NATIONAL HERITAGE BILL

HC Deb 03 December 1979 vol 975 cc55-166

Order for Second Reading read.

4.37 pm

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas)

I beg to move, That the Bill be now read a Second time. I am delighted this afternoon to ask the House to give a Second Reading to this important Bill. Long after the political controversies which loomed solarge in the contemporary consciousness have been forgotten or consigned to the bound volumes of Hansard, than which there can be no deeper oblivion, the effects of this measure will still be felt. It will be alive and vital and still bearing fruit. The fund will be a vehicle by which successive Governments will be able to show their concern and their care for our heritage.

I am glad that this is a Bill which carries all-party support, but it is particularly appropriate that it should be introduced by a Conservative Government, because of the name of our party and because the Bill fulfils our direct manifesto pledge on this matter.

I offer my congratulations to my hon. Friend the Member for Stafford shire, South-West (Mr. Cormack), who has done so much by spoken word and by pen, on his contribution and to the hon. Member for Warley, East (Mr. Faulds), who has been such a doughty champion of all forms of the arts.

We should, of course, all have liked a greater amount of money for the Bill, and it would, indeed, have been available had not the Public Accounts Committee—most unfortunately, in my view—recommended in 1957 that the old National Land Fund should be reduced to £10 million, that recommendation being later enacted by Act of Parliament. But we cannot undo the past, and it is much better to get something started with modest sums than to wait for the day, which may never dawn, when great sums become available.

That, at any rate, is the policy which I intend to pursue throughout the arts, and it is, I believe, one which will be supported by all but the most unreasonable or the most idealistic.

We wish to keep all major projects going and to start new ones on a modest basis so that, when better economic days dawn, they can grow to greater stature.

The Bill is the joint responsibility of my right hon. Friend the Secretary of State for the Environment and myself, but as it is a United Kingdom measure it concerns also my right hon. Friends the Secretaries of State for Scotland, for Wales and for Northern Ireland, and, as certain responsibilities are being transferred to my right hon. Friend and myself, my right hon. Friend the Chief Secretary to the Treasury also is concerned.

When I was given responsibility for the arts, as the first Cabinet Minister to have that responsibility, my first task in that capacity was to set up the new Government department of the Office of Arts and Libraries. My second main task, once the department had been set up, was to prepare the Bill. The principal proposals in the Bill are ultimately derived from the third report of the Select Committee on Expenditure of the 1977–78 Session on the National Land Fund. Valuable lessons were learnt in the discussions that took place while the Sub-Committee was taking its evidence and after the report was published in the summer of last year.

The first lesson was that changes were needed in the way in which the resources available to the Government for the preservation of the national heritage were administered. The second lesson was the need to modify the role of Treasury Ministers in relation to the heritage policy. The third lesson was that the operation of the system under which property is accepted in satisfaction of capital transfer tax and estate duty, and the function of the National Land Fund in those arrangements, was obscure and should be clarified.

The Bill is evidence that those propositions have been accepted not only by the heritage movement but by all the Ministers on the Treasury Bench. I pay tribute to the Environment Sub-Committee for its report on the National Land Fund. The report, and the store of evidence associated with it, constitutes a thorough and enlightening expose of the system for accepting property in lieu of estate duty. The main recommendation of that report was that the National Land Fund should be converted into a new fund under independent trustees, to be used to help in the preservation of outstanding elements in the national heritage That is the main purpose of the Bill.

Mr. Tam Dalyell) (West Lothian

I simply wish to ask a factual question. Is the £15 million that is expected to be in the National Land Fund net, or does it include any property that may have been left in lieu of death duties or other tax requirements?

Mr. St. John-Stevas

Perhaps I may deal with that point when I come to the financial provisions of the Bill.

The Bill has three main purposes: first, to set up the fund that I have just mentioned; second, to transfer the responsibility for the system of acceptance of property in satisfaction of tax from the Treasury to my right hon. Friend the Secretary of State for the Environment and myself, and to abolish the National Land Fund; third, to provide the vires for a scheme under which the Government can compensate certain institutions for the loss to, or damage of, items that they loan from their collections to certain other classes of borrowing bodies and persons.

Part I of the Bill establishes the National Heritage Fund, to be vested in, and administered by, independent trustees appointed by my right hon. Friend the Secretary of State for the Environment and myself. The role of the trustees of the new fund will be essentially a supporting one. They will be there to assist others. The basic concept is that the existing institutions, museums and galleries, libraries, preservation trusts, the great National Trusts of England and Wales and of Scotland and similar bodies will continue to be responsible for decisions on whether to seek or acquire particular property.

The initiative will lie with them in deciding whether to acquire. When looking around for funds, they will be able, in cases of outstanding importance to the national heritage, to obtain assistance from the National Heritage Fund. Where an institution has funds of its own—such as the purchase grants-in-aid that the national museums and galleries are annually voted by Parliament— the National Heritage Fund trustees will be entitled to expect that institution to make a contribution towards the purchase and, where appropriate, to seek support from other grant-giving bodies. Those bodies supported by local authorities and universities will be treated similarly, although the particular circumstances of the case will effect the proportion that the trustees decide to cover. We must recognise that the National Trusts and many local ad hoc trusts have little or no resources available for acquisition or maintenance. Therefore, the trustees may have to consider making 100 per cent. contributions in those circumstances.

Under the Bill, the trustees are enabled to assist those bodies that are administered by Government Departments, such as the Science museum, the Victoria and Albert museum and the Royal Scottish museum. It would be absurd to deny access to the fund to those bodies in cases that were otherwise appropriate. Of course, it is for the trustees to decide whether they could afford to make their scarce resources available.

The Bill will also enable the trustees to assist Ministers in their capacity as acquirers and preservers of ancient monuments and historic buildings.

Mr. Alan Clark (Plymouth, Sutton)

Perhaps my right hon. Friend intends to enlarge upon this point later, but in whom is vested the final decision to acquire or reject? As I understand the Bill, that power of decision is vested in the Secretary of State for the Environment and in my right hon. Friend. In other words, the decision is highly subjective. Although we all have confidence in the Minister's taste and perception, his right hon. Friend's obsession with practicality is such that he might be compared with the late Duke of Windsor, who thought that Graham Greene was a golf course. The varieties of taste and perception that may attach to particular Ministers may be a source of danger.

Mr. St. John-Stevas

As I understand the Bill, the decisions are to be taken by the trustees. The recommendation that grants over a certain amount of money should be referred to Ministers is not implemented in the Bill. We intend that those trustees should be genuinely independent and that intervention of Ministers will be reduced to a minimum. The trustees will have a large degree of independence. It is for them to devise a working definition of the national heritage. They will be obliged to take expert advice before reaching any decisions, but they will be free to seek that advice where they wish. They will get their grants-in-aid, like the national museums and galleries, in one lump sum at the start of the financial year and not by the drip-feed method of most grant-aided bodies that are paid in instalments and have to prove the need for each new instalment.

They will also be free to accept private gifts and bequests. Those will not be subject to control by the Treasury, but they will be subject to the general provisions of the trustee investment legislation. They will be fully accountable to Parliament through the Ministers who appoint them and through the Comptroller and Auditor General, who will audit their accounts. It follows from my previous remarks concerning their supporting role that they will not be able to acquire property in their own right, except with the express permission of Ministers. There is no intention that they should form their own estate or picture collection in competition with existing institutions.

Although they will have freedom of manoeuvre as I have described, it will be open to Ministers to give them guidance on their work. That applies in particular to the conditions of grant and financial memorandum that are issued to grant-aided bodies and also in the discussions and correspondence that such bodies normally have with Ministers from time to time. They will, of course, have to take into account any views expressed from time to time in Parliament on their work.

The Environment Sub-Committee attached some importance to the method of appointment of the trustees. It is the standard practice for the Ministers responsible for a policy area to be responsible for the appointments to bodies in that area. The authority of the Ministers concerned would otherwise be diminished. However, the appointment of the chairman will be subject to the Prime Minister's approval. It is vital that this body, charged with the handling of a large new sum of public money that will affect and in part determine the cultural heritage that we transmit to posterity, should be equipped in ability and experience to meet that challenging task.

We shall be looking for a group of what I call cultured generalists, reflecting the whole British heritage, rather than experts in particular fields. Contrary to reports in the press, no decisions on appointments have yet been taken.

Mr. Andrew Faulds (Warley, East)

What a relief.

Mr. St. John-Stevas

It would be inappropriate even to consider them until the House had given a Second Reading to the Bill.

The trustees will be served by a small secretariat, the costs of which will be met from the grant-in-aid. Although the Bill makes no explicit provision for a particular date but leaves the Act to be brought into force by a statutory instrument, we hope to be able to set up the fund with effect from 1 April 1980.

Part II of the Bill deals with the system of acceptance of property in satisfaction of capital transfer tax and estate duty. Our decision to maintain that provision, which the previous Administration wished to abolish, was announced by me before the general election after consultation with the then Shadow Chancellor of the Exchequer.

The Bill fulfils our commitment to maintain intact the existing system, subject to two necessary qualifications. First, it was necessary to abolish the National Land Fund and, secondly, the ministerial responsibility for the system is to be transferred from the Treasury to my right hon. Friend the Secretary of State for the Environment and myself.

I should briefly explain to the House the operation of the acceptance-in-lieu system. Anyone who has capital transfer tax to pay, typically as the executor of an estate, may offer certain property to the Inland Revenue in satisfaction of the tax. That property could be land or buildings, together with the contents—works of art and other collectors' items—and the property must pass a stringent quality test.

The Treasury takes the advice of expert advisers on the quality and valuation of the property offered. If it is accepted, the value of the property, which would not be liable to tax, is set against the amount of the tax liability. When the property is accepted by the Inland Revenue, it is reimbursed from the National Land Fund for the tax it forgoes. The fund is to be abolished and the Inland Revenue will in future be reimbursed from Votes.

Section 50(2) of the Finance Act 1946 declares: The Treasury may, if they think fit, direct that a sum equal to the amount of the duty…shall be paid to the Commissioners". The permissive form "may" is repeated in clause 8(1) of the Bill, which provides that Ministers may pay to the commissioners a sum equal to the tax. We have tried to make the minimum necessary change in the existing system, but I must make clear that the Government remain, fully committed to the principle and the practice of reimbursing the Inland Revenue which has applied since 1911. Reimbursement will continue.

The decisions on whether property should be accepted, which has hitherto been taken by Treasury Ministers, are to be taken under the Bill by my right hon. Friend the Secretary of State for the Environment and myself. The decisions have always been taken on expert advice. That will continue to be the case.

Where the property comes from a Scottish, Welsh or Northern Irish estate, the lead will be taken by the appropriate territorial Minister. Where it involves land or buildings in England, it will be a matter for my right hon. Friend the Secretary of State for the Environment and where it involves objects in England, it will be for me.

We shall work in full consultation and we shall co-operate in order to ensure consistency of standards. The ultimate responsibility for the decisions and the payments to the Inland Revenue will lie with my right hon. Friend the Secretary of State for the Environment and myself jointly.

Mr. Dalyell

May we stick on Clause 8, which says that Ministers "may" pay the Commissioners of Inland Revenue? Can it be taken that that means that trustees must pay the commissioners if they are to accept a property in satisfaction of a tax? That is a crucial point which should be clarified.

Mr. St. John-Stevas

The duty under clause 8 as regards payment or ability to pay is laid firmly in the in-lieu procedure on the Ministers concerned. It is permissive and does not concern the trustees at that point. As I have indicated, it is a permissive power, but I have stated firmly that it is the Government's intention to continue with the existing practice. That is in accordance with our pledge.

Mr. Michael Morris (Northampton, South) rose—

Mr. St. John-Stevas

The Environment Sub-Committee report showed that the criteria that the expert advisers were asked to apply were, particularly in the case of works of art, not always easy to apply. The report recommended that they should be clarified and that the burden of advice should not fall, as at present, on the shoulders of a single person, however distinguished.

The Treasury has taken the advice, in such cases, of the director of the appropriate national museum or gallery, and, although the directors are free to consult other experts, they alone are answerable for their advice. I am considering the best method of improving the present system, which, I accept, places a considerable burden on a single individual.

May I say two things in clarification of the quality test? First, I shall be asking whoever is called upon to give advice under the new arrangements to consider, where appropriate, the desirability of leaving works of art in the country houses or other locations with which they have become associated. Secondly, the policy that has applied since 1972 of encouraging the acceptance of items that would be pre-eminent additions to local museum collections will be continued.

It may be convenient if I explain in more detail the financial provision proposed by the Government for the National Heritage Fund and the acceptance-in-lieu arrangements. The National Land Fund is expected to have standing to its credit at the end of the current year about £15½ million. When the fund is wound up, an equivalent amount will be made available in the financial year 1980–81, divided between the National Heritage Fund and acceptance-in-lieu.

In deciding on the precise division of the £15½ million between the two, we shall have to take account of the number of acceptance-in-lieu cases known to be in the pipeline or on the horizon. There are also some cases where property recently accepted in lieu of tax will require further expenditure or maintenance before it can be disposed of. That will be a further call for the next year or so on the sums allocated to acceptance-in-lieu cases.

Although a precise allocation is not possible at this stage, I can say that the new fund will have upwards of about £12 million in its first year. That will be in the nature of an endowment and it is not expected that the whole sum will be used in the first year or even the first few years. The balance will earn interest for the trustees.

In later years, the planned expenditure, at 1979 Public Expenditure Survey Committee prices, is £5½ million a year on the fund and acceptance-in-lieu cases. As with other public expenditure programmes, that sum will be revalued from year to year and the precise allocation between the fund and acceptance-in-lieu cases can only be decided nearer the time.

The grant-in-aid for the fund and the reimbursement to the Inland Revenue will both be borne fifty-fifty on the Votes of the Department of the Environment and the Office of Arts and Libraries. Of course, if a really big house or other piece of property came along for consideration either by the trustees of the fund or for acceptance in lieu of tax and it exceeded, or would unacceptably deplete, programmed expenditure, the Government would have to consider whether it would be possible to make the necessary funds available.

Similarly, if several smaller but still significant cases all came along at once and it was not possible to accommodate them all, the Government would again have to consider whether savings from elsewhere in planned expenditure could be realised for that purpose. I must stress that the Government are not inflexible in these matters, but we cannot give an open-ended commitment.

I turn to part III of the Bill, which deals with indemnities. There are two fundamental principles at issue here. First, the borrower, as a rule, undertakes to compensate the lender for loss of or damage to what he borrows and undertakes to pay any insurance or other costs arising. Secondly, the Government carry their own risks, as do bodies which are wholly or mainly supported by moneys provided by Parliament. Therefore, when the owner of a work of art lends it to a national museum or gallery, the latter undertakes the contingent liability to compensate the owner for loss or damage, but does not need to insure. However, when the Government or a national museum or gallery lends property, the borrower is normally required to insure. Of course, there have been exceptions to this rule. A current example, which we heard about earlier this afternoon, is the Royal Academy Post-Impressionist exhibition. The Government have accepted that this exhibition is so important that they will stand in place of the borrower—in this case, the Royal Academy—and carry the risk themselves.

Over the years it has been represented to Governments of both parties that many items in national collections, in store or on restricted display, could be displayed to advantage at regional institutions if only the Government would accept the risk of loss or damage. It was argued that the insurance costs which fall on local authority or university museums were inhibiting those institutions from borrowing much that the national institutions would otherwise have been ready to lend. This argument was accepted, and on an extra-statutory basis the Government have, since 1977, been accepting the liability in approved cases where such loans have taken place.

This Bill provides the opportunity to place this extra-statutory arrangement on a statutory basis. We have taken the opportunity to widen the scope of the arrangement so that it will apply to loans to university libraries, the National Trust and other approved bodies and persons. We hope that this will facilitate the loan of items which have come into the ownership of national institutions back to the houses with which they have been associated in the past, or to comparable houses. More generally, it will facilitate a wider display to the public of property which is owned by the public.

It has been suggested that the Government should go further than this and take over the liability for items which are loaned by one local authority or university museum to another or by a private individual to a local authority or university museum. Clause 17 of the Bill provides for this in the special case where the object in question has been refused an export licence and is displayed in such an institution in the hope of raising funds for its purchase and retention in Britain. In such cases, the Government, by withholding an export licence, have established a clear locus in the matter, and it is reasonable that they should take on the risk involved. But it is debatable whether the Government should take on this liability in other cases where the matter is essentially between bodies and persons who are unconnected with the Government and who derive benefits from the loan for which it is arguable that they should incur the corresponding costs. I shall listen to hon. Members' arguments on these points.

For the benefit of the House, I shall run quickly through the Bill clause by clause. Clause 1 provides for the establishment of the new fund and for the trustees of the fund who are appointed by Ministers—the Secretary of State for the Environment and myself. Schedule 1 provides more detail on the trustees. The fund itself will not qualify for charitable status, but it is intended that it will be exempt from tax on its income and on its capital gains, and it should enjoy the rate relief which charities enjoy.

Paragraph 2 of schedule 1 provides the appropriate relief from local authority rates. The appropriate reliefs from Inland Revenue taxation will be provided in next year's Finance Bill and will apply from the beginning of the life of the fund.

Mr. Dalyell

There is the question of the circumstances in which the Secretary of State for Scotland is an appointing Minister. This is considered to be a matter of some substance north of the border. I hope that the position will be clarified.

Mr. St. John-Stevas

I shall certainly ask my hon. Friend the Under-Secretary of State for the Environment to make a further statement on the matter when he replies to the debate. I have indicated the role of the Secretaries of State in regard to Scottish, Welsh or Northern Irish properties, which is a different point. As I understand it, there will be an opportunity for a trustee to be appointed by the Secretaries of State concerned or upon their advice.

Clause 2 provides for payments to be made into the fund by the Ministers within a month of the beginning of the financial year, and for the trustees to pay any receipts they may have into the fund as well.

Clause 3 contains the main power for the trustees to make grants or—subject to Treasury consent—loans to eligible recipients who are listed in subsection (6) for the purpose of assisting them to acquire, preserve or maintain property of importance to the national heritage. The provision as to expert advice is in subsection (2). It is also provided in subsection (5) that the trustees can lay down conditions for their assistance.

Clause 4 enables the trustees to spend money from the fund on connected purposes—for example, incidental expenses such as transport, to the acquiring body, or necessary repair before disposal—and on the acquisition of property themselves; but subsection (3) provides that they can acquire property themselves only to the extent permitted by Ministers. We do not envisage the trust fund as a permanent holding body. I suspect that the trustees will find so many claims pressed upon them that they will be chary of spending much of their resources in this way.

Clause 5 enables the trustees to accept gifts of money or other property. Of course, it is a central part of our arts policy to encourage private patronage and sponsorship of the arts. I hope that this new fund, quite apart from its public support, will attract considerable private support also. It is intended to provide in next year's Finance Bill that gifts and bequests to the fund will be wholly exempt from CTT and CGT.

Mr. Martin Stevens (Fulham)

I am sure that the House welcomes what my right hon. Friend has said about private support for the fund. Has he given thought to the recognition which might be afforded to corporations and institutions which give that support? While they may not necessarily seek advertisement, it is obviously desirable that they should be seen to be helping the fund and should not be expected to help anonymously.

Mr. St. John-Stevas

I think that recognition in full should be given, and, if it is not, it should be claimed by the firms concerned. That will have some repercussions in the tax system as well. I shall bear that important point in mind. Recognition in every meaning of the word should be afforded to anyone who gives anything to the fund, including the Government.

Clause 6 deals with the powers of investment of funds that are not immediately needed. That is an important clause. Clause 7 provides for an annual report and accounts.

Part II of the Bill is complicated by the need to refer to and amend a vast corpus of existing tax legislation. The main operative provision remains paragraph 17 of schedule 4 to the Finance Act 1975.

Clause 8 provides that, where property is accepted in satisfaction of tax under this paragraph, the Ministers, instead of the Treasury as at present, may reimburse the Inland Revenue for the tax forgone. I have already made it clear how we intend to apply that provision. Clause 9 gives the Ministers control over the disposal of property accepted in satisfaction of tax. Clause 10 provides that when property is accepted in satisfaction of tax, receipts and expenses in respect of the property are paid to or by the Ministers.

Mr. Dalyell

With regard to clause 9, will stamp duty exemption extend to private treaty purchases made by the fund or to those bodies that it assists with grants? I do not expect the right hon. Gentleman to answer off the top of his head, but it might save a lot of time if some answer could be given.

Mr. St. John-Stevas

I am perfectly willing to answer off the top of my head, but experience has taught me that it is not always the safest course to adopt. I shall refer to the experts on this matter, and we shall endeavour to convey the information during the course of the debate.

Clause 11 exempts from stamp duty conveyances or transfers made under clause 9. Clause 12 transfers to the Ministers the responsibility for various decisions which now lies with the Treasury. Clause 13 makes it clear that property can be accepted in lieu of interest on CTT and estate duty as well as in lieu of the CTT or estate duty itself. This is already done in practice and the clause simply clears up a doubt about the interpretation of the existing legislation. Clause 14 provides that if at some future date it is decided to transfer on to the trustees the functions now being transferred from the Treasury to my right hon. Friend and myself, this can be done by Order in Council subject to affirmative resolution of both Houses. Clause 15 simply provides for the abolition of the National Land Fund.

Clauses 18, 19 and 20 make provisions for receipts and payments, entry into force of the Bill and interpretation, repeals and territorial coverage.

Part III deals with indemnities. Clause 16 deals with the schemes covering loans by national institutions to other bodies. The national institutions are listed in schedule 2 on page 13, and there is a power in subsection (3) to add to the list by statutory instrument if new bodies are created or if some which are at present not included, such as the Ministry of Defence museums, are later included. The list of eligible borrowing bodies is in subsection (1) and includes a very wide residual category for various types of body which might occasionally use the facility. Clause 17 deals with the power to grant an indemnity in cases where an export licence is withheld.

Hon. Members on both sides of the House will realise that the Bill, while simple in principle, has a number of complex and technical points, but I think that it is more advisable to pursue these in detail in Committee rather than on the Floor of the House. Although it is not a measure that is politically controversial, there will be some aspects that will have to be argued out thoroughly.

