HC Deb 05 July 1982 vol 27 cc109-22

Order for Second Reading read.

10.11 pm
The Minister of State, Treasury (Mr. Barney Hayhoe)

I beg to move, That the Bill be now read a Second time.

This is a modest but not unimportant measure. Its main aim is to bring the existing statutory constitution of the Duchy into the twentieth century.

Parliament has been concerned with the affairs of the Duchy for more than 600 years, as the Duchy was created by a charter having the authority of Parliament in 1337. The charter was granted by King Edward III to his son Prince Edward, the Black Prince. The purpose of the Duchy, as encapsulated in the charter, was to maintain the dignity of the heir to the throne. Further, it gave the heir an opportunity to learn the duties of kingship by exercising them in the rather more limited form of ownership of estates. The lands granted by the charter were declared to be inalienable. Although a Duke of Cornwall had full powers of management so long as he remained duke, when he ceased to be duke, either by accession to the throne or by death, they ceased.

Minor alterations in the properties subject to the charter were made by Parliament during the Middle Ages. From the seventeenth century onwards, successive dukes were given limited powers to grant leases by Parliament. Apart from that, the Duchy remained broadly unchanged until after the accession of Queen Victoria.

Following neglect—students of the period may recognise that harsher terms could be employed—during the eighteenth century, a major reform of the duchy affairs was clearly required. The first minor step towards this was the passing in 1838 of an Act that required accounts from the Duchy of Cornwall, as well as from the Duchy of Lancaster, to be produced to Parliament.

Following the birth of Prince Albert Edward, who subsequently became King Edward VII, the opportunity was taken to carry out a reorganisation of the duchy. In 1844 Parliament passed an Act that was intended to give some administrative power to a council of the Duchy of Cornwall under the chairmanship of the Lord Warden of the Stannaries—at that time the Prince Consort, Prince Albert. The objects of this were to resolve a number of outstanding disputes with other land owners, to sell isolated parts of the duchy estates and to purchase fresh land to consolidate existing holdings. In addition, certain management powers relating to leases were granted.

When Prince Albert Edward attained his majority, a further Act became necessary. That 1863 Act, slightly amended by the 1868 and 1893 Acts, still provides the basic administrative powers under which the duchy is governed. I am told that at that time the powers were seen as enlightened and wide for the mid-nineteenth century, but I have no doubt that they are far from suitable for modern conditions.

In other, somewhat similar, circumstances, Parliament has thought it appropriate to confer modern powers of management on several classes of limited owners. For example, private landowners whose property is held in trust were given wider powers in the Settled Land Act 1925, and universities and colleges were given similar powers in legislation between 1925 and 1964.

The original management powers of the duchy are now without any doubt considerably more restricted than those agreed by Parliament as appropriate and reasonable for other limited owners. The still current nineteenth-century legislation concerning the duchy imposes no major restrictions on the duchy's general power to buy and sell freehold land, provided that a proper price is obtained or paid and that the moneys are used in the prescribed manner.

The powers of the duchy to grant leases, however, are subject to a number of restrictions which appear to serve no useful purpose in modern conditions. Additionally, except in very limited circumstances, the duchy at present has no power to take a lease. This applies not only to leases of land of which the freehold is owned by others but also when the freehold is owned by the duchy. In such circumstances, although the duchy has power to accept the surrender of leases, it has no power to buy out a tenant. Understandably this continues to cause difficulties for both the duchy and its tenants in situations in which payment of a capital sum to the tenant would be in the interests of both parties.

Clause 2 of the Bill is intended to overcome those difficulties. It gives power to take leases, including power to buy out duchy leases with capital money, and empowers the duchy to buy land jointly with other persons.

I shall briefly describe the other main provisions of the Bill. Clause 1 deals with investments and adapts the application of the Trustee Investments Act 1961, which already applies to the duchy, so that when cash in hand deriving from sales in land is invested it need not be divided into two funds. As by far the greater proportion of duchy assets is and will continue to be held in land, there is no need to require half the investments to be held in gilt-edged securities or similar assets, provided that they are held in what are described as "wider-range" investments.

Clause 3 provides limited power for the duchy to mortgage land as security for loans. This is intended to provide only for loans for the specific purposes mentioned in the Bill—broadly speaking, the purchase or improvement of land. It is intended to avoid the unnecessary sale of other properties simply in order to raise money for a desirable purpose. It is intended that any exercise of this power would need the consent of the Treasury. The requirement for Treasury consent carries forward similar provisions in the 1863 Act concerning the sale of land and property.

The same Treasury control applies to clause 4, which deals with improvements and gives the Treasury power to relax the existing requirement that improvements such as houses, roads and fencing must eventually be paid for out of duchy revenue. As the improvements add to the capital value of the duchy estates, the existing provisions are unduly restrictive.

