should support the concession. That is why we tried to achieve a more extensive concession in Committee, but our arguments failed to carry the day.
We believe in a cut in the rate of CIT. We believe that at lower rates of capital taxation these problems would not arise in their present acute form. In the meantime, I suppose that any concession, however small, should be recognised and accepted. In this case the concession is very small indeed.
§ 5.15 p.m.
§ Mr. Joel Barnett
With the leave of the House, I shall reply. I think that the new clause has been welcomed. However, two hon. Members spoke against it—my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) and the hon. Member for Wolverhampton, South-West (Mr. Budgen). They make a very interesting pair. One hon. Member warned me not to be too surprised, since the concession was acceptable as a minor help, if there was a demand for me to go further. When one has been Chief Secretary to the Treasury one is never surprised to hear that one's concessions do not go far enough.
I do not seek to argue that what we have done is of major moment. The hon. Member for Guildford (Mr. Howell) asked how many funds had been set up, and he was correct in his suggestion that the answer is "None". That is precisely why I am introducing the new clause. People have not set up maintenance funds in the past because they would have had to pay tax on them at the top rate applicable. Under the concession they will pay the basic rate plus investment income surcharge. To that extent the concession will encourage people to set up funds.
828 My hon. Friend the Member for Motherwell and Wishaw does not appreciate that someone who sets up such a fund must put the money into the fund and cannot then take it out again. That is quite right, because we all want that money to be used to maintain historic houses for the benefit of the nation. We do not want people to set up funds in order to pay the lower rate of tax only to be able to draw the money out again later.
§ Mr. Cormack
Does the Chief Secretary not accept my point that the 80-year rule is a deterrent? I appreciate that he cannot deal with the matter in this Bill, but does he not agree that the Government's attention should be bent in that direction?
§ Mr. Barnett
I explained to the hon. and learned Member for Dover and Deal (Mr. Rees) that the Government accept that there is a problem about the perpetuity rule. We are looking at it. One of the difficulties concerns the relationship of general law to a specific fund such as we are now discussing. We are examining the matter to see whether there is some way in which we can help. I do not pretend that what we are doing here is a major matter.
My hon. Friend the Member for Motherwell and Wishaw talked about the super-rich with their great stately homes. On the other hand, Conservative Members referred to the average fish and chip shop saying that at both ends of the scale people should be able to maintain their stately homes or mixed hereditaments. There is a problem of balance here about how much help one can give whilst maintaining equity as between taxpayers.
What we have done for the heritage and for historic houses generally under CTT has gone a long way to help in the problems they face. Those who are involved in these matters recognise that we have tried hard to ensure that historic houses are maintained by those who live in them. That benefits those who want to visit the houses rather more than if the houses were left empty.
I agree with much of what has been said in that respect, including by the aristocratic and upper middle-class hon. Member for Ludlow (Mr. More). I acknowledge all that he has done in that way. I want to see these homes maintained 829 and therefore I hope that the clause will give a little help.
I should be astonished if I were not pressed in the future to go further. I acknowledge the pressure that is put upon me, but I do so without giving any commitment that I shall yield to that pressure.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.