WEALTH TAX PROPOSAL AND HISTORIC HOUSES

HL Deb 26 June 1974 vol 352 cc1495-585

3.59 p.m.

Debate resumed.

VISCOUNT NORWICH

My Lords, I rise to address your Lordships this afternoon as one whose total property holdings amount to a four-room cottage occupying about half an acre of ground in Sussex, and as one who, to the best of my knowledge, possesses not a single work of art which could conceivably be valued at more than £100. These seem to me to be already admirable qualifications with which to intervene in this afternoon's extremely important debate, but I also have another which is probably even better; that is. that I am passionately and desperately concerned with the cultural heritage of this country.

I think we all owe an enormous debt of gratitude to the noble Duke for having given us the opportunity not only to discuss the very real dangers which appear to me to face that heritage in the near future, but also to have done so with such admirable promptitude some months before the Green Paper is published. I think this is extremely important, first because it is always easier to divert dangers before they are too clear-cut than after people have, as it were, nailed their colours to the mast, and secondly because I think we have no time to lose. If the dangers are what I fear them to be, and what many other people, perhaps thousands or even millions in this country, who share my concern about this fear, then the sooner we can discuss them rationally and reasonably and, I trust dispassionately, the greater the likelihood of our being able to avert them.

My Lords, the subject of the Motion this afternoon is not that of the rights and wrongs of a wealth tax as such; it is the effect of that tax on the country houses and the art collections of this country. Nearly all those houses and those collections, whatever their legal ownership, are, to a greater or lesser degree, open and available to the general public of this country for their enjoyment. I never fail to be surprised at the way the aberration seems to continue—not only in the minds of many of the public but also, it seems, in Parliamentary and possibly even in Government circles—that owners of such houses and of such collections are by definition rich men. I do not for a moment deny what the noble Lord. Lord Shepherd, has just told us, that there are a great many rich men in this country; certainly there are. What I do deny is that the large majority of those rich men are the same as the house owners of whom we are speaking this afternoon. A few house owners are indeed rich men, some of them very rich men indeed, but they are the minority, and they are rich, paradoxically enough, not because of but despite their possessions. If they were, for reasons of inclination or necessity, suddenly to decide to pack it in, to sell out, to rid themselves once and for all of this endless strain of upkeep, maintenance, repairs and insurance, they would find themselves at a stroke not only much less worried than they are to-day but also in financial terms a good deal better off.

But, my Lords, the enormous majority of the owners of the English country houses and the collections of which we are speaking this afternoon are not people like that. Their houses may be equally beautiful, even more beautiful, but the enormous majority of those 600-odd houses which arc open now to the public are rather more modest. Their owners have neither the space nor the land nor, heaven knows! the capital to invest in safari parks, museums or funfairs which might help to make their properties viable. Every year they find it harder and harder to keep a roof on. Over the last thirty years, thanks to a combination of good luck, clogged detemination, an endless capacity for self sacrifice, a good deal of faith and quite a lot of enlightened legislation passed by both Conservative and Labour Governments alike and the occasional grant from the historic buildings council, they have somehow managed to soldier on. But they have not done that for pleasure; they have done it because they love their houses. It may have been in their family for several hundred years; it is part of them; it is part of the country, and they see in it a little slice of English history in microcosm. They feel it their duty to preserve it; they feel themselves less its owners than its trustees who are morally bound to pass it on to later and possibly luckier generations. If they had not felt like that they would have thrown up the sponge, as indeed quite a lot of them did, twenty or thirty years ago.

But even the survivors, who have somehow managed to soldier on, are now beginning to feel themselves at the end of their tether, and if a wealth tax is introduced, and if that wealth tax does not give them enthusiastic protection, they will go. They have no alternative. If they go, what happens? They have to sell. To whom do they sell? They will be very lucky indeed if they find a private purchaser. There is not going to be such a thing as freehold any more. Once a wealth tax is enforced so far as I can make out everybody will be paying what amounts to an annual rent for his freehold property. If they do not find a private purchaser, what will they find? The National Trust?—conceivably.

Here, my Lords, I have to declare an interest, I speak now not just for myself and for my Party, but also as a member of the Executive Committee and the Properties Committee of the National Trust. The National Trust, so far as country houses are concerned. has always thought of itself as merely a lifeline, as the last resort when all else fails. We have always believed, and we know we are right, that the only real way to protect and preserve a country house is to enable it to continue in private ownership, and ideally in the ownership of the family to whom it has traditionally belonged. It is only when that ownership no longer becomes possible, when there appears to be no other way out, that the National Trust will, on occasions, step in. Even then it can step in only if it is satisfied, first, that the historical and architectural value of the House merit it; and, secondly, that it will have sufficient and adequate endowment to enable it to maintain that house as it deserves to be maintained.

We are, above all, determined to maintain certain basic principles Perhaps the most important principle of all is to maintain our status as an independent charity. This, we believe, is the secret of the success of the National Trust and the value it has been, we like to think, to this country over the last eighty years. But that is not the only standard we have to maintain. We also have to maintain our standards, as I say, of architectural merit, of management, of maintenance and financial viability. We are already stretched to the utmost. We are growing all the time. We are suffering, like every. body else, from inflation, and if now we suddenly have to face an enormous influx of new house owners imploring us to take over their houses, and find ourselves being asked to take on far too much too quickly, we shall find our standards impossible to maintain. This must inevitably mean that a large majority of the offers which will be made to us will have to be refused. What then do the poor house owners do?

One or two owners, probably the larger ones, may be lucky. They may find some institution, but it is not very likely, and I am afraid that in all too many cases they will find themselves faced with only one solution, the final solution—demolition. I suppose it could be argued that just occasionally for the one or two vitally important houses the Government might be able to feel willing to take them over and give them perhaps to a county council or a local authority to run. This can happen. It has happened, but it is not very satisfactory. First of all, as the noble Duke has already pointed out, a house run like this as a museum tends to lose its warmth, its life and atmosphere; it becomes dead, cheerless and infinitely depressing. Secondly, it is astronomically expensive.

Let me give your Lordships just one example, a National Trust property, Tatton Park in Cheshire. Many people think is one of the most successful of the National Trust properties. It receives rather more than 140,000 visitors a year. But in fact it came to us with practically no endowment. It is managed on our behalf by the Cheshire County Council and for the last year for which we have figures, 1972–73, that county council made a net loss, despite the enormous visiting figures of just on £70,000.

So, my Lords, the simple truth is that by far the easiest, the most satisfactory, the most successful and the cheapest way of keeping a country house going is to leave it in private ownership, in the hands of its owners. A good deal of enlightened legislation since the last war has enabled us to do this, and it has meant that the country has been offered probably its greatest single tourist asset—as we have heard, 43 million people a year, roughly visit the historic buildings of Great Britain—on a platter, at almost unbelievably little cost. Are we now going to throw all that away? I do hope that we are not.

So much for the country houses. But there is also the other half of the subject of the noble Duke's Motion, which concerns collections. This is almost more frightening a matter than that of the country houses because the temptation to sell is so much greater. For a very long time an owner of a country house with a small collection has seen his collection, not as a temptation to make money but as probably representing the only conceivable way in which he can stay out of the red. A work of art brings in no dividends. With every year that passes it seems it is increasingly vulnerable to theft, to vandalism, to the attentions of the Dr. Rose Dugdales of this world. It is extremely costly to maintain. It is ruinous to insure. Now, on top of everything else, it looks as if it is also going to incur what, to all intents and purposes, will amount to a rather steep annual rental.

Can we then blame the owners of these collections who start selling? They will have no alternative. If they sell, once again arises the question: To whom will they sell? Once again they are not going to find many, if any, buyers in this country. Few people will want to collect any more if they are going to have to pay an annual rental for their collection. They are not going to be able to sell to the museums and galleries who will suddenly be faced with an enormous quantity of stuff pouring on to the market, for their extremely modest annual grants will prove nowhere near adequate.

There is only one possible answer to this question, and that is that there will be an art drain from this country such as Europe has certainly not seen since the years immediately following the French Revolution, from which France has not yet recovered. The results of that will, I believe, be absolutely incalculable. The museums and galleries of this country have benefited, thanks once again to so much enlightened legislation. I go on harping on this farsighted legislation because I think this is a subject on which, on the whole, this country has the most superb record within the last 30 years. We can forget the rather awkward moment about the gallery entrance charges last year—which I may say will be as absolutely nothing compared to the consequences of the wealth tax, if it is introduced, as we think it will be.

On the whole, legislation has been extremely enlightened and has operated enormously in favour of the museums and galleries of this country which have always relied, and which must always rely, on private collectors for their own growth. Over half the pictures in the National Gallery—and the noble Lord, Lord Clark, will I am sure correct me later on if I am wrong—have come from gifts or as bequests from private sources; of the Tate Gallery, over three-quarters, to say nothing of the building itself; and of the Wallace Collection, the whole lot. Will any other collector ever give or bequeath a work of art to the nation if, year after year that nation has annually and systematically mulcted him of his money merely because he is a collector? I think it is extremely unlikely.

Moreover, how conceivably is this tax to be worked? First of all, it will demand a degree of honesty which I should like to think every British subject possesses, but I cannot in all fairness and frankness say that I do. It will be too easy, too natural and, in my view, too excusable for people to hide their little Fabergé objects at the back of the linen cupboard or their Boningtons under the bed. Even if they do not do this, how on earth will you find this regiment of valuers which is going to march through every house in England valuing and appraising? On what standards will they value and appraise? Who nowadays can value a work of art? Not three weeks ago somebody wrote a letter to The Times pointing out that one single picture had had five separate valuations by four art dealers and one auctioneer in one day, and that those valuations had ranged between £5,000 and £24,000. Somebody else who wrote to me the other day—once again it was someone in the trade—said, and I believe him, that it is axiomatic in the art world that if you nowadays want to be able to fix or to foresee the price at which any important work of art will go, there is nothing in the world half so good as a really effective crystal ball.

So, my Lords, it seems to me that the case must ultimately rest on this. A wealth tax is reprehensible in theory if only because it demands, it levies, the same payment year after year on the same basic capital. It is unworkable in practice because it would demand a nation of valuers, all equipped with second sight, to be able to work it. It will not bring in an enormous amount of revenue because in the long term it will be self-defeating. It will leave the so-called rich of this country with far more spending money and far fewer immediate personal worries than they have ever had before. It will do not a jot of good to the man in the street. And it will leave the country as a whole irreparably, irretrievably impoverished.

4.19 p.m.

THE EARL OF GOWRIE

My Lords, despite the rude things often said about them, those who work in public life are, I believe, usually patriotic and disinterested people. After all, the rewards are not so very great whether one counts them in money or in reputation; public memory is short, and most politicians do not leave all that much of a memorial. I recognise, of course, that it is difficult for anyone to be altogether disinterested where the subject of taxation is concerned. What I want most urgently, if briefly, to do this afternoon is to argue that the great chorus of anxiety which we are beginning to hear from people concerned for the Arts of this country is, with very few false notes, a disinterested and patriotic chorus. I believe that the opening speech of my noble friend is proof enough of that. We on these Benches want to back him up with all the power we can command, and I hope that if much of what I say seems to footnote the speech of the noble Viscount, Lord Norwich, it will not give rise to more ugly rumours of coalition. It is simply that I agree with almost everything the noble Viscount said.

I agree with him that this is not the moment or the place to argue in any detail the rights and wrongs of wealth tax or capital levy—call it what you will. Although many of your Lordships—and of course I include some of my noble friends—are quite poor and although most of us (and I include myself here) could not, in the old genteel manner, support ourselves without earning, some of your Lordships undeniably have retained great wealth, great privilege and position. In the public mind, I rather fear we may all appear to be "loaded", as the term is; and a tooth-and-nail opposition to wealth tax might sound more like the squeaks of squeezed pips than the anxious chorus I mentioned earlier. So I should like to point out that I believe it is common knowledge that the Conservative Party looked carefully at capital taxation when it was last in Opposition, and when it was last in Government its rejection of this form of levy was certainly not doctrinaire—and I ask your Lordships to accept that.

It was after all, the Conservatives who initiated the capital gains tax, but we were at one with the Revenue authorities at that time in finding really substantial difficulties in the way of wealth assessment and, more importantly, of keeping up with the "relativities of wealth". I mean by that phrase the rapid shifts in the league table of wealth, and these shifts are, of course, engendered and added to by an inflationary age. No political parties at this time are committed to confiscation pure and simple. We were therefore alive to the enormous burden on the taxpayer of having to support land or houses or other material assets which their owners, because of capital levy, would no longer be able to support. And, of course, once you destroy a more or less free market in such commodities the natural flow of their exchange dries up and you, in Government, are left carrying the can. The alternative is selling or disposal.