Clause 5 deals with leasing powers and provides that a duchy lease may be granted for any length of time. It also removes technical restrictions on leases which do not give immediate possession to the lessee.

Clause 6 deals with banking and allows duchy capital—money which at present can only be held in the Bank of England—to be kept in any bank registered and recognised under the Banking Act 1979.

Clause 7 provides a new general power for the authorisation of transactions for the good management of the duchy, subject to specific Treasury approval. Similar provisions are contained in other Acts conferring wider powers of management to cater, in particular, for eventualities that cannot be foreseen. This is intended partly to cover such matters as the grant of mortgages for duchy staff and tenants, the provision out of capital for the purchase of equipment, plant and machinery conducive to the good management of the duchy estates, and the financing of private businesses conducted by Duchy of Cornwall tenants or licensees. It could also cover transactions that cannot at present be foreseen but which may seem appropriate as conditions change.

Clause 8 deals with accounts and audits. It extends the existing time limit for the presentation of duchy accounts to Parliament to comply with its present accounting period and allows for the appointment of additional auditors so that periods of sickness, holidays, and so on, of the existing auditor can be covered.

Let me make it absolutely clear that the Bill is not intended to alter in any way the constitutional position of the duchy, nor its basic structure. Nor does it affect the majority of the activities that can be carried on during the life tenancy of any duke under the existing statutes.

Perhaps I should also say something about the general public interest which in many ways coincides with that of the Duke of Cornwall himself in promoting the viability and profitability of the estate. The reason for this identity of interest is that when there is no Duke of Cornwall, the revenues of the duchy revert to the Sovereign and under the provisions of the Civil List Acts are then used to reduce the statutory sums payable for the Queen's Civil List. Similarly, when the duke is a minor, eight-ninths of the net revenues are placed at the Sovereign's disposal for a like abatement of Civil List payments. At present, one-quarter of the net revenues are voluntarily surrendered to the Consolidated Fund.

As I mentioned earlier, the present measure is designed effectively to bring up-to-date the conditions in which the Duchy of Cornwall conducts its business while at the same time both fully protecting the legitimate long-term public interest in the proper management of the estate and having regard to the need to safeguard the interests of future Dukes of Cornwall. This means balancing the grants of additional commercial freedoms with the maintenance of proper restraints.

The Bill in its present form goes a long way to meeting these requirements, but I shall, of course, be willing to look most carefully at any further matters that hon. Members may raise now or, if the Bill receives a Second Reading, in Committee. I commend the Bill to the House.

10.24 pm
Mr. Alan Williams (Swansea, West)

The Bill deals with the efficacy of the management machinery and the present methods used in providing income for the Prince of Wales. There are serious questions on whether this is the appropriate method of making payment or of deciding the level of that payment. I recognise that in opposing the Bill we would do nothing to influence those questions, but some of my hon. Friends will no doubt want to touch on these wider aspects that go way beyond the management issues.

No one wants to deny the Prince of Wales reasonable and proper finances, but the point underlying the Bill is that experience over a period of years shows the vagaries and unpredictabilities that arise from the archaic accounting techniques that have been used, which date back well into the last century. If money borrowed for capital improvements is repaid and in the meantime that improved capital asset is sold, the improvements still have to be met out of income, but the money received for the sale of the capital asset all goes into capital funds.

I agree that there is a need to ensure that the resources of the duchy are husbanded. As in any other business, I hope that hon. Members in Committee can establish whether these resources are husbanded in the interests of those living on the duchy lands as well as those administering the duchy lands. I believe that the measure must be judged by whether it ensures that the real value of the estates is not eroded as income. The Minister has assured me in private that this purpose will be achieved, but he will appreciate that the Opposition wish to explore the matter more fully in Committee.

The Bill must also be judged by whether the form of accounts provides adequate managerial control and the relevant information. I would seriously suggest that it does nothing of the sort and offers no improvement whatever in terms of control information. It may make possible more up-to-date methods of financing certain operations. In terms of providing the necessary control information for management, it achieves nothing.

The measure also has to be judged by whether it curtails or advances parliamentary scrutiny of the administration of the estates. Here again, I suspect that the form of accounts proposed in the Bill fails to do that. We shall want to explore in Committee not only whether the existing checks and balances are fully maintained in the Bill but whether new and adequate checks and balances have been introduced to cover the changes proposed in clauses 3, 4 and 7.

As a matter of interest I had the Library prepare some figures from 1970 to 1981 showing the relative movement in income on this estate going to the Prince of Wales compared to the retail index and to average earnings. Over that period, the net income received by the Prince has increased five and a half times. The retail price index increased fourfold and average earnings fivefold. I must admit that I was somewhat surprised to find the closeness of the relationship in the movement of the figures. A great deal depends on the choice of starting point. I chose 1970 because that was the time when the funds actually became due to the Prince on his attaining the appropriate age. Over this period there have been incredible variations in the return. By 1975, when the cost of living had doubled, the income had fallen by 60 per cent. That is why I say that the present method is unpredictable. It is an unsatisfactory method of deciding payment. We shall want to discuss these incredibly wide variations in Committee.