In the protection of our national heritage, we already have a powerful array of weapons and institutions. On my side, that is the Office of Arts and Libraries, we have the national and local museums and galleries—nearly 1,000 in all—the Standing Commission on Museums and Galleries, which is a constant source of wise and valued advice, and the Reviewing Committee on the Export of Works of Art, with its advisory council. In addition, we have the acceptance-in-lieu system, which we are now improving in the Bill, and the other tax reliefs, private treaty sales to public sector institutions and conditional relief from capital transfer tax for items placed on display to the public.

Now we are adding this powerful auxiliary fund, the main function of which will be to supplement existing resources and to deploy its own resources in the most critical situations. We are also widening the scope of the Government indemnity. I believe that with this Bill we shall have placed our national heritage in a far more secure position than it has ever enjoyed before.

When our proposals were originally announced in September of this year, they were hailed by Mr. Hugh Leggatt, who has done so much for the preservation of our heritage in Britain, as the brightest day for the arts and the heritage in this country for more than 30 years. That was a generous tribute, which, coming from such a source, was extremely welcome. I believe it to have been no exaggeration.

What has for so many years been a dream of visionaries and enthusiasts is about to become a reality. It is a measure of the importance that the Government attach to the preservation of our heritage that, despite all the pressures for the reduction of public expenditure which the Government are quite rightly exerting, they have found room for the extra investment needed in this area. It is not an extravagant beginning, but it is not a derisory one either. Tall oaks from little acorns grow. I believe that in future the branches of this fund will spread over the heritage ever more widely, protecting it from the economic storms and changes that make it especially vulnerable.

I recall the even more modest beginnings of the National Trust, which has now become one of our great national institutions known throughout the world for its skill and sagacity. The National Heritage Fund is set to follow along that successful path. If I may be allowed a personal reflection, I feel that had I done nothing more than introduce this Bill my tenure of the office of Minister with res- ponsibility for the arts would have been justifiable and worth while.

5.16 pm

Mr. Andrew Faulds (Warley, East)

What can I say, except to greet warmly the introduction of the Bill—[HON. MEMBERS: "Well done."] Wait for it. It is not often—indeed, in this Parliament it is exceptional, probably unique, that we in Opposition can positively welcome any legislative intention from this benighted Government. Why should we not welcome the Bill? Recognition of one's offspring is an ordinary and expected paternal reaction. We, of course, can make a claim to paternity of this welcome little bundle.

After all, its swaddling clothes were the Labour Government's White Paper of February 1979, and it was the Labour Government of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) who slapped it into life. The Chancellor of the Duchy of Lancaster is simply, by electoral chance, and with no procreative effort, standing in loco parent is. Although he has the satisfied smirk of a fond father, it was not his brat originally. We have a longer lineage to claim—

Mr. Patrick Cormack (Stafford shire, South-West)

The grandfather.

Mr. Faulds

The hon. Gentleman has put me right on the dot. The grandparent of this measure was a previous Labour Chancellor, Hugh Dalton, whose healthy conception—the Land Fund—was stillborn by the machinations of earlier Treasury operatives.

The Chancellor of the Duchy was uncharacteristically less than generous, although he said nice things about me, in his account of the genesis of the Bill. I want to get the record straight, so I trust that the House will excuse me for an introductory word or two on its history. Perhaps I can recall, because it is important that we should go back to the beginning, Hugh Dalton's words when establishing the Land Fund at £50 million in April 1946. He said: It is surely fitting, in this proud moment of our history, when we are celebrating victory and deliverance from overwhelming evils and horrors, that we should make through this fund a thank-offering for victory, and a war memorial which, in the judgment of many, is better than any work of art in stone or bronze."—[Official Report, 9 April 1946; Vol 421, c. 1840.] Then, of course, Hugh Dalton was thinking of saving aspects of the British landscape. Heretofore, that purpose of the fund has been largely neglected. Now, we must keep it in the forefront of our minds. I hope that the Minister will do that.

In a too little regarded letter to The Daily Telegraph, the national president of the Royal British Legion, Sir Charles Jones, wrote in his concluding sentence: I therefore urge MPs to recall the principles, accepted by all political parties, on which the National Land Fund was founded". What subsequently transpired on the Land Fund was that, in 1957, the Government, at the urging of the right hon. Member for Down, South (Mr. Powell)—who, I notice, is not in his seat as I should have expected him to be when we are debating a matter such as this—reduced the fund, which the right hon. Gentleman considered to be inert and non-existent, from £50 million to £10 million. The Minister has also made reference to this matter. Thereafter, the principle on which it was founded was lost from public view. I mention the right hon. Member for Down, South in that connection not to immortalise him in this important debate but to put the blame on the Conservative Party, where the responsibility properly lies for that deprivation, however much the right hon. Gentleman plays with words about conservation. The sooner the record of the right hon. Member for Down, South, in all its aspects, is forgotten, the better for British political life.

The proper purpose of the fund fell into desuetude. It was only the tragedy of Mentmore that highlighted the sad problem as a matter of public and parliamentary concern. Lady Birk suffered a desolating experience—as did all of us who care about the heritage—with the sale of Mentmore. That brought about her resolution to change the whole set-up. She established an interdepartmental group to study the problems and to put them to rights. The House set up a Committee which was admirably chaired by our now retired colleague, Arthur Jones. That Committee reached a number of conclusions as to how matters in the area of conservation of the heritage should best be pursued.

The previous Labour Government issued their White Paper in February 1979. The right hon. Gentleman will have to agree that this legislation is based pretty precisely on that White Paper with the exception—before the right hon. Gentleman intervenes—of the retention of the in-lieu procedures. So let us give credit where it is due—to my colleagues in the other place, Lady Birk and Lord Donaldson. They took up cudgels on behalf of the heritage and, with the positive support of the then Prime Minister, brought the Bill to light. The vagaries of electoral choice have now presented the Bill to the right hon. Gentleman on a parliamentary platter.

Mr. St. John-Stevas

We are all subject to the vagaries of electoral choice. I had no intention of withholding a tribute to anyone. However, I thought that the tribute to the hon. Gentleman subsumed the other, lesser, luminaries to whom he referred—the greater light included the lesser one. With regard to the responsibility for the Act of Parliament and the reduction in the old Land Fund from £50 million to £10 million, that was an act of a Conservative Government. However, it was recommended by an all-party Public Accounts Committee with a Labour Party Chairman. I do not wish to be contentious about the matter. We all have responsibilities, for good or for evil. However, I claim this credit for the Government in this respect—which was given to us fleetingly by the hon. Gentleman—that what prejudiced the whole scheme was the insistence of the previous Government on abolishing the in-lieu proceedings. The fact that those have been retained has enabled us to launch the scheme in what Matthew Arnold called an atmosphere of "sweetness and light".

Mr. Faulds

I have only two comments to make on that. With my natural modesty, I could not consume all the credit and I tried to put that right. Whatever the right hon. Gentleman tries to say, it was a Conservative Government and it was the right hon.—odd phrase, in his case—Member for Down, South who deprived the Land Fund of those moneys.

Let us look at the Bill in some detail. In clause 1(2) the definition of Ministers, who figure so largely in the provisions of the Bill, is given as: the Secretary of State and the Chancellor of the Duchy of Lancaster". I imagine that the generic term "Secretary of State", without specifying the Department of the Environment, is the normal form used in legislation so that if the title of the Department changed in future no change is necessary in the statute. Nevertheless, the Chancellor of the Duchy of Lancaster is in a somewhat different league. The historic title is unlikely to be changed. The duties that go with the title, other than those of the Chancellor ship proper, can and do change regularly. The right hon. Gentleman's office figures in the Bill only in so far as he himself is the Minister responsible for the arts. Incidentally, that responsibility is to be found on his notepaper, and I am glad that he makes that boast.

Sadly, the right hon. Gentleman is not immortal. Such responsibility may be transferred in the future to, for example, the Lord Privy Seal or—sadly in a doubtless more remote future—the arts might be promoted to a Secretary of State ship of their own. Thus, the argument of flexibility which validates the generic character of the first definition would invalidate the second, which is too specific. Consequently, in order to give greater flexibility to the second definition, would not the right hon. Gentleman consider the possibility of adding, after the mention of the Chancellor ship of the Duchy of Lancaster, the words: as Minister responsible for the arts"? That might clarify the matter a degree or two.

The matter of the financing of the fund, which transpires in the third page of the explanatory memorandum, calls for comment. The proposal is to pay to the new National Heritage Fund the equivalent of the capital balance standing to the credit of the National Land Fund at the moment of its abolition. But the proposal includes denying the new fund its first year's income. As a consequence, for one year, the new fund will be compelled to fall back on the consumption of its capital. When we reflect on that sad passage in 1957, when Parliament was induced, on more or less false pretences, to sanction the cancellation of about £50 million of the original capital of the Land Fund, the present small-minded and niggardly proposal amounts to adding gratuitous insult to gross injury. Not only that, but provision is being made for the assets of the new Heritage Fund to be raided for purposes which are nothing whatsoever to do with its proper function and purposes. I shall return to that matter in a moment or two.

Even with the National Heritage Fund set up with about £16.3 million from the National Land Fund and the £5½ million that will be put in each year, there will, on occasion, be a need for special provisions. The right hon. Gentleman made reference to that fact. If, for instance, a major house has to be bought in to save our heritage, we could be talking in terms of about £20 million. There must be a responsible attitude to a contingency fund. Can we really expect this Cabinet of—I do not wish to be too discourteous—philistines, in which the right hon. Gentleman is a lonely lost figure, to fork out that sort of figure to retain our heritage?

I turn to part II of the Bill, which deals with property accepted in satisfaction of tax. I warmly congratulate the right hon. Gentleman on his success in preserving in principle this valuable protection of our heritage. I, myself, argued against the proposal to abolish it after the matter had been sprung on the art world earlier this year without the slightest consultation with the museums. It is ironic that certain former Ministers who were most intimately concerned with this matter—they do not sit a million miles away—were equally in favour of preserving the system. I put that fact on the record. However, they were neutralised by the entrenched opposition of the Treasury and the stonewallers of Whitehall. I am glad that the right hon. Gentleman has broken through that resistance. Although the right hon. Gentleman's adamantine stand is much to be welcomed, I hope that he does not fool himself that he has as yet completely won the contest.

To return to my earlier animadversion—and I made reference to this earlier—clause 8 seeks to satisfy the appetite of the Commissioners of Inland Revenue to enter a figure in their accounts equivalent to the capital transfer tax, satisfied by the acceptance by the State of property surrendered to it in kind.

What will occur is that there will be a demand for a sum to be voted by Parliament from the Consolidated Fund—that is, from money raised from the generality and generosity of taxpayers—to be paid to Ministers but which is not to be spent outside the public sector, and can only be paid to the commissioners in order to offset a payment received in kind. I think that the popular description of that would be having one's cake and eating it.

Once this sum reaches the commissioners, they have no option but to treat it as if it had been newly raised from taxation—whereas, of course, it comes from funds from which taxpayers have previously been parted—and pay it into the Consolidated Fund, from which it originated in the first place. I believe that the right hon. Gentleman understands that matter.

I wonder, and, indeed, the House should wonder, whether the Public Accounts Committee might not look askance at such a raid for such a purpose on the Consolidated Fund, made on the pretext that, even if it does not actually constitute public expenditure, it ought to do so, and accordingly it must be treated as such, albeit notionally.

These are cloud-cuckoo-land calculations—and I am carefully weighing my words today—with which the Treasury confuses and confounds interested and concerned parties. Can the country afford the frustration of such fatuous nonsense and lack of proportion when our cultural heritage is at stake? I remind the House that the French, when taking over the idea of acceptance-in-lieu that we pioneered, had the common sense to treat it as payment in kind, not involving public expenditure, and to record such transactions in the ledgers merely in terms of units of account—in that case no doubt in francs.

The truth is that acceptances in lieu of tax merely betoken the agreement of the State not to insist, in selected cases, on receiving cash from the sale of certain objects. In short, the State refrains from raising revenue in cash in certain instances because it recognises the existence of a competing national interest—the preservation of our cultural heritage.

There is no valid reason, except that it will be a novel step, for rejecting a system analogous to that established in France. It would be totally misleading to imply that the adoption of any such method would amount to an open-ended commitment outside the control of Ministers and Parliament. That is simple nonsense. On the contrary, the quantity of units of account expressed in sterling, or the total of licences to "write off", or whatever one calls them, could be made available to Ministers each year by means of statutory instruments laid before Parliament for approval, whether positive or negative. The advantage of that for the preservation of the heritage is that the cultural interests of the country would be considered strictly on their merits and not obscured by other considerations.

Instead of that, what do we get in clause 8(1)? The Ministers may pay this conventional tribute of taxpayers'money—that is, they have the discretionary power to pay it or not pay it. However, in clause 8(2) it is stated that the commissioners shall deal with those sums as if they were payments on account of capital transfer tax, which they are accordingly recognised not to be. That is to say, the commissioners are subject to a mandatory injunction, which accurately corresponds to the real situation and would be equally valid in dealing with units of account expressed in sterling.

One of the most striking and pernicious demerits of the Bill is the attempt to confuse the real money, if I may call it such, and consequently real public expenditure, represented by the annual grants made outside the public sector to the Heritage Fund trustees, with the phoney money circulating inside the public sector, which is employed for accounting purposes in connection with the in-lieu acceptance and which does not involve genuine public expenditure.

That improper conjunction of two different species may be spied from the statement on the third page of the explanatory memorandum, which reveals that both payments, the genuine and the false, are likely to be lumped together in one Vote to the Ministers. However, the effect is likely to be that unless the grant to the heritage trustees is kept entirely independent, as it clearly ought to be, there will always be a danger that the more of this totally arbitrary cake that is devoted to the one category, the less will be available for the other. The right hon. Gentleman was good enough to be frank and honest about that.

Just as the heritage trustees might be reluctant to be a cause of the exclusion on faked financial grounds of the acceptance of some desirable items in lieu of tax, so testators, having such items, might be reluctant to be a cause of reducing or even perhaps eliminating the annual grant of genuine money for the Heritage Fund, which ought to be fixed independently each year.

The unjustifiable confusion between these two totally disparate functions will, indeed, prove a perfect recipe for controversy in the future. I warn the right hon. Gentleman of that outcome. Cynics may be inclined to suspect that to be an object of the exercise, on the old principle of divide and conquer, and they are probably right. Perhaps the Minister will enlighten us on those matters a little later.

The fact that I emphasised earlier, that the questionable payment to the Inland Revenue is discretionary, may be accounted for on the grounds that it has always been so in the past. But here I want to pose an intriguing question.

Mr. St. John-Stevas

The hon. Gentleman will, in fairness, note that the administration of the in-lieu procedure and the fund have been separated in the Bill. There were some who counselled against, but it is an important point that, although the money is coming from a common source, the administration of it is being kept separate. One is being done by the Ministers and the other by the trustees in order to reduce any degree of confusion.

Mr. Faulds

Even though that may be true, it does not lessen the force of the argument that we are talking of certain limited sums having to be spent in two different directions.

Mr. St. John-Stevas

That is right.

Mr. Faulds

I am grateful to the right hon. Gentleman for admitting that, and that is the force of my argument.

I wanted to pose a question. What happens if a testator—I cannot think of any names but there are some very testy testators for all their public-spirited intent—should offer highly desirable items in satisfaction of tax on condition that the Ministers exercise their statutory discretion to make no such payment? That is a serious question and I should like to have a serious answer from the Minister. It is a situation that may arise.

Clause 9 deals with the disposal of property accepted in satisfaction of tax, and the drafting of that clause is not as clear or consistent as it should be. Subsections (2), (3) and (4) appear to deal with buildings, their contents and land, leaving only subsection (1), which has a very general power, to cover chattels—that is, works of art and so on. However, chattels constitute and will continue to constitute an exceedingly important aspect of the whole system.

Subsection (2) conveniently refers back for definition purposes to clause 3(6)(b), which would cover such bodies as the National Trust, but somewhere in clause 9 there should be a reference back to the definition in clause 3(6)(a), which covers museums. At the same time the opportunity should be taken to specify the National Art-Collections Fund, so frequently cited in past statutes, and the Friends of the National Libraries, both of which are accepted as eligible destinations. It would be perfectly simple, as well as extremely desirable, to add to the general power in clause 9(1) such words as: including transfer to any body falling within clause 3(6)(a) above to the National Art-Collections Fund and to the Friends of the National Libraries. The purpose of subsection (4) of clause 9 is by no means clear. Historically speaking, it seems to be a somewhat garbled derivation from section 51(2) of the Finance Act 1946–the old Land Fund legislation. But section 51(2) of the 1946 Act refers back to section 50(3) of the 1946 Act, which is the equivalent of clause 9(2) of the present Bill and not of clause 9(1). Yet in subsection (4) of clause 9 of the present Bill there is a reference back to this subsection (1) rather than to subsection (2).

I trust that the Minister is following all this. I am sure that you, Mr. Deputy Speaker, have got the gist of it. [An HON. MEMBER: "Set it to music."] I have not had time this afternoon to set it to music. I leave that to my talented colleagues.

I wish to question what I regard as the arbitrary and undesirable insertion of the trustees of the National Heritage Fund in clause 9(4). While the general power they are given would doubtless cover such a body, the specific mention of it suggests that one of the positive purposes of the Bill is to involve the trustees in holding and managing property. We all heard the right hon. Gentleman's disclaimer. It is all very well listening to the sermon, but these are the words of the good book. This would mean operating in the same field as the National Trust. The latter, however, commands the experience and the expertise and staff to undertake such tasks, which would be lacking to the National Heritage Fund trustees as envisaged at the moment.

The subsection seems to be at variance in this respect with clause 4(3), which provides that if the trustees should exceptionally acquire property themselves, by means of their funds, they should not normally retain it and so act as principals. But there appears to be no difference in effect between property acquired by payment and property acquired through transfer. The right hon. Gentleman will note this if he will look at the clause.

It should be borne in mind that if there is any serious prospect of the trustees holding and managing property, the whole nature of the trust is changed, and with it the qualifications of the potential trustees, since managerial and administrative skills would be called for. It will be difficult enough to find experienced trustees, as I am sure the right hon. Gentleman realises, to do justice to their duties as set out in part I of the Bill, without adding this further dimension almost by the back door, as it were, in part II. I hope, therefore, that reference to the National Heritage Fund trustees might be deleted from clause 9(4).

The provision in clause 13 that property may be accepted in satisfaction of interest on tax is reasonable, but there is one administrative practice in connection with this which requires elucidation. The Inland Revenue possesses discretionary powers to waive interest charges retrospectively to the date of an offer when the merits of that offer are established by its acceptance. But it does so only on rare occasions. In equity, ought it not to be directed to make this a more normal practice, and only to withhold this reasonable concession to the extent that the time consumed between offer and acceptance is judged to be due to causes other than the transacting of the necessary departmental procedures?

This was, as the House will recall, the recommendation of the Select Committee on the Land Fund, and I hope that the position will be finally clarified in the context of the Bill. The problem is that debtors may well be deterred from entering into negotiations for acceptance in lieu, or at least deterred, if interest is charged during a lengthy period of departmental procedures, even though in the end their offer may be validated by acceptance.

With regard to part III of the Bill, relating to indemnities for loans, I entirely endorse the general view of the museum and heritage world that it is largely a non-event. This part consists of two clauses. Clause 17 may be welcomed as a small, sensible and long-overdue provision, but the principal clause, clause 16,which gives national museums—and, I stress, national museums only—the power to lend to, among others, local museums, does very little more than provide statutory backing for what has hitherto been legitimate administrative practice, without as yet involving any claim on the Exchequer. The right hon. Gentleman admitted that in his speech. He has just informed me, as he will remember, in a written answer that a loan has been made to a National Trust house in anticipation of the Bill. I refer to the Turner water colours at Petworth from the British Museum collection which have been lent back to Petworth.

A great deal of discretion in these matters has been properly exercised by Ministers in the past, but it will be interesting to know whether there is statutory backing for the various other forms of Government indemnity which are currently in existence. These include, first, loans by private individuals to national museums; secondly, loans by private individuals to Government buildings, including embassies; thirdly, loans to exhibitions abroad sponsored by the British Council; fourthly, loans to exhibitions in the United Kingdom sponsored by the Arts Council; and, finally, loans to the current Post-Impressionist exhibition at the Royal Academy. If there are any other categories, perhaps the right hon. Gentleman will tell us.

One facility which has long been strenuously and unanimously sought by the museum world—and which it was generally hoped, if the Bill were to deal with indemnities, would figure in it—was the provision of indemnities for loans from private sources to certain carefully chosen major museums which are the responsibility of local authorities and universities and the security of which had been approved by the security adviser to the national museums. Perhaps I should point out that in practice this latter expert regularly vets security at regional museums for the purpose of satisfying the strict requirements of the national museums when contemplating loans of works in their own collections to such museums. I must emphasise that these regional museums cannot afford insurance premiums. I am sure that the right hon. Gentleman will know that and admit it.

This matter can hardly have come as a bolt from the blue, even to Departments whose liaison with, and understanding of, their so-called clients leaves so very much to be desired. I feel justified in pointing out that I have asked certain parliamentary questions on the subject during the past couple of years—on 26 April 1978, 24 May 1979 and 4 July 1979. More recently, the matter was aired in the correspondence columns of the The Daily Telegraph. There is, however, sadly no sign whatever in the Bill that the light has penetrated those dusty dormitories which serve the right hon. Gentleman.

There are two points relating to indemnification which I want to stress. The first is the potential cost to the Exchequer. Over the years I have taken the trouble, in a long series of parliamentary questions, to establish that the cost to the Exchequer has in the past been absolutely minimal. As for long-term loans to national museums, £750 has been paid over the past 12 years. That has to be contrasted with the fact that at the beginning of this year the public enjoyed access to works of art indemnified for over £72 million.

With regard to temporary exhibitions at national museums, the cost was less than £2,000 a year over 12 years. Loans sponsored by the British Council have cost £24,000 over 10 years. Those sponsored by the Arts Council have cost £40,000 over five years.

Although loans from private sources to Government buildings, including embassies, were started back in 1946, the right hon. Gentleman was recently good enough to inform me, in a written answer, that there is no record of any compensation ever having been paid.

So much for what the Exchequer has had to pay in this field. I hope that there will be no question as to the enormous cultural advantages of the particular extension which I urge.