In general, I do not wish to go into the rights and wrongs of wealth taxation, so I hope I shall not disappoint my noble friends too much by refusing this afternoon to try out David's sling for size. Apart from my own unsuitability, Goliath has not yet issued his Green Paper and David was surely too sensible to shadow-box. Although we all recognise a giant in the noble Lord, Lord Shepherd, it was the voice of a relatively sensitive and friendly giant which we heard this afternoon. What we are now concerned with is the peculiar and very special threat which a new mode of taxation offers to an equally special and, indeed, unique area of our national life. If capital levy is allied to existing forms of taxation, Scylla will indeed be set opposite Charybdis. If the necessary, but inevitably contentious, exemptions are not made, then I for one give the great collections of pictures, furniture, books and art objects in their designed settings about five years to remain there; and within a few years more I would guess that the bulk of them will have joined their many fellows abroad. Therefore, we have to ask ourselves two questions: is this what would happen, and is this what we want?

Let me look for a quick second at the politics of the subject. There is a desire in the Party opposite to secure a more equal distribution of wealth in this country. For what my own opinion is worth, this seems to be an entirely proper Socialist aim, and indeed it is in the mainstream of Socialist tradition. Nor, as I said earlier, is sensitivity towards wealth distribution without active precedent in my own Party. When we were in Government, I received some support from a memorandum arguing that it was difficult for the State to intervene in the processes of income distribution and to avoid intervening in the distribution of assets. But I did at least learn at first-hand the really incredible complexity of all such intervention. Dirigism. as my right honourable and noble friends had to learn the hard way, is a difficult dance and one never quite knows at a given moment who is calling the tune. What I also found out—and I hope that noble Lords opposite are also finding it out—is that redistribution is taking place on a very rapid scale at the moment. We ought perhaps to keep a moment's silence at this point for the state of the stock market.

To return to the Socialist tradition, if greater equality of wealth is one part of it, surely the quality of life is another. My noble friend the Duke of Grafton has infinitely more experience in this field than I have, but I think he would agree with me that Labour have no less good a record of helpfulness towards those who maintain expensive houses or look after great treasures, than the Conservatives have. In the manuscript of the Report which Mr. John Cornforth so helpfully made available to us, he throws bouquets to Socialists as disparate in time and space as Mr. Hugh Dalton and the noble Lord, Lord Kennet, who I am sorry to see is not here to-day to give us the weight of his experience in Government—and of course the noble Lord, Lord Shepherd, mentioned Sir Stafford Cripps in this context.

Nevertheless, we cannot avoid—the Government above all—a painful conflict between the desire to interfere in the actual processes of wealth redistribution, and the desire to retain for the national benefit the unity of our unique collections. I therefore ask the Government and, through our Cabinet Ministers, I ask the Prime Minister and the Chancellor especially, to face this dilemma and realise what they are getting into. A capital levy which includes, say, agricultural land will not mean a redistribution of agricultural land; it will mean the nationalisation of it at very great cost. A capital levy which includes works of art will not even mean nationalisation. They would not be nationalised: as the noble Viscount has said, they would be sold. The buyers would not be British and in my view, by the end of the century. most of our store would have gone.

I do not think that most of your Lordships think of me as a dogmatic person or a scaremonger, but I am convinced that is what would happen.

Consider, my Lords, just one case—that of a friend of mine, though not unknown to many of your Lordships. He kindly allowed me to use him as a guinea pig, but I think it might be courteous not to use his name. He lives in a National Trust house in a park in the largest Labour constituency in Britain. His family has owned it from the time it was built in the 18th centry until he endowed it and gave it to the National Trust. All the furniture of the house was made for the house—for each and every room, and for a particular place in each room—by Thomas Chippendale. My friend's home and park are used virtually as their own by his community. He gets into rather hot water if he makes any changes or cuts down a tree.

As a way of life, this is of course a vocation. My friend likes it; he has chosen it; and there is no need to feel sorry for him. He has retained the furniture—and why should he not? It is his reserve of capital. It brings in no dividends; its outgoings, maintenance and insurance are colossal to him as well as to the Trust. In any case he had to endow the whole property heavily. My estimate, not his, is that wealth tax at 1½, per cent. would involve him "renting" his furniture for about £50,000 a year. How long could that go on? One of the few original pieces that left his house before his time, now has pride of place in the Governor's mansion in Williamsburg, Virginia. It is not even an important piece.

I have talked about selling. I want now to declare an interest. I earn my living in and around the English Art market. In the past 15 years or so this market has become synonymous with the world market. This has been due to the great energies and abilities of the men who created it, to their overwhelming reputation for integrity and, not least, to an enlightened Treasury, whether under Labour or Conservative Administrations. It might be thought that people like me would be in clover if the "wattage" of sales were increased by sales tax. On the contrary, I believe that the world market would quickly shift elsewhere, still with continued British participation, but elsewhere. The English sales are a feature of our national life and of London life particularly. The contribution to invisible exports was recognised by the Committee on Invisible Exports, a Committee which was wisely set up by the last Administration of Mr. Wilson. I beg the Government to consider the consequences of the destruction of this market, not just by flooding but by the redistribution of Art market centres which would be the world consequence of flooding. Interested parties though people in this market are (and they always acknowledge it), they are nevertheless experienced in the difficulties of assessing values accurately at any time, particularly, as the noble Viscount, Lord Norwich, said, in an inflationary period. There really would be terrible abuses on the assessor's side as well as on that of the assessee.

Consider the absurdity of the Dutch experience—and my noble friend who moved the Motion mentioned this. The Dutch are not noted for irrationality in their conduct of affairs, but I understand that although revenue inspectors are allowed into one's house in order to look over one's belongings, they are not allowed to open cupboards and drawers. It cannot be the Government's intention to add hugely to the value of stamps or porcelain at the expense of paintings. We must have taxation, but it should be at contained and accepted levels where its collection can acceptably and sensibly go forward. All this would happen. Do we want it to happen? There is a long list of speakers, and I leave it to others more experienced than I am to spell out the consequences for this country for the pleasures of its people, and for the visitors whom we need as well as welcome. My noble friend Lord Glendevon has asked me to say how sorry he is that he cannot be here because of illness.

I believe that the English country house, in all its aspects, is second only to our literature as a contribution to the Arts of mankind. Just think of their names. In the county of Kent, where I live, we have Knole, Sissinghurst, Chevening, Bourne Park, Ightham Mote, Penshurst, Mereworth, Squerry's Court and Saltwood. I have visited more than I can remember. I implore the Government to think carefully, to take time and to look before they leap. Ecology may be the fashionable term, but it is no less useful when thinking of houses and collections than when thinking of nature. We have in the English country houses, great and small, an astonishing range and balance of interests. These are indistinguishable from our landscapes, our nationhood and our sense of history. Surely it is this sense which has enabled us to withstand great trials, shocks and redistributions of power and influence without hatreds and without division. May it always go on.

4.35 p.m.

LORD CLARK

My Lords, in what does the wealth of a country consist? I hope that your Lordships will forgive me if I give a Ruskinian answer—and may I remind the noble Lords seated on the right of the Throne that when the Labour Party first gained strength in 1905, and a reporter asked the delegates what had led them to join the Labour movement, practically every one of them answered, "the works of Ruskin." Well, Ruskin would have replied that the wealth of a country consisted of three things. First, its men: that they be vigorous, healthy, hard-working, lawabiding and confident. Secondly, its institutions—a fair system of laws impeccably administered; a Civil Service entirely free from corruption; a political system that faithfully expressed the will and satisfied the needs of the people. And thirdly he would have said the visible evidence of our past, of our history and of our traditions, which the noble Duke, the Duke of Grafton, has so eloquently described. He would have added that if any one of these three conditions ceased to operate, the country would be impoverished, would lose its character as a country and become unmindful of its greatness.

Such is the nature of our wealth, and we do not yet know how a wealth tax is going to affect it. Whether or not such a tax is necessary it is not for me to say. I suppose that for political and social, although not for fiscal, reasons, it is inevitable. The problem is so to frame it that it falls on those who can afford it without destroying those who cannot. I expect that Samuel Butler's immortal verses have often been quoted in your Lordships' House: The rain it falleth every day upon the just and unjust fella, But chiefly on the just, because the unjust's got the just's umbrella. In other words, those who are sufficiently devoted to money to make a lot of it can usually find ways of keeping it which the ordinary quiet or indolent citizen would not think of.

I am afraid there is no doubt that one of the ways they have thought of is to buy works of art. There is no good brushing this fact aside, as I see happens occasionally in letters to The Times. Of course collectors in the past have hoped that their buys would increase in value, but the change in values in works of art in the past 15 or 20 years has been exactly the equivalent to the rise in the value of property. Collecting works of art has ceased to be a pleasure, an exercise of taste or of patronage, but has become a sort of Stock Exchange gamble. The Times prints every week or every fortnight assessments of the rise and fall of various works of art, even china—" Lowestoft up 3 points; Rockingham down 4 points", and so forth. To me it is disgusting. Auctions rooms have become like gaming parlours.

It is true that these speculations may not always turn out well: what speculations do? They are subject to the ups and downs of fashion. But one thing they are not subject to—taxation. So no wonder the Chancellor wants to get his hands on this hoarded wealth. Unfortunately in doing so it is very hard not to penalise those who have bought and inherited works of art or fine craftsmanship for very different reasons. And this of course leads to the last of my Ruskinian categories of our national wealth. Because a wealth tax on the contents of English country houses, large and small, would, in a very short time, lead to their extinction, as has been said by several noble Lords. With them would go the whole pattern of English society as it has existed in this country since the Middle Ages. I need not say anything more about that aspect of the matter because my noble friend the Duke of Grafton has said it so admirably.

Of course there are some large land owners whose considerable properties brieng them in large revenues; but, as your Lordships know, and as the noble Viscount, Lord Norwich, said very truly, the majority of people living in small country houses or manor houses, are hanging on by the skin of their teeth, doing their own housework, digging their own gardens, and yet remaining at the centre of the rural English scene and helping, I may add, to preserve that English scene which is almost as beautiful as the houses which stand in the middle of that landscape. Because one of their ancestors had shown sufficient taste to buy a landscape by Wilson or to have his wife painted by Reynolds, they could be subject to a tax which would be the last straw.

And this leads me to a matter which I have not yet seen referred to in the many letters devoted, perhaps rather prematurely, to this subject: the purchase of works of art by living artists. I have always considered it a duty as well as a pleasure for anyone who cares for art to buy the work of his contemporaries. Sometimes this will turn out badly in financial terms; sometimes astonishingly well. Must courage and good judgment be punished? Must the collector who as a young man bought the works of Henry Moore and Ben Nicholson—and here perhaps I ought to declare an interest—when they were entirely unknown, when he was probably laughed at for doing so, now be penalised? The State spends millions of pounds trying to encourage the Arts. Thanks to the good offices of the noble Baroness, Lady Lee of Asheridge, and the Labour Government, millions of pounds are very well spent. But where contemporary artists are concerned, 90 per cent. of the purchases are by private collectors. I must confirm the words spoken by the noble Viscount, Lord Norwich, that over half of our great public collections were originally private collections.

I am not fond of hypotheses or speculations, but there are times when they are an aid to foresight. I suppose that a wealth, tax, which I take to be inevitable might include a tax on works of art. So how can this be made least harmful to those values that are the true wealth of our society? Any answer will be open to objection but I should like to make one proposal which is fairly clear and workable, and it is that the tax be levied on what was paid for the work of art, with of course some adjustment for the change in the value of money. This has a far greater element of certainty than the fancy figures made by a corps of valuers, recruited Heaven knows how, going around the houses and not being allowed, or being allowed, to open the cupboards.

Most people can remember what they paid for their possessions, and there are auction records and the dealers have records. This plan has two other advantages. It does not discourage collectors from buying the works of young artists, and it does not lead to the immediate break-up of all small collections whether bought or inherited. On the other hand, those who have paid inflated prices for works of art as a speculative investment, whom I regard as enemies of civilised values, will pay tax or sell. But when all is said, I incline to the hope that the Chancellor of the Exchequer will think twice before extending the wealth tax to works of art and craftsmanship. It would be appallingly difficult to administer; there would be endless complications, litigations and, I fear, chicanery. We do not want to be made more dishonest than we are already. It would have no budgetary significance. By the time the money had been collected it would be worth practically nothing in terms of national income. But after a few years the visible evidence of our history and our past greatness would be very seriously affected.

4.45 p.m.