It is invidious that the income source should be so unpredictable, although I recognise that this matter is outside the scope of the Bill. Fundamentally, the failure of the Bill is in its approach to accounting. It has to be remembered that accounting is important not just in terms of managerial efficiency but also in terms of the capabality of the House to scrutinise exactly what is happening in terms of the capital value and the withdrawal resource from the estate.

The existing system is archaic, and so is the system proposed in the legislation. The new method will ease the problems of husbandry but will do nothing to facilitate financial control by the House of Commons, or by those in charge of the administration of the estate. I am forced to draw unfavourable comparisons between the accounting requirements in the Bill and those in, for example, the Crown Agents Act 1979. In that, there is a duty on the Crown Agents to prepare in respect of each accounting year a statement of accounts dealing with, and giving a true and fair view of the state of affairs, profit or loss, and source and application of funds of, the Crown Agents … Every statement of accounts prepared by the Crown Agents under this section shall conform to the best commercial standards". Hon. Members recognise that the methods of accountancy have evolved to facilitate the more effective and efficient control of business, and the estate is, after all, a business with enormous assets and acreage and several thousand people, whose well-being depends on the estate.

Therefore, in Committee we shall be tabling amendments intended to improve financial control and reflect the changed face of the accounting art. It is impossible to achieve efficient control and scrutiny of the affairs of the Duchy when there is no capital value from which comparisons can be made, and no proper profit and loss account is drawn up by the normal criteria.

We shall be putting forward suggestions to facilitate good management, to ensure that the real value of the duchy is maintained, to ensure that the Prince receives his fair entitlement from the profits rather than by this rather strange concept of a residual surplus, and-to enable proper parliamentary scrutiny, which the Bill does nothing to enhance.

The appropriate time to deal with these points of difference would be in Committee. The objectives that many of my hon. Friends will espouse this evening will be achieved, if at all, mechanistically rather than by symbolic votes on Second Reading, the defeat of which will not advance the objectives that I suspect they have in mind. Therefore, although I realise that I may not be heeded, I advise my hon. Friends not to oppose the Bill at this stage but to support amendments in Committee.

10.33 pm
Mr. William Hamilton (Fife, Central)

It is worth looking at the way in which the Bill has been handled by the Government. The House may recollect that the Government originally tried to have the Second Reading of the Bill upstairs, off the Floor of the House, in a small Committee, by using Standing Order No. 66. Subparagraph (1) of that provides that a Government can seek the Second Reading of a Bill in a Committee by putting an order in front of the House that can be opposed only by 20 Members standing in their place.

That is a legitimate exercise, except that the Government used that ploy on Friday 28 May, the day when the House was rising for the Whitsun Recess, and there were not 20 hon. Members to be found anywhere in the House. [Interruption.] The Government carefully calculated that it would be virtually impossible for any Opposition Member to get 20 hon. Members to the House on the day that the House rose for the Whitsun Recess. In addition, in the first instance, the Government sought to have the Bill treated as a Private Bill and to take it away from the scrutiny of the House as a whole.

The story is even stranger than that. A Committee was set up to debate the Second Reading of the Bill, instead of discussing it on the Floor of the House. For very strange reasons that the Government have yet to elucidate, that Committee was abandoned. The Government decided, after all, to take the Second Reading on the Floor of the House. However, they decided to do so at the fag-end of a day in which we have had two debates. The Government presumed that hon. Members would have left for their lodgings by now. However, we now have a rare opportunity to debate, and throw some light on, one of the darker recesses of the institution of monarchy. The genesis of the Bill is a mystery. Why is it being introduced now, at the fag-end of a Session. On whose initiative has it been introduced? Is it being brought forward because the duchy's owners and management are suffering from the financial restraints imposed by the Duchy of Cornwall Management Acts 1863 and 1893? The answer is probably that now that the heir to the throne is married, with a family to support—a family that will almost certainly increase—the need to augment the family income from the duchy has assumed an increasing urgency.

When there is no Duke of Cornwall and when a reigning monarch has no son, the Duchy is in the hands of trustees and there may not be the same pressure to increase the duchy's revenues. But now, presumably, the situation is urgent, if not desperate. The young couple and their child William—Willie—have got to live, and the duchy is their only known source of income.

Mr. John Maxton (Glasgow, Cathcart)

My hon. Friend is breaking my heart.

Mr. Hamilton

The last parliamentary inquiry into these matters was undertaken by the Civil List Select Committee in the Session 1971–72. I was a member of that Committee—[HON. MEMBERS: "Hear, hear."]—although my membership was opposed by he who now is Lord Boyd-Carpenter. He thought it improper for a person such as me to be on a Committee like that. [HON. MEMBERS: "Hear, hear."] However, his view was over-ruled by the House, and I duly took my place on that Committee—[HON. MEMBERS: "Hear, hear".]—which was chaired by the then Chancellor of the Exchequer, Mr. Barber. What has happened to him?

The Select Committee's report was published on 22 November 1971. All the evidence—or, nearly all—was published for the first time and, as it happened, the last time. The House was precluded by subsequent legislation from ever discussing in detail the revenue, income and expenditure of the institution of monarchy. We cannot do that. Therefore, this occasion affords us a unique opportunity of examining a wee part of it.

We took oral and written evidence from the officials of the duchy, including the Earl Waldegrave, KG, TD, then Lord Warden of the Stannaries, Lord Ashburton, KG, KCVO, the Receiver-General of the Duchy of Cornwall, Mr. AJL Lloyd, QC, Attorney-General to the Prince of Wales and Sir Patrick Kingsley, KCVO, Secretary and Keeper of the Records of the Duchy of Cornwall.

Mr. Ivan Lawrence (Burton)

All good lads.

Mr. Hamilton

They submitted to us a memo outlining the history of the duchy plus an annex showing the accounts of the receipts and disbursements of the duchy for the year ended 31 December 1970. We took oral evidence on the basis of that memo on 6 July 1971, almost exactly 11 years ago to the day.

Naturally, I was the first to put the questions to the officials of the duchy. I was interested in the origins of the duchy. As the Minister said carefully from his brief, the duchy dates from 17 March 1337, when a new rank was added to the English peerage by Edward III, when his eldest son was created Duke of Cornwall by parliamentary charter. The charter was granted to Prince Edward and his heirs. It provided this estate, which originated a long way back and was taken from the lords of Cornwall, who originally obtained their estates from the plunder of William the Conqueror. We are talking about plundered land. The estates were described in the memo as being in Cornwall, Devon, Somerset, Dorset, Gloucester, Wiltshire, the Isles of Scilly and Kenington and forming a total in 1970 of 128,930 acres.

It is important to understand that all this took place 600 years ago. At the time that the charter was granted, Edward III was aged 24 years, having succeeded to the throne at the age of 14 years. There was no democracy then as we know it today. Kings and landowners were all-powerful and they shared out the spoils as they wished. The kings and their sons had a fair whack.

The memo states: The Duchy of Cornwall was largely made up of the possessions of the Earls of Cornwall, which go back to 1066." Over the weekend the Prime Minister cajoled the railwaymen because they want to return to an agreement of 1919. Let the right hon. Lady read the 1066 agreement. Why does she adhere to the history books when it suits her purposes and upbraid the railwaymen for daring to wish to adhere to an agreement that was made about 63 years ago?

The estate is presumed to be the private property of the Duke of Cornwall, although the duchy functions under Act of Parliament—the Duchy of Cornwall Management Acts 1863 and 1893—which provide that the accounts of the duchy must be presented annually to the House. They are not available in the Vote Office. I have tried to ensure that they are made available there so that all hon. Members can examine them. I am the only hon. Member who goes to the Library because I know when they should be published. Only one copy is available, but one can make a copy of that. I have one for every year and I have built up a nice little pile from which I shall quote in the latter part of my speech.

As my right hon. Friend the Member for Swansea, West (Mr. Williams) said, the accounts are designed to prevent hon. Members from obtaining information rather than to disclose it. I quote from a Treasury memo presented to the Select Committee in 1971: The income and the property of the Duchy of Cornwall is exempt from income tax, surtax, capital gains tax and estate duty. When questions were asked of the Treasury witness on this matter on 6 July 1971 by the former Leader of the House, the right hon. Member for Chelmsford (Mr. St. John-Stevas)—who was given the boot by the Prime Minister—and by my right hon. Friend the Member for Huyton (Sir H. Wilson), it was explained to us that the tax exemptions were based on the opinions of Law Officers given in 1913 and 1921.

The right hon. Member for Chelmsford asked: Following up on that point of the Duchy of Cornwall, why is the income from that Duchy not liable to tax? Mr. Strudwick replied: This question was raised with the Law Officers of the Crown, first in 1913, particularly in relation to mineral rights duty, and again in 1921. Their answer, I am afraid, which is all I have, does not really take us much further, because they simply said that the principles which render … an Act of Parliament inapplicable to the Crown, unless the Crown is expressly named, apply also to the Prince of Wales in his capacity as Duke of Cornwall. This result arises from the peculiar title of the Prince of Wales to the Duchy of Cornwall. That is all they said. What the peculiar title is, I am afraid I cannot say. That matter was followed up by my then right hon. Friend, now unfortunately deceased, Mr. Charles Pannell, who was interested in such matters. He said: I am interested in this Law Officers' opinion in 1913 on the Duchy of Cornwall. I should like to hear more about that. You have not in that document the circumstances that led to the first enquiry to obtain the Law Officer's opinion. The answer was: I do not think I have it in any detail. The question did first arise in relation to mineral rights duty which was one of the four duties on land values imposed in 1910 by Lloyd George, I think, and this duty would have fallen perhaps heavily on the Duchy of Cornwall. Quite how the question came up, I do not think I can say. The opinion of the Law Officers was desired—this is the instruction—with reference to a question which had arisen between the Board of Inland Revenue and the Duchy of Cornwall, whether they were bound to make returns. I suppose—this is only guesswork—that the Board of Inland Revenue asked the Duchy of Cornwall to make returns of their mineral royalties for this purpose and the Duchy officials asked whether they had to do so. We have never received to this day a satisfactory answer from any Government, or from any Treasury official as to precisely why not one penny of the revenues and the income of the Prince of Wales is taxable.

I want to quote one further passage. My right hon. Friend the Member for Huyton said: I should like to ask a question of Mr. Strudwick, who I feel seems to be over-deferential towards the advice given by long-dead Law Officers. I think it was Sir Rufus Isaacs; he may well have been preoccupied with the transactions of another select committee at the time. As I understood Mr. Strudwick, the judgment was very short and a little inscrutable, because it referred to either the peculiar or the special nature of the Duchy of Cornwall, and did not go on to say what was peculiar or special. But the Inland Revenue, more trusting than they would be today, accepted it without question, and it seems to me they have gone on doing so. Has there been any further elucidation of that special or peculiar nature from later Law Officers? The Treasury official, Mr. Strudwick, replied: In 1921 we did put to the Law Officers the specific question of liability to income tax and the Law Officers of that time who, I understand, were named Hewart and Pollock, confirmed completely the 1913 opinion and said it applied to income tax, but again gave no reasons. We have never received any reason why those revenues should be tax-free. The present Prince of Wales has had an income from the duchy since he was a child of 3 or 4—from 1952 onwards. In 30 years that has amounted to several million pounds, on which not a penny of tax has been paid.

The accounts for the year ended December 1981 are difficult to understand and I propose therefore to read from them: Excess of receipts over disbursements for the year payable to His Royal Highness (of which 25 per cent. will be paid to the Treasury) was £771,480. Deducting one-quarter from that, last year the Prince of Wales received, tax free, from the estate £578,610. That figure will increase steadily. One of the purposes of the Bill is to so increase the efficiency of the management as to maximise and increase still further the revenues from the estate all of which can go, and probably will go, eventually into the pocket of the Prince of Wales.

Sir John Biggs-Davison (Epping Forest)

Will the hon. Gentleman explain why the 24 per cent. payable to the Treasury is not a form of tax?

Mr. Hamilton

I wish that I could write to the Treasury, or the Inland Revenue, and suggest that, instead of paying tax, I would give it a proportion of my income that I would decide. The Prince of Wales writes or telephones the Treasury and says "I will voluntarily pay you a proportion that I will state of my tax-free income from the duchy". That is a strange way to pay tax.

The estate is big business. In the year ended 31 December 1981, £1,332,958 was spent on the purchase of securities. In addition, securities held on capital account at the end of the year had a market value of £3,626,823.

The Minister talked about bringing the situation into the twentieth century. We should bring the whole method by which we pay for the Prince of Wales and other members of the monarchy into the modern age. If he is doing a job for the country, which most people believe that he is, he should be paid the rate for the job, just like other members of the Royal Family. He should not have to rely on a so-called private estate. There is certainly no defence for it being tax-free income when all our constituents, including the unemployed, are groaning under the increased tax burden imposed by the Government. The unemployed will pay tax on their dole, while this young man gets £½ million a year tax-free. That is the society that we are living in and that is what the Government seek to defend. The purpose of the Bill is to increase the efficiency with which the estate is exploited for the exclusive benefit of that family. It is time that that was ended.

I have an article written two years ago in a high-quality national newspaper, the Financial Times. I name it to show how completely authoritative my remarks are. It dealt specifically with the complicated finances of the Duchy of Cornwall. The duchy management was then, and probably is now, trying to assert its right over all the river beds in the duchy and was charging mooring fees. Beach charges had been increased. The rent for a wide-mouthed beach in North Cornwall was increased from £5 to £500 and at Polzeath from £100 to £2,000. The duchy states that it owns 11,000 acres of river bed and charges between £1.50 and £2 a foot for it. It owns 160 miles of foreshore for which it makes charges. So there is no doubt that it is big business, and that it is exploiting every acre, every river and every shore on which it can get its hands. The Government are introducing this Bill to increase the efficiency of that exploitation. If the money went into the public purse for the common good, I should find it defensible.

Mr. David Penhaligon (Truro)

Is the hon. Gentleman aware that, where river beds are involved, if one of my constituents can produce a deed to prove that he owns it, the Duke of Cornwall assumes that he does indeed own it, and can exploit it from thereon.

Mr. Hamilton

The hon. Member for Truro (Mr. Penhaligon) was mentioned in the article to which I referred, and I hope that he will speak in this debate, because he alleged in the article that he thought that the Duchy management was efficient and treated its tenants fairly, although I have evidence from people who think otherwise.

However, the argument relates to the purposes for which the revenues are used. The fiction of this being a private estate should be abandoned. The charter of 1337 should be repealed, and the matter should be brought into public hands, I sent a memorandum to the national executive of the Labour Party a year ago, arguing that the Duchy of Cornwall and the. Duchy of Lancaster, together with the grace and favour houses, should be brought under one Ministry called the Ministry of the Crown, that that Ministry should be accountable to this House, and that the revenues raised from them should go to the Chancellor of the Exchequer or the Consolidated Fund—in short, to provide money for the public benefit, not for the benefit of a private individual.

I want to ask the Minister one or two questions which could perhaps be answered when we reach the Committee stage. I have already asked him several questions, but there is still the important matter of investment. How will the management of the estate be publicly accountable for the investments that it makes? I ask that question because it is a matter of public concern. For example, would it be allowed to invest in South Africa? Would it be allowed to invest in the armaments industry? What control will this House have over the investment policy of the management, once the Bill is passed? Those are important questions to which we need answers.

The fundamental problem remains that in this day and age, when everyone in this land is expected to pay his due quota of taxes, it is quite obscene that the revenue from this estate should be tax-free. That is why we shall oppose the Bill.

11.2 pm

Mr. Bob Cryer (Keighley)

I want to make a few comments based on the claims made by the Minister. He made the extraordinary claim that this is a process of modernisation. In fact, its basis seems to be an eighteenth century antique notion that the heir to the throne should manage estates. In a modern industrial society, surely the heir to the throne should have a wider knowledge than simply management of what are or could be largely farming estates.

First, I echo what my hon. Friend the Member for Fife, Central (Mr. Hamilton) said. When the heir to the throne and the monarch provide a public service which many people appreciate, they should be paid a salary for the job. The system whereby they are paid an amount of money, called the Civil List, from which the heir is provided with money, should be swept away. It creates a sense of injustice in many people when they see a massive chunk of money called the Civil List allocated to one person who does not pay tax.

Mr. Nicholas Baker (Dorset, North)

Does the hon. Gentleman agree that people would feel less worried and envious—if any do—if they realised that most of the money goes in salaries to people who provide a service, along with the Royal individuals?

Mr. Cryer

I do not cavil at the fact that some of the Civil List goes to pay wages and salaries. However, it would be fairer and more open for the monarch and the heir to be paid a clear and accountable salary. They are public figures, carrying out public duties, and as such should be paid a salary. The upkeep and maintenance of other properties should be paid for by the State in the ordinary way.

I would go further than that and say that instead of people peering at Buckingham Palace from the outside in awe, a much greater proportion of it than the art gallery and the royal mews should be open to the public. That would give people more opportunity to look at what is a national and not a personal architectural treasure.

My hon. Friend the Member for Fife, Central has already said that the tax burden has increased under this Government. Where a person receives a considerable sum tax-free, there is a strong sense of injustice, particularly since, as my hon. Friend pointed out, under this Government the unemployed will have to pay tax.

I should have thought that one of the training grounds for the heir to the throne should be that he, like the rest of the nation, should pay tax. That is not dealt with by the Bill, which is more a royal supplementary benefit Bill than the process of modernisation which the Minister claims.

Under clause 4, for example, loans are to be simply written off. The accountability provided for by the Bill is extremely slender. It gives a good deal of power to the Treasury. I am not in favour of simply allowing the Treasury to approve of expenditure without immediate and clear approval by the House. It would have been in order for the Minister to suggest, for example, that orders should be placed before the House for greater public accountability. Under the negative procedure, orders do not impose great accountability. However, it would be better than giving a Ministry power to act without any direct authority from the House apart from primary legislation. We have a subordinate legislation system and we should use it because it gives elected representatives some accountability.

The Minister said that the Bill was at least in part a modernising process. The legislative process should be used to bring the Duchy of Cornwall and the Crown in general into conformity with general legislation—such as the Health and Safety at Work etc. Act 1974, agricultural rents provisions, and so forth—which has been passed by the House.

If the heir to the throne is to undergo training, the estate that helps provide that training should not be exempt from many of the statutory requirements that apply to the nation at large. It is antique that palaces and the employees within them should be exempt from legislation.

I realise that attempts are made to impose the standards of, for example, the Health and Safety at Work etc. Act 1974, but that their application, through improvement and prohibition notices and so on, are not possible against the Crown. That is one area that could have been remedied in this brief legislation. I should have thought it was extremely important that such a modernisation process should recognise that we are an industrial nation, not one with an eighteenth or nineteenth century landed gentry, which is what the Minister claims.

Income tax was mentioned by my hon. Friend the Member for Fife, Central. In a brief that it published a couple of years ago the Library stated; The Queen does not pay income tax on either the Civil List or on the revenues of the Duchy of Lancaster paid to the Privy Purse. The Crown Private Estate Act of 1962 made the Sovereign liable only to rates and to Schedule A income tax, since abolished, so the Queen does not pay income tax on farm profits etc. and is in fact entitled to claim refund on amy income tax suffered at source, on company dividends, for example."] That makes the majority of the nation who pay income tax and the other forms of taxes feel a sense of injustice.

The brief then states: Prince Charles does not pay income tax on the revenue from the Duchy of Cornwall. The gesture of returning half this revenue to the Consolidated Fund is a partial recompense for this and follows a precedent set by Edward VIII. The other half of that revenue goes to the Civil List, so that all the revenue ends up in the royal pockets.

On estate duties the brief states: The Sovereign is exempt from paying death duties on all estates, including Sandringham and Balmoral; nor is she liable to capital gains tax … No estate duties are payable on the Duchy of Cornwall. With such a background, and with increasing taxes, I should have thought that this tiny measure, which will increase the revenue to the Duchy of Cornwall, should have been looked at in the much wider context to which I have referred. It demonstrates double standards—one for ordinary working men and women and another for the heir to the throne.

I believe that the heir to the throne should experience some of the difficulties that the vast majority of the people face, including some of the burdens that are thrust upon the nation by the Government. That is the proper experience that any heir to the throne should go through. The Bill does not give him that opportunity. Therefore, it remains a feeble attempt at a royal supplementary benefit Bill.

11.13 pm
Mr. Hayhoe

I shall reply briefly to some of the points that have been made.

I welcome the comments of the right hon. Member for Swansea, West (Mr. Williams) and his constructive approach to the Bill. I assure him that during the Committee stage we shall look at the various points that he has mentioned. I hope that it will be possible to provide some assurance to him on many of the points that he has raised. Most careful consideration will be given to those matters.

The rest of the short debate has been taken up by two characteristically sour speeches, one from the hon. Member for Fife, Central (Mr. Hamilton), who tried to make an issue of the fact that the Second Reading Committee procedure had been considered for the Bill. As he knows, those matters are discussed through the usual channels. The Bill came back to the Floor of the House so that it could be debated, as the hon. Gentleman suggested in his Early-Day Motion, after discussion through the usual channels. That decision had been made before the hon. Gentleman put down his Early-Day Motion. It was also interesting to note that five people supported him on his Early-Day Motion after the Bill had come back to be taken on the Floor of the House.

I was sorry that the hon. Gentleman thought that it was necessary, although it was entirely within his parliamentary right so to do, to inflict upon the House his rather pathetic comments and the same discordant refrain that we have heard from him so often in the past, which have added nothing to the sum total of knowledge about his attitude to those matters or to the general knowledge of the House.

The hon. Gentleman gave us fresh cause to be pleased at the intellectual perceptions of Lord Boyd-Carpenter in his comments about the noble Lord's membership of the Select Committee. He talked about several matters, the origin of the estates, the twelfth century, ASLEF and tax arrangements. They are all important matters but remote from the narrow scope of the Bill.

I was glad that the hon. Gentleman corrected the figure for the duchy revenue. He made it clear that the revenue, one-quarter of which is voluntarily given by the present Duke to the Treasury, is £771,000 rather than the £1 million-plus that is quoted in the hon. Gentleman's Early-Day Motion. He also asked about the investment policy and the investment constraints that the Bill would put on the administrators of the duchy. I am advised that the constraints are those of the Trustee Investment Act 1961 and the wider range securities, as they are referred to in the Act.

The comments of the hon. Member for Keighley (Mr. Cryer) were put into proper perspective in the intervention of my hon. Friend the Member for Dorset, North (Mr. Baker). The overwhelming proportion of the revenue goes in staff salaries. It gives jobs to people. It allows the Duke of Cornwall to contribute to national life, which is highly appreciated by the vast majority of our fellow citizens who reject the politics of envy and discord that have been clearly expressed by Opposition Members.

Mr. Dennis Skinner (Bolsover)

The Minister is taking a liberty when he attacks my hon. Friends for raising the matter. The Tory Government always prate about freedom. My hon. Friends are quite right to make those statements. Is it not fair also to acknowledge that we represent constituents, such as widows, who are being taxed on their £6 a week National Coal Board pension—net incomes of less than £37 a week—and that it is right to draw attention to the Government's double standards? The Prime Minister refuses to give any relief of those widows' tax burden. The coal board widows have never before had to pay tax on that pension. We are also drawing attention to the fact that no tax is paid on the revenues. It is honourable for anyone to draw attention to those double standards.

Mr. Hayhoe

It is interesting to note how thin skinned the hon. Member for Bolsover (Mr. Skinner) is. I am surprised that he is so sensitive. As one whose comments in the House are always attuned in such carefully moderated terms, he would surely be the first to accept that other people have a right to comment on what is said by his hon. Friends. I made it perfectly clear that the hon. Gentleman and his hon. Friends had the parliamentary right to raise these matters. I merely regretted that they did not have the self-control to deny themselves that opportunity.

Mr. Maxton

Will the Minister answer the basic question? As a Treasury Minister who has just dealt with a Finance Bill which increases taxes for a large number of people, does he believe that it is right that the Duke of Cornwall should not pay tax? Will he answer that simple question?

Mr. Hayhoe

This Bill is not about taxation, but I am certainly content with the present arrangements. I believe that the attacks made on the royal family tonight would be rejected by the vast majority of our fellow citizens. Of course, there will be some who share the views expressed by Opposition Members, but I think that if they go back to their constituencies and talk, for example, to the coal miners' widows, to whom reference has been made, they will find much wider support for the royal family than has been expressed in the debate.

I therefore commend the Bill to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 101, Noes 4.

Division No. 256] [11.20 pm
Alexander, Richard MacGregor, John
Ancram, Michael Major, John
Atkinson, David (B'm'th,E) Marlow, Antony
Baker, Nicholas (N Dorset) Mather, Carol
Beaumont-Dark, Anthony Mawby, Ray
Beith, A. J. Mayhew, Patrick
Benyon, Thomas (A'don) Mellor, David
Berry, Hon Anthony Mills, Iain (Meriden)
Bevan, David Gilroy Moate, Roger
Biggs-Davison, Sir John Montgomery, Fergus
Blackburn, John Mudd, David
Bonsor, Sir Nicholas Murphy, Christopher
Boscawen, Hon Robert Needham, Richard
Bright, Graham Nelson, Anthony
Brinton, Tim Neubert, Michael
Brocklebank-Fowler, C. Newton, Tony
Brown, Michael(Brigg & Sc'n) Osborn, John
Browne, John (Winchester) Owen, Rt Hon Dr David
Bruce-Gardyne, John Page, Richard (SW Herts)
Butcher, John Penhaligon, David
Cadbury, Jocelyn Percival, Sir Ian
Carlisle, Kenneth (Lincoln) Proctor, K. Harvey
Carlisle, Rt Hon M. (R'c'n) Renton, Tim
Chalker, Mrs. Lynda Rhodes James, Robert
Clarke, Kenneth (Rushcliffe) Ridsdale, Sir Julian
Cockeram, Eric Rumbold, Mrs A. C. R.
Cope, John Sainsbury, Hon Timothy
Costain, Sir Albert St. John-Stevas, Rt Hon N.
Cranborne, Viscount Shaw, Giles (Pudsey)
Dorrell, Stephen Shepherd, Colin (Hereford)
Dover, Denshore Smith, Tim (Beaconsfield)
Dunn, Robert (Datrford) Speed, Keith
Fairgrieve, Sir Russell Speller, Tony
Faith, Mrs Sheila Stanbrook, Ivor
Garel-Jones, Tristan Stevens, Martin
Goodlad, Alastair Stradling Thomas, J.
Griffiths, Peter Portsm'th N) Tebbit, Rt Hon Norman
Gummer, John Selwyn Thomas, Mike (Newcastle E)
Hamilton, Hon A. Thompson, Donald
Hampson, Dr Keith Thorne, Neil (Ilford South)
Hawkins, Sir Paul Trippier, David
Hawksley, Warren Waddington, David
Hayhoe, Barney Waller, Gary
Henderson, Barry Wells, Bowen
Jopling, Rt Hon Michael Wheeler, John
Lang, Ian Wickenden, Keith
Latham, Michael Wilkinson, John
Lawrence, Ivan Wolfson, Mark
Lester, Jim (Beeston)
Lloyd, Peter (Fareham) Tellers for the Ayes:
Lyell, Nicholas Mr. Peter Brooke and
McCrindle, Robert Mr. David Hunt.
Macfarlane, Neil
Evans, John (Newton)
Hamilton, W. W. (C'tral Fife) Tellers for the Noes:
Parry, Robert Mr. Bob Cryer and
Skinner, Dennis Mr. John Maxton.

Question accordingly agreed to.

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