But now I want to make a second point and to make it with all the emphasis that I can. It is this. When works are on loan to museums, the likelihood of their coming on the market—this often means being sold abroad, as the right hon. Gentleman will know—is in practice very much diminished. To provide indemnity for private loans to regional museums would therefore play an essential role in the preservation of our heritage, and at absolutely minimal cost to public funds. The right hon. Gentleman and his colleagues really must take in that simple fact.

There is another extension of the indemnification system which would enable regional museums to play a further useful role. The Select Committee on the Land Fund and the whole of the heritage and museum world are agreed on the desirability of providing for specially selected objects, accepted in satisfaction of tax, to remain in their original location, subject to various safeguards, including public access. That, of course, is the "in situ" requirement.

However, there is a problem when the location in question is not a publicly owned building. The solution suggested, and widely supported, is that ownership of the object should be transferred to the local museum, which would take over the responsibility for its care and supervision. But this service could be reasonably asked of a local museum only if it were spared insurance premiums by means of a Government indemnity—which is not much to ask.

The existence of this problem wasrecognised by the right hon. Gentleman, and his press statement of 26 September led us to beleive that it would be solved in the Bill. Alas, there is no genuine solution in it—merely an attempt at cosmetics, since clause 16 deals only with indemnities, not loans from national museums. Anyone except, apparently, the right hon. Gentleman's own departmental staff—who seem to make a practice of consulting others as little as possible—could have warned him that trustee-governed national museums are highly unlikely to accept on to their books objects up and down the country for which there was no physical possibility of their taking a serious responsibility. He has only to lift the phone and ask any of the directors of the national collections and he will get a short, sharp raspberry of an answer.

Apart from the necessity to reconsider the accounting skulduggery to which I referred, and to make certain amendments, especially those involving a thorough rethink of clause 9 and the deletion of clause 14, there is a pressing case for two new clauses in part III. Whether the problems relating to indemnities were seriously faced at all in the Department seems doubtful. It is to be hoped that the draftsmen will now receive instructions to buckle to and that we can expect properly-thought-out new clauses tabled by the Government. Let us hope that there will be no further attempt by the right hon. Gentleman's Department or that of his right hon. Friend to bounce us again.

Why has such a fundamentally simple Bill, the general purpose of which commands such general support throughout the House and the country, been so unnecessarily botched in part of the drafting? The reason is surely to be found in the mentality of the mandarins of Whitehall. They tend to deceive themselves into believing that, ex officio, they know best and to adopt the slogan of no consultation except with prospective yes-men.

Nor have they profited, sadly, from the experience of the instant outcry from the museum world which was given not the slightest inkling of what was brewing when the proposed abolition of acceptance-in-lieu was unexpectedly produced in the White Paper of last February. In fact, what may not invariably have been true of the Bourbons—that they learned nothing and forgot nothing—seems unfor- tunately to be an endemic disease in some Departments not tar removed from the right hon. Gentleman.

In concocting the Bill, the departmental lack of timely consultation has once again been all too characteristic of the official approach, which persists in arrogantly assuming that mere briefing at the twelfth hour as to decisions reached without genuine consultation is all that the citizenry require—however much better qualified some of them may be than the corridor men.

When I say "at the twelfth hour", that is being too charitable. The House will be amazed to learn that representatives of the regional and university museums are to be first convened—when? Will the right hon. Gentleman tell us? He does not know. They will be convened tomorrow. That is "consultation" on a Bill of this importance. That is disgraceful.

The consequence of such a charade is that Parliament and everyone genuinely concerned with the art world are given much unecessary work and heartbreak. The simple reason is that what is decided in the monastic fastnesses of the Departments is so often out of touch with and resolutely ill informed about the real world in which the museum and art gallery people live.

The much more experienced and qualified museum bodies whose opinions have not been sought at the right time become first frustrated and finally deeply resentful. I think that the right hon. Gentleman is aware of that. I hope that it is safe to assume that this total breakdown in communication has at length dawned on him. To be trusting is doubtless a virtue, and he practices many virtues; but to be too trusting when the evidence so palpably fails to justify it is to allow his charity to be abused.

If the right hon. Gentleman gives the Bill a brisk spring-clean, turns over a new leaf or two and applies to a few backsides a touch of his elegant toe, all will be forgiven him. The art world undoubtedly wishes him well. We all want to see the Bill—tidied up a little as I have suggested—on the statute book, and we welcome its appearance.

5.55 pm

Mr. Patrick Cormack (Staffordshire, South-West)

I am delighted to be able to add my words of welcome to the Bill and to congratulate my right hon. Friend, in slightly less diluted terms than those used by the hon. Member for Warley, East (Mr. Faulds). The hon. Member was rather uncharacteristically ungenerous. He has an all-embracing nature, as we all know, but this afternoon he has perhaps allowed his plaudits to be too muted. The indignation to which he gave vent at the end of his speech was a little under-rehearsed.

Of course, parts of the Bill need tidying up in Committee, and that can be done, but basically this is a splendid and long-overdue Bill. The National Land Fund had an unhappy history, culminating in the fiasco of Mentmore, with which some of us were intimately involved. That in turn led to the reference to the Sub-Committee of the Expenditure Committee and now to my right hon. Friend's Bill.

The Bill puts on a sound working footing that splendid vision which Hugh Dalton had over 30 years ago. In spite of the way in which the hon. Member for Warley, East tackled this matter, the most refreshing aspect of the exercise is that it commands all-party support. The Select Committee itself was all-party and unanimous. It adopted almost in their entirety the recommendations of the all-party Heritage Committee, of which the hon. Member and I have the honour to be officers.

Then we had the last Labour Government's White Paper in February of this year. The Bill improves upon it in one or two important respects—particularly the retention of the in-lieu provisions. I am grateful that the hon. Gentleman at least grants it that.

Mr. Faulds

I argued it.

Mr. Cormack

Indeed the hon. Gentleman did, and we are delighted that he did. All this emphasises that this is an all-party occasion. It is vital for the preservation of our heritage that it should never become a political football.

That is important for a reason that has not been advanced so far today. The Bill can be only one strand of a comprehensive heritage policy. The fund that we are hoping to set up can at best be only a safety net, which can be effective only if not too many owners of properties, be they works of art or historic houses, feel forced to test it.

Let us consider for a moment the riches of our heritage. We have talked in terms of £12 million or more and an income of £5 million. If in any year a Chatsworth or a Blenheim Palace were vacated by its owner, all the resources of the fund would be gone at one go.

After all, it is nearly three years now since Mentmore. That collection, which the then Government could have acquired for a trifling sum—as the hon. Member for Warley, East and I agreed and fought for at the time—fetched under the hammer about £7 million. It would fetch considerably more today. What would the contents of Chatsworth fetch? Hon. Members can think of their own figures.

In the light of that fact and of the fact that the Paul Getty museum alone has an annual income of double the total resources with which we are establishing the fund, one realises that we are talking merely of a safety net.

This is not to decry my right hon. Friend's achievement. We all appreciate and applaud the Bill. But the fund can be successful only if it is part of a comprehensive heritage policy. Fundamental to that policy must be the concept stated by previous Ministers time and time again, from Dispatch Boxes in both Houses. They have said that the cheapest way of maintaining our great heritage of historic houses—that is where the vast sums of money are involved—with their great collections set in spacious parklands intact is by encouraging and enabling their owners to remain in possession. This was said by the noble Baroness, Lady Birk, at the time of the Mentmore auction and many times thereafter. The view was echoed by her noble Friend Lord Donaldson, and the previous Secretary of State for the Environment, the right hon. Member for Stepney and Poplar (Mr. Shore), made the same point from the Dispatch Box at that time.

It is vitally important that owners be encouraged to remain in possession not just for themselves and the heritage of which they are the trustees but to meet the point made by the hon. Member for Warley, East about the landscape. Many of us have received a communication from the Ramblers Association. The association is rightly anxious that our beautiful countryside should be as high a candidate for preferment when the fund trustees meet as any work of art or any historic house. I strongly endorse that, but unless the historic houses with their collections are kept intact the ramblers, I fear, will not have their dream realized.

If we recognise the importance of our heritage to the nation, the Government, in preparing the Budget, must move forwards relaxing capital taxes and make other concessions promised by the Chancellor, and slot those measures in as part of a heritage policy broadly acceptable in all parts of the House. I say "broadly acceptable" because the previous Government recognised that point. I have referred to the oft-quoted statement about the cheapest way of maintaining historic houses. In a number of amendments to Finance Acts the previous Government sought to give expression to that policy.

Even if we cannot grant the point a very high priority, let us look for a moment at tourism and realise that tourism is our major growth industry. Many of us may regret that, but it is a fact. Let us also recognise that investment by the Government in our heritage—which is what the tourists come to see—brings a far bigger return on the meagre sums invested than anything else one could imagine.

In this context, we must regret the fact that the Government felt unable to accept the recommendation of the Select Committee. The Committee recommended that the £50 million set aside in 1945 by Chancellor Dalton be restored. We all accept the exigencies of the moment and we understand the problems faced by my right hon. Friend, but we hope that in the course of the next few years the fund will be restored to something like £50 million. It has been calculated that, if the fund were re-established, that figure of £50 million in 1945 terms would be the equivalent of more than £400 million today. Obviously that is unrealistic and out of the question, but if the fund could be restored, as urged by the Select Committee, to £50 million, this would give pleasure to us all.

We also regret that, although the "in lieu" system has been maintained—we are glad of that—there will be the need for constant reimbursement for items accepted. The Select Committee stated: Your Committee therefore recommended that Her Majesty's Treasury's rule of reimbursement by national collections to the National Loan Fund be discontinued. I am delighted that the word "may" is in the Bill. Let us hope that, as economic circumstances improve, that "may" will indeed take the place of "shall".

There are a number of points on which I seek clarification. I am sure that my hon. Friend will try to answer these points when he winds up. First, there is the point raised by the hon. Member for West Lothian (Mr. Dalyell). He asked what were the specificroles of the Secretaries of State for Scotland, for Wales and for Northern Ireland. We have had a tentative answer from my right hon. Friend, but we would welcome confirmation that some trustees will be appointed, or could be appointed, by the Secretaries of State. This Bill embraces the whole of the United Kingdom, and it is important that the Secretaries of State who have responsibility for Scotland, Wales and Northern Ireland should be fully consulted.

In clause 3 there are one or two important points on which we should have clarification. The clause says: (1) Subject to the provisions of this section, the Trustees may make grants and loans out of the Fund to eligible recipients for the purpose of assisting them to acquire, maintain or preserve— I would have preferred to see the word "enabling" rather than "assisting" and I would like to know whether "assisting" can mean "enabling"—in other words, a 100 per cent. commitment. I would like to know also whether the words "maintain and preserve" embrace "endow". It is important that endowment should be provided.

We all know that the National Trust can no longer contemplate taking on any more historic houses unless it receives enormous endowments to maintain buildings. That is another reason why we should not try this safety net too often. As regards the conditions enumerated in clause 3(1)(a), (b) and (c), I would like to know whether "land" includes gardens. The great historic gardens of this country are a most important part of our heritage. Does the word "object" include structures such as the Iron Bridge? If we are prosing legislation to stand the test of time, we must make sure that no important part of our heritage is left uncovered.

Under subsection (2) of clause 3, I presume that among the bodies from which the trustees will take advice and which they will consult will be the Export Reviewing Committee and the Historic Buildings Council. I would be happy to have confirmation on that point.

I bring an extremely important point to the attention of the House concerning clause 3(5)(a)(i). The words "public access" are used. In subsection (6)(b) we have the words any body having as its purpose…". Public access is an issue which is not often fully understood. There are some extremely magnificent country houses which do not lend themselves to constant hours of opening and which cannot accommodate enormous streams of visitors. It is important that that sort of house should be covered by the Bill. There should be reasonable access, but that must not mean constant hours of opening or specific numbers of people.

An even more important point is that there are tracts of landscape which could be spoiled by public access. I would like to believe that the words "any body" to which I have referred would include the Royal Society for the Protection of Birds. One of the objects of that society is to preserve nature reserves. The public must be kept away from them if the habitat is to be preserved and the society's conservation remit observed. Would the RSPB qualify under clause 3(6)(b)? If my hon. Friend is unable to answer that question this evening, I hope that he will show sympathy with the point I am making.

Clause 5 deals with gifts entrusted to the trustees. I was pleased at the assurance that there will be an amendment in the next Finance Act to include the fund in the schedule 6 bodies. Without that, nobody will wish to give. We must think in terms of being more adventurous. I hope that in the future we shall consider introducing heritage bonds in which people can invest.

Part II is headed Property Accepted in Satisfaction of Tax". Two Ministers are involved. When an acquisition is paid for, will 50 per cent. of the payment come from each Minister, or can the payment come out of one Minister's budget? The fund is to be topped up each year by a contribution from the Department of the Environment and the Office of Arts and Libraries. Will each acquisition be paid for in the same way?

I am worried about the definition of "pre-eminent". When an object is accepted in lieu of tax, it must be "preeminent". We should re-examine that definition. That which is pre-eminent in Leeds is not necessarily pre-eminent in the Tate. Many objects are pre-eminent in their locality but are not of outstanding national importance. We should ensure that we do not miss important objects as a result of that definition. This is particularly important when we are considering the acceptance of objects that are to remain in situ. I was delighted to have the Minister's assurance that the Government intend that where an object is of great historic importance and associated with the building in which it has been housed for centuries it should stay there.

We must reconsider the definition of "pre-eminent" and consider into whose guardianship an object should pass when it is allowed to remain in a building. Local museums should be empowered to act as guardians or keepers in such cases. It does not make sense for somebody from the Victoria and Albert museum to travel all the way to Castle Howard when an object can be looked after by the staff at Temple Newsam. I hope that it will be possible for the provincial museums—some of which are indeed pre-eminent—to have guardianship of such objects. If there is no proper indemnity, that will not be possible.

Mr. Esmond Bulmer (Kidderminster)

The word "outstanding" is used in clause 3. "Outstanding" is described in the Oxford dictionary as meaning "eminent", which is more flexible than "pre-eminent". Perhaps that is the word which my hon. Friend seeks.

Mr. Cormack

That is a good suggestion. The words "outstanding" or "of intrinsic importance" are possibilities. It is important that we do not so restrict ourselves that we miss objects which are of particular interest or importance.

I may be wrong, but it seems that VAT will be payable on any work which trustees carry out when repairing a building which they have accepted. It is not intended that trustees should hold buildings or objects for long. Nevertheless, inevitably there will be a time lag. It could be days or many months. In some cases it will be necessary to effect repairs to a building. It is wrong if the trustees have to shoulder the burden of VAT on necessary first-aid repairs.

Mr. Faulds

Does the hon. Gentleman agree that the whole issue of VAT on the arts and the heritage would be enormously simplified if the Government had the good sense to drop it from those aspects of our cultural life?

Mr. Cormack

The hon. Gentleman tempts me to go too far. He knows my views. He knows that I believe that a 15 per cent. VAT rate is a penal surcharge on those who have the job of looking after ancient buildings. I should like confirmation that my interpretation of the Bill is correct. I should also like confirmation that when the Department of the Environment buys a building it does not pay VAT on repairs. If I am correct, there is an anomaly which must be put right. Value added tax is a significant obstacle to the maintenance of historic buildings, and the trustees could be faced with real problems.

The hon. Member for Warley, East referred to the Expenditure Committee's recommendation that there should be a remission of interest during the period of negotiation. Those who were involved with Mentmore know how protracted such negotiations can be. In fact, those negotiations failed and, therefore, this would not have applied, but had they succeeded this provision would have been important. When proper negotiations are entered into honestly, there should be a remission of interest incurred during that period.

It is not usual to pay trustees. I welcome that. However, the first trustees of the National Heritage Fund, and especially the chairman, whose appointment is vital, will have a great deal of work to do. It will be unfortunate if the only people who can serve as trustees are either elderly or rich—or both. It is important that the best talents available are recruited. The chairman's job will be virtually full-time at least for the first year or two. I hope that we can consider some form of remuneration for the chairman of the trust.

Mr. Clement Freud (Isle of Ely)

Since the Government have an affection for the honours system, perhaps they may award—or possibly reaward—a knighthood.

Mr. Cormack

We all know that for the hon. Member for Isle of Ely (Mr. Freud) the task of serving would not impose burdens and a knighthood would, indeed, be an admirable recompense. If he were awarded a baronetcy, how his name would be immortalised.

Mr. Speaker

The hon. Gentleman could have a peerage if he remembered that others also wish to speak.

Mr. Cormack

I am grateful for that promise. Having been tempted off the paths of righteousness by one of the most righteous of hon. Members, I shall conclude. This is an important Bill. It is the most significant piece of heritage legislation in more than 25 years. I wish it well and I hope that it will reach the statute book speedily.

6.19 pm

Mr. John Parker (Dagenham)

I welcome the Bill. I also declare an interest, as a member of the Historic Buildings Council and a member of the executive of the National Trust. But I should like to make it clear that I am not speaking for either body today.

Rightly, we have paid tribute to Hugh Dalton for the original idea which led to the creation of a national land fund. I should like to pay further tribute to Arthur Blenkinsop and to Arthur Jones, who urged the Select Committee to reach such sensible conclusions and recommendations which Governments have since followed up and which have led to the Bill.

It is important that the trustees should be independent and I am pleased that they will be appointed by the Chancellor of the Duchy of Lancaster and the Secretary of State for the Environment. It is important that the trustees should be independent of the Treasury. Throughout our discussions on the arts, historic buildings and the heritage generally, there has always been opposition from the Treasury. I should like to reinforce the point made by my hon. Friend the Member for Warley, East (Mr. Faulds) that the Treasury should not come in by the back door to influence decisions unduly.

I agree that the funds available are much too small, in view of the amount originally set on one side by Hugh Dalton for this purpose. It is to be regretted historically, whoever may be at fault, that this sum of money was not left by itself to increase in value. As the hon. Member for Staffordshire, South-West (Mr. Cormack) said, it would now be worth well over £400 million, and there would have been an income of £60 million which would have gone a long way towards meeting the needs of the National Heritage Fund. We must, however, accept that that has happened.

I should like to comment on the present position and on some of the problems which the National Trust has had to face in recent years. It agreed to take over from the Government the ownership of certain houses which were handed to them. Arrangements were made by which the Government agreed not only to hand over houses but to pay a certain amount of money yearly to finance the deficit on those houses. Over the years there has been considerable trouble with regard to that arrangement. There have been arguments about how much money should be paid yearly towards the maintenance of these houses. There have been arguments about detailed managements and delays in paying the money. It was for those reasons that the National Trust decided that it could not take over further houses under those arrangements.

I do not think that that solves the problem. Whatever arrangements may be made for taxation purposes to try to keep owners in possession of their houses, from time to time there will be other houses for which some future will have to be found. I hope that arrangements can be made by negotiation by which the National Trust can take over properties on more favourable grounds than in the past.

The Department of the Environment—formerly the Ministry of Works—did a good job of work in the restoration of Audley End. I remember going there when it first came into the possession of the Ministry. It was almost an absolute ruin after it had been occupied by Polish troops during the war. No repairs had been carried out since 1860. The restoration cost so much money that the Department has not been prepared to take over similar houses for restoration in the future.

At the moment we have the problem of Heveningham, a house which was about to be demolished in the 1960s. The Government stepped in and bought the house to prevent it from being demolished. They were not prepared to manage the house themselves and to restore it as they had restored Audley End. They asked the National Trust to manage it for them. There has been considerable friction because the National Trust feels, quite rightly, that the house is not a credit to it or to the Government. Much of it is in bad condition. The orangerie is practically falling down and no money has been forthcoming to carry out essential repairs or restoration work.

Heveningham has now been put up for sale. National Trust management comes to an end, I understand, in March next year. If no one buys it, it will fall down or it will have to be demolished. What is to be its future? That problem should be dealt with in the debate tonight.

A large number of houses may be in difficulties in the future. I am all in favour of keeping such houses running as going concerns, but unless some arrangement is made with a body such as the National Trust to take over when necessary there will be difficulties in the future.

An alternative has presented itself. Special trusts are to be created for certain houses, as the Arundel Trust was created to manage that estate. Such trusts are set up because the owners cannot find sufficient capital to give to the National Trust to enable the trust to take them over. Therefore, a smaller fund is set up. But how long will that fund be a viable institution? There may come a time when extensive repairs are necessary and resources are not available. The creation, therefore, of such alternative trusts to deal with a particular property may produce problems in the future. That can only be a temporary solution. What is to happen to houses that cannot be taken over by the National Trust because insufficient capital can be found? What will the National Heritage Fund be able to do in such circumstances?

There are a number of minor manor houses which can never be great attractions for visitors. But they are an important part of our national heritage and should be preserved. It might cost, say, a quarter of a million pounds to put some of these houses in good condition. The National Trust might then take them over. The rent and income from occasional visitors might then be sufficient to maintain them.

Rightly, we have become interested in industrial archaeology, and a number of buildings—the hon. Member for Staffordshire, South-West mentioned The Iron Bridge—are being cared for, restored and maintained. But our agricultural heritage is not being maintained in the same way. Many barns at farms are fine examples of craftsmanship. Some are in the possession of the National Trust. Many large barns can be maintained and visited. There are also many smaller barns of good standard and character, some of which can be used for storage. But when a farmer receives a grant from the Ministry of Agriculture to put up new barns he may do that and keep the old barns or he may pull the old barns down to make room for them. There is a strong case for preserving our agricultural heritage. An agricultural museum for farm implements is not sufficient. Farm buildings which have architectural merits should be preserved.

I am particularly struck by what I think is a big error by the Ministry of Agriculture. The village of Laxton is one of the few places where the medieval open field system of cultivation continues. I believe that there is also a place in what was Carmarthenshire, and there are one or two other places, but Laxton is the most complete example in this country. People come from all over Western Europe to look at it. Schoolchildren are taken there to be educated on how we ran our agriculture before the enclosurer.

That property was bought by the Ministry of Agriculture in 1952 to preserve it. Now it is on the market, because the Ministry decided to realise some of its agricultural properties in order to find money to make a contribution towards the present financial crisis. No one objects to other farms that have no historical interest being sold, but this property should not be sold. It is of great historical importance; it is an important part of our heritage. Promises are being sought that a new owner will try to preserve the existing system, but there is not the same guarantee that this will happen as there is when it is in the Ministry's possession. The Ministry can see that the system works and that it goes on working.

The system has the full backing of the local population. The whole operation—the election of officers, the working and the division of the fields—is not merely a theoretical piece of history but is practical and working. It is unfortunate that at the very time when a Bill of this kind comes before the House the Ministry should be selling this property. We should consider the agricultural heritage as well as the industrial heritage when we think of possible grants and work to be done.

To sum up, I welcome the Bill. I hope that we can improve it in Committee. Many useful suggestions for improvement have been made. I should like to see it become law as soon as possible.

6.32 pm

Mr. Esmond Bulmer: (Kidderminster)

Like the hon. Member for Dagenham (Mr. Parker), I must declare an interest, as a member of the executive committee of the National Trust. I should like to follow up some of the things that the hon. Gentleman said, but first I extend a general welcome to the Bill and the fact that it has the support of the official Opposition. Credit may properly be taken by both sides of the House, but I think that the Bill was conceived by the Environment Sub-Committee out of Mentmore. It implements many of the Sub-Committee's recommendations. The Bill is welcome for its flexibility and for the promise of better things to come, amplified most helpfully by my right hon. Friend the Chancellor of the Duchy of Lancaster.

For the first time we are to have a fund with which to protect our heritage, a fund whose existence will not be in doubt and one with significant resources. We are to have a committee of independent trustees with relevant knowledge and experience drawn from all parts of the kingdom. We shall have a safety net and an early warning system. That is a great step forward.

The trustees will want to be active as well as reactive. Looking at schedule 1, I hope that my hon. Friend the Minister who winds up the debate will say a word about the staffing arrangements. The staff will not be regarded as Crown servants. Does this mean that civil servants will be encouraged to transfer, if they wish? If they do, will their pension and other arrangements be protected? In the case of non-civil servants, if wrong decisions are made and compensation must be offered, will the arrangements be sufficiently generous to allow that to happen? I very much hope that civil servants will be allowed to transfer, and if necessary to transfer back again, if they have particularly relevant information and skills.

We are all agreed on the importance of preserving our heritage. We have been uniquely blessed, by reason of geography, climate and social history. John of Gaunt said it all. This fortress built by Nature for herself became the seat of the greatest empire since Rome. It is now second only to Italy in its architectural heritage. For hundreds of years we have been able to draw on the best that the world had to offer in ideas, natural resources and the decorative arts. This is our incomparable inheritance.

When we visit the empty chateaux of the Loire and the great cities of Europe destroyed in the last war, we indeed have reason to give additional thanks.

It was in recognition of the sacrifices made in war that Dr. Dalton conceived the National Land Fund as a perpetual memorial. I regret that this concept has not been continued, that it has not even been given a decent burial. I hope that the trustees will look in each part of the United Kingdom for one area of outstanding beauty that should be endowed as a perpetual memorial to those who died.

The Labour Government's White Paper said that it was not part of the fund's role to contribute substantially to exceptionally expensive proposals. If a memorial is not to be treated on a regional basis, there may materialise one scheme that seems so particularly suitable that the Government feel it fitting to give an extra sum of money for one national memorial. We need more than cenotaphs. We need places of peace and beauty where people can remember.

Dr. Dalton earmarked £50 million from the sale of war materials. At 1977 prices that was worth £200 million—a great deal of money, but less than one year's loss in one nationalised industry. When we remember that foreign visitors generate £3 billion of income and that our heritage is outstandingly the most important reason for their coming here, we understand not only what large sums are at stake but how little we are putting back into a major national asset. It is critically important in terms both of the employment that it will generate and of the balance of payments.

I know that my right hon. Friend's instinct is to spend more. The Treasury, of course, is only too conscious of the present difficulties and is reluctant to give more, but I hope that in due course the figures in the Bill will be increased. In the meantime, we must do all we can to neutralise the forces of destruction, the rising costs, the penal taxation. It is just as important as pouring fresh concrete into the foundations.

In a speech, I think to the Historic Houses Association, my right hon. Friend listed four initiatives that he expected this Government to take. There have been important cuts in income tax, and a review of capital taxation is promised. I am sure that that review will take into account the need for maintenance funds to be far more attractive than they have been.

My right hon. Friend drew attention to the listed building repair allowance as it operates in Holland and the need for case 1, schedule D, to be available as of right. The hon. Member for Dagenham drew attention to Heveningham, which is a classic example of a house that could never have a fraction of its repair costs compensated for by entrance fees. I think that that applies to virtually every house except those houses whose owners decided in effect to go for much wider forms of entertainment. It is ludicrous that the Treasury should hold to the position that an owner is guilty until he can prove himself innocent.

I seek further clarification of clause 3. It does not mention endowments, but clause 4 seems to make it clear that the trustees can endow property. I would not feel the need to ask the question but for the policy followed by successive Governments of avoiding any offer of capital endowments, despite the power to do so in the Historic Buildings and Ancient Monuments Act 1953. May we have an assurance that these endowments can be offered and that the Government will remain neutral, or will they be offering guidance to the trustees?

The National Trust, as the House knows, has received many important properties through the National Land Fund, but has had to spend hundreds of thousands of pounds out of its own charitable fund to maintain them. Mr. Boles, the director general of the National Trust, told the Expenditure Committee that the National Trust is quite sure that it cannot become the owner and manager of the bulk of the National Heritage". It is quite clear that without adequate endowment the National Trust would be reluctant to accept any great house.

Mentmore alerted the nation to the risks facing our great country houses. Today a million pounds may not be enough to endow quite a modest house. It would certainly not be enough to endow any of the great houses still in private hands—Chatsworth, Hatfield, Longleat, Woburn, Syon, Blenheim, Kedleston, Castle Howard, Althorp, Wilton, Holkham and Houghton. One only has to list the houses to rehearse the scale of the problem with which the Government might be confronted. From what my right hon. Friend the Chancellor of the Duchy of Lancaster said, I understand that such houses would be treated as special cases.

Mr. Cormack

It is important that there should not be any special cases, but if there are they should be the minimum number possible.

Mr. Bulmer

I take the point made by my hon. Friend.

From the evidence given by the National Trust to the Environment Sub-Committee that looked at the problems of the National Land Fund, there is one other point that I should like the Minister to consider. In paragraph 8 of its submission the National Trust said: In Northern Ireland, and perhaps elsewhere, it would in the past have been useful if the Land Fund could have been used to pay for the acquisition of Rights of Way and possibly of sporting and fishing rights and other easements in order to promote better access of the countryside. Earlier I welcomed the flexibility of the Bill, but I wonder whether clause 3(1)(c) might not in due course be amended to make it possible for purchases to include easements, rights of way and sporting rights. Nowhere is it more important than in Northern Ireland that people should have as much access as possible to recreation.

I said that I welcomed the Bill particularly because of the promise of better things to come, but I join with several other hon. Members who have spoken in hoping that events will prove that the promise in clause 8 is an indication that we can move to the French system of accepting heritage objects without revenue offset. The last figure I saw was £1.6 million out of £384 million received from capital taxation. That hardly seems a significant figure.

I hope that in due course more money will be made available for the National Heritage Fund and that there will be some simplification of ministerial control. I believe that the Bill should be given a general welcome.

6.43 pm

Mr. Ednyfed Hudson Davies (Caerphilly)

I welcome the Bill, with perhaps some reservations. I welcome the provision for financial assistance to a wide range of bodies providing they are of importance to the heritage—not merely to museums and galleries but, indeed, to any body having as one of its purposes the improvement and preservation of amenities enjoyed, or to be enjoyed, by the public. That is a desirably broad scope.

I am delighted that a real fund is to be securely, if perhaps modestly, established and not a notional and depleted fund, such as the old National Land Fund, which turned out to be so inadequate. I hope that the tragedy of the failure of the nation to acquire Mentmore is not something that could, in the terms of the Bill, happen again.

I am delighted, too, that the trustees will be independent. I believe in independent trustees as well as the whole concept of trustees. It is desirable that it should be written into the Bill that the trustees should represent in some way, and have some connection with, the length and breadth of the United Kindom. In this artistic area there is perhaps often a danger of an over-emphasis on London.

It is important that the trustees should not be under Treasury influence and jurisdiction. It is also important that the danger of having experts, as such, is avoided in the definition given in clause 1, in that they should have knowledge and experience or interests relevant to the purposes for which the Fund may be applied. They should not be over-technical experts. That is very desirable.

I come to one reservation that I have. In the Bill there is a clause that deals with the arrangements that are to be made for the exercise of the in-lieu procedure, whereby the Inland Revenue is permitted to accept objects in place of financial settlement in payment of tax liability—currently capital transfer tax and perhaps residual cases of estate duty. I should have preferred to have seen this particular function exercised not, as the Bill stipulates, by the Chancellor of the Duchy of Lancaster and the Secretary of State for the Environment, assisted presumably by the Secretaries of State for Wales and Scotland and the relevant Minister for Northern Ireland, but by a body of trustees with jurisdiction over the whole in-lieu procedure. The system envisaged in the Bill perhaps opens up an area for squabbling and possibly the application of different standards in different parts of Britain.

Many problems have arisen in connection with the way in which the in-lieu procedure has been exercised. Reference has been made to the standard that was laid down in the Finance Act 1976, which was that objects can be taken in place of payment if they are pre-eminent for national, scientific or historic interest. But the word "pre-eminent" tends to be interpreted as what is pre-eminent, say, to the national galleries—here I am thinking of the Tate gallery and the National gallery. It is a London-based concept.

The point has already been made that an object can be of enormous value perhaps in a provincial context. For instance, an object that would have meaning, significance and artistic merit in Wales would not perhaps make the ratings in a national, London sense.

I can mention one or two examples where this procedure has caused a great deal of difficulty. For example, a Reynolds which was of great importance and significance in Doddington was not accepted in lieu of tax liability because it was not a Reynolds that rated with Reynolds in the London galleries. But in the context of Doddington, where it portrayed a stage in the building of a house, it was enormously important. I feel that some such term as "significant in its context" would be preferable to "pre-eminent".

Another troublesome situation occurred at Althorp, where objects were accepted but on unfortunate conditions. The Van Dyck paintings in the Van Dyck room which hadbeen built to house them were accepted—indeed, they were worthy of acceptance—but they were accepted on condition that they were taken away, torn out of their setting and placed in the National Gallery, thus depriving the people of Northamptonshire of the opportunity to visit Althorp and see those Van Dycks in the setting created for them.

An unfortunate state of affairs of that kind would not, I believe, occur if the body of trustees envisaged under the Bill were exercising their function in that respect.

I ask the Minister to give an assurance that, if the present system is to be maintained, with the Ministers instead of the Treasury being responsible, there will be some modification of the concept of preeminence and that more attention will be given to regional significance, in keeping, in fact, with the thinking behind the recommendations of the Drew Commission and the emphasis on regional centres of excellence.

I hope that efforts will be made to allow objects which are of value in their setting to remain in situ—in other words, that a loan procedure will be established whereby objects taken by the Revenue may be allowed to remain in the one place where they have perhaps been for centuries, where they make sense and where they have their real value.

There is a further difficulty in the question of separation. The Chancellor of the Duchy of Lancaster referred to this, although he did not view it as a difficulty. Under the system envisaged in the Bill, some payments will have to be preempted from the fund each year—and in the first year they will run to several millions of pounds—for the purpose of in-lieu payments to the Revenue. I regard this as an unsatisfactory division. It would be far better if one group of trustees and one fund were used for both purposes, for grants and loans and for payments to the Revenue.

However, I think that there is here an element of hope, since I note that in clause 14 there is provision for transfer to the trustees of the functions envisaged in the Bill as being exercised by "the Ministers". Perhaps, when the Bill was drafted, there were misgivings among some people about this division, and I greatly hope that, as we see the trustees appointed and watch the work that they do, that transfer of functions will in the long run take place.

Mr. Alexander W. Lyon (York)

I was on the Select Committee which considered these matters. I was strongly of the view that there should be a difference between the people who take the decision about how much the country can afford at any one time and those who decide on the artistic merit of what is to be bought within that budget.

If both functions are to be transferred to the trustees, all that we shall do will be to move out of Whitehall that incongruity between the two functions which formerly resided in Treasury officials, and we shall not have made any real move forward. Surely, it would be better if the question of how much we could afford was totally distinct from the artistic merit of what was to be afforded, with the trustees making up their mind within their budget what was the highest priority.

Mr. Hudson Davies

I appreciate that point, save that, in my view, it is within the global sum attached to the fund that the decision is made as to how much the country can afford, and the trustees will then be exercising a wide discretion within the ambit of that fund. But that is undoubtedly something which will be the subject of further discussion.

The preservation of our national heritage is not only important to our own people but is a profitable exercise in preserving a national asset. I refer here to the importance of our heritage in relation to tourism. In 1978 we earned in Britain £1,131 million in foreign currency from overseas tourists coming to Britain. People come to Britain not for our climate but, perhaps more than anything else, for the whole range of our heritage—for places, for objects and for buildings, both private and public, which can be described as part of our heritage.

The previous Labour Government recognised the importance of our historic homes. It is certainly in the national interest that they be preserved and that, where they are in private hands, assistance should be given for their preservation. Perhaps the greatest help that can be given to a historic home is that it should be allowed to keep on loan objects which have become the property of the nation through acceptance by the Revenue in lieu of tax liability but which can remain in situ within the context in which they make sense.

I speak as a former chairman of a national tourist board and as a member of the board of the British Tourist Authority when I say that there is an enormous financial return to this country from the quite modest investment which we make in our heritage. I am delighted that the Bill will to some degree extend that investment. I hope that the introduction of the concept of Government indemnity for loans will be interpreted in such a way as to make it possible for objects to remain on loan in the houses whence they came in the first place and where they have meaning and significance.

It is important to remember that, although some have been more assiduous than others as custodians of our national heritage, it remains none the less the national heritage of us all. The Bill goes some way towards facilitating the task of preserving our heritage.

6.58 pm

Mr. W. Benyon (Buckingham)

I think that I am the first member of the Select Committee to speak in the debate today, and I cannot express strongly enough the pleasure which it gives me to take part and to welcome the Bill, which has come forward as a result of our deliberations in the last Parliament.

I pay my tribute to Mr. Arthur Jones and the late Arthur Blenkinsop for their part in the work of the Select Committee. Our report was unanimous. We took a long time, we had a lot of evidence, and the assistance of our two colleagues in our deliberations was a truly fitting finale to their respective careers in Parliament.

It is not always the case that the recommendations of a Select Committee are so soon accepted by the Government. I suspect that a number of other people who have laboured hard and well in those rooms upstairs must be looking rather enviously at what is happening today in relation to what was the National Land Fund and will now become the National Heritage Fund.

My first comment is to emphasise how important the selection of trustees will be. I suppose that that goes without saying, but it is of especial importance in this case since, whatever happens, they will, in effect, be the arbiters of the national heritage as a whole. Their actions must be seen to be fair, and not favouring any particular part of the heritage but dealing with each fairly. This will be a very difficult job. I listened with considerable interest to what was said by my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) about payment and the amount of work which the trustees will have to do. I am certain that is a question which must be considered carefully in Committee.

The Arts Council is a good precedent for our actions. That precedent has been established by giving an independent body a sum of money each year that it may decide how to spend. The Arts Council has been criticised over the years, but it has done an extraordinarily good job in that respect and provides a good precedent for the new trustees of the National Heritage Fund. Like several hon. Members, I am sorry that our recommendation that the £50 million should be reinstated could not be implemented. However, I, too, understand why that could not be done.

At least the Bill will put an end to the Byzantine obscurity of whether the money paid from the National Land Fund each year was Government expenditure. In Committee we went round and round that question, but it is now quite clear. It is an initial grant with a topping-up grant each year. If circumstances demand it, the trustees can go back to the Government and say that they need something for a particular operation.

I do not think that the question of endowment is clear. When I first read the Bill, I thought that endowment was out. As hon. Members will know, we received very strong evidence from the National Trust and others that we should be able to endow properties.

Like my hon. Friend the Member for Kidderminster (Mr. Bulmer), I find that clause 4(1) seems to cover endowment. Perhaps when the Minister winds up he will be able to say quite definitely whether that clause does or does not cover endowment. If it does not cover endowment, I hope that the Standing Committee will look carefully at that and see whether it can be put in.

It is important to remember the definition of "the heritage". Parts of the heritage will not go away. The coastline will not disappear. It can be desecrated or spoilt, but it cannot vanish or moulder away. However, a house or a painting, for example, can moulder away.

My hon. Friend the Member for Staffordshire, South-West referred to how fortunate we are to have such a heritage. However, a great part of that heritage was amassed and built during periods of high prosperity, when people had the necessary money to build or buy something and to preserve it. It is because that is now at risk that these provisions are important.

I am glad that the proposal in the White Paper that individual sums of money should be limited has not been implemented. We live in a difficult time and it would be wrong to limit the trustees in that way. One small point that struck me while reading the Bill was the position of the Ministers. It is fair that the Secretary of State for the Environment and his Department are involved, but the Bill also mentions the Chancellor of the Duchy of Lancaster. At the moment, he is responsible for the arts and heritage, but that may not be so in future. My right hon. Friend is only mortal, and therefore I wonder whether it is intended that these two particular offices of State should be so designated. Perhaps the Minister will also deal with that when he winds up.

It was extremely wise to keep the in-lieu provisions and to go against the original suggestion. The more important aspect is how that fund will operate, especially as regards the destination of objects. The hon. Member for Caerphilly (Mr. Hudson Davies) mentioned that where something is taken in lieu or where something is purchased, it should be possible for it to go back to the house. It would still be owned by the museum, but would be kept in situ so that people could see it in its proper environment.

Clause 3(6) carefully sets down the people who can be given such objects. It is right that that is so. If the fund had been in existence and the Warwick castle Canalettos had been purchased, they obviously should have been in Warwick castle even though that castle is not a recipient under the terms of the clause.

If anyone thinks that this is the final answer for the preservation of our heritage, he had better think again. The taxation system is a most important aspect that must be covered. Reference was made to that in our report, during the last Session. My hon. Friend the Member for Staffordshire, South-West has already said that if two large important houses came on to the market at the same time the fund would dry up. The alteration of taxation arrangements should go hand in hand with the setting up of this important fund. The taxation arrangements must vary from one set of circumstances to another. What is right for Woburn or Chatsworth is not right for a small manor house or a particular picture that is kept in a smaller house. All have their different characteristics and all must be considered. That variation is the great glory of our land.

Much has been said about tourism. I was interested to read last week in the Evening Standard that a survey had been carried out among tourists in London. They were disillusioned with London because it is dirty and expensive, and so on. Tourists do not come here to enjoy our climate or beaches, but to see what can loosely be called "our heritage." Britain's greatest factor is its country houses and the contents of those houses. If we allow them to wither away and become impersonal, unoccupied museums, as they are in France, it will be the greatest tragedy of all. One must encourage and help the private guardian or trustee—I prefer "trustee or guardian" to "owner"—who will look after them. Whatever happens, the trustee or guardian should not be able to walk off with any cash. It must all go on the preservation of the fabric or particular chattel. If either is sold, the full rate of tax must be paid.

The public must have access, and that will vary with the particular house and circumstances of the house and owner. The evidence given to us on the Select Committee seemed to show that that has operated very well and that the arrangements made for each particular house are fair and just. I am sure that that can be expanded. If we put our minds to altering—in many cases not in too great a way—the taxation arrangements, so that they will help those who own such houses to continue and preserve their contents, the Bill will be of great significance.

The sums of money involved will be very large in the future, whether inflation continues or not. The provision made today in the Bill will not be sufficient to preserve our heritage in the future.

7.10 pm

Mr. Clement Freud (Isle of Ely)

On behalf of my right hon. and hon. Friends, I should like to welcome the substance and intention of the Bill, though, like other hon. Members, I have reservations about the limit of its extent.

It is right that successive speakers have paid tribute to Dr. Dalton and the National Land Fund, which was the predecessor of the National Heritage Fund. The concept of the National Land Fund was similar to that in Julius Caesar's will in which he left his parks and walks and castles to the people of Rome. The purpose of Dr. Dalton's fund was that we should celebrate peace by giving open spaces to the people in order that we might remember the war and our victory.

One matter that has never been considered with sufficient care is that the fund was set up not with a notional £50 million but with an actual £50 million. We shall not go into the iniquities of those who wound up the fund, but when it was wound up 11 years later it had had a lifetime expenditure of £750,000 and after those 11 years it was said to be worth £60 million. Interest had been allowed to the fund at a rate much less than what could have been earned from the Post Office savings bank. An investment of £50 million over 11 years produced interest of £10 million. Even at 2½ per cent., simple interest on £50 million would have given £1¼ million per annum.

If the trustees had been normal trustees, they would probably have stood trial, for it is totally wrong for any trustee to administer money in that way. Today it is doubly important that we ensure that the trustees who are appointed this time are so independent of the Treasury that there is no chance of a repetition of that sort of scandalous rate of interest.

If the trustees had done what I am sure they could have done, namely, to say that as trustees of the National Land Fund they would invest in land of some sort until they got land of the right sort, the sums of £300 million and £400 million that we have been talking about would have been realised.

To some extent, the Bill has been brought in to buy off criticism, and I am sorry that the price for which we are asked to vote is so small. Buying off criticism ought to be in real terms and not in the minuscule terms that we are offered. An initial £15½ million and an annual £5½million are mean sums, but then the Government have shown that, in the arts, actual aid as opposed to electoral promises of aid is some way from being generous.

The hon. Member for Buckingham (Mr. Benyon) and other hon. Members have mentioned tourism, and the sum of £3 billion has been referred to. In its latest report, the British Tourist Authority says that £6,800 million accrues to the nation as a result of tourism and kindred activities. That is the figure that we must look at. I can think of no commercial company that would invest 0.2 per cent. from central funds in order to sustain its own prosperity. That is the ratio of 15½: 6,800. It is a niggardly sum.

The hon. Member for Buckingham also said, rightly, that the coastline remains the coastline; but as the National Heritage Fund is the successor to the National Land Fund, it must be appreciated that land can be developed and wrecked. That is why I should like the Minister who is to reply to explain whether land is included in the terms of reference of the National Heritage Fund. There seems to be no specific mention of it in the Bill.

I agree with what was said by the Father of the House, the hon. Member for Dagenham (Mr. Parker), about Heveningham. I have much affection for Heveningham, because I live and was brought up nearby, for to take into national ownership a house with the obvious problems of Heveningham and the tremendous expense inherent in its upkeep had to be a mistake.

The trustees of the new fund must look not only at the merits and the value of a building but at the continuing financial commitments that will be involved. We in Suffolk have never been very bright, but one did not need to be bright to know that we could not keep up Heveningham Hall.

The trustees must be independent of the Treasury, and I should not like to see Ministers use their bounty quite as regardless of national appointments and trends as the Bill would allow them to do. I should like to see a few ex officio appointments among the trustees. It might be sensible to include the chairmen of the Arts Council, the Countryside Commission, the Architectural Association, perhaps even the Royal Society, and their Scottish, Welsh and Northern Irish counterparts.

I am concerned about the power of veto that is given to Ministers. Such powers should not be vested in Ministers and, above all, not in Ministers as casually chosen as the two mentioned in the Bill. The present holders of office may be the right people, but the Bill still gives them more power than a bad man should have or a good man should need.

I should like the powers of veto by the Government and Ministers to be reduced to an absolute minimum, and the Government should re-examine the powers of the trustees provided for in clause 6. That might be a useful point to pursue in Committee. I am concerned that people do not die as conveniently as the Bill suggests they might. It is wrong to suggest that every year about £5½ million worth of proper, true blue, recognised and accepted treasures will come onto the market. It is far more likely, as we have all noticed at by-elections whence always manage not to get the right people dying in the right constituencies, that there will come one year when enormous treasures will come on to the market and another year that will produce a dearth.

I want to see more flexibility provided in the Bill. If we have trustees properly selected with expertise at their command, they should not be restricted to the Trustee Investments Act and the terms of clause 6. They must be allowed to invest in whatever they know about—as the trustees of the National Land Fund were not allowed to do, as a result of which cumulative interest of less than 1.6 per cent. was realised on that first £50 million.

Perhaps there should be a special category of national heritage for objects about which the trustees are not unanimous. No doubt there will be many objects in whose cases some trustees will say "Yes" and others "No". It would not be difficult to create a tax incentive or some small way in which the spirit of the Bill could be achieved—and that spirit is that our heritage should remain in our country.

Before we reach the Committee stage, national experts should be allowed to consider whether, before an item is allowed to leave the country, it should be made slightly easier to find people here to purchase it. If thereby there is a concession in the tax rate, as there is under the Waverley rules at the moment, we should encourage it.

I am steadily sceptical about getting back what has already gone away, and we should consider very carefully before we allow a repetition of the Axel Springer type of bequest. I suppose that that bequest may one day get back if the beneficiary does not, in his own country, have some law passed whereby treasures must remain in situ, but I should like to see us keep what we have, and the spirit of the Bill is what, even with the limited amount of money available, ought to be achieved. If it is achieved by the odd tax concession, we shall give it our blessing.

7.22 pm

Mr. David Price (Eastleigh)

Like all other hon. Members who have spoken in the debate, I welcome the Bill, particularly because we have been waiting 33 years for it. I regard it as the fulfilment of Hugh Dalton's ideal. I think that we can all agree on that. On both sides of the House we are anxious, as has become clear, to do right by the national heritage. This immediately raises two questions. First, what do we mean by "national heritage", and, secondly, how do we as legislators do right by that national heritage?

I welcome clause 3 of the Bill because it gives a definition, in effect, of the national heritage. I ask the hon. Member for Isle of Ely (Mr. Freud) to mark the words in clause 3 which, I believe, cover the point that he raised about the landscape. It so defines the national heritage as to include any land or building which in the opinion of the Trustees is of outstanding scenic, historic, aesthetic, architectural or scientific interest". That is a pretty massive definition, and I welcome it. I defy hon. Members in Standing Committee to find what is missing in it.

In the spirit of this debate, I believe that the definition should be massive and all-inclusive. Let us add a few figures to it. Let us take buildings as an example. Through recent parliamentary questions, I have learnt that there are some 7,500 grade I listed buildings in the United Kingdom. There are also some 280,000 grade 2 listed buildings. That is a very large number of listed buildings. Superficially, all are potential candidates for the sort of rescue treatment proposed in the Bill.

Hon. Members have referred to the question of land, so I turn now to the question of nature conservancy, particularly in relation to land use. I know that the hon. Member for West Lothian (Mr. Dalyell) is very much with me on this matter. It is clearly included in the term "scientific interest". The "Nature Conservancy Review" has identified 735 key sites—its own phrase—of national or even international significance. But only about 20 per cent. of the area of those 735 sites is currently protected by designation as national nature reserves.

"National heritage" is an omnibus term that includes a vast variety of objects and activities which matter to us as British citizens. I therefore welcome the fact that the clause 3 definition includes the concept of associated objects. The hon. Member for Caerphilly (Mr. Hudson Davies) mentioned Van Dycks. There is a very good case in my own part of the country, near Salisbury. The Van Dycks of the Herbert family are an integral part of Wilton House, and it would be a tragedy if, at any time in the future, supposing that that great house came up to be sold, those Van Dycks should be taken from Wilton House, stashed away and put in some public gallery in London. It would be quite wrong. That message comes clearly from all of us who have examined these problems, and that is quite apart from the question of why everything of merit has to come to London anyway—a question about which all of us provincial Members feel strongly.

The national heritage is not simply static works of art. It also involves a dynamic aspect, the living tradition. We have excellent examples in the theatre, opera and music-making. They are all part of the national heritage. It also includes making relevant contemporary use of old buildings.

There is an example in my constituency at Romsey. An early medieval building called King John's House is now being used for poetry reading, music-making and so on. The hon. Member for Warley, East (Mr. Faulds) will be pleased to know that even I perform there. I hasten to add that I do so purely as an amateur. The hon. Gentleman is always welcome to join us.

We have to find, as far as we can, contemporary uses for old buildings. I am sorry that the Father of the House, the hon. Member for Dagenham (Mr. Parker), has left us, because I can tell him what we in Hampshire are doing with some old barns which are listed, finding contemporary uses for them when they are no longer needed for agriculture.

We must look not only to preserving our national heritage but to nourishing it. We must make it flourish. We must strive to make it blossom. Therefore, we need not only the care of the curator and the scholarship of the antiquarian; we also need the green fingers of the gardener and, above all—I hope that I do not sound too emotional—the love of the public. That is and will be the most beneficent form of custodianship.

How do we do right by the national heritage? Doing right means, in this context, doing right both by our predecessors and by our successors as well as by ourselves in the contemporary generation. I recall the great defence of tradition made by the late G. K. Chesterton. He said that tradition was the truly democratic thing to do because one did not limit the suffrage to those alive at any particular time. That is a good way to look at the national heritage—not only backwards but also forwards in the general continuity of trusteeship.

The preservation of the national heritage must be a partnership between the central Government, local government, industry and commerce, private societies and the individual citizen. The variety and permutations of those relationships are legion. I like to think that each of us, in his own part of the country, has experiences to throw into the common national pool of how to achieve our object. I hope that in Committee some of us will have the opportunity to share our thoughts on this important subject.

There is no absolute answer to the question of how we do right by the national heritage. Obviously, public and private moneys are necessary. I draw the attention of those narrow money men who seem always to come in and rule our destinies to paragraph 62 of the report of the Expenditure Committee, which refers, as have three hon. Members already, to tourism. It states: The national heritage is the single most important aspect of Great Britain that attracts tourists". It adds: It is the quality and variety of Britain's national heritage that tourists, whether foreign or indigenous, enjoy. It is essential that it remains available. The hon. Member for Isle of Ely quoted some further figures. Whether we accept the higher or the lower, there is a clear case here. Let us convince the narrow money men that whatever method of calculation happens to be the in one to use, and it varies from decade to decade—cost benefits studies or whatever—this is about the best investment that we can make with our public money.

Having said that, I come to the sorry story of the National Land Fund. I shall not go over it again, because many hon. Members have already accounted it. Suffice to say that between 1946 and 1979–between Hugh Dalton and my right hon. Friend the Chancellor of the Duchy of ancaster—there have been 33 years of plunder, deceit and neglect. That may sound a harsh judgment, but those who read the admirable third report of the Expenditure Committee, or those who do not have the time to read the full report but yesterday read Christopher Brasher's article in The Observer properly entitled "Stopping the Great Land Robbery", have it all there. As Christopher Brasher rightly pointed out, the £50 million of Hugh Dalton's fund would at 1979 prices—without going into all the permutations on interest rates—be about £400 million today. Where has the £400 million gone?

It is true that the National Land Fund was a capital sum. It is true that my right hon. Friend is offering £15,500,000 to get the National Heritage Fund started and subsequently £5,500,000 each year. If one does a modest calculation, and assuming—and this is a great assumption—a zero rate of inflation, one will discover that it will take 70 years for the National Heritage Fund to reach the financial strength of the National Land Fund when it was set up in 1946. That would take us to the year 2049. I suspect that few of us here today will be left in the House to challenge that. That means that it will have taken 103 years to get back to the position at which Hugh Dalton first started the National Land Fund.

Some hon. Members believe in progress. I always think that it is a doubtful concept, but I am sure that we all oppose regression, and this is clear regression. My right hon. Friend will have to do a lot more talking to the hard, narrow money men to make this fund the success which we are all determined it should be. Knowing that his hope and faith, like mine, is always eternal, and that he and his successors in office will succeed with the new National Heritage Fund where the old fund failed, I should like to conclude with the words of a great Cambridge poet, Rupert Brooke, whose sentiments my right hon. Friend and I share: Honour has come back, as a king to earth. And paid his subjects with a royal wage; And Nobleness walks in our ways again, And we have come into our heritage.

7.33 pm

Mr. Tam Dalyell (West Lothian)

The hon. Member for Eastleigh (Mr. Price) referred to the countryside aspects of the heritage. Perhaps I can put the first of a series of questions that I think should be cleared up before we go into Committee. The Countryside Commission for Scotland feels that it should be enabled to receive land acquired through the National Heritage Fund in appropriate circumstances. The wording of the provision relating to eligible recipients would appear to embrace the Commission in relation to its existing limited land-holding powers. In the event of the Commission being given wider land-holding powers in the new countryside legislation that is being considered by the Government, it would appear that this, too, would be satisfactory.

In this connection, the Commission also sought to ensure that voluntary organisations, such as the Scottish Wildlife Trust and the Scottish Youth Hostels Association, should be enabled to be the recipients of property acquired through the National Heritage Fund. It is not absolutely clear that these bodies will be eligible, as this will depend upon their having in their constitutions purposes for the provision, improvement or preservation of amenities enjoyed or to be enjoyed by the public, or the acquisition of land to be used by the public.

My first question is whether the Minister can say anything about the countryside aspects that were touched on by the hon. Member for Eastleigh, because that is certainly a cause of some concern outside the House.

Secondly, I should like strongly to agree with my hon. Friend the Member for Dagenham (Mr. Parker) that the Laxton position has a wide interest well firth of Nottinghamshire and the Nottinghamshire Members of Parliament who have tabled an early-day motion on this subject. This is a British issue, not a Nottinghamshire issue. It would be no dishonour to the Government if they were to say that on reflection, after all the fuss that has been made by the House of Commons, they intend to retract that decision.

Thirdly, I should like to raise an issue that was raised by the hon. Members for Kidderminster (Mr. Bulmer) and for Isle of Ely (Mr. Freud), without going over the whole story of the Land Fund to which other hon. Members have referred. I think that there is something of an issue here. Can one just say "Goodbye" to the war memorial aspect of this issue? After all, it was not Dr. Dalton's fault. As I understand it, it was the decision of the post-war House of Commons, supported by all parties at that time, to provide a national memorial, in memory of those who died in the Second World War. It remains a very live issue as to whether, some decades later, one can just sweep under the carpet the memorial aspect of all this. I want to be constructive about it. I hope, possibly in all parts of Britain, that certain properties will be earmarked as memorials in the way intended by oar predecessors in the second half of the 1940s.

Mr. Alexander W. Lyon

As I understand it, what Dr. Dalton had in mind was not so much country houses but open moorland and open space which would be easily available to members of the public. I think that that would be a suitable memorial.

Mr. Dalyell

That was my understanding of the position. That is why I couple this with my opening remarks about the countryside aspects that concern the Countryside Commission for Scotland and, doubtless, many other bodies. Certainly, there is no dispute between my hon. Friend and myself on that issue.

I now come to a slightly jarring note. I think that hon. Members would agree that, possibly, of all our colleagues I am the least given to Scottish nationalism. But when I heard the Minister going on about the virtues of the English National Trust, to which I willingly accede, without a mention of the Scottish National Trust, where director James Stormonth Darling and his colleagues have done much pioneering work, it jars even on me. I do not say that it makes me into a nationalist, but some of us have thought for a long time that it is that kind of ill-thought-out statement that creates the problems which, heaven knows, this House spent four years discussing.

The Under-Secretary of State for the Environment (Mr. Hector Monro)

As a card-carrying member of the National Trust for Scotland, I can assure the hon. Gentleman that it will not be forgotten when I reply to the debate.

Mr. Dalyell

I welcome that assurance. I must now say that much of the meaty speech that I shall offer to the House is the result of two meetings that were called by the National Trust for Scotland, one five weeks ago and the other on Friday at five o'clock. Indeed, many of the hard items about which I am asking come from the meeting that was convened at 5 Charlotte Square rather than out of my own imagination.

The first issue, which I raised in an intervention, is whether the Secretary of State for Scotland should be one of the appointing Ministers. In clause 1(2), the appointing Ministers are said to be: the Secretary of State and the Chancellor of the Duchy of Lancaster". It is understood that that is intended to meet the case of the Secretary of State for the Environment acting with the Chancellor of the Duchy of Lancaster. However, it is desirable that the Secretary of State for Scotland should be an appointing Minister. As I warned the Chancellor of the Duchy of Lancaster in his opening speech, I should like a statement on that matter.

The reason for making the Secretary of State for Scotland an appointing Minister is not just to satisfy a quibble, nor is it an expression of Scottish pride. It is because, in the real world, there is a need to ensure that the Scottish contribution to the national heritage is properly and adequately represented on the National Heritage Fund trustees. The Secretary of State for the Environment has no responsibility for the conservation of scenic interest in the Scottish countryside. That is only one example. Therefore, we are concerned that the Secretaries of State for Wales and Scotland, who are shown as sponsors of the Bill, should be regarded as appointing Ministers. We were concerned about how they would be consulted in the working of the Bill. I am sure that the matter can be easily cleared up.

Clause 3(1) deals with the question of enabling. I wonder whether the word "assisting" could not be read narrowly to rule out 100 per cent. grants whereas "enabling" is sufficiently broad to stand by itself. "Assisting" implies partial help only, whereas "enabling" is more the word we want, as it is envisaged that the trustees might make 100 per cent. grants for the acquisition of property in certain cases. In this clause the words "acquire, maintain or preserve" go practically all the way. However, I should like to see the words "or endow" added to those words. After all, in the Historic Buildings and Ancient Monuments Act 1953, in section 4, grants for the preservation of historic buildings, their contents and adjoining lands are dealt with. Section 2 of that Act deals with grants to the National Trust and states that the grants can, if the Minister thinks fit, be made by way of endowment". In other words, there is a precedent for the use of the specific word "endowment" in that Act. I should like to see it written into the new National Heritage Bill. That would make it clear that endowment funds are permissible, if the trustees so wish.

Clause 3(1)(c) deals with an issue that was touched on by the hon. Member for Eastleigh. It refers to: any land or object I believe that the additional words: allow money to be made available for acquiring, maintaining or preserving the natural habitat associated with a building or structure are required. That would enable woodlands, plants and animals to be taken over and looked after.

The issue is raised of whether we are concerned with horticulture and gardens. A great number of gardens of national importance are in desperate need of financial help. Some are attached to historic houses while others are on their own, but they should be eligible for grants from the fund. Parliament has already decided that outstanding gardens come under the definition of land of scientific interest. In certain cases they might come under the heading of land of outstanding scenic interest. Nevertheless, it will be helpful if the word "horticultural" can be added in clause 3(1)(a) to clarify the position. Frankly, I do not expect a "yea" or "nay" to that matter tonight. However, it would be helpful to know the Government's general attitude before the Committee stage.

Clause 3(5) enables the trustees to accept gifts. Will such gifts be free of both capital transfer tax and capital gains tax? If trustees are empowered to accept such gifts, it should be possible to encourage donors to make them. In clause 3(1), does the word "maintain" give power to grant annual maintenance grants for the day-to-day running of property as well as capital maintenance grants? It is important that a statement should be made in the winding-up speech on the Government's general philosophy towards whether money should be made available for running costs rather than major capital costs. It is often the case that comparatively small running costs are extremely important. I say that as a member of the council of the National Trust for Scotland.

It is important that in clause 3(1) there should be clarification that the words include the power for the trustees to make 100 per cent. grants which would enable rather than assist. There is also the question of the power of the trustees to make annual or periodic maintenance grants towards revenue deficits as well as capital grants. Also, I have raised the question of the power of the trustees concerning the endowment of a whole property. It is important that the trustees can help, by way of a consortium, towards annual maintenance and that they can encourage others to help towards endowments. Will the trustees be acting like the Pilgrim trustees who have the power to give certain help but not total help? No doubt, that matter will be pursued in Committee.

I should like clarification of the phrase: by or for the benefit of the public". Does that phrase cover a wildlife sanctuary? Entrance to a wildlife sanctuary may well be limited. Indeed, in certain manor houses to which my hon. Friend the Member for Dagenham referred in his speech, it may not be sensible to encourage maximum visiting on some occasions. Does the phrase include the concept of people being able to visit on occasions but that such visiting will be limited?

On clause 3(6), it is the view of John Imre of the Scottish Records Office and it is the view of the British Records Association, as keeper of the records, that archive institutions should be eligible recipients. Presumably, the Bill was drafted for the arts departments. Will similar eligibility apply to archive collections as well as museums and galleries? Mr. Imre attended the meeting held to discuss the Bill that was organised by the Scottish National Trust last Friday. He would like to see the Scottish Record Office and the Public Record Office in London included in schedule 2, part I.

I come to an extremely important issue, which has been referred to by the hon. Member for Staffordshire, South-West (Mr. Cormack), my hon. Friend the Member for Caerphilly (Mr. Hudson Davies) and a number of others, concerning the question of allowing objects to be left in situ. To take an example, Hopetoun House in my constituency is frequently opened to the public by Lord Linlithgow. Since the 1914 war many houses have been demolished and their contents dispersed. In addition, many more have lost furniture and decorative items specifically designed for them, due either to family division or to their being disposed of in sale rooms. Comparatively few great houses still contain their original furniture and fittings, and hardly any of the more modest gentlemen's houses survive intact.

It is the professional opinion of David Learmont, the curator of the Scottish National Trust, that at Hopetoun 95 per cent. of the furniture, looking glasses and girandoles remain in the house, but even here there are one or two unfortunate gaps in the suite of furniture that James Cullen supplied for the house in the middle of the eighteenth century. One of a pair of very high-quality night tables designed for the state bedroom has gone, to give but one sad example.

The quality of the furniture at Hopetoun is unquestionable, wherever it is displayed, but Mr. Learmont would submit in his professional capacity that its real importance lies in the fact that it is still in the house for which it was designed. Moreover, in recent years it has been restored to its original position. One could say that it forms part of the original architecture.

In less important houses, the quality of the contents is not quite so obvious, but in many cases the furniture would have been supplied by a prominent provincial cabinetmaker, and it plays an equally significant part in our heritage, as does the great house with its elaborate contents.

Portraits painted by local artists of considerable talent often adorn the houses of lairds and of the squirearchy, and they are part of the country house scene. Once they become dissociated from their original places of display, they lose a great deal and tend to rank with the ordinary and commonplace. No local museum or art gallery, whether national or provincial, can ever quite take the place of the domestic setting with all its historic associations.

Are the Government satisfied that the Bill covers the whole question of putting valuable and especially not so valuable treasures at an advantage in situ? The break-up of collections must concern us all.

I am glad to see that in clause 5 the Bill makes provision for acceptance of gifts. It may be that under other legislation such gifts would be exempt from all taxes such as capital transfer and capital gains tax, but I should like to see that made clear to encourage gifts to the National Heritage Fund. Further, has it been assessed whether bequests and legacies to the National Heritage Fund would mean that such bequests might not go to other charities in the same field? There might be competition here, and I should like to know whether the Government have considered that.

Clause 3(6) deals with eligible recipients and appears to be widely drawn. I am glad to see that in subsection (6)(b) the old wording used by Hugh Dalton has been carried forward. Does subsection (6)(a) cover such bodies as the National Trust and the National Trust for Scotland? I should like to think that it also includes charitable trusts such as the Scottish Wildlife Trust and the Royal Society for the Protection of Birds. Perhaps the Minister will deal with those matters.

The purpose of the Bill is to preserve and care for the national heritage, but nowhere is the national heritage defined. In the past there have been discussions in the House of Commons and the House of Lords as to what it meant. On 12 July 1979, in the Lords debate on a Bill that was promoted to deal with these matters, Lord Reigate said that the trees, flowers and wildlife conservation and so on should be looked upon as part of our national heritage. He said that he would like to see this point being considered and possibly the Bill extended if, in the view of the Government lawyers, it needed to be extended. Buildings needed their context for full public enjoyment and the countryside needed its trees and flora and fauna for its full enjoyment. I could not put the matter more simply. If the National Heritage Fund is to be used to help preserve the contents of buildings, as it will, surely it should also help to preserve everything that makes the countryside attractive for the benefit of the nation and the enjoyment of the people. I am speaking at some length on the matter because I should like to see an amendment—preferably from the Government—to cover in general terms wildlife conservation on land which in its own right is worth preserving or is adjacent to historic buildings.

The Bill makes clear that the fund can be used to preserve land, and in Scotland at any rate "land" includes everything growing on it, which I assume would cover forestry activity. I believe that the specific point about wildlife conservation could be brought into the Bill. The Scottish National Trust lawyer, George Russell, has gone into the matter in some detail, and it is a substantial point. It would be preferable for the Government to bring forward an amendment, if they concede that clarification is necessary, rather than have an extended Committee stage.

I intervened to ask the Chancellor of the Duchy of Lancaster about stamp duty, and that brings me to clause 9. Will stamp duty extend to private treaty purchases made by the fund or by those bodies that it assists with grants? Will acceptances-in-lieu be exempt, even if the duties of the Ministers are passed over to trustees, as in clause 14? If there is a general switch from acceptance-in-lieu to private treaty sales stamp duty, charities will increase and there will be a need to fund the trustees additionally for that purpose. That point was put by Mr. Jeremy Benson, who has been helpful to hon. Members on both sides of the House and who over the years has been of extreme help to conservation bodies. Mr. Benson points out that, although it is possibly a bit of a quibble, the generous thing would be to exempt all purchases by private treaty, whoever may make them, from stamp duty, to the extent that they are made with National Heritage Fund money—that is, a 50 per cent. grant bringing in a 50 per cent. exemption. To be really generous, all private treaty sales made by museums, if eligible for National Heritage Fund grants, should be totally exempt from stamp duty. I shall not quibble if the Minister says that stamp duty is a matter for Committee, but it is important.

Mr. Benson also makes the point that it seems that VAT will be payable by the trustees on any works on repairing buildings in their ownership. It will also be payable by some of those who receive grants from the trustees to carry out repairs. In contrast, the Department of the Environment will not pay VAT if it repairs a building that it has purchased or if it accepts one in satisfaction of tax in future. In that confused situation, it would be preferable to exempt the trustees from payment of VAT. It is difficult to imagine that they would ever have to charge VAT and so have a credit to set against tax payable by them. It might seem an esoteric point to raise on Second Reading, but Mr. Benson, with his customary courtesy, has given the Department a copy of the paper, and perhaps there has been discussion on that point.

A point that I am concerned about and which also concerns Mr. Stormonth Darling, the secretary of the Scottish National Trust, is whether the National Heritage Fund is to be considered a heritage body for total exemption of CTT and CGT under section 6 of the 1975 Finance Act. It may be that the Minister in his reply can clear the air here and say that there is total exemption. That would certainly help us before we start to table amendments to the Finance Bill.

The National Heritage Fund is intended to provide a mechanism to secure for the nation a property of national importance by meeting the tax liability arising and due from a taxpayer. The tax is due and must be satisfied, and the fund is intended to provide a means of doing this. I understand that that is the position. I may be a bit thick about this and possibly should have grasped the position from the opening speech by the Chancellor of the Duchy of Lancaster, but some other people are also not clear as to what exactly is the position about moneys in lieu. This has not been made abundantly clear, or crystal clear. At least, it has not sunk in to some of us. Perhaps it ought to have sunk in. It would be helpful if a statement could be made as to precisely how the money that is being made available is affected by the in-lieu clauses, because this could affect very considerably the amount that is available for the purposes with which we are all concerned.

I turn now to a matter which will doubtless come up in the discussion of the Finance Bill—exemption from corporation tax. I am asked why we have to wait for the next Finance Bill, for example, to consider the question of gifts to the trustees under CTT and CGT. What about CGT on sales to the fund? Here we are not clear as to what happens. There might, for instance, be a sale to the British Museum. This might be complicated by the possibility of a sale of a totally unencumbered object and one already held under conditional exemption.

This brings me to the vexed question of indemnification. Either of the Ministers concerned may indemnify, and presumably this also applies to the Secretary of State for Wales and the Secretary of State for Scotland. The Ministers find the cash, do they not, if they have to compensate someone else after a loss, by way of Supplementary Estimate? Does this compensation come out of the National Heritage Fund? In the first year the £15.5 million is split by the Ministers, and perhaps, if somebody has to be compensated, the trustees would then get less in consequence.

I also raise the question whether in the Bill the word "indemnify" in the explanatory statement is confused with the word "compensate" in the first paragraph. It might be helpful to explain at some stage why the parliamentary draftsmen have chosen "indemnify" in one context and "compensate" in another.

I make no apology, Mr. Deputy Speaker, for having put forward the fruits of the meeting that the Scottish National Trust took the initiative of convening last Friday and the thoughts of many people in Scotland who have given a considerable amount of their time and their legal, professional and architectural expertise to the Bill.

I will accept what the Chancellor of the Duchy of Lancaster said—that out of small acorns grow great oak trees. But all of us here tonight would wish, if we are involved in the Bill and take an interest in these things, to be party to getting it right first time. It is a fact of parliamentary life that it is much easier to say all these things on Second Reading, to state one's worries and then to hope that before the Committee stage takes place—especially if it is to start in the last week before Christmas, which will not give us much time—the Government will come forward with appropriate amendments.

If I have spoken at length tonight and taken up more than my share of time, Mr. Deputy Speaker, it is in the hope that in the cold light of day the Government lawyers and the parliamentary draftsmen will sift through the points that have been made and perhaps come up with Government amendments that will save us a great deal of time. That is, on the whole, far more satisfactory than having Back Bench amendments, imperfectly drafted and without the legal expertise that is available to the Government.

I say to the right hon. Gentleman, who has patiently sat through my speech, that I hope my reward will be a series of Government amendments which will be on the Order Paper before we start the Committee stage of the Bill.

8.5 pm

Mr. Christopher Murphy (Welwyn and Hatfield)

When one discusses the subject of the heritage, there is an almost inevitable phrase that is brought forth on such occasions—"the quality of life". But I venture to suggest that this should not be treated as simply rhetoric. It is a fundamental concept that is a valuable component of Conservative thinking and one which clearly infuses the Bill.

The beliefs of those of us on the Government Benches have at their central core the view that the freedom and re- sponsibiiities of the individual should the focal point of attention to which the State is an adjunct, not a goal in its own right. As part of that recognition of the importance of the individual, we accept that the conditions in which he enjoys his life, and in which he maximises his opportunities, are a legitimate concern for the Government.

Education and social services are obvious examples of this, but equally an understanding of the importance of culture in the widest sense of that word is needed. The role of the arts and of our heritage is fundamental to the future condition of our society and of the individuals who are its components. The quality of life demands that we should support that which enhances the individual's understanding of himself and of his society. Conservatism holds that the character of the cultural benefits that our heritage can provide for that individual.

The Bill will add to the framework of society which provides the opportunities for the individual to exercise his freedom and his rights. Legislation such as this gives due attention, as it rightly should, to the cultural benefits our heritage can provide for that individual.

I hope that the advantages of such action on the part of Her Majesty's Government are apparent to all but the most philistine of critics. There is the conservation of that which has intrinsic value, both aesthetically and historically; and there is the educational need of preserving for future generations the achievements of our predecessors, both artistic and skilful. In addition, there are economic aspects which cannot, nor should, be ignored in terms of the importance of tourism to our country; and there is the impact upon our lives of the increase in leisure time.

The Bill seeks to provide the opportunity to protect important strands of the essential fabric of our nation. It seeks to defend our national heritage within broadly defined parameters. It seeks to preserve both countryside and building, both natural and man-made beauty. It seeks, in short, to raise the quality of life.

In welcoming the Bill, I can do no better than to conclude by quoting from the election manifesto on which the Government were so decisively elected: We favour the establishment of a National Heritage Fund to help preserve historic buildings and artistic treasures for the nation. Yet another election pledge is being fulfilled by the Chancellor of the Duchy of Lancaster, and I am privileged to be able to give him my full support in helping to secure this measure.

8.9 pm

Mr. Alexander W. Lyon (York)

I was a member of the Select Committee which was the parent of the Bill, and therefore I would also like to welcome its introduction, although it differs a little from the recommendations of the Select Committee.

I soon found, when we came to discuss this somewhat complex subject, that the heritage lobby is at least as vociferous as the animal lobby, but probably not quite as vociferous as the university teachers in support of their pay claim. But that it was a lobby that was single-minded in its devotion to what it thought was the injustice of the National Land Fund made it sometimes a little obscure in its reasoning.

When the matter came to be sorted out, after we had heard both sides of the argument, it became clear that the National Land Fund which was set up in 1946 was an allocation of money to Government stock, and entered as such in the Treasury books, and that very little use was made of it until 1957, when the Public Accounts Committee had recommended that the original £50 million should be repaid to the Treasury and that the interest which had accrued should be all that remained.

That being so—that is the surviving amount of £15½ million which is the basis of this National Heritage Fund—there never was any question in my mind that we were talking about a public expenditure of £50 million in 1946 which had been hypothecated by the Treasury for a particular purpose. Of course, the Treasury would never admit it and I could not persuade the Select Committee to assert it, partly because the Committee did not like the word "hypothecated" but also because it thought that it would put the Treasury's back up.

But the truth is that this is one instance in our recent history of hypothecated income. That is something that we should use in future. The purpose of a particular form of income can sometimes, with great merit, be a particular form of expenditure. I should like to see the BBC financed in just that way, by raising expressly through taxation a certain sum which would go to the BBC without any interval in between. I should not like that point to be lost in our general welcome of the Bill.

Although I share with all those in the heritage lobby—many of whom are represented here today—the general sense of admiration for what we talk about as "the heritage" and a sense of the importance to our cultural and social life of the heritage in its widest sense, I do not believe that we can appropriate land, art or property generally to a position which takes it outside the realm of priorities of any Government's spending programme and sets it above the needs of the old-age pensioner or the hospital service or any other item of public expenditure.

Therefore, it was necessary to preserve the distinction between a decision about how much was available at any given moment to be spent on the heritage and what use that money should be put to in deciding among the many demands upon such a fund and the priorities to which it should be allocated.

The House will have noticed from previous speeches that so many demands have been made upon the prospective £5 million a year that the trustees will simply not be able to meet them in anything like full measure. Inevitably they will have to ask themselves not "Is this good?" but "Is this so good that we ought to spend our small amount of money on securing it for the nation, as against something else which might have great worth but may not be quite as fruitful for the nation as a whole?"

That decision, which in essence is one of artistic merit, has to be determined by people with a very different kind of mind and prospectus from those who have to decide how much money is available in the first place. For that reason, I was all in favour of creating a heritage fund with trustees who had artistic qualifications to decide what they regarded as of the highest priority and what was not of such priority, and leaving to the Treasury the issue of how much should go to the fund, to be decided on the merits of overall public expenditure priorities. I am glad that, on balance, that is the way in which this has come out.

I feel that there was something to be said for the Labour Government's White Paper, which would have abolished the in-lieu provisions and allowed the fund to make its assessment of what it desired to buy when estates came up for death duty or for capital transfer tax and to make provision within the allocation to the fund so that it could make that kind of judgment and buy from estates.

I think that that was a better method than simply allowing the Treasury—or, in this case, Ministers—to go on asserting that a particular picture or house was of such outstanding merit that it could qualify for the in-lieu provisions and thereby deprive the Treasury of resources which would have come to it as a result of CTT. That again is to mix up the two completely separate types of decision making, namely, the artistic provision and the amount of expenditure that should take place.

To some extent, that is confused by the way in which the Bill is drafted, but the transfer of those functions in due course from Ministers to trustees, which is at least a power retained under the Bill, means that in time, as people begin to see how irrational it is that the Treasury or Ministers should make those artistic judgments, the objective that I was seeking would come about.

For that reason, I was prepared to agree to the unanimous recommendations of the Select Committee report that there should be a National Heritage Fund and that it should take over the outstanding money in the National Land Fund, but I was not prepared to go further in terms of future revenue than saying that that should be a matter to be determined by the Government of the day, in line with their overall spending priorities—save and except, a little under pressure, that I thought that it might be right that the original £50 million should be made up again, since it should never have been taken from the National Land Fund in the first place.

When we say that, let us remember, despite what was said by the hon. Member for Isle of Ely (Mr. Freud), that the plunder and atrocities were committed not by civil servants or Treasury Ministers but by the recommendations of a Select Committee of this House. It is fitting that we should deal with a certain humility with wrong judgments of the past.

The upshot is that the original sum, whether it remains £15 million or is the original £50 million, is an allocation which was made by the Government in 1946.

The public expenditure commitment was in 1946. Any notion thereafter that anything paid out of it was a further addition to public expenditure is nonsense. Yet we have not been able to persuade those in the Treasury of that, even today. They go on insisting that the National Land Fund was only a separate entry in the accounts in a different area of the books and that the money did not actually exist.

If the money did not exist, it is difficult to see how interest accrued over a period—albeit somewhat limited interest since the money was in Government stock. The truth is that it was an expenditure and it was made in 1946. The importance of the point is that the £15 million which will be the basis of the National Heritage Fund will count against the right hon. Gentleman's Vote as public expenditure this year. As such, it comes within the Government's cash ceilings on overall expenditure.

That means that £15 million, which otherwise could have been made available for something else, will not now be made available. It may be that this is too abstruse a point for the House to take in at 8.20 pm on a night when the Chamber is empty. All the same, £15 million in present circumstances is a lot of money. There are a number of spending programmes which could usefully benefit from an extra £15 million. I know it is late in the day for the Minister to consult his right hon. Friend, but we are told that there is to be a further attack on public expenditure.

This £15 million ought never to have been brought into the net. It was never money which the Government could properly describe as public expenditure. The truth is that the £15 million was not available for disposal by the Government. It had been hypothecated back in 1946 and should never have been brought into the net of public expenditure now. For that reason, the right hon. Gentleman has something of an argument to use against his right hon. Friends when the allocation of resources is being considered in future. I would give him a great deal of support if he were to keep the extra amount for this particular purpose.

I admire much of our heritage, and though I like to go and see the great houses of England and walk the areas of moorland we have been discussing, I think that there are many other pressing demands on public expenditure. The pleas of Conservative Members that stately home owners are in real difficulty and need all kinds of concessions in capital taxation to enable them to live in their houses fall on my ears with less effect than they do on the ears of some hon. Gentlemen.

Sir Robert Cooke told the Environment Sub-Committee, with great pain and anguish, about the plight of those living in stately homes with bad plumbing and bad central heating. When there are many people in this country without adequate roofs over their heads, I weigh their plight in the balance against the maintenance of the heritage and the people living in it.

I am sorry that I am not part of the general consensus which was quoted by the hon. Member for Staffordshire, South-West (Mr. Cormack), but I do not accept the advice given in another place by a Labour Minister that the best way to look after the heritage is to leave the people whose ancestors obtained their property by various means in possession of it.

Mr. Faulds

If my hon. Friend has studied these matters, does he not understand that what he suggests would eventually lead to a situation where we would have, as they do in France, dozens of empty houses bereft of people, bereft of furniture and a bloody bore to go round? Cannot my hon. Friend take that point?

Mr. Lyon

I have never been able to equate my language with that of my hon. Friend the Member for Warley, East (Mr. Faulds). Whether the stately homes are a sanguinary bore or not, the fact is that a considerable number of stately homes in England are in that position. They are, nevertheless, extremely interesting houses to go round. I have not found—exceptin two houses—that the fact that I have to walk around on a carpeted footway between balustrades put up for the day makes the house more intimate than if the balustrades were there permanently and the family did not use the house on the occasions when the public did not manage to get in.

In assessing the beauty of a house and the value of its contents, it does not matter too much whether people live there. Surely my hon. Friend is not suggesting that the Kremlin, with all its treasures, is not a place to which one goes on pilgrimage and to admire its treasures.

Mr. Faulds

I reiterate that if the family has gone from a house the likelihood is that the furniture and the paintings will be dispersed. If my hon. Friend is saying that he thinks that that can be prevented, he should be supporting the creation of an even larger National Heritage Fund and not having reservations about its use.

Mr. Lyon

On the contrary. I am glad that my hon. Friend raised the issue, since obviously I have not communicated what is on my mind. I shall try to do so. If the State is prepared to buy a stately home with all its contents and to preserve it, it may do the job better than a family could on its own. There are plenty of examples of improvements taking place after a property is transferred from a family to the State.

I am anxious that such houses and their contents should be preserved, but I do not necessarily accept that that is best done when the original owner still lives there. The State's funds should not be used to provide more salubrious living accommodation for people who have inherited a house and its contents. There could be exceptions. I merely argue against the principle.

We must decide how much of our total resources should be spent on the preservation of the heritage. I do not accept private ownership as a sine qua non for preserving the heritage. I welcome the Bill.

8.26 pm

Mr. Richard Alexander (Newark)

I have pleasure in contributing to this debate. It has been interesting if at times somewhat obscure and rarefied. We have all enjoyed it.

Clause 5 states that, subject to the provisions, the trustees may accept gifts of money or other property. That is a good idea. We all like gifts. Under clause 8 the Commissioners of Inland Revenue may accept any property in satisfaction of any amount of capital transfer tax". It is not clear whether the State can have two bites. If someone makes a bequest to the fund, will that be taken into account when assessing liability for CTT? I hope that it will.

Loans by private individuals to national exhibitions should be given favourable treatment. While an item is on loan to a museum, the owner does not have the use and enjoyment of it, and yet on the owner's death CTT is leviable on the increase in value that has taken place in that time. I hope that some relief will be given to an estate in such circumstances. I think that that is the argument made by the hon. Member for Warley, East (Mr. Faulds), and I am pleased to have his support.

Clause 3(1) empowers the trustees to make grants and loans out of the fund to acquire land. I draw my right hon. Friend's attention to the early-day motion in my name which has the support of hon. Members from the three main parties. It deals with the subject which was referred to by the Father of the House, the hon. Member for Dagenham (Mr. Parker)—the problem of the Laxton estate, in my constituency.

Laxton is, without doubt, the last surviving village in the country with open fields which are cultivated in the same way as they were cultivated in the Middle Ages. The estate covers approximately 1,800 acres. It consists of 15 working farms, six smallholdings, four houses and a public house, where, incidentally, I celebrated my stag night many years ago. It was bought by the Conservative Government in 1952 from the Manvers family, with the declared intention of maintaining it permanently as part of our agricultural heritage.

This land is unique. It is mentioned in textbooks. It runs at a profit. It is, I repeat, the only remaining example of how many of our villages have evolved over the centuries and how those who lived in them worked the fields prior to the enclosures. Parties of schoolchildren visit Laxton regularly, and people from abroad visit it regularly. It has been described recently as the equivalent of Stonehenge. The crops are farmed in strict rotation. There is a court leet and farmers are fined a small amount if they stray from one strip of land to another.

I was delighted that the Father of the House raised this point in connection with our national heritage. There is no one more enthusiastic than I am that the Government should not hang on to unwanted assets merely for the sake of it. But this land is part of the nation's heritage. There is no doubt about that. Its sale would fetch about £2½ million, or perhaps two days' losses from British Steel. The Government cannot shirk their responsibility for Laxton.

The answer given by my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food in a written answer, in which he said that the estate would be offered only to those able to give the necessary assurances about the future of the system and the welfare of the tenants, is inadequate. That is no reassurance. First, it goes against the commitment given by the Government as long ago as 1952–a Conservative Government, after a period of Labour Government—that they would maintain the land permanently as part of our agricultural history. The proposed sale would go back on that assurance.

Even if someone were able to purchase the land, would that purchaser be any more likely, for ever, to honour any assurance given? If the Government find it convenient not to honour the assurance given in 1952, and even if the purchaser honestly believes that he can maintain the land, circumstances could intervene whereby he would find it inconvenient for himself or his successors to continue this undoubted part of our national heritage in the way in which it has been continued for centuries past. There would be no one to enforce it, and by the time the Minister of Agriculture got round to doing anything about it the area could be ploughed over, and it could be enclosed.

Fortunately, there is provision in the Bill for the Secretary of State or bodies such as the National Trust to receive grants to acquire, maintain or preserve areas such as Laxton. Therefore, I hope that if it is not possible to let the National Trust have it—I hope that that possibility will be considered—the Secretary of State will take it over under this provision.

Mr. Gordon Oakes (Widnes)

I hope that the hon. Gentleman does not misunderstand me. I am with him 100 per cent. in his attempt to retain the estate, which is unique, I think, in Europe. But surely he is not seriously suggesting that the Ministry of Agriculture should sell off the land and then use hard-pressed resources to buy it back again. That would be double-dealing of the worst order.

Mr. Alexander

I am obliged to the right hon. Gentleman for his intervention. I had it in mind that under the Bill all that need happen would be a transfer from the Minister of Agriculture to the Chancellor of the Duchy of Lancaster or the Secretary of State for the Environment. I see no possibility of selling off the land, and I am glad that the right hon. Gentleman has made the point. I am very much with him on that.

If we could transfer the land to the National Trust, the Secretary of State or the Chancellor of the Duchy of Lancaster, as the nation already owns it, they would be able to continue to run it at a profit. That would be for the benefit of generations yet to come. In that way we should not only be talking about our heritage, as we have properly done when discussing the Bill, but should be able to do something about it. The present position has lasted for the past 1,000 years. For 1,000 years to come people will be able to say that the 1979 Parliament, of all parties, managed to save Laxton for the nation.

8.36 pm

Mr. Jim Callaghan (Middleton and Prestwich)

We heard earlier about little acorns growing into large oaks. There is a Chinese proverb that a journey of 1,000 miles begins with but one step. Tonight the Chancellor of the Duchy of Lancaster has taken a very important step on a long journey, which will ultimately help our national heritage. Therefore, I heartily congratulate him.

The establishment of the National Heritage Fund is undoubtedly one of the most important pieces of heritage legislation to come before the House since the war. It has been said that the Bill is simple in principle but complex in detail. I agree with the latter part of that statement. Having sat through most of the debate, I should like to comment on, and ask questions about, parts of the Bill.

The Bill seeks to Establish a National Heritage Fund for providing financial assistance for the acquisition, maintenance and preservation of property of importance to the national heritage". I am sure that we all agree with that.

The Bill also amends the law concerning the acceptance of property in satisfaction of capital transfer tax and empowers the Secretary of State and the Chancellor of the Duchy of Lancaster "to compensate certain institutions and persons if objects lent by them are lost or damaged".

I wonder whether the liability for compensation for objects which are passed from one area to another in this country also applies to works of art loaned for exhibitions in other countries. Some time ago the Vatican authorities—I believe that the matter went as far as the Pope—agreed that a Michelangelo Madonna and Child statue housed in the Vatican might be sent on loan to the United States. The Vatican authorities accepted liability for the statue's safe arrival and return.

Yet recently the Russian authorities asked us to send a work by Michelangelo to Leningrad on loan, in exchange for some Russian works of art, and the Minister declined. What was the reason? Was it the question of liability? Was the Minister afraid that in the event of damage or loss he would be liable? I should be most grateful if the Minister would enlarge on that.

The Bill also provides for the abolition of the National Land Fund. That fund was set up in 1946, with £50 million allocated to it, as a public war memorial. I am sorry that it has had to be wound up. Nevertheless, that fund was to cover the acquisition of land in lieu of death duties or to help bodies concerned with the enjoyment of the countryside.

The scope of the National Land Fund was extended by the Historic Buildings and Ancient Monuments Act 1953, and the Finance Act 1956 further extended the fund to include the acceptance of pre-eminent works of art. So the National Land Fund was the forerunner of the Bill. Sadly, little use was made of that fund, which had grown to £60 million by 1957. In that year the fund was reduced to £50 million, and it is a pity that that £50 million could not be used today.

As late as 1977, many hon. Members argued that the assets of the National Land Fund should have been used to save Mentmore and its contents for the nation. Because of the concern shown over Mentmore, public pressure has remained high about the need to change the system to prevent such a tragedy from ever happening again. Consequently, this matter was discussed by the Expenditure Committee and the Bill is largely based upon its recommendations.

To prevent another Mentmore and the consequent loss to the nation of valuable works of art and paintings that are sold abroad, Ministers are to make annual payments into the National Heritage Fund. I have heard various figures bandied about during the debate as to the total sum of money. It has been mentioned that initially the sum of £15 million—the residue of the National Land Fund—will be placed at the disposal of the National Heritage Fund.

I want to ask where this £15 million will come from. My hon. Friend the Member for York (Mr. Lyon) asked a similar question. Will it come from the National Land Fund, as we have been told, or will it come from the total allocation of funds to art? If that is where the money is to come from, it will obviously mean a net loss to other art institutions throughout the country. I ask the Minister to clarify that point. It has also been said that £5.5 million is to be given to the fund in each subsequent year. Again, will that £5.5 million come from the general allocation to art funds?

The Inland Revenue has had some power to accept property in lieu of tax since 1911,so the idea put forward in the Bill is not new. If we look at the history of the matter, in only two cases was that power used between 1911 and 1946. The Finance Acts of 1975 and 1976 extended the provision of the capital transfer tax which replaced estate duty. That was a move in the right direction, and I shall say why. The system is beginning to work because the Benjamin Britten manuscripts, covering the whole range of his work, were accepted in lieu of death duties and allocated to the British Library. A finer thing could not have happened.

While I believe that the measures in the Bill will play an important role and help to ensure that our heritage is preserved, I feel that those measures could go further. I am sorry that the Chancellor of the Duchy of Lancaster is not present, because I should have liked to put one or two questions to him. Perhaps he will answer them subsequently. It is important that the Minister with responsibility for the arts should go further than he has done in the Bill. He should create a climate in which the arts of today, as well as those of the past, can flourish.

I ask the Minister to give serious further consideration to the idea that donations to the arts from business groups or private individuals should be tax-deductible. I am sure that if this were done we should see more works of art coming into our national heritage.

Moreover, ways of implementing a building cost percentage should be seriously explored. Hon. Members will know that in other countries, such as Italy and Germany, tax deduction is allowed on the building of, say, a new block of offices which can exhibit works of art or provide areas devoted to culture where people working in the building may go and admire works of art. I am sure that, if the Minister were to do something along those lines, it would be an enormous boon to the art world, and I hope that the idea of a building cost percentage can be further explored.

For too long, Governments of both parties have regarded the arts as outside politics and as something of secondary importance worthy only of a tiny proportion of local government rates. I do not wish to be controversial, but one hon. Member speaking earlier from the Government Benches spoke approvingly of the Conservative manifesto. There are two sides to every coin, and one should remember that the Conservatives produced a document entitled "The Arts—the Way Forward" in which it was proposed that the arts should be exempted from public expenditure cuts because of the minute sums involved and the large-scale harm caused by even the smallest cuts.

In this connection, I ought to remind the House that the Arts Council has lost £1,114,000 because of the cuts, and that despite the Conservative manifesto. Moreover, local authorities are being affected. For example, the ILEA is suggesting the saving of £380,000 on staff-student ratios in arts centres, and the Wands worth local authority has announced its intention to close the Battersea arts centre.

I did not want to mention those matters, and I should not have done so had not an hon. Member given praise earlier to the wonderful prospect offered by the Conservative manifesto.

However, despite my criticisms, I wish the Minister responsible for the arts well in his term of office. I believe that the Bill will go a long way towards preserving the nation's heritage.

8.47 pm

Mr. Alastair Goodlad (Northwich)

I give a warm welcome to the Bill, and I congratulate my right hon. Friend the Chancellor of the Duchy of Lancaster on introducing it against a background of financial stringency. I agree with him that it is better to get the show on the road, albeit modestly, and to hope for better economic days to come.

I join in the tributes paid to my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) and the hon. Member for Warley, East (Mr. Faulds), with whom I had the honour to serve as an officer of the all-party heritage group, for the work which they have done both in the House and outside to improve radically the climate for legislation of this kind.

I associate myself also with the tributes paid to the late Arthur Blenkinsop, to Mr. Arthur Jones, the former Member for Daventry, and to Lord Reigate for their roles in the genesis of this legislation.

I agree with my right hon. Friend that we cannot enter into open-ended commitments. The sums involved under the Bill are neither extravagant nor derisory, but, in company with my hon. Friends the Members for Staffordshire, South-West and for Kidderminster (Mr. Bulmer), I cannot disguise that I should have preferred a much larger initial capital sum under the Bill.

It is not necessary to reopen old wounds, much as one might like to, about whether the National Land Fund constituted an addition to public expen- diture. Suffice it to say that the Bill still ensures that the fund will be competing on a routine year-to-year basis with other forms of public expenditure and that Ministers and the Treasury can reduce payments into the fund from year to year and direct the fund's investments. I refer here to clause 6(2)(b): The Trustees shall…if the Treasury so require, invest any such amount specified by the Treasury in such manner as the Treasury may direct. I am sure that the trustees will not become the Treasury's poodles, but they must guard against becoming its retrievers.

Our aim in the medium term ought to be to give the fund a substantial capital base and flow of income, so that there should be a possibility, at the discretion of the trustees, to make a major purchase when politicians and the Treasury have other preoccupations. That is the only possible long-term solution to a proper role for the National Heritage Fund as part of a comprehensive heritage policy.

It is an old saw that no man can be the servant of two masters. Most trustees would acknowledge no master other than their trust deed. However, there will be many ministerial fingers in this particular pie. Is that necessary or beneficial to the Bill's objectives, upon which we all agree? I agree with the hon. Member for Isle of Ely (Mr. Freud) about the power of ministerial veto. I shall not belabour that point but will say a word or two about the multiplicity of fingers in the pie.

As the noble Lord Reigate adduced in another place, one of the purposes of removing the control of the National Land Fund from the Government and replacing it with suitable safeguards under independent trustees was to eliminate delays in decision making. When a work of art or house comes on the market, it is often essential that a decision is made quickly. A delay might make the process impossible.

One example of the responsibilities given in the Bill to Ministers and to the Treasury can be found in clause 5(3): The Trustees shall not retain any property (other than money) accepted by them by way of gift except in such cases and for such period as either of the Ministers may allow. The distinction between the areas of responsibility may be said to be that the Secretary of State for the Environment deals with property and land and the Minister responsible for the arts deals with objects. However, the properties that are the subject of consideration will frequently consist of land, buildings and objects. Therefore, a single stream of responsibility would seem better. Either of the Ministers, by order and with the consent of the Treasury, can add to the list in schedule 2 any institution that is maintained wholly or mainly by moneys provided by Parliament.

Two Ministries are again involved, as well as the consent of the Treasury. However, is the Treasury the best judge? Should it be involved? In clause 17, under Objects displayed pending export licence decision", we read that the Chancellor of the Duchy of Lancaster may undertake to indemnify against loss. There we are dealing with objects rather than land. It appears that my right hon. Friend is being allowed off on a frolic of his own, free from the restraining hand of the Secretary of State for the Environment. However, if we look carefully, we see that he is not free. In clause 17(2), there is reference to conditions approved by him and the Treasury". Should the Treasury really be concerned with storage conditions?

Clause 16(2) concerns objects loaned from national collections. It provides: Neither Minister shall give an undertaking under this section unless the loan of the object in question is made in accordance with conditions approved by him and the Treasury and the Minister is satisfied that appropriate arrangements have been made for the safety of the object while it is on loan. Once more, two Ministers and the Treasury are involved.

The Government propose to go into the insurance business in a different way from before. They will be acting as insurance brokers, underwriters, inspectors, assessors and loss adjusters. The position of those items is not on all fours with the Government bearing—as they do—their own losses. One should ask whether there will be periodic reports on claims, and whether there will be resort to the commercial insurance market for competitive quotations. That might not seem important now, but if the activities of the National Heritage Fund take the course that we anticipate it might be very important in future.

I shall not dwell on the role of the Treasury in relation to the National Land Fund, except to say that one lesson of that unhappy affair must be that the House must make its intentions clear beyond peradventure and must ensure that the legislation reflects and gives continuing effect to that intention.

On the role of trustees, I have referred to clause 6(2)(b) under which trustees may be required to invest at the behest of the Treasury and as it directs. Clause 6(3) provides: Any sums to which subsection (2) above does not apply may be invested in accordance with the Trustee Investments Act…as if they constituted a trust fund and the Trustees were the trustees of that trust fund. Aside from that, it seems to be the intention of the Bill that the fund should not exhibit the aspect of a trust and that the trustees should not exhibit the characteristic of trustees in the normal sense of the word. For example, they have to give money to the Treasury when it asks for it. As the course of the fund's activities develops, that provision will be seen to be an inherent weakness in the Bill.

Since the £50 million to which reference has been made is not to be restored, it should be not only on record in the House but provided in the Bill that in deciding on the amount of each annual payment into the fund Ministers should not have in mind the amount standing to the credit of the fund.

The trustees must have flexibility to accrue payments for particularly large calls on their resources, either anticipated or unanticipated, and must not be put in the position of buying non pre-eminent things for purely budgetary reasons. We have seen all too many effects of that sort of pressure elsewhere in our national life.

Under clause 14 Her Majesty may, by Order in Council, provide for the transfer to the Trustees of the National Heritage Fund of any functions exercisable by the Ministers or either of them. It would be helpful if the Minister who is to reply could elucidate at greater length the thinking behind that clause. Is there any intention to streamline and rationalise the administration of the fund after a trial period? If not, what is the thought behind clause 14?

I thought it important to dwell briefly on the question of ministerial responsibility. If functions are widely dispersed, there can, as we all know, be a blurring of responsibilities, with inevitably unsatisfactory results. There can be a waste of resources and of time on the part of Ministers, civil servants and trustees and there could even be, heaven forbid, confusion.

Most important, blurred responsibilities are a lobbyist's paradise which can lead to the frustration of the intentions of the legislation. I am thinking not only of potential vendors competing for the limited attention of Ministers and trustees but of the potential activities of the great lobbyist—the Treasury. I ask the Government and the House to ponder on that.

I wish to refer briefly to property accepted in satisfaction of tax. We would not need a National Heritage Fund if taxation had played a more restricted role in our national life and had been applied more rationally to the national heritage. However, in present circumstances the Bill is welcome as far as it goes.

Clause 9(4), which deals with the disposal of property in lieu of tax, provides: Either of the Ministers may in any case direct that any property accepted in satisfaction of tax shall, instead of being transferred to the Commissioners, be transferred to the Trustees of the National Heritage Fund or to some other person nominated by the Ministers". I am delighted that the Chancellor of the Duchy of Lancaster confirmed that his policy will be that pictures in a collection that may form the foundation of a particular room can remain in situ even if the site is not publicly owned.

That leads ineluctably to considerations of other fiscal matters important to our national heritage which are not included in the Bill. My hon. Friend the Member for Buckingham (Mr. Benyon) discussed the matter in some detail. If that policy is pursued, it will be important that nationally-owned treasures should remain in private property and under private management.

What further help are we to offer to secure the protection of these national assets? Will running expenses be tax allowable? Will special listed-building allowances be built into the tax system, as Lord Gowrie suggested in another place in November 1978? Will donations to galleries and the National Heritage Fund be legitimate offsets against taxable income? The Bill highlights, while providing only a small solution to, the necessity of further fiscal concessions to private owners of historically interesting properties to maintain those properties for public enjoyment. There can be few better long-term investments for the country.

The Bill will not in any way solve the problem of preserving and enriching our national heritage. Many beautiful objects will still be taken out of the country. There will still be desecration of the countryside, and many fine houses will undoubtedly still be destroyed. Nevertheless, the Bill is a welcome if limited step in the direction of a comprehensive heritage policy. We congratulate my right hon. Friend on introducing it and look forward to further steps to come.

9.1 pm

Mr. Gordon Oakes (Widnes)

The Chancellor of the Duchy of Lancaster, in a felicitous phrase, referred to Matthew Arnold and the sweetness and light that the debate has engendered in the Chamber. The debate may be one of the last occasions this year when we have such a measure of unanimity and agreement. Every hon. Member who has spoken has praised and welcomed the Bill, including my hon. Friend the Member for Warley, East (Mr. Faulds), the hon. Member for Isle of Ely (Mr. Freud), representing the Liberal Party, and even my hon. Friend the Member for York (Mr. Lyon), although the latter somewhat damned it with faint praise.

I congratulate the Chancellor of the Duchy of Lancaster on bringing to the House a Bill that is obviously dear to his heart and which has enjoyed such a unanimity of welcome. But I say also to the right hon. Gentleman, in his other capacity as Leader of the House, that it is nothing short of astonishing that we should spend a whole day discussing a Bill which is so unanimously agreed by both sides of the House and is therefore the ideal measure, both constitutionally and temperamentally, for the other place to begin when tomorrow the Government will be introducing a highly contentious Bill for debate for the first time in the other place instead of in this House. Presumably the Local Government, Planning and Land Bill is beginning in the other place because this House did not have the time to begin it. It is an astonishing situation.

Mr. Cormack

Is it not important that occasionally the House of Commons should turn its mind to things that are perhaps of more lasting importance? In my experience, this is the first time that we have debated the national heritage on a Government motion or Government Bill. Surely that alone merits this debate.

Mr. Oakes

It is delightful that we should be able to discuss the Bill, but not at a time when a major Bill, involving not merely £15 million but many thousands of millions of pounds and of major constitutional significance to the workings of government and the relationship between local government and central Government, is being debated in a House which is a non-democratic Chamber.

In this Bill we must look at a number of matters. First, there is the position of the trustees and their appointment, and the way in which the fund will be administered. Secondly, we must look at the amounts involved in the fund. Thirdly, there is the question of the expenditure of the fund and the ways in which the trustees will carry out that expenditure.

Questions also arise in respect of other parts of the Bill, such as acceptance-in-lieu as well as the question of indemnities, which really have little or nothing to do with the National Heritage Fund. One of my hon. Friends said that he believed that the indemnity moneys would come out of the National Heritage Fund. I hope that he is wholly mistaken, because as I read the Bill that would be moneys provided by Parliament into the Consolidated Fund, which has nothing to do with the National Heritage Fund.

I should first like to look at the question of trustees, about which a number of hon. Members on both sides of the House have been concerned. As the Chancellor of the Duchy of Lancaster will remember, I had the somewhat difficult job of introducing the Public Lending Right Bill. I must admit that I got full and absolute co-operation from the right hon. Gentleman and from the Conservative Front Bench. However, I wonder where those Conservative Members are who used to talk about quangos, who saw quangos behind every piece of legislation, and who regarded quangos as wicked bodies who were doing the Government's job forthem. In effect, what we have done is to set up a quango. The trustees will form a quango. I make that point because administrative quangos can be most economic and useful bodies to set up. Indeed, there is no adequate way in which this fund could be properly administered without trustees, who in themselves really form a sort of quango. I cannot resist saying that, because there was so much attack on the previous Government when they set up bodies exactly like this to do a job independently of the Government.

However, a number of important questions have arisen in relation to trustees which I hope the Under-Secretary of State for the Environment will answer. We know very little about the trustees except that there shall be a chairman and eight others, and that the eight shall be geographically distributed so that Scotland, Wales and Northern Ireland as well as England are represented. That is about all that we know about the trustees from the rather meagre provisions in the Bill.

The first question that inevitably arises relates to their appointment and to the Ministers who appoint them. From the tenor of the right hon. Gentleman's speech, it seemed to me that the two lead Ministers—indeed, from what he said, the only Ministers—who will do the physical appointing, other than the chairman of the committee, will be the Secretary of State for the Environment and the right hon. Gentleman as Chancellor of the Duchy. The first question that must be answered—it was raised by my hon. Friend the Member for West Lothian (Mr. Dalyell) and others—is precisely what the role is of other Secretaries of State, particularly the Secretaries of State for Scotland, Wales and Northern Ireland, because the Bill covers Northern Ireland as well. What is their precise role? Will they appoint? Will they be consulted? Are they merely advisory? The House needs to know, especially when trustees of such power are to be appointed.

Another matter raised by my hon. Friend the Member for Warley, East, and it is asignificant issue, is that although I and, I am sure, the House are more than happy for the Chancellor of the Duchy of Lancaster, who is also Minister for the Arts, to be one of the appointing Ministers, I wonder whether it is wise in legislation to name the Minister by his office of Chancellor of the Duchy. When we were in office in the last Parliament, the Chancellor of the Duchy of Lancaster was a Minister attached to the Treasury.

In view of what we have heard from all sides about the iniquities of the Treasury, I do not think that any hon. Member would want a Treasury Minister to be one of the appointing Ministers. That would be absolutely counter-productive and would defeat the whole object of what the Government are trying to do under the Bill, with which broadly the Opposition agree. Therefore, we must consider whether the title "Chancellor of the Duchy of Lancaster" is used. It may ideally suit the appointing Minister in the present instance, but should the right hon. Gentleman go on, as no doubt he will, to higher office within the Government—perhaps Home Secretary: who knows?—another Minister may become Chancellor of the Duchy and he may be a Treasury Minister. Certainly, that is not what the House aims at or wants.

Mr. St. John-Stevas

I am grateful to the right hon. Gentleman for his kindly reference to myself. However, it is not possible to go on to a higher office than being Leader of this place. Apart from that matter, I was moved to rise by his denunciation of the Treasury. Throughout this matter, the Treasury and the Treasury Ministers have been most helpful and co-operative. Without that help, the Bill would never be before the House. Therefore, I would like to make an unusual tribute to them in response to the right hon. Gentleman's censure.

Mr. Oakes

I was echoing the censure of the House. The right hon. Gentleman is providing himself with indemnities and insurance way beyond the third part of the Bill in ensuring that he keeps well in with Treasury Ministers and officials. That point will be examined in Committee.

An important question was raised by my hon. Friend the Member for Caer- philly (Mr. Hudson Davies), namely, that the trustees shall not be too London-based. The hon. Member for Staffordshire, South-West (Mr. Cormack) raised a point about the Ramblers Association and the obvious interest it will have in a Bill of this nature. I ask the Government whether eight trustees as well as the chairman are enough. We do not want a huge body but, in view of some of the comments of my hon. Friend the Member for West Lothian, I wonder whether eight trustees will be able to cover the wide interests that are involved. Suppose that one trustee represented Scotland and one represented Wales. It is hard to say that that would be wise, with all the interests in Scotland and Wales—environment, art, library, scientific and so on.

The hon. Member for Staffordshire, South-West also raised the point about remuneration. The Bill is silent on that point, but we know that allowances will be given to the chairman and members. Presumably, those allowances will come out of the fund. Therefore, we must be careful not to spend precious resources on expenses. On the other hand, to get people of the calibre that we want, who will have to devote much of their time to the task—in the initial years especially—will be difficult. The office is so high that the appointment will be by the Prime Minister herself. We must look at the question of remuneration, and I hope that the Minister will clear up the matter. Do the Government mean a salary or merely expenses for attending meetings?

It is important that not all the trustees should be academics. I was encouraged on this point by the Chancellor of the Duchy's opening speech and his reference to "a cultured generalism". That is a lovely phrase. I do not know exactly what it means.

Mr. David Price

It means us.

Mr. Oakes

If that is so, some of the environmental interests, scenic interests, the rights of the public and the Ramblers Association might be excluded by that sort of approach. Certainly, many questions remain open about the appointment of trustees.

We come to the vexed question of the amount of the allocation. We have heard frank speeches about this from several hon. Members. I came into the House in 1964. In 1977 I had been a Minister for three years. I had never heard of the National Land Fund until Mentmore. I suspect that most hon. Members were in that unfortunate position. In 1957, the House was advised—no matter which party was in office and whether or not by a Select Committee of the House—that we should rob the dead of their memorial. That is what the House did only 12 years after the war, at a time when we were entering the "never had it so good" era. It is astonishing that the House allowed Treasury Ministers to get away with that. It is water under the bridge. It happened.

The hon. Member for Buckingham (Mr. Benyon) was not a member of the Committee, and I wonder why he was kind enough to accept the fact that neither we in our White Paper nor the present Government acceded to the Committee's request that £50 million be put back. Hon. Gentlemen exaggerate when they say that this is the implementation of what Dr. Hugh Dalton suggested. We should look at the enormity and bravery of the House in the post-war period when things were extraordinarily difficult. The equivalent of £400 million was put into a fund that was later robbed. As the hon. Member for Isle of Ely said, it was robbed after a period of total neglect. That money was earning just over 1 per cent. for year after year, and none of it was spent, which was probably largely because the then Members of the House knew so little about it.

Had we been in Government and implementing our White Paper, there would have been severe criticism from the hon. Member for Buckingham and other members of the Committee to the effect that we did not go the whole hog and, as recommended by the Committee, put £50 million back into the National Heritage Fund.

My hon. Friends have asked a number of important questions about the £5.5 million a year. First, will that sum vary in accordance with the number of bequests from private individuals to the fund? I hope that the Minister will tell us that that sum will be put in yearly regardless of private bequests. It will be highly counter-productive if the Government decide not to put money in because, in a particular year, there have been large numbers of contributions from private individuals. We need clarification that the fund will not vary according to individual contributions and a commitment from the Government that at least £5.5 million will be put into the National Heritage Fund annually.

Secondly, is this new money or is the £5.5 million being taken from other parts of the arts budget? I hope that it is new money provided by the Government and not an attempt to rob Peter to pay Paul. We need a clear and unequivocal statement. It would be monstrously wrong, under the guise of setting up the funds, to rob theatres, the opera, art galleries, and so forth, and that could happen unless we have a clear assurance from the Minister.

Clause 5 covers payments by individuals. I was glad to hear that in the Finance Bill such gifts will be relieved from capital transfer tax, but will they be wholly relieved? What publicity will be given to that relief? I accept that it may not be possible to put such provisions in this Bill and that they should go in the Finance Bill. However, it should be made known that a bequest to the National Heritage Fund will be tax-exempt. My hon. Friend the Member for West Lothian asked a valid question on the position of other funds, particularly the National Trust and the Scottish National Trust.

Will there be a competitive element set up that might well rob those funds of money by reason of people bequeathing to the National Heritage Fund? Will it make any difference? Perhaps the Minister will tell us what discussions he has had with other charitable organisations on the effect of bequests to this fund. If he has not had any discussions, will he tell us what discussions he will have? This could make very serious inroads on the revenue from bequests in the case of bodies such as the National Trust and the Scottish National Trust.

Mr. Dalyell

The related question is whether bequests can be earmarked via the National Heritage Fund for the Scottish National Trust, the National Trust, the Royal Society for the Protection of Birds, or whatever it might be.

Mr. Oakes

Indeed. What will the mechanism be? My hon. Friend has raised a perfectly valid point.

With regard to the expenditure from the fund, we are talking about £15.5 million initially. I thought I heard the Chancellor of the Duchy of Lancaster mention at some point the figure of £12 million and not £15.5 million. Perhaps there is an explanation of that difference. I had thought that at least in the first year the full capital transfer of the existing Land Fund would go in to to to the new National Heritage Fund. Even then, the fund would be deprived of the first year's income of £5.5 million, and it is not a good enterprise that has to live on its capital in this way. We need to know from the Government how these trustees, with so many commitments in so many varied areas, are to spend the money. Will they have enough money to cover so many different areas?

The question of our industrial heritage and our agricultural heritage was raised by the Father of the House, my hon. Friend the Member for Dagenham (Mr. Parker), and by the hon. Member for Newark (Mr. Alexander). I urge the Government to remember that we have a unique example of an agricultural system. It is unique within Europe, not just in this country. When advice comes from the Father of the House, the Government ought to heed it, because my hon. Friend is a respected figure in this House—almost a non-party figure. It would do the Government no harm to think again before they dispose of these priceless assets.

Archaeological sites and archaeology are not mentioned in the Bill. The Minister may say that there is no need to mention the subject. I know that the word "historical" is used in the Bill, and probably I shall be told that it includes "archaeological". There will be a very definite role for the fund in dealing with instances of rescue archaeology. There are instances in which priceless parts of our national heritage can be lost unless immediate emergency action is taken. Sometimes this can be done merely by compensating the builder concerned for the time involved in the rescue operation. It would be well worth spending that money in order to acquire a better knowledge of Roman sites and of medieval sites. Often these are in the centres of towns.

One of our greatest treasures in this country, Hadrian's Wall, is very little protected, especially when we think of the protection given to national monuments in other countries. Hadrian's Wall might well be regarded as an international monument. If there were to be some major expenditure needed because of land sales, or whatever it might be, in that area alone, the fund would not go very far. We should be in a similar position if a major house with its contents came up for sale. The whole fund could be swallowed up in one such transaction. It would no doubt be a most worthwhile transaction, but what of all the other transactions that the trustees will have to face? We should not forget our industrial heritage and the great interest today in industrial archaeology. I suppose that the word "scientific" would cover that.

It is important to remember that not all the treasures of our heritage are paintings or books. Our heritage also consists of marvellous engineering feats—civil and transport engineering and so on—and they should be preserved for future generations. I hope that such things will also be included in these provisions.

I realise the enormous task and the puny resources that the trustees will have. The hon. Member for Isle of Ely said that this was a mean sum—only 0.2 per cent. of the money we get from tourism. The question is vividly before the House whether the Bill is far-reaching enough and whether the trustees will have enough money and enough powers.

My hon. Friend the Member for Warley, East did not like the statement in the Labour Government's White Paper of February this year about acceptance in lieu. I agree with my hon. Friend the Member for York. I was a Minister at the time. I was not responsible for the issue of the White Paper, but I fully accept vicarious responsibility for it.

One statement in the White Paper does not seem to have got over to the Government: While the acceptance in lieu procedure has in the past played a useful role in helping to preserve the national heritage, the system has a number of disadvantages. The procedures for accepting property in lieu are complex, liable to misunderstanding and sometimes time consuming. The system is inflexible because it can only be used on those occasions where the individual owner has a tax bill which equals or exceeds the value of the property he wishes to sell. In the Government's view an attempt to fit the acceptance in lieu procedures into the new National Heritage Fund would increase the extent to which they duplicate private treaty sale arrangements and would not cure the existing defects. That paragraph of the White Paper, I believe, is as true now, under this procedure, as it was then.

I should like to hear whether that is so or whether the Government have overcome these difficult and complex problems merely by transferring this responsibility from the Treasury to the Ministers concerned. I fear that there will still be great difficulty with the in-lieu procedure. The Treasury itself issued a press notice on 23 February in which it tried to clear up some of the misunderstanding and pointed out that an extended system of private treaty sales could be operated with advantage to both the vendor and the acquiring institution. That should perhaps be looked at again.

The indemnity provisions are suspiciously like proposals for a Bill which were brought out each autumn in my three years at the Department of Education and Science only to be put away to gather dust again because legislative time could not be found. As the Minister rightly said, they give statutory backing to what is already being done.

Would it not be wise to take the opportunity to extend this indemnity procedure, as my hon. Friend the Member for Warley, East suggested, to private loans rather than restrict it only to the institutions which are actually named in the Bill? It is as tight as that. Secondly, is it not equally important to make provision now for international funds and exhibitions, to allow some of our treasures sometimes to go abroad, just as we have had the enormous benefit of seeing other people's cultures through such events as the Tutankamun exhibition or the South American exhibition? The Bill will cater for that, and I was heartened by the tenor of the remarks of the Chancellor of the Duchy of Lancaster in opening the debate. He implied that he was quite prepared to be flexible over the indemnity provision.

The financial provisions of the Bill state: Contingent liabilities arising from undertakings to indemnify institutions and persons…cannot be predicted. I think that my hon. Friend is probably right. Those liabilities have been nil as far as indemnity arrangements are concerned. If that is so, surely it would be possible to widen the scope to cover statutory power for private loans to institutions and for international loans.

As an ex-Education Minister, I know that our universities—to quote the Chancellor of the Duchy of Lancaster—are the jewel in our educational crown. Even so, I would like to see the provisions widened to include polytechnics and other institutions of higher education. I hope it will be possible to do that.

This is a useful Bill and we accept it. It implements much of what was contained in our own White Paper produced in February this year. The Bill does little, but the Government have every right to say that the previous Labour Government also proposed very little. The Bill can certainly be improved in Committee. As many hon. Members have said, the Bill is at least a start in the right direction towards preserving the manifold aspects of our heritage for the people of this country.

9.31 pm

The Under-Secretary of State for the Environment (Mr. Hector Monro)

I am grateful to the right hon. Member for Widnes (Mr. Oakes) for his remarks. I shall try to respond to the points he has made. He is right in his reference to indemnities. We wish to be flexible. That is what the debate is about. My right hon. Friend and I have listened to points made today. If there is something we can do in Committee about them, that will be the time to do it, particularly in relation to the museums which are not included in schedule 2 and which many people consider might be included. We must look at that.

The debate has been interesting. At times I thought that we were going through the Committee stage at a rate of knots. It is a privilege to be associated with the welcome given by the Government to the concern of hon. Members in all parts of the House that the future of our national heritage should be assured for the benefit of future generations, so far as it is possible to assure it with human institutions and available resources.

It is particularly pleasing, and a demonstration, at a time of financial stringency, of the Government's desire to conserve our heritage, that we have been able to respond so closely to the recommendation of the Environment Sub-Committee of the Expenditure Committee. My hon. Friend the Member for Buckingham (Mr. Benyon) was a member of that Sub-Committee and I was glad of his intervention in the debate.

We are determined to respond to the interest shown in conserving our environment and my right hon. Friend the Secretary of State has maintained, as an indication of his enthusiasm, the full grant to the Historic Buildings Councils, which cater for many of the matters we have been discussing today. I am grateful to hon. Members on both sides of the House for their contributions which have been favourable to the Bill. The hon. Member for Warley, East (Mr. Faulds) was, I felt, a bit ungracious. It was untypical of him. Perhaps he was a little jealous that he was not presenting the Bill. I know of his great interest in the issues as a result of the White Paper published by the Labour Government.

Hon. Members have shown themselves well acquainted with the Government's intentions and are sensible of the difficulties that the preservation of our heritage entails. I hope that this temperate attitude will continue since I anticipate being in charge of the Committee stage of the Bill.

I stress that we regard the National Heritage Fund first and foremost as an effective safety net which is intended to look after historic houses, the countryside, land which is of scientific interest, and pictures and art objects which may otherwise be lost to the nation. The Government have no intention of going into the business of running country houses or setting up shop as a picture gallery. The fund provides a refuge of last resort.

I stress the theme which runs through the proposals. We are essentially dedicated to the establishment of trustees with unfettered discretion to make decisions for the preservation of the heritage. We do not wish to tie the trustees' hands any more than is necessary to ensure parliamentary control over expenditure. We intend to trust the trustees.

The Secretaries of State for Wales, Scotland and Northern Ireland will each appoint a trustee with the agreement of my right hon. Friends the Secretary of State for the Environment and the Chancellor of the Duchy of Lancaster. There may be more than one trustee from each of Scotland, Wales and Northern Ireland, because we are interested in talent, experience and breadth of interest. We want people who understand not only country houses and art but gardens and the landscape. We are sure that we shall be able to achieve a broad balance and that the trustees will be acceptable to everybody.

I shall try to answer as many questions as I can early in my speech. The hon. Member for Warley, East asked a number of questions. The heritage interest is articulate. We held meetings, some of which were confidential. Officials met under the auspices of the Standing Commission on Museums and Galleries. The hon. Gentleman also asked about local university museum representatives. In October they were invited to attend a meeting on the Bill. They were offered a number of dates and chose 4 December as the date which suited them. As a result of their wish, the meeting is to take place tomorrow. It was not our wish to put them off.

The hon. Gentleman also asked about whether trustees will be able to spend capital only in the first year. That is not correct because the grant will be paid in the first month after the fund is established. That can be invested and the interest used. It will involve a substantial sum. The right hon. Member for Widnes asked about the sums of £12 million and £3½ million. Broadly speaking, £15½ million will be transferred to the National Heritage Fund. We do not know the exact sum, but about £3½ million will be for the in-lieu provision. The sums involved are flexible depending upon what is in the pipeline on 1 April, if that is the day on which the fund is set up.

I was also asked about offers of objects of art in lieu of tax. The Government are firmly committed to reimbursement to the Inland Revenue. We should probably have to refuse such a gift—but reluctantly.

I was asked whether we could specify the National Art-Collections Fund and the Friends of the National Libraries as eligible recipients of property accepted in lieu. That will be possible. Clause 9(1) contains the main provision for the disposal of property which is accepted instead of tax. The terms are wide. I assure the hon. Gentleman that that covers his point.

There is no discrepancy between clauses 4(3) and 9(4). The trustees will hold property only in unusual circumstances, and with the consent of the Minister where the property is paid for by the trustees or accepted in lieu of tax. The waiving of interest charges on the capital transfer tax debt when the property has been offered in lieu is under consideration by my right hon. and learned Friend the Chancellor of the Exchequer. In the unlucky event that the Chancellor of the Duchy of Lancaster no longer has responsibility for the arts—other than an edict from Rome, I cannot see that happening—there would be a transfer of functions order, and all would continue as normal.

My hon. Friend the Member for Staffordshire, South-West (Mr. Cormack), who has taken immense interest in the Bill and has taken a personal interest in our heritage over many years, asked a number of questions. I have answered the point about trustees. We want the best talent available, and the trustees will be appointed in good time so that they can take up their appointments before 1 April, if that is to be the date on which the trust comes into operation.

My hon. Friend asked about the difference between "enabling" and "assisting". There is no difference. There will be up to 100 per cent. help from the trustees, whether to enable or to assist. That point was also raised by the hon. Member for West Lothian (Mr. Dalyell).

My hon. Friend the Member for Staffordshire, South-West asked about gardens and land as part of our heritage, as did the hon. Member for Isle of Ely (Mr. Freud). It is very much a part of our heritage, and certainly assistance to gardens or landscape will be covered by the fund, as will be buildings and objects.

Mr. Freud

My reason for raising that point was that the Bill seemed to make no provision for recreational or park land. It contains much about scenic, historic, aesthetic, architectural scientific interest". There is not a word about recreational or park land.

Mr. Monro

I assure the hon. Gentleman that that is not the intention. If that point is not clear, it is a matter which we must put right in Committee. Recreational and park land certainly should be included within the Bill.

My hon. Friend raised the question of objects, and particularly Iron bridge. We are considering three points—land, buildings and objects—and everything falls into one of those categories. I can assure my hon. Friend that Iron bridge, being a building, is quite safe. Everything about which he is concerned will be included in the Bill. The trustees will consult the Royal Society for the Protection of Birds, if necessary. The provision of amenities is covered by the Bill, and a bird sanctuary is an amenity which we would encourage.

We have taken on board the crucial point that local pre-eminence is important, as is national pre-eminence, and we must not overlook that in safeguarding our heritage.

I mentioned earlier that we had asked for views about indemnity. We have received some views today, which we shall consider in Committee.

May I answer the point about VAT raised by my hon. Friend and other hon. Members? We cannot exempt from VAT the trust or any body connected with historic buildings. The Department of the Environment pays VAT, and all bodies must be alike.

My hon. Friend asked whether the trustees should be paid. Certainly at this stage—and I see no reason why we should change our view—the answer is "No".

Mr. Dalyell

We note the welcome presence of the Minister of State, Treasury. Surely it is simply not true, as those of us who are Finance Bill addicts know, that everybody is treated alike under VAT. There are exemptions. Is not this a case for an exemption?

Mr. Monro

As the hon. Gentleman says, there are exemptions, but in the position that I have mentioned everyone is a like.

My hon. Friend the Member the Staffordshire, South-Westr asked about reimbursement. The cost is borne fifty-fifty by Votes of my two right hon. Friends the Secretary of State for the Environment and the Chancellor of the Duchy of Lancaster—if my hon. Friend likes to have it correctly, the Office of Arts and Libraries. No problem is envisaged.

My hon. Friend the Member for Kidderminster (Mr. Bulmer) raised several important points. He asked whether civil servants would be eligible to staff the secretariat and what would happen to their pension rights. If they are employed by the secretariat, they will have to be seconded, and in those circumstances their pension rights will be preserved.

My hon. Friend also raised a point that many other hon Members consider to be important—the original intention of the National Land Fund to represent a war memorial to those who lost their lives in the war. His idea that some of the money from the trust might be used by the trustees for at least one example to be treated as a memorial is one that I think all hon. Members will approve. We should leave that thought to the trustees, who will no doubt read the reports of this debate and realise that hon. Members on both sides of the House felt it to be an idea that should be pursued. It is for them to see whether it can be worked out in practice.

I note and appreciate the great work of the hon. Member for Dagenham (Mr. Parker) with the Historic Buildings Council. He rightly mentioned our debt to Mr. Arthur Jones and the late Mr. Arthur Blenkinsop. It is sad that Mr. Blenkinsop, who died in my constituency, did not live to see the Bill come to the House.

When we are thinking about those who are no longer here, it is also right to mention Miss Betty Harvie Anderson. Baroness Skrimshire, as she became, did a great deal for the Conservative Party arts group, but is also, sadly, no longer with us.

The hon. Member for Dagenham raised the question of Laxton. That is the type of property that could and should be considered by the trustees. There is to be no indication that they should not buy land for the trust, provided they can pass it on as quickly as possible.

The hon. Member for Isle of Ely asked about an investment fund run by the trustees. If public money is involved, they must have approval and advice from the Government, but if they want to invest their own income they can do it in their own way, subject only to the provisions of the Trustee Investments Act.

My hon. Friend the Member for Newark (Mr. Alexander) spoke in detail about Laxton. I have given him his answer. It is one that we can consider in the future.

The hon. Member for Caerphilly (Mr. Hudson Davies) mentioned the question of trustees. There will be a trustee from Wales. The hon. Gentleman highlighted the regional significance of the fund and said how important it is for us to do all that we can to retain as many objects and works of art in situ as possible so that historic houses may be furnished with the original furniture and pictures that have hung in them for many years.

The hon. Member for West Lothian asked many questions, all of which I accept are important. I have already answered some of them. I have already explained to him that land is eligible and answered his query about Laxton. I accept what he said about the importance of the National Trust for Scotland and the fact that we should have a trustee from Scotland who will consult the Secretary of State in detail.

I have covered the points raised about gardens. Gifts, of course, would be free from capital gains tax and capital transfer tax.

On maintenance, houses are entitled to support from the Historic Buildings Council if they fall into the appropriate category, but day-to-day maintenance would not normally come within the orbit of the National Heritage Fund.

As regards limited visiting, we must treat each case on its merits. We must look very carefully at the geographical position of the property and consider the number of visitors likely to attend. But we want to help the owners of historic houses and enable them to live in their houses so that they can be seen to be houses that are lived in with, as I say, original furniture and pictures.

Archives certainly would be entitled to assistance under clause 3(6)(a) and, if necessary, could be added at any time to schedule 2 by statutory instrument.

I note what the hon. Member for West Lothian said about Hopetoun House. That is certainly important.

The existing exemption from stamp duty will continue, and any new provisions in this Bill are under consideration by the Treasury. I have already said that there will be certain exemptions from CGT and CTT, and they will be implemented in the next Financial Bill.

Mr. Dalyell

Is the Minister of State, Treasury, who is with us tonight, volunteering for service on the Committee which will consider the Bill? If so, his presence will be most welcome.

Mr. Monro

I am sure that my hon. and learned Friend will not volunteer, though I wish he would.

The hon. Member for West Lothian asked about the Scottish Countryside Commission. Ot the moment, that body would not have powers under the Bill to hold land, because, of itself, it has powers from the trustees. However, the trustees could certainly help a body such as Scottish Youth Hostels Association to acquire property.

The hon. Member for Middleton and Prestwich (Mr. Callaghan) asked why the Government had refused to allow the Tondo to be lent to the Hermitage museum. The Tondo is unique and should not be subjected to unnecessary risk. No compensation in the world would cover the loss, or damage in transit, of this object. I have explained to the hon. Member the split of the £15.5 million.

I say to my hon. Friend the Member for Northwich (Mr. Goodlad), who made a thoughtful speech, that we do not think that there are too many fingers in the pie. Clause 14 will be considered in Committee, and, over the years, if we can simplify the procedure, we shall do so. It may be that experience will show that the in-lieu system should at some time be changed. Clause 14 gives us an opportunity to change it.

As the House is now well aware, we are firmly committed to preserving the heritage. The fund is central to our strategy—

Mr. W. Benyon

Could my hon. Friend answer the question which a number of us asked about whether the funds could be used for endowment in respect of property taken over?

Mr. Monro

Yes, they can. I am sorry that I overlooked that. However, I should remind hon. Members that if one sets up too many endowment funds, which often have to he pretty substantial, the National Heritage Fund may disappear rather more rapidly than we would wish.

When in Opposition, we made clear our ideas on the arts and the heritage through publication of the booklet "The Arts—The Way Forward", produced under the chairmanship of my right hon. Friend the Chancellor of the Duchy of Lancaster. Since taking office, we have set up a separate Ministry to reflect the importance that we attach to the arts and give them a voice in the Cabinet. Moreover, the interest and concern of my own Department, on the historic buildings side, is no less. Despite financial stringency, we are maintaining our expenditure on this part of the heritage.

Nevertheless, it is perhaps true that we do not always realise how important our heritage is until we have lost it—until a stately home is demolished or in ruin, its contents dispersed and sold abroad, its gardens overgrown and desolate, and the unique atmosphere of historical presence gone for ever.

Mr. Freud

Will the hon. Gentleman recognise that it is money we need, not voices? We have had voices on the arts for a long time, but no amount of voice seems to save anything. Theatres and orchestras are closing in spite of voices.

Mr. Monro

Of course, money is important in the whole issue here. That is what we are debating, and at least we have done something about it. We are here setting up a fund which will do just what the hon. Gentleman wishes and what the whole house wishes to be done to preserve the heritage. My right hon. Friend has set a fine example to the nation in the determination to maintain the heritage in every possible way, and I have highlighted that we are equally as interested in the landscape and countryside as in the historic buildings and their contents. Many people perhaps consider the latter to be the primary concern of the Bill. That is not so. Our concern is for the whole heritage, and that is why I said that the trustees would reflect countryside interests, interests in gardens, parks and so on just as much as interest in the buildings and their contents which we consider so important.

In the Government's view, the National Heritage Fund will play a decisive role in relieving us of the fear of a recurrence of such disasters as have occurred in the past. I am sure that the House will wish to afford the Bill speedy progress to the statute book so that the fund's contribution to preserving the heritage can begin just as soon as possible.

I believe that some hon. Members have tended to think that the money we are talking about here, the £15½ million, is all that is available. Of course, resources are extremely tight, but we have made clear also that should a major object come up, whether it be a historic house and contents or some quite exceptional work of art, the Government will themselves look at the whole issue and consider whether special treatment should be given to that important matter.

I am confident that the Bill will receive a Second Reading and that, after the work in Committee, we shall be able to provide for the House a measure which will be acceptable to all in the interests of our national heritage.

Mr. Dalyell

I acknowledge the Minister's genuine attempt to answer the debate, for which he should be given credit, but will he or the Chancellor of the Duchy tell us whether there will be a Treasury Minister on the Standing Committee? This is more than just a light-hearted point. Many aspects of the Bill can be properly dealt with in detail in Committee only with the authority of a Minister from the Treasury present. Do the Government intend to have a Treasury Minis- ter on the Committee which considers the Bill?

Mr. Monro

We shall give the matter thought. I have no time to go into more detail now.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).