BARONESS LEE OF ASHERIDGE

My Lords, the noble Lord, Lord Clark, does not come to this House often enough, but when he does come he has the great gift of going right to the heart of an issue. It has been a pleasure to hear him, and for me it is a privilege to speak after him. Indeed, I thought he might have gone back to a theme which he used on a previous occasion, in the debate which took place in your Lordships' House on Wednesday, April 11, 1973, on historic houses, because on that occasion he said: Let us make no mistake about it, my Lords, those who wish to preserve old buildings are a very small minority."—[OFFICIAL REPORT, 11/4/73; c. 663.] His Lordship did not come back to that theme to-day, but I should like to say something about it. Love of beauty, the desire to improve the aesthetic standards of our country has always been a very important strand in Socialist philosophy. It would be a complete misreading of our history to think, whether we were talking about the William Morrises and the Ruskins of the past, or the Stafford Crippses and others of nearer times, that they would have sustained the rigours and criticisms to which they were subjected if they were concerned about material things only. That is a misreading of their place in history and the contribution which I am sure Socialist philosophy will make in the future as in the past.

I was particularly pleased about the references to Sir Stafford Cripps. There was so much abuse in his lifetime—"Austerity Cripps". I was very close to the happenings of the 1945–50 Labour Government, and I can remember when Aneurin Bevan, as Minister of Housing, then said he would be damned if he would build council houses in the Cotswolds with bricks. He had his fight with the Treasury, and it was from the private purse of Sir Stafford Cripps, along with public money, that even in those immediate years following the Second World War we were able to build a dream village in the Cotswolds of Cotswold stones. That is known to some Members of this House. but not to many.

Then, it was not an accident that the last Labour Government enjoined me as a very junior Minister to concern myself with two things: to sustain the best in the Arts, but—and this is important—to make the best more generally available. How does this come into our debate this afternoon? May I say straight away about myself that I am a conservationist. Indeed, one of the few arguments that I had with the noble Lord, Lord Goodman. who will speak later, in the years when we were in double harness was when he shocked me on one occasion by saying—the Front Bench has been so discreet that a little indiscretion from me may be pardoned—that he wanted the Elgin Marbles to go back to Greece. I said: "Over my dead body!" Maybe he will say something which is still a mystery to me—

LORD GOODMAN

My Lords, I must correct the Record. The noble Baroness made that statement in her second week of office. She shared my view in her first week of office.

BARONESS LEE OF ASHERIDGE

Well, my Lords, I am flattered to think that I have such powers of quick growth. In any event, the point I am making is that if we started opening that stable door, where should we get? After all, we have the loot of Empire, and the British Museum would be a much poorer place without it; but so have other countries. And what we have to deal with to-day is the situation as we now find it, and the future. I do not want to see great possessions put on to the art market at a difficult time, with the consequences that they would have to be shipped abroad. This is a difficult exercise. I wondered at one time whether there was not some way by which we could tighten up regulations to make it more difficult for works of art to be taken abroad. But as the noble Earl, Lord Gowrie, has said, we are a great international market in London, and it is very difficult to know how to deal with these matters. What we have in mind this afternoon, therefore, is to alert the Government of the day to the dangers and consequences which might follow from certain aspects of the wealth tax.

We all accept that there is a need for a wealth tax. Industrial and professional workers have no say about paying income tax, P.A.Y.E. is deductible at source. They have to pay their own rent and they have to pay for their own transport to get to work. If we are to keep their good will and sense of fairness, then we have to deal in some form with the fantastically inflated wealth in this country. It is hard, living an honest life and paying one's income tax in the normal way, to find that by property deals somebody has made a vast fortune overnight. However, I think that our attack has been in the wrong direction. Those who have been making great profits by the sale of land and property have been doing something which is perfectly legal. It is only the amateurs who are caught out by going outside the law. The really able people know how to make their fortune and keep inside the law. I am not talking about fair returns on capital, but of excessive profitering. We must have a wealth tax that will bring back to the public purse money which ought never to have found its way into the private purse.

I hope that our debate this afternoon, and further debates, will help to enlighten the general public about what could be the consequences of a wealth tax falling on country houses and works of art. When we say "country houses" we do not mean all country houses. Already we have organisations for the preservation of some of them. Some of these country houses are best left in the hands of private owners who make an industry of it and bring in all kinds of auxiliary entertainments. Some of these country houses can become the Arts centre of the district. I should like this country to have not only a Housing the Arts Fund but also a Housing the Museums and Galleries Fund. Indeed, I should be happy if the Housing the Arts Fund could be understood to include museums, galleries, great country houses, where suitable, and sometimes libraries which would be extended into Arts centres. We will not carry public opinion with us unless public opinion realises that what we are trying to do is to save our great national assets, not just for a privileged few but for the many.

Your Lordships have referred again and again this afternoon to the history of the country house. In doing so, your Lordships have been thinking of the craftsmen, of the painters, of the joiners, of the plasterers—the men of skills of many kinds whose work we are trying to retain. However, I could be arguing about this subject to a very different audience to whom "the great country house" means the hard work that is done in the kitchens and the cold bedrooms in the attics. We must be on our guard unless we have to pay too heavy a price for some of the hardships and indignities of thes past. I could be talking about this to a very different audience who would say to me, "Let them rot. The great country houses and their owners have had their day. They took full advantage of the times when one family occupied a house and a regiment of servants sustained them".

I try to argue about it from a different angle. We are living in a changing society. We are not seeking to sustain the best of the country houses and their contents for the exclusive use of past or present owners. That has been made clear on every side in this debate. What we should be emphasising is that we are paying our respects not only to the great patrons or people of great wealth who were able to have splendid houses built, wonderful furniture made for them and beautiful pictures painted for them by the most distinguished artists to adorn their walls. Often we do not know the name of the patron. But he was only one of those who were concerned. What about the generations of Englishmen and Englishwomen whose skill, the skill of the poor, made those wonderful homes and gardens. The gardener was a lower servant, who was often poorly paid. Look at these wonderful gardens and ponder the love that we have for these gardens. We are not seeking to preserve the best of our country houses in order that they should be for the exclusive use of any one family. What we are seeking to do is to retain something of great beauty, which, should it be lost, will be irreplaceable, in order that as many as possible of the people of this country, old and young, can enjoy and have their lives enriched by the contents.

In his splendid opening speech the noble Duke disclosed that he had been on journeys behind the Iron Curtain. I have been on such journeys myself. Three years ago I travelled from Moscow to Samarkand. What impresses you when you go to these countries is that what has been left from the past—an old house or an old church—is beautifully looked after and perfectly maintained. Aneurin Bevan said that there are two ways forword; you can either break heads or count heads. We belong to a tradition of constitutional Socialists—

LORD SEGAL

My Lords, would not my noble friend agree that many of these treasures which have been inherited from occupiers as a legacy from the past are not only museums of the past but almost mausoleums, due to the fact that although they are visited by the public they have no warmth, no actual occupation, no inheritance that gives them a "living" factor as well?

BARONESS LEE OF ASHERIDGE

My Lords, was my noble friend talking about the position in Russia or here? I understand that he is referring to Russia and I am coming to that. If you go to The Hermitage in Leningrad there is a splendid display, but when I was last there I was tactless enough to say that, come the revolution and we garnered all the treasures from all the great country houses in England, we would have a big display, too. Surely we do not want to plough through bloody revolution, with all its suffering for human beings, and then, on the other side, gradually have to salvage what is left from the past. If, therefore, it could be clearly understood that we are concerned not only that the great country house should be maintained but that it should be maintained as a living unit and that we want this to be done for all of us, not just for any particular family, it would help a great deal.

It is suitable that some of these country houses should remain with the owner. Other country houses are natural Arts centres for those areas, and the more that they can be used for that purpose the better. That is why I mentioned extending the Housing the Arts Fund, because in that way we might be able to make it clearer, at least to some members of the public, why it is that we think that these houses should be maintained as much as possible as living units. At the same time we should prevent the owners of those houses from having to take their pictures from the wall, one by one, and put them into a market where there are likely to be no purchasers except from abroad. There used to be the old jingle about the rich man in his castle and the poor man at his gate—

A NOBLE LORD

My Lords, that is from a hymn!

BARONESS LEE OF ASHERIDGE

My Lords, nowadays it seems to me that it is the poor man in his castle and the rich man outside with his 40p, ready to take over, at least for an hour or two.

We are in a changing society, and if we are too greedy—or let me put it this way: if we allow the minority of greedy people among us to be too selfish—then, of course, the future will be very hard indeed. We shall get it the rough way. But if we can make a distinction between a legitimate wealth tax which seeks to return to the public purse money which ought never to have gone into private purses, while, on the other hand, we try to keep the lovely heritage of the past—not just as a monument to distinguished patrons who created those places, not to their owners, however public-spirited those owners might be—we want to do so. If we can build our future on the past and get rid of so many of the injustices and cruelties of the past, while at the same time remembering the tradition of Morris, of Ruskin and so many others, that is really the path that this side of the House will want to follow. I hope that in this at least we shall have the support of noble Lords opposite.

5.2 p.m.

VISCOUNT ECCLES

My Lords, like other noble Lords I must say how indebted we are to my noble friend the Duke of Grafton for explaining to us in such an admirable speech the dangers of levying an annual tax on the value of country houses, and, let it be remembered, country houses which are open to the public in the case of 600 or so, and of those 43 million visitors I am bound to remind the House that a great majority pay an entrance fee.

I should like to add a few words on the subject of works of art and libraries, which enhance the attraction of many of these country houses, and then refer to the relationship between private owners and public collections, and I have one or two interests to declare. First, I introduced in another place the Bill setting up the Historic Buildings Council. Many bouquets have been thrown at that Council and I should just like to add that I think Sir Allan Lascelles, the first Chairman, proved to be an outstanding success, and when the Historic Buildings Council had teething troubles (and it was not at all an easy institution to start) he was a tower of strength. Secondly, I am Chairman of the British Library and therefore much concerned to see continued the flow of gifts from private sources. Thirdly, I suppose I must declare a few very modest collections of my own, consisting of works of art and antiquarian books. I should also like to apologise to the noble Duke for the fact that owing to an engagement entered into long ago I am not likely to be here at the end of the debate.

The noble Baroness, Lady Lee of Asheridge, really threw out a challenge. As I understand her, she said that the principle of a wealth tax was accepted by almost everybody. I must immediately say that I do not accept a wealth tax on principle and I think that in circumstances in which we have a threat hanging over us but no detailed proposals as yet it must be right to examine in a few words whether the argument in principle will stand up.

Personal taxation either reduces what we can spend out of income or it falls on our savings, accumulated or inherited. The second kind of taxation has for a long time been levied at death, and the principle of death duties is, I firmly believe, generally accepted. Of course, I should like it to be levied in the form of legacy duty. If a wealth tax were levied during a man's lifetime, he would aggregate the cost of that tax with his income and surtax and his attitude towards his financial affairs would be determined by this combined payment.

A fortnight ago I was in Canada, where the air sparkled with the general feeling of prosperity and progress. The contrast with the prevailing gloom here has so sharp and painful that it could not be ignored, and I asked one of the Canadian Ministers how he accounted for the buoyancy of his country in a world so full of troubles. He gave several good reasons, but he said that the most important was that Canadians knew that they had a good chance to get a good reward for their efforts and could keep a good slice of what they made. Not for them the prospect of a combined surtax and wealth tax equalling, or even exceeding, a man's total income. And my friend said to me that development in a free society must be nourished by a strong flow of private savings, and in Canada this flow was not frustrated by intolerable taxation. He asked whether I thought that frustration was about to occur in my own country. This is surely the argument against too heavy taxation on the process of becoming better off. No-one ought to impede the effort which is essential to secure a steady increase in the national wealth, and there lies the distinction between a wealth tax during life and estate duties levied at death. So far as I know, dead men do not groan, but during a man's lifetime taxation not only causes him to groan, but impels him to waste much time and energy trying to evade those imposts which are most prejudicial to the accumulation and preservation of his own property.

What is the reaction to a wealth tax likely to be? In the present circumstances, the Government must be desperately anxious to secure more savings. Long before inflation hit us, new capital was seriously short for investment in industry, agriculture and commerce. We were falling behind our competitors. But now inflation creates an extraordinary demand for vast additional sums to finance raw materials and work in progress, and the shortage of capital has become desperately critical and is, I think, the point at which many of our best companies get into real difficulty. Therefore the need is greater than ever before not to take any measure which reduces the flow of savings or increases a demand for nonproductive loans. It might be said when taking l per cent. or 2 per cent. from private funds by an annual wealth tax, that one would not significantly eat into savings; or that the proceeds of the tax would be better invested by Mr. Wedgwood Bean than by private individuals.

On the first argument, what matters here and now is not the initial rate of the tax, but its immediate effect on current willingness to save; and on the second argument I have no confidence in Ministers of any Party proving to be better investors than those whose life's business is production and exchange. What must be obvious and beyond dispute is that a wealth tax is socially divisive, making it more difficult, not less, to fight inflation and to restore a healthy rate of investment in the economy. When society is ranged into opposing camps what then happens, who suffers?—the national interest, my Lords, because nothing is so likely to weaken it at home and abroad as this creeping civil war which the most experienced of nations appears to have embarked upon without realising what it was doing.

My Lords, it is against these general reflections that I must say a word about particular objections to a wealth tax upon works of art. The acquisition and possession of a beautiful house and fine works of art has always been a sign of civilisation, a way of identifying oneself with mankind's highest creations. One does not need to have an enormous collection to make that gesture towards the best in life; a very few things will do it for one. Further, it is a fact, as I think the noble Viscount, Lord Norwich, mentioned, that private collections blaze the trail for public collections. The museum director, with his limited funds, is likely to concentrate his purchases on what is generally considered to be important. His scope to take risks on as yet unrecognised masterpieces is very limited. On the other hand, a private collector can indulge his fancy and make quick. sometimes quixotic, decisions. If he makes a mistake, the public does not suffer. If he discovers a talent, later on the public will benefit by his taste and foresight. Museums and libraries would be much poorer if this process had not been in operation for several centuries.

Realising that the rise in the art market must endanger this beneficial process, the last Government empowered the Estate Duty Office to make more favourable arrangements for the transfer to public collections of material submitted to the Treasury by the owner or his executors. The collecting has been done with private money, and the museums benefit when the works collected are tendered in lieu of estate duty. But this sets up a delicate relationship between owners and museums which can easily be upset by a tax which reduces both the ability to collect and the willingness to transfer what has been collected or inherited to a public institution in this country. The one certain consequence of such a tax is that important works of art—and I do not mean just works which are exempted; there are far more just below that line—now in this country would be sold on the open market or, more probably, quietly and out of sight offered to a foreign buyer.

My Lords, I come to the British Library, which is beginning to reap great advantages from the Act which your Lordships passed some two years ago. The British Library, and I speak mainly for that part of it which used to be the British Museum, is never likely to have enough funds to buy against American competition all but a few of the books and manuscripts which would add to the comprehensive nature of its collections. Since the war, money values of the most important material that we want have risen several times. From my own experience, I am quite sure that the values of the secondary but very desirable items have risen even more steeply. Worse still, all the indications are that the rise will continue. Unless the British Library—and this goes for all libraries—can rely on benefactions, we must resign ourselves to seeing still more important collections and individual items crossing the Atlantic to find their final resting place in American institutions.

In the British Library we have examined with some care the probable effect of a wealth tax. The most serious danger lies in the following type of case. The owners of specialist collections have, in several instances, deposited them on loan with the British Library, or with one of the other great libraries. The understanding has been that on the owners' death the collection will be accepted in lieu of estate duty, and pass absolutely to the library concerned. Sometimes these collections have been deposited for a considerable number of years, during which the acquisition policy of the library has been directed to buying material complementary to the loan collection; in other words, we have treated the loans as if they were already part of our permanent stock. I need not remind your Lordships that the value of a library to the scholar depends in no small measure on the approach to completeness in its holdings of the material on the subject in which the scholar is interested.

Supposing the lender of such a collection, who in good faith gave the library concerned the belief that on his death he would leave the material to it, is a man of property. He might have a variety of assets, but no large cash resources. If an annual wealth tax were introduced, he would have to pay the tax on the total of his assets, whether they were in works of art or in any other form. To meet the tax he would have to sell something, and what more likely than the collections which, having been on loan for some considerable period, are out of sight and out of mind. We fear this very much. For obvious reasons, I cannot give your Lordships the names of these lenders, but I can assure the House that our fears are based on actual cases.

My Lords, to the extent which a wealth tax causes owners to sell works of art in order to raise money with which to pay the tax, we risk fine and important objects being bought by foreigners, and leaving this country for good. I think the noble Baroness, Lady Lee of Asheridge, suggested—she will correct me if I am wrong—that we might tighten up the export restrictions in order to prevent these works of art, thrown on the market to pay the tax, from leaving the country. Anyone who makes that sort of suggestion must realise that the effect would be to ruin London as a centre of the world art market.

BARONESS LEE OF ASHERIDGE

My Lords, I am afraid the noble Viscount, Lord Eccles, has misunderstood me. Actually, I said the opposite. I said I have looked at the possibilities of tightening up restrictions, and then I found that one had to balance that against the value of London as an international centre.

VISCOUNT ECCLES

My Lords, I beg the noble Baroness's pardon. Anyway, there are people who say that. I should like to remind the House that London as the centre of the world art market rests on three assets: the skill and expertise of the trade, which is without rival, but is mobile and would move; secondly, the fact that tax at the time that things are sold in this country is much lower than elsewhere, and, thirdly, that works of art are going freely in and out of the country to a degree to which they could not do in the other rival markets. If anything interfered with that, the London market would be destroyed. I cannot believe something of that sort might not happen with the introduction of a Wealth Tax.

The strong economic arguments against a wealth tax on works of art and country houses are greatly reinforced by the administrative difficulties to which the noble Viscount, Lord Norwich, referred; that is, the difficulties of making or checking annual valuations. Even to-day, it is often a delicate business making these valuations for the very limited purpose of the capital gains tax. When in doubt, the Inland Revenue rely on the expert staff of museums and libraries. Quite clearly, these experts cannot deal with very many cases. I must tell your Lordships that in respect of books and manuscripts, the staff at the British Library could not undertake the far greater task of checking valuations for a wealth tax. I have consulted Sir Edward Playfair, Chairman of the National Gallery, and he has authorised me to say that the National Gallery is in exactly the same position. I have not had time to consult the chairmen of our other national museums and galleries, but I am sure they would all have to give the same answer. How, then, can a tax on works of art be administered with any semblance of justice? Justice is only there if the valuation is correct.

I end by repeating my main argument. I am not pleading for exemptions to a tax which has already been conceded in principle. I believe that a wealth tax which fell on the process of reaping the rewards of hard work would serve only to hasten the decline and fall of our free society. Such a tax—and I hope noble Lords in all parts of the House would agree—is quite different from duties levied at the time of death. Such a tax ought to be rejected on principle.

5.21 p.m.

LORD GOODMAN

My Lords, I should like to join in congratulating the noble Duke on inaugurating what I regard as an extremely important, and, in fact, what may be a memorable, debate with what was an extraordinarily accomplished and impressive speech. There are some 17 speakers to follow me, and maybe there would have been more if the rather thin attendance on the Government Benches had not arisen from what I believe might well have been the cause of my own absence, that I never had a single worthwhile ancestor who bequeathed me a single picture about which I could have any concern. But had more ancestorless Peers attended this afternoon they might have had some words of comfort from me, because in a very modest fashion in a short lifetime I have been able to repair some of the omissions that my ancestors neglected to repair on my behalf. I think that the principle of self-help still operates.

I want to be extremely brief, but there are a few points which I think it is important to make. I have agreed up to now with every single speech, and what is remarkable about the speeches is that although they have all had the single theme of resisting a wealth tax in relation to works of Art they have all advanced different and none the less equally cogent reasons. The only speech I profoundly disagreed with was that of the noble Lord, Lord Shepherd, who has wisely departed so that he does not hear our strictures.

LORD STRABOLGI

My Lords, I am sorry to interrupt the noble Lord, Lord Goodman, but that really is not fair, if I may say so. My noble friend the Leader of the House did explain why he had to leave. Perhaps the noble Lord was not listening.

LORD GOODMAN

My Lords, I think even a member of the Government ought to be able to recognise a certain degree of flippancy. However, I withdraw any suggestion of want of courage on the part of the noble Lord, Lord Shepherd, who has demonstrated it on many occasions by making speeches worthy of much more severe stricture. I want to say about his speech that it was profoundly disappointing that we should not have had a word of reassurance about the principle of this debate. We really did not want to hear a short homily on how the country is seething with the need to have a redistribution of wealth, and how our malaise to-day is due to a general feeling throughout society that the maladjustment of wealth requires urgent rectification. This is not a view that many people acquainted with our problems to-day would share.

The noble Lord produced some rather formidable statistics. I have had the benefit of the best scientific brain in the country, which conveniently came and sat behind me for a moment; and he produced a little arithmetic which I should like to share with the House. I noticed that when the noble Lord, Lord Shepherd, produced his statistics to show that £2,000 million worth of income was possessed by only 8 per cent. of the taxpayers in this country, some of the less reprobate Members of the Tory Benches actually blanched. I saw one or two wincing at the notion that they were maintaining a system of such horrible inequity. But I can give them a word of comfort, and it does not derive from my arithmetic, but from much more impressive arithmetic. Eight per cent. of the population represents two million persons as taxpayers, if you take 24 million taxpayers. Two million persons, if you spread over them 80 per cent. of £2.000 million, which is £1,600 million, would give you something like £750 per year as a taxpayer. I do not think anyone would regard it as a terrifying acquisition by a man after a lifetime of concentrated effort to obtain that amount for his old age. If I may say so, people should not be carried away by their own slogans; it is a dangerous matter, particularly if you proceed to pass the slogans on to the electorate when they may not have the advantage of the noble Lord, Lord Zuckerman, to correct the arithmetic.

We wanted to hear about the matter of principle of this debate, and it is extremely important. It is in essence not, so far as I am concerned, the preservation of country houses. As I have said. I was notably lacking in ancestors and I do not have a country house. I think it is important that we should not make the Philistine assumption that because a man has a picture he has something which is to be regarded as realisable material wealth. I think this is a horrible Philitine proposition and should be rejected out of hand. I do not believe the Government will make any such assumption. I had the pleasure of serving a Government of the same Party for five years, as Chairman of the Arts Council. That Government gave the greatest encouragement to the Arts of any Government within living memory. It appointed the noble Baroness whose distinguished services to the Arts do not need recounting here.

I am quite convinced that when the Government come to consider the matter they will see that to regard a picture on a man's wall as a realisable piece of wealth is not only a ridiculous proposition, for reasons which have been advanced (and one or two of which I will urge), but also a proposition that would create such carnage in relation to possession of artistic works in this country as to reduce us to a twelfth rate country in the artistic league table. It is the case, alas! that we have probably receded in matters like finance and military force, and in many matters where we were at the forefront of the world 50, or 60 or 70 years ago. In the last 20, 30, or 40 years we have been able to make enormous advances in the intellectual field which have placed us in the very forefront of the world, particularly in artistic matters. We have had the advantage of hearing this afternoon as distinguished a group of authorities as ever addressed this House on this subject. We have had, if I may say so, sparing his blushes, in Lord Clark, the most revered figure in the whole of the artistic world telling us why this would be a nonsense if anyone were proposing to do it.

We do not know that anyone is proposing to do it. I do not entirely agree with Lord Shepherd when he says that possibly it is unwise to cry before you are hurt. Where Governments are concerned, it is extremely wise to cry a long time before you are hurt. Where we have this extraordinary institution of the Green Paper, on which I should like to say a word, I think it is exceptionally important that you should say something before you are hurt. The Green Paper is a new institution in relation to Government in this country. It appears to be a kind of prospectus where the Government span the extremes of possibility on the basis of which it may legislate. They will say, "The range of possibilities we advance to the population of this country will extend from giving you a box of chocolates to cutting off your heads. It is for you, by some unknown democratic process, to convey to the Government what your choice is, and we will take soundings, by an equally unknown democratic process, as to what it is that you prefer". If this debate does nothing else, if a few people were to urge upon the Government the extreme unwisdom of this process of procedure it might do a great deal of good.

This process has aroused such disquiet and concern as to what may happen, for the obvious reason that anyone reading a Green Paper reaches the conclusion that the most disagreeable consequence is the one that will be enacted, that there is hanging over the country for months possibilities of a most sinister character that may never come about. I do not know who thought of the Green Paper as a method of Government. I do not know how it is proposed to sound public opinion in relation to the Green Papers, by what method. But I do not think there is a better method than listening to what has been said in this House to-day.

I do not think that it is necessary for me to continue much longer. There are only two other points that I should like to make. I should like to endorse, if it needed any endorsement, what Lord Clark said about the living artist. Of course, a wealth tax on Art would do irreparable damage to the living artist, and particularly to one who is beginning to climb into some measure of success. I did not have the prescience or the foresight to buy Henry Moore or Ben Nicholson, but I did buy John Piper and I did buy Paul Nash and a few others who I am told will increase in value.

I have collected pictures ever since I was an undergraduate. I have never sold a picture. It would never enter my head to sell a picture, or that a picture was a valuable piece of work on which I could cash in. If I knew that hereafter each year I was going to have the attendance of some fiscal officer who would enter my home, and who would know or not know where the Fabergé objects that the noble Viscount, Lord Norwich, had concealed in the living room cupboard were to be found, and if he was to examine my modest collection of pictures to reassess them each year, then I would cease buying pictures and of course cease buying pictures by living artists. The damage would be very great indeed. It can be exaggerated, but it would be very great.

The impending arrival of a wealth tax may, or may not, be right. I think that I am the only man in the whole country who does not know whether it is right or wrong to have a wealth tax. We are obviously exceptionally fortunate in this country in having such a quantity of people who are totally devoid of doubt, particularly among our legislators. It is most encouraging to find legislators who have not the slightest scintilla of uncertainty about the proposals they are putting forward. I do not share that situation; I have no idea whether it is good or bad to have a wealth tax. But I am convinced that to have a wealth tax that includes the man's private ownership of pictures, to have a wealth tax that attaches to the great homes of England and to the contents of the great homes of England, would be unwise, Phillistine, and damaging to the country.

5.31 p.m.

THE MARQUESS OF EXETER

My Lords, I rise to say a few words with considerable diffidence and indeed embarrassment. Diffidence after hearing so many good speeches today, and particularly the last one from the noble Lord, Lord Goodman, which was full of good, sound common sense. I speak with embarrassment because I must confess that I am the owner of a stately home, and one does not like talking about oneself or one's possessions; no one does, because it does not seem very modest. There are times when one has to sink one's thoughts on this if one thinks one can make some practical contribution to the discussion.

I want to say something about the problems of running a stately home, and also why one does it. I think in a large part certain people outside do not really understand. Everybody likes to live in the home of his fathers. It is natural that he should do so. But there are other motives, and I give an example from my family only, although no doubt there are many others. About 450 years ago an ancestor of mine built a gigantic palace. One hundred years later in the 1600s another one went three times on the Grand Tour in a carriage across France, and bought a large collection of pictures and other works of art from the artists and great houses in Italy. Then 50 years later another one completed the collection. By 1794 he had died. The point is that in 1785 he opened that collection to the public. They have been able to go from that period right the way through for 170 years by paying only one shilling, which was given either to the housekeeper or to whoever showed them round, and the whole of the expense was borne by my ancestors. That is only one example, and I am quite certain that many people in the stately homes to-day have a strong feeling on just this point; they feel that they are trustees to the collections of their ancestors who have gone before, and they rejoice that they have the opportunity of seeing these lovely things and making them available for the public to see. I believe that these are the motives.

We have had some general talk to-day about what the people want. I can tell your Lordships from practice, not from theory, what I find they want, because for the last 17 years every Sunday, Bank Holiday, and several other days too, I go round against the crowd—that is, meeting them head on—to see as many as possible, guiding them and chatting them up. My wife does the same in the cafeteria, helping them and talking to them. Without exception over those years—and my guides confirm this—never has anybody said other than how lovely it is to see all these lovely things in a home where the family lives, and that this makes it something personal. You may see more lovely things, or as lovely, in museums, but it is entirely impersonal. They all mention that fact and they even write about it, too. So when people say that the public demand this and that, I would ask people in other stately homes if they agree with what I have said. If this is so, nobody has a right to say that the mass of people want a violent change.

What is the alternative which faces us now? Here you have a system that is working. You have a lot of people giving up an immense amount of their time to run these huge houses, which are great anxieties, a great worry, and, except for perhaps two or three, having to dip deeply into their own pockets to keep the show going as it should. They are doing this for the motives that I have already spoken about, and I believe that the public appreciate it. If you are going to destroy this—why? It is going to be immensely expensive for the Government to keep all these places up. That warmth and personal feeling that you get would be lost. You could never do it financially; it would be hugely expensive. You are going to break up some of these great collections of pictures and works of art and, as the noble Viscount, Lord Norwich, said, that is exactly what would happen. When people are struggling to keep their heads above water you would push a lot of them under. All these works of art would come on to the market together; they could not all be bought here; they would go to various parts of the world, and they would have been lost for good. When the public like coming to these places and looking at these works of art, what advantages would accrue from taking them all away and riot letting the people do as they like to do at the present moment?

The noble Lord, Lord Shepherd, made two points about this. One concerned death duties, which bears little relationship to a wealth tax because this would happen every year and you hope that the death duties do not happen for many years. Do you want to destroy all this? How are you going to face young people in another 15 or 20 years time if they say, "Why can't we do what our parents liked doing on a Sunday afternoon or a Saturday afternoon out, visiting the homes?". They are cosy even if they are big, and they are warm and enjoyable, and what answer are you going to give to them? Some theoretical idea? I do not believe that the public of this great country would accept this. I think that they are happy with things as they are. For those reasons, I hope that any wealth tax will not include the stately homes and their contents, which are natural treasure houses and are treated as such by the owners.

5.38 p.m.

THE LORD BISHOP OF LEICESTER

My Lords, may I first of all say that I consider it a privilege to follow the noble Marquess. I used to see him leaping the hurdles at Cambridge, and he has shown us to-day that there are still many hurdles that he can leap with equal alacrity. I also have to offer a word of apology. It is not my habit to speak in debates when I cannot stay to the end, but to-night we on these Benches have a function connected with the retirement of the most reverend Primate, and I am sure that your Lordships will understand that some of us have to be there.

Those of us who are concerned a good deal with the maintenance of historic churches realise that they have much in common with historic houses. They are part of the landscape of England; they are very often expensive to maintain, and they do not always fit in easily with the economic pattern of our modern populations. I have owed a great deal to the noble Duke for the work that he has done in connection with the Historic Churches Preservation Trust, which was one Trust that he omitted to mention—quite naturally, because it was not strictly relevant. I feel that he has done so much in that connection that one good turn deserves another, and, if for no other reason, I want to say a few words in support of what he has said. But, of course, I do so for much deeper reasons. Like everybody else who has spoken in this debate, I believe that our historic houses are an essential part of our national heritage, something that we ought to be able to present next year, which is European Architectural Heritage year, without a great threat hanging over it.

Vita Sackville-West, in her book entitled The English Country House 1944 said: There is nothing quite like the English country house anywhere in the world. France has her chateaux, Italy her historic villas,.. Germany her robber castles, but the exact equivalent of what we mean by the English country house is not to be found elsewhere. I need not labour that point, because on all sides of the House it has been recognised this afternoon.

I do not propose to become involved with the detailed economic problems of how a wealth tax might be administered. I prefer to approach the matter rather more fundamentally and to talk about the social importance of our historic houses and of their being occupied, as far as possible, by the families who traditionally have lived in them for many years. All Parties at any rate profess to support a mixed economy. I think it is time for us to agree that we also accept a mixed social structure. It is not very easy to explain this in the modern climate, and the noble Baroness, Lady Lee with whom I recently had the pleasure of walking through Cambridge in distinguished robes, has shown that that is a task of education and presentation, but I believe it is essential for it to be done.

The Christian Church has for long been committed to the general principle that, as far as possible, extreme differences of wealth and poverty are to be regretted and overcome. That was one of the great features of the teaching of Archbishop William Temple, and it has become a commonplace of Christian thought. But I believe we have somehow to hold, with that faith and that truth, the complement of it: that there are certain forms of wealth—one can use no other word—which while in private hands still make a unique contribution to the life of a country like our own. Ducal and other noble families living in castles may from one point of view be a social anachronism, especially when we contrast them with the surging tide of industrial egalitarianism, but the ordinary people of this country derive, as we have heard from the noble Marquess, great pleasure and satisfaction from the existence of these families and their houses and greatly enjoy visiting them.

I come from the Midlands, and in the Midlands we cannot claim to have a great deal of outstanding natural beauty. We have some, but it is not a prominent feature of the Midlands. We also have a good deal of bleak industrial property. But we are rich in having a considerable number of historic houses. In my own diocese of Leicester we have Belvoir Castle and not far away we have the Marquess of Exeter's house, and Haddon Hall in Derbyshire, and many others that would rapidly come to our minds if we stopped to think of them. I know for certain that 75,000 people visit Belvoir Castle every year and a similar number visit Haddon Hall; and similar numbers visit all these great houses. If 75,000 people were prevented from enjoying a football match, we should think that great social harm had been done, and if we so work things that this pleasure is in some way taken away from our people we shall have done them a great deal of harm.

The families living in these houses—these are difficult things to say nowadays, but I believe them to be true—are in many cases governed and animated by a long tradition of public service. I know for certain that the Duke of Rutland's father, for instance, opened Belvoir Castle to the public long before there arose the present necessity to open it on economic grounds; and, what is more, he gave them a free meal. I know of another ducal family which has—this is something quite different—adopted two coloured children into the family. The idea that all these great families are just living in feudal isolation from modern social tendencies and problems is really quite false.

By comparison and contrast, I heard of a pop start who had recently bought one of these very great houses. He was asked whether, in the usual way, his house and garden could be opened for the Red Cross and he replied, "Open to the public? Not Pygmalion likely!"—only he did not say "Pygmalion". There is a very great difference between those who have behind them this long tradition of public service and those who, perhaps, have approached things up a rather different ladder.

One of the Commissions on which I have sat is the Church and State Commisson. We happened to have our last meeting at Goodwood House, and that gave me an opportunity of both hearing and seeing all that had been done there. There is a house of marvellous significance, both from the point of view of its setting, in an area of outstanding natural beauty, and also because of the great wealth of the pictures, Canalettos and others, to be seen inside. It might have been thought that here was a house for the National Trust, but I happen to know that when the owner went to the National Trust to offer Goodwood House the answer he received was, "Oh, not another of those." So he decided there and then that he would tackle the problem himself and, with enormous vigour, he has carried through a great programme which has made that house already a place of tremendous value to the whole community. He has done all the necessary things about car parks and facilities, restaurants and all that kind of thing; he has made a nature trail for the schoolchildren; and the whole thing has been governed from the start by the principle of stewardship for the public. I have seen actual figures and I think that a wealth tax, even if levied at a quite small rate, might very easily bring to an end the whole of that project. I think we should all agree that that would he a disaster.

Some of these great houses could perhaps be turned into art centres, as the noble Baroness suggested, but to my mind that is not a realistic or satisfactory answer. Some of you will have visited the famous church known as the Sainte Chappelle in Paris, a church that is no longer used for worship but is preserved clean and wholesome. But it gives the impression of being an absolutely empty shell. It no longer serves the purpose for which it was made and half its value is lost. I am certain that when the ordinary people of England visit these houses they love to feel they are visiting homes.

If we are to have a wealth tax—and I do not want to comment on that in itself—we shall have to find a way of making it possible for these historic homes and houses with their contents to continue as living units. We have heard much to-day about the importance of our past. I want to close by underlining that point: the past is not dead; the past is living. When we know where we have come from we may have a better idea as to where we are going. Do not let us encourage the vast mass of our people to think that there is enormous wealth to be plucked off the walls of our historic houses. Let us tell them that we owe it to them to see that our land does not become one great monotonous suburbia.

The noble Baroness, Lady Lee of Asheridge, began to make a little new version of that old verse for which the Church has suffered so much: The rich man in his castle, the poor man at his gate. I do not suppose that many people in this House have heard that verse sung, at any rate since their early childhood; but as I close I will offer another brief parody of that same line: The poor man in his castle, the tourist at his gate, the Chancellor with his wealth tax broke up the whole estate".

5.53 p.m.

LORD MONTAGU OF BEAULIEU

My Lords, in welcoming the noble Duke's Motion I feel that I must begin by declaring an interest, being as I am Chairman of the Historic Houses Association and owning as I do an historic house which is one of the largest single tourist attractions in Great Britain. However, declaring an interest in itself belies the whole essence of the argument of this debate, for I firmly believe that it is the national interest and not the personal interest of historic house owners which is at issue to-day, for it is the houses not the owners which are threatened.

Before anyone can accuse this House of talking for its own interest, it may be useful to underline that I believe only four peers speaking to-day are, in fact, owners of historic houses. Indeed, fewer than 60 of the 800 historic houses open to the public are owned by Members of this House. All over the world historic houses, great and small, have decayed and have been allowed to fall down; but what a different picture we find in England. It is now widely accepted all over the world that the preservation and the continuity, as family homes, of Britain's historic houses is probably one of the most unique and remarkable examples of conservation since the war. A battle was indeed waged against tremendous odds. We were just beginning to win; now, what with inflation and the threat of a new wealth tax, a much more serious crisis looms. I am sure that to-day it is unnecessary for me to say to people who are only too well aware of the vicious spiral of costs, taxation and inflation, that the burden of keeping up any house, large and small, which was difficult between the wars, became almost impossible by the end of World War Two.

As one who has been involved in historic houses for 22 years, I should like to take your Lordships back for a moment to 1945 and ask you to imagine the problems that faced us owners. Most of our houses had been requisitioned during the war. There was no fuel for heating, there were no servants and there were five years of neglected repairs. There was also petrol rationing. The whole situation looked very gloomy indeed. Who could otherwise have concluded that within ten or twenty years all these houses would either have become Government offices, lunatic asylums or roofless ruins? What a great challenge it was for us all and what a remarkable story evolved.

In 1949, Lord Bath opened Longleat House to the public and many prophesied certain failure. Would anyone be interested in coming? Would they come in sufficient numbers to make the whole operation worth while? All of us might, have shown greater optimism if we had studied historical precedent. The noble Marquess, Lord Exeter, has so clearly shown that although Lord Bath can claim to have started the movement after the war, he only re-started it for its origins can be traced back to the 18th century. Indeed, at the height of their then popularity the stately home became a sort of substitute Grand Tour for those who could not afford to go to Italy. The great tradition was that the public had always been welcomed into the houses. They have never been the homes of a selfish few, as the noble Baroness, Lady Lee of Asheridge, suggested. Indeed, 200 years ago Lord Cobham complained that: Coaches full of travellers of all denominations and troupes of holiday neighbours, are hourly chasing me from my apartment or strolling about the environs keeping me prisoner in it. The Lord of the place can never call it his during the finest parts of the year". Certainly, a more prophetic statement about what we sometimes feel about stately homes in the 20th century can hardly be imagined.

As the years went by, as your Lordships know, more and more houses have become open to the public. The great phenomenon of England to-day, which makes the situation so different from the chateaux of the Loire, is how many of our historic houses are still homes lived in, loved and cared for by the descendants of the families who original built them. The ironic thing is that they exist still as homes to-day because they are open to the public. None of us who is really honest—and I am sure that that would include many in the House to-day—would prefer to share his home with thousands of strangers. You can imagine the traumatic shock which goes through one's mind when complete strangers peer intimately at one's family possessions. But for us there was a simple choice, even if the choice was difficult. Either we could keep our privacy and gradually see our homes decay, or sacrifice our privacy and share our homes. I believe I am not alone when I say that my decision to open was based on the belief that our homes are indeed treasure houses of the whole nation, and that they should be made available to a wider public than they were originally intended for when they were built.

The truth is that whoever is the owner, the private person or the State, income is desperately needed to maintain a house. Of course it might have been far easier to have sold off the whole estate and gone to live in the Bahamas and enjoy a life on the beach. But for me, and for many others, this was unthinkable. Unless you and your family have lived in the same house for generations, it may be difficult to understand our feelings. You may consider it to be emotional and sentimental, but I believe it is that emotional attachment we feel towards our houses that gives us the necessary will to make a last ditch stand to preserve our homes.

But for the nation there has been an extra bonus. Not only have the great efforts which have been made up till now to preserve these houses been partially successful, but the historic houses of Great Britain are now recognised as being one of the largest single tourist attractions. I feel that I can speak about that aspect with some authority, in view of the fact that for many years now I have been associated with the British Tourist Authority. For the last 21 years I have been lecturing overseas, using television, radio and the Press to urge people to come to Britain. I can certainly confirm from my personal experience that overseas visitors rate our historic houses as one of the main reasons for their visit, and for prolonging their stay outside London.

Britain cannot offer hot sun and beaches: what we have is living history, a panorama of which can best be seen in our historic houses and their contents. But unlike many European houses, which, though beautiful on the outside, inside resemble a mausoleum of a bygone age, Britain's historic houses are still homes. Their walls still breathe, and a "lived in" atmosphere pervades the scene. It is just this that the overseas visitor finds so seductive—flowers in the hall, oak fires burning in the grate and perhaps children's steps on the back stairs. These are as much part of what they come to see as the contents. I certainly have it on the authority of the British Tourist Authority that they rely on historic houses as a main pillar of overseas advertising which, if knocked out, might have a very serious effect on the image which they have so successfully marketed since the war. There is no potential tourism in New Towns, factories or open-cast coal mining.

Let us examine for a moment the facts of historic houses and their openings. Seven years ago there were 18 million visitors: 10 million to the Department of the Environment houses, 3 million to the various National Trust properties and 5 million to private properties. Five years later the number had doubled to 34 million: 14 million to the Department of the Environment houses, 4½ million to the National Trust properties and 15 million to private houses. Only yesterday did I get the provisional figures for 1973, and in fact the total figure has now gone up to 44 million: the Department of the Environment, 16 million; National Trust, 5½ million; private, 23 million. As your Lordships will see, the biggest growth has in fact been in the private sector, which has gone up 450 per cent., as compared with the others, which have gone up only 60 per cent.

No responsible authority like the B.T.A. could afford to ignore the clear message behind these figures. If a wealth tax or other fiscal penalties are imposed to destroy these houses and their contents. not only will the national heritage suffer but also the great contribution which the tourist industry makes to the balance of payments will be much impaired. Nor am I talking only about overseas visitors. Millions of our own people from our factories and our towns look upon these historic houses as one of the main destinations for a good day out for the whole family. Moreover, the money they spend, as well as that of the overseas visitor, is an important part of our general tourist income. In an industry which plays such an important part in the economic life of this country—indeed, forecasts are that it will contribute £1,000 million to the Exchequer this year—it would be foolhardy in the extreme to run the risk of destroying one of this country's largest tourist attractions.

It is, I think, the clear duty of any Government to see that our nation's wealth is preserved, for few owners look upon their houses or their contents as personal wealth. Most believe that they are but unpaid custodians of part of our national heritage. They are willing, indeed happy, to share their houses with people from all over the world, but believe that it is their personal involvement, though this means much discomfort and sacrifice of privacy, which is vital to their success. It is indeed our duty to make our houses available for education and diversion, but instead of being threatened with a wealth tax, perhaps we can have a little more help from Government in setting up trusts or special endowments to be attached to houses, which were, in fact, recommended by the Gower Report.

We certainly do not open to line out own pockets. If sometimes people think that we in the stately homes business are too commercial, I say that half-measures are no good. We know that visitors need a good day out, and I believe that not only do Britain's historic houses mirror the past achievements of Great Britain, but that the attitude shown by the owners since the war reflects our desire to make our own way in the world, as we have done for so many centuries. We must all now become experts and professionals in our business, and choose the right tools for the job. It is long ago since any of us have thought that the world owes us a living. We have been forced to adopt the attitudes and the methods of an impresario. This we can do with discretion, but if at times we appear to be over-mercenary or publicity conscious, this is being forced upon us by the circumstances of an ever-changing world. I do not regret this change, for I believe that we have a difficult but important role to fulfil.

But, above all, we owners are determined that our houses should remain homes, for I am convinced that these houses, built in the past, perhaps for the pleasure of a few, should now be made available for the pleasure and the education of the many. As trustees of a part of our national heritage we are indeed playing our part in preserving something, very precious in an ever-shrinking island, of what is unique. We belong to our possessions rather than that our possessions belong to us. To us they are not wealth, but heirlooms over which we have a sacred trust. I think we all owe it to future generations to see that these possessions are not dissipated on the altar of short-term political expediency.

6.5 p.m.

THE EARL OF MANSFIELD

My Lords, my first and very pleasant duty is to congratulate the noble Duke, the Duke of Grafton, on putting down this Motion for discussion in your Lordships' House to-day, and my second is to congratulate him on the terms in which he moved it. Thirdly, I must ask your Lordships' indulgence if I do not stay until the end of this debate. I have the equivalent of an Unstarred Question down in which I might term "yet another place", and I have to start the weary trek to Luxembourg as soon as I have finished speaking here.

My Lords, I speak as one who certainly has a country house. I think it could also be described as an historic home, and possibly even as a stately home. I am, I think, as yet, the only person who has spoken who owns one of these houses and lives in Scotland, although I hasten to say that this particular edifice was owned by the ancestors of the noble Earl, Lord Gowrie, until, nearly 400 years ago, one of them misbehaved, as a result of which it was confiscated and given to my ancestor. Be that as it may, the house is one (and I should say this) which is open to the public some 150 days a year. It has never received a penny by way of grant from anybody, and never has any application been made. It makes a modest profit; but I want to emphasise something that has not perhaps been emphasised to your Lordships as yet. The existence of so many of our country houses is already on a knife-edge. The costs of keeping up such a house and its fabric have escalated enormously, even in the last two years, and it is safe to say that many of our country houses could not be kept in repair, with their grounds in decent shape, unless either the owner or occupier has an estate of some kind which he can devote to keeping up his home or. alternatively, has a business or some other form of money to devote to that purpose.

As one illustration. I should tell your Lordships that the National Trust for Scotland kindly provided me with figures which relate to Culzean Castle, in Ayrshire, which is in their care. In January, 1972, having determined to do up part of the stonework, they received an architect's estimate of £20,000. In April, 1972, they received a tender of £26,000. By January, 1973, they were advised that the costs of the work had increased to £35,000; and by August, 1973 (18 months after their architect's estimate). they were advised that the work would cost £39,000—very nearly a doubling of the figure in a period of 18 months. So, my Lords, quite irrespective of this proposed wealth tax, I would say to your Lordships that the combination of the taxation of income plus capital gains tax and estate duty makes it very likely, in my opinion, that unless some sort of avoiding action is taken on the part of the owner, or some sort of help is given on the part of the Government, then within the next generation or two country houses will cease to exist as we know them, or else they will exist merely as dilapidated shells—monuments, perhaps to their former glory.

Of course, another matter, besides the repair of the fabric, is the actual upkeep of the treasures which some of us are lucky enough to have in our homes. In my own case, I cannot compete with a great many Members of your Lordships' House but we do have furniture, and it has to be kept in a constant state of good repair in spite of the fact that most of it is not used; it is merely on show. The costs of obtaining a craftsman has escalated in the same way as other costs, and therefore we are more and more dependent on tourists who come—and I do not crib at that—to contribute towards the costs of repair and maintenance.

My Lords, one effect of recent taxation has been that country houses, and stately homes particularly are now reduced to a battle for survival. In the debate this afternoon I do not think that this point has been made, or if it has been made, it has been insufficiently stressed. Take my own case: ever since the middle of the 18th century each generation has contributed in one degree or another to the collection within the home. Each member of the family has bought a collection, usually piece by piece but occasionally as a whole, of what he regards as some of the outstanding work of his own time, so that the tourist who goes around casually now may see nearly 250 years of accumulated art treasures gradually unfolding, as it were, a full part of the history of Art, mostly French and German. In my own modest way I have tried to collect modern silver as a new departure, but with taxation at its present level and with the cost of maintenance escalating so sharply that is something that I shall not be able to do in the future.

My Lords, I feel that for a Government who are committed to social reform, as our Government are at the moment, and they are indeed committed to a policy of reducing what they consider to be a disparity of wealth, this debate to-day poses something of a dilemma. The Government are committed to a form of equality or egalitarianism, yet they are being asked, in effect, for relief by a part of the community which is generally regarded as being amongst the most wealthy. I should like to make the point that so far as the contents of most country houses are concerned, those art treasures certainly do not count as what I would call normal wealth for their owners. The possession of a picture does not entitle the owner of the house to a better life in material terms; a piece of furniture does not confer anything except responsibility for its upkeep, and certainly the possession of many of these forms of so-called wealth are burdensome in that they are constantly liable to be stolen and one has to bend one's mind to all kinds of uncongenial activities such as security and electronic alarms.

The matter does not stop there. Most of us at some stage have been subjected to estate duty, and the actual works of art have been exempted by the estate duty office as being of national or historic interest so that they cannot be sold without attracting the rate of tax at the last death. It follows, therefore, that there is not the slightest danger (if that is the right word) of our selling these works of art because the share from the sale that would accrue to us would be so small. Many of us not only regard ourselves as trustees for the public and those who come later but also, in effect, only the actual owners of a tiny proportion. There is, I submit, a reasonably strong case for saying that the pictures hanging on one's walls are not one's own wealth at all, and if the purpose of the wealth tax is to cut down what I might call "the goodies", so that they may be more equally shared among the population as a whole, I hope that I can convince somebody that this is not a "goody" which can be cut down; it is not really a "goody" at all.

What will be the effect of such a tax on country houses and their contents? Many noble Lords have already pointed out that there will, at best, be a slow death while people frantically try to pay their tax from other assets which they can turn into cash; at worst, there will be a sudden explosion in the art market leading to the destruction of the country house and its contents in the way we know it. There is one further point, my Lords, I would deal with. I went to a social function the other day and met a Member of Parliament in the Labour Party who I had not met before. He was most pleasant and knew about the debate in your Lordships' House this afternoon. We fell to conversing about it, and I told him of some of the difficulties of the historic house owner, and he said eventually quite cheerfully, "Well, we will just have to enlarge the Department of the Environment". He was taking into account, I suppose, all that that would entail.

My Lords, I would reinforce if I can what the noble Marquess, Lord Exeter, said. Especially to foreigners one of the most attractive and compelling features of our country houses and their contents is the fact that they are lived in. I am blessed with a somewhat stout son who plays habitually above one room where the public look at our china, and because of his activities there is sometimes what I might call vibration. It is quite astonishing to learn of the reaction, particularly of American tourists, when a guide tells them that it is the son of the house making this noise. It is also sometimes pleasing to me, if I am in the grounds, when before luncheon a bedraggled and rather dirty little figure drags himself out from behind a bush and makes his way across the stately lawns to have his lunch. The effect on tourists is electric, because they suddenly see the point of the whole thing—a house which is lived in and in which a family is raised.

My Lords, nothing, I suppose, will stop this wealth tax. I am not even convinced that one should stop it, but it possible I should like to make, on behalf of other owners of stately homes or historic houses, what I might call a social compact with the Government. We are already opening them to the public and millions go through to their enjoyment and personal profit. We are content to run them in this way because we like to see the house in good repair and good condition; we like to see the grounds well kept and we like to see the treasures which our ancestors have produced and passed on to us kept in good and decent repair to be passed on to another generation. I am quite sure that, if the Government look at this matter without rancour, without trying to cause dissension for the sake perhaps of some of their more outspoken supporters, an arrangement can be arrived at whereby some historic houses of our time can he preserved for the future and the public may, for the sake of their future, continue to enjoy them.

6.18 p.m.

VISCOUNT DAVIDSON

My Lords, I am sure that I am expressing the feelings of this House when I say how sorry we are that the noble Viscount, Lord Esher, is not able to be here to contribute to our debate. I am certain, too, that I am expressing the feelings of this House in thanking my noble friend the Duke of Grafton for initiating this debate which, in spite of what the noble Lord, Lord Shepherd, said, I feel is both timely and important. It is timely because the whole future of the private ownership of historic houses and their estates is already at risk as a result of the heavy burden of capital taxation which already exists in this country. As the last speaker mentioned, not very much comment has been made about existing levels of capital taxation, and if your Lordships will bear with me that is the topic I wish to talk about later on. I feel that the chance of continuity and indeed of survival will be reduced even further by the imposition of a gift tax and the proposed introduction of a wealth tax. The fact that the debate is important is confirmed by the number of your Lordships who have put down their names to speak.

My Lords, having heard most of the debate I feel that I should say only a couple of sentences and sit down. As so often happens at this stage of the proceedings most of what one wanted to say has already been said. However, I must declare—I am not sure whether I should call it an interest or a non-interest. Like the noble Lord, Lord Goodman, I do not own. I have never owned and I am very unlikely to own an historic house or a stately home. But, so strongly do I feel about the importance of private ownership of houses and estates in the social and economic structure of our countryside that I would do anything to ensure its continuity and would oppose any measures which seem likely to threaten its survival. In spite of certain exemptions which already exist, and about which we have heard already, such as the postponement of the payment of estate duty on works of art of historical or national importance until they are sold, the level of capital taxation coupled with the present runaway rate of inflation already poses a considerable threat to any prospect of continuity of ownership of historic houses, of estates, or of agricultural land itself from this generation to the next.

We must make it quite clear that we are not just talking about individual people but about a system of retaining and maintaining national assets of intrinsic and irreplaceable value—a system which has not only proved itself to be excellent, but from the point of view of the nation has provided, without doubt, the cheapest method of maintaining these assets. Conversely, the burden has fallen on the private owner, and because in most cases these assets represent not only a part of the national heritage but a family's history and home, many sacrifices have been made in order to preserve them for future generations; for the great majority of owners of historic houses (and of agricultural land, for that matter) look on themselves as trustees for the future, always placing the emphasis on their maintenance and improvement. The last thing they want to do is either to allow them to decline or to sell them. But either of these alternatives is becoming more likely as a result of the ever-increasing burden of revenue and capital taxation.

Before moving on to the subject of capital taxation, I should just like to stress how important I feel it is that we should not confine our remarks and our thoughts in this debate to the subject of the house alone. It is the whole entity of the house and the grounds which support it—whether these are gardens, parkland or farmland, or a combination of all three—which matters; it is the entity of the whole estate which has grown up and been developed over the years, over the generations, which needs to be preserved. No two estates are similar and that perhaps accounts for their very great attractions. But one thing is certain, and that is that a house without the grounds to support it can quickly die and become, as it were, a body without limbs. It is that entity which I fear is in danger of being broken up and fragmented.

We are concerned with the likely effects of a wealth tax on the future of historic houses and works of art. As has already been pointed out, it is not easy to talk constructively at this moment in time, about a tax of which the details are not yet known and which certainly will be open to comment and amendment after the Green Paper has been published later this summer. I would therefore ask you Lordships to bear with me for a few minutes as I should like to make some comments on the total burden of capital taxation which already exists in this country and to show just how punitive and destructive a wealth tax can be when added on to that which already exists.

We have had estate duty with us since 1894, and since 1949 it has been the sole duty charged on capital on the occasion of death. Over the years there have been various amendments to it: the threshold has been raised every so often, but has never been raised sufficiently to attempt to catch up with inflation; the inter-vivos period for gifts has been gradually extended from one year to seven years; but to my mind the result of this has been that this particular form of taxation has become nothing more nor less than "a gamble with death" and in that respect can no longer be considered to be equitable; and lastly, the liability for remitting the estate duty lies with the estate, and this very often leads to forced sales of land or other assets in order to find the money.

I cannot believe that what was considered to be the right way of tackling a problem in 1894 can still be the right way 80 years later in 1974. It is for that reason that I welcomed the publication two years ago by the last Government of the Green Paper which discussed an inheritance tax as a possible alternative to estate duty. At first sight, this seemed to hold some attractions. The burden of paying the tax was placed on the person who inherited the money, and I see nothing inequitable in capital taxes being paid out of capital received. This could work well if the capital consisted solely of cash and stocks and shares which are easily marketable. But when it consists of what I might describe as functional capital and land, it soon became obvious that an inheritance tax would in fact lead to more rather than less fragmentation, more fragmentation than was already happening under estate duty.

Then, in 1965 we had the introduction of capital gains tax. Again, I do not believe that anyone should object to paying tax—if that is the law—on gains which have been realised. But here, in this particular tax, tax is levied on deemed disposals, which again must lead to forced sales if the money is to be found for the tax to be paid.

We now have a gifts tax, which is operative from March 26 of this year, but of which we shall have no further details until another Budget later this year. All we do know is that the liability for finding the tax will be on the donor rather than on the donee, because presumably this fits in better with the existing system of estate duty. On top of all this we have the proposed wealth tax. Whatever the rate at which this is levied, if the levels of the other forms of capital and revenue taxation remain unchanged, the total effect will be, to say the least, crippling. At least in those other countries in the European Community which have the highest combined levels of capital and income taxation, they recognise the need to leave the taxpayer with some minimum margin. As we have already heard, in those countries which already have a wealth tax, at least they tend to exempt such things as jewellery, furniture, works of art and art collections. At least the Irish, who produced an extremely interesting White Paper on capital taxation last February, have already revised their original ideas and have recognised the problem of the overall level of taxation by proposing that when they introduce their wealth tax next April, the top rate of income tax will at the same time be reduced from 80 per cent. to 70 per cent, and the band of income which attracts that top rate will be increased by £2,000. But here, because of the seeming desire to pile the Pelion of capital tax upon the Ossa of income tax, it looks as though the total burden will soon become not only completely inequitable but wholly unbearable.

My Lords, in the few minutes that 1 have spoken I have tried to point out the problem, that the taxation of capital in this country has been just like Topsy, it has "growed and growed and growed" I suggest that the time has come for a fundamental reappraisal of not only the different methods of taxing capital but also of the criteria and definition of capital and wealth. What is important is not what the different taxes are called but the total burden of all the taxes combined.

Perhaps I may finish by emphasising once again that I am not against any system of capital taxation, provided that it is fair, that it is seen to be fair, and that it is right in the overall context of taxation. What I do object to is a system which fails to recognise the importance of the continuity of private ownership; which fails to understand the important part which private capital has to contribute to the economic wellbeing of our country; and which fails to appreciate that an enforced redistribution of personal wealth can probably, in the event, result only in a real reduction in the prosperity of our country.

6.29 p.m.

LORD HOLFORD

My Lords, until to-day I had not intended to intervene in this debate, nor to speak of my experience which has paralleled that of the noble Duke, the Duke of Grafton, in sitting as a member of the Historic Buildings Council. I intended only to come to listen and I am sure it has been a debate very well worth listening to. In the first place, I knew that the noble Duke in opening the debate would deal with these points, and very admirably he has done so. Secondly, I knew that the noble Lord, Lord Hailes, the present Chairman of the Historic Buildings Council, intended to speak. The noble Viscount, Lord Eccles, has referred to our first Chairman, Sir Alan Lascelles, and paid him a very well-deserved tribute.

For the 10 years after Sir Alan, we enjoyed the chairmanship of the noble Lord, Lord Hailes. He has had an infection of the eye and by this morning it became clear that he would not be able to speak. However, I know that he wanted to make one point that has not been much emphasised so perhaps, without his authoritative background or experience, I might be able to emphasise it very briefly. It is the system of partnership between the owners and the public on the one hand and between the owners and the State on the other, which successive Governments, by means of the Historic Building Act and through the agency of the Historic Buildings Councils, have patiently, and in my view rather successfully, built up over the last 21 years.

At this stage in the debate, most of the arguments on this side have been put, but I should like to emphasise, as someone who is not the owner of a great estate, how I see this partnership working from a quite different point of view. As I said, I am not encumbered with any great estate. Nor, when elevated to your Lordships' House, did I acquire any. But this elevation I was allowed to lay claim in a purely allegorical and titular way to the entire development of Kemp Town in the county of Sussex. In fact, the only actual ownership of land which I have in Kemp Town is the ground, an area of some 30 feet by 50 feet, on which my terraced house was built. The point is that the house is a listed building. Along with its neighbours up the street and round the corner, it is regarded as having architectural and historic interest. The houses were designed as a group in 1824, so, much to our distress sometimes, they are 150 years old. The distinction or, as some would call it, the misfortune of living in an historic building of that age carries with it some obligations and restrictions.

I should like, if I may, to give two very trifling examples to illustrate my point. One is this. When the very characteristic cast-iron buildings which used to surround the house were knocked down as scrap during the war—I believe it was for the sum of that long-forgotten coin, the half-crown—the series of gaps thus left had to be filled by posts and rails of the same design and material, and this at a time when architectural cast-ironmongery, if I may so describe it, had almost ceased to be a trade. The replacement in the 1950s, after building rationing came to an end, cost this owner just over £300. A similar replacement would cost £850 to-day.

My second illustration is that the terrace on which this house stands is exposed to the sea and to the full force of the prevailing South-Westerly winds, and even to the occasional, more deadly, South-Easters. When a gust of extraordinary violence last February tore away the ceiling and the cornice and part of the decorative balustrade of the porch, the insurance company immediately disclaimed it as "an act of God". My Lords, it would seem from the Acts of the Apostles that "God is no respecter of persons"—nor, apparently, of listed buildings either!

But to come down to earth and the Town Planning Acts, I realised that the restoration of the porch had to be properly carried out and the appearance restored at the owner's expense and in such a way as, … not substantially to alter the external appearance of the building ". Although the building is statutorily listed, it is not in the "outstanding" class, and so this repair would not qualify for a grant on the recommendation of the Historic Buildings Council for England, even if its owner had not been a member of it for 21 years. Neither could the owner give it up and sell the house and site for redevelopment, even if he wanted to, which he does not.

I do not complain of this for one moment. I very much approve of it, because it is part of the system of conservation which has been worked out over the years. All of us have had to accept it, from the minnows like myself to the great whales—and I must say here that the noble Marquess, Lord Exeter, has just spoken in a very sincere and, 1 thought, a very illuminating way about Burleigh. But I am not talking about the Chatsworths, the Blenheims and the Castle Howards, but of the smaller range of historic buildings in respect of which, equally, there is a partnership between the owners and the Government. Moreover, I recognise that it is a privilege to own, even temporarily, a Regency house in a terrace which, although it has been "knocked about a bit" in the words of the old song, is still a recognisable piece of good achitectural design placed in a pleasant if occasionally somewhat intemperate situation. I admit the privilege and I am ready to pay, as long as I can (which, with rates as they are now, may not be very long) for my share of the enjoyment it gives me. But I am also aware that this enjoyment is shared by the public, as the noble Earl, Lord Mansfield, and the noble Lord, Lord Montagu of Beaulieu, said in regard to their much greater estates—and it is enjoyed by visitors and tourists and by the public, or at least by that section which cares about such things. And every year more and more people care and more and more people are involved and protest about any deterioration of the buildings which they have come to regard as of value.

Not for many owners now is there the smug satisfaction of sitting indoors and saying: My face I don't mind it Because I'm behind it— The people in front get the jar. This is no longer possible because the people in the front at the moment are quite vocal and want, quite rightly, to share the enjoyment—the enjoyment of your facade, for example—when they have a mind to do so. Sometimes, indeed, they are moved by more obscure and Freudian motives and end up by wanting to heave a brick at it. If they do, it is the owner who has to repair the windows or the stucco. I think that most owners will agree that occasional vandalism is worth the effort to resist and repair. None the less, in spite of public apathy or protest and in spite of vandalism, the owner's obligation is quite clear. It is, … to maintain the external appearence and the historic features of a listed building". And if he qualifies for any help from central or local funds in order to do so and, as a condition of that help, throws open his house to the public in one way or another, it is, I think, essentially on the basis of partnership that he does it. This is the point that goes right up the ladder from these small examples to the great country houses.

There is one other very small point I should like to make after listening to the debate so far. The noble Lord, Lord Goodman, remarked, I think more or less jocularly, that so far as Governments are concerned, it is a good thing to cry out a long time before you are hurt. I simply want to say that we have been hurt already. I referred to one small instance of this during the debate on historic towns last April, when I pointed out that V.A.T. had been imposed on the repairs to buildings but not on new constructions. The result of that has been that, although I know it is more or less a book transaction—transferring money from one pocket of the Government to another—nevertheless it discourages us from recommending to a man that he should repair his roof with old timbers, where it is worth doing that, if in addition to all the other arguments and the 50 per cent. which he is expected to pay, another 10 per cent. is added for V.A.T. whereas if he pulls it down and puts up a new building he does not pay V.A.T.

But, my Lords, V.A.T. is, or was, a substitutive tax; it took the place, to some extent, of S.E.T. and purchase tax. What is one to say about wealth tax? We do not know whether it is going to be substitutive or additive. If it is substitutive it seems to me that many of us would not be terribly concerned about it. It is simply a new, and perhaps more efficient, way of collecting the surplus of wealth; and, after all, if the wealthy cannot pay, who can? But if it is additive then everything that the noble Viscount, Lord Davidson, said, is absolutely true. It is the last straw. It then accumulates on top of all the other discouragements. I think I can best summarise my point on this by saying that I hope that the Government, in deciding on what kind of wealth tax, how substitutive, how additive, it is going to be in character, will consider that there is a point of breakage, a point almost of no return, and that comes when an owner is asked to cut off his nose, not to spite his own face, but to spite the public's face.

6.40 p.m.

LORD NUGENT OF GUILDFORD

My Lords, I should like to add a brief word to this fascinating debate. I have to make a race with the timetable in order to succeed at the appropriate time the noble Lord who is at present sitting on the Woolsack, and so my speech must be short. I should like to congratulate my noble friend the Duke of Grafton on giving us this opportunity to speak on this matter, and I wish to say a word of support rather as a member of the public. Although I sit on this side of the House, my background is not one of hereditary wealth and property. Indeed, when I started my farming career in the 1920s, I began on the bottom rung of the ladder and worked for several years on a farm. When I came to buy my farm I had to borrow every penny of the money required for it and, in due course, I made a success of what I was about.

I mention my background because I want to ask this question. What is the purpose of this proposed wealth tax? It is not economic; we know that, because it could not be for the relief of the general taxpayer as the money raised could not have more than a minimal effect when spread over the whole body of taxpayers. The noble Lord, Lord Shepherd, in his opening speech in this debate, referred to a purpose of social justice to remove inequalities. Of course in the great estates there are inequalities. The argument for taking action of this kind in setting up a wealth tax of the kind contemplated, is valid only if there is a general demand among our people for the abolition of the wealthy in general, and of the hereditary owners of historic houses in particular. I must confess that I myself have never felt this, and as my background is the same as that of the rest of the community I can claim to speak with the same feelings as the rest of my countrymen.

Of course envy occurs in all walks of life. I have even heard it expressed in the corridors of powers of the Palace of Westminster. But even in my early days when I was struggling very hard, and when I had borrowed a lot of money, I did not feel any envy of the people who lived in vast estates. I felt the additional incentive to get on with what I was doing. My impression is that most people, far from wishing to see the upper crust of wealthy families driven out of the historic homes by a swingeing wealth tax, wish to see them continuing living there for the sake of the contribution which they make to local and national affairs.

We have heard to-day from a number of my noble friends who occupy those great, historic houses just what their contribution is. They live in these houses, they maintain these vast pieces of architecture, they maintain the immensely valuable collections of art, porcelain and objets d'art for the enjoyment of present and future generations; and, in so far as I have seen it, the devotion and sacrifice given by some of these families has to be seen to be believed. They guide the visitors round the houses, and of course the fact that somebody is living there is indeed, as my noble friend Lord Mansfield so graphically described, an immense attraction to tourists. If these houses simply became unlived in they would lose the living interest which they have to-day.

Also, I should like to make a point which has not been made so far, that those who are, like some noble Lords here to-day, members of great families who have played a distinguished part in the history of this country, who confer a unique interest and glamour on their houses which makes a special attraction to the visitor, whether our own people or foreigners visiting from overseas. One point was well made by the right reverend Prelate the Bishop of Leicester—the value of the leadership of these families in their localities and, indeed, the national scene is considerable. It goes far beyond social forms. It contributes to the civic scene, local government, national government, educational and charitable activities.

In order to give the chiaroscuro of this particular point, which I know will appeal to noble Lords opposite, I should like to say that we have only to look at the other side of the coin in new towns and in large new housing estates. We all know the immense difficulty in new communities to get anyone to come forward and take the responsibilities of leadership, in order to get a community and social spirit going there. Here we are in this structure, we have these families who have been born and bred, and the tradition of patriotism and public service lying behind some of these great families brings up their sons and daughters with a sense of duty which it takes the rest of us a lifetime to acquire.

On the irrational value of this structure of historic houses and the nobility, it is truly said that man does not live by bread alone. But his happiness depends intimately on the myths and dreams which dwell in his mind being fulfilled in some way in the life of the world. Our hereditary Sovereign and the hereditary nobility play a major role in this context. Myths about kings and queens, princes, princesses and noblemen, weave through the fairy tales, the drama and poetry of our people and they have a deep significance for all of us. They form part of our cultural heritage which gives it colour and romance. We would all be infinitely poorer if this living structure were dismantled. We have only to see the daily scene outside Buckingham Palace of thousands of tourists who crowd there just to watch the changing of the guard, let alone the tens of thousands who flock out to see the Queen herself.

On a smaller scale, the great hereditary families play a similar role in their own localities. Their dissolution would remove from the scene a romantic structure which would make us all very much poorer. I must add one point to that made by my noble friend Lord Davidson. The agricultural structure in this country is the best economic food production structure of any country in Western Europe with the biggest farm units. That is the direct consequence of the landlord/tenant relationship which has been developed by the big, landed estates. We should not forget that. To break it up will mean that we shall inevitably be moving towards smaller farm units and less efficient food production.

My Lords, I conclude with this thought. A wealth tax which drives the great hereditary families out of their historic homes and landed estates would leave us all the poorer and it is not the wish of most of our people. I hope that this Government will direct their energies to the creation of wealth rather than its confiscation.

6.50 p.m.

THE EARL OF PERTH

My Lords, we are fortunate that the noble Lord, Lord Nugent of Guildford, found that he had time to address us before he sat on the Woolsack. I should like to join with all the other noble Lords who have spoken in thanking the noble Duke, the Duke of Grafton, for introducing this Motion, for its terms, and for his skill in speaking to it. I must confess that when he first put down the Motion I was somewhat worried about its timing, knowing that the Green Paper was to come one of these days not too far off. But the more I thought about it, the more I was sure that it was most opportune to deal with it now, because it should make the Green Paper a better and perhaps a wiser document. Should I declare an interest? My answer is, "Yes" and, "No". "Yes", because I have a small family historic house; "No", because there were not works of art in it when I took it over, unless it be a painted ceiling, which I or anyone else could hardly remove, or a mantrap, and that perhaps would not qualify for what we are talking about.

When I touch on that point it illustrates one difficulty which I saw in the Motion: it seemed to bracket the house and the work of art together as one. In fact, our debate to-day has ranged, I think rightly, much wider. While it is true that many houses are the subject of history and must be kept together—houses, grounds and their contents—equally, it is important that we should have covered the ground as we have done on houses on their own and on works of art on their own. I have a second interest and that is as Chairman of the Reviewing Committee for the Export of Works of Art. I must confess that in the 2½ years that I have been Chairman I have constantly been worried that one thing or another done by a Government might lead to a flood of works of art coming before us with a request for export licences and our recommendation. So far, thanks to enlightened legislation by all Governments, this danger has been avoided. Furthermore and importantly, Governments have been fairly generous in the actual grants they have made to save works which otherwise would have left the country. Long may that continue!

Along with others who have spoken, I am fearful again. We may be seeing ahead of us the risk of a new flood, and this time there would be no stopping it if a wealth tax is to be levied on works of art. I would make the suggestion that those about whom we have been speaking; namely, those who own historic houses or those who own works of art, should be thought of as holding them as custodians for the nation. If we could have that principle adopted, then, so far as houses were concerned, it would be for the Historic Buildings Council to advise the Government that this, that or the other house should be exempt. When it comes to works of art, there is one worry about this suggestion, which is that there might be a great increase in demand for works of art which would put their prices into an artificial sphere.

Just as the noble Lord, Lord Clark, put forward one concrete proposal on how to deal with a problem of this kind, I would put forward another. Where we owned works of art before the magic date of March 26, those works of art should come within the principle of being held for the nation; that is to say, we held them as custodians for the nation, and therefore during the lifetime of the people who held those works of art, so long as they did not sell them they should be exempt in exactly the same way as works of art are exempt at the time of death. If that principle were adopted I think it would get over this difficulty about a great rise in the price of works of art which would otherwise come about if all of them were exempt from a wealth tax—if a wealth tax is to come, and I am not advocating it. All the same, there would be a difficulty about contemporary works of art, and those would need to be a special case because, as many noble Lords such as Lord Goodman have pointed out, we certainly must encourage, and not discourage, the living artist.

All the same, I fear that with a wealth tax, even if restrictions of the kind I have mentioned are put upon it, we shall see a greater flood of works coming for sale, and shall have the worry I have always had that the Reviewing Committee will again and again be asked, "Can this go out of the country?" In that connection, I fear that at such a time the Treasury's pocket may become exhausted; they may feel they cannot do any more. So we have to look at our last line of defence, which is the National Arts Collection Fund and other charitable bodies which make grants for this purpose. So once again I would say to your Lordships: let us try to strengthen the National Arts Collection Fund. The Government have done it in one way or another, and I have a suggestion to make here. As the Fund is constituted now it can make grants for museums and galleries, but it could not make a grant to save a work of art for one of the National Trust houses. There is a way round that difficulty. The Fund should make the grant to the Victoria and Albert Museum, which in its turn would hand over the work of art on a permanent loan basis or a long-term basis to the National Trust houses, which so often otherwise find that half of what they have inherited is withdrawn. If this is a good idea, then it could be for the National Trust and the National Trust for Scotland, which have half a million members between them, to see whether they could not come to some arrangement with the National Arts Collection Fund to encourage their members also to become members of the National Arts Collection Fund, and in that way build up our defences against this flood which I fear will come.

My Lords, like all who have spoken I am deeply worried that our historic houses and our treasures may be seriously affected if we have this wealth tax. I hope that the principle of "custodian for the nation" will be seriously considered by the Government. We all know that our houses are the admiration and the envy of the world. Future generations will not forgive us if we squander our heritage now. Let us remember that if it is squandered it is not something we can recover again: it is gone, and gone forever. Somebody may say, "Let the public take it over. Let us make it over to the public." We all have experience of what happens when "the public take it over". Often they do it well. Look at Ham House or look at Hardwick—I could go on with a long list. But it is not the same. Even if they are well furnished and well looked-after, somehow they are dead; they are not lived in. As the noble Marquess, Lord Exeter, said, they are no longer homes. So that will not do as a solution. The National Trust know this. Again and again they seek to have people living in their houses—indeed, they make it an essential point that people should do so. The civil servants know this. The public knows this. And, my Lords, I beg that the Government should know it too, and act accordingly.

7.0 p.m.

LORD GEDDES

My Lords, may I start with an apology that a long-standing engagement made it impossible for me to be present when the noble Duke, the Duke of Grafton, opened this debate. Others have spoken of the cultural and ecological importance of our great country houses and their collections of works of art. I would stress the more mundane subject of their economic value as an invisible export.

I was Chairman of the Board of the British Travel Association from 1965 until the British Tourist Authority took over its responsibilities under the provisions of the Development of Tourism Act of 1969. The Association was then wound up, but much of its principal activity is continued by the British Tourist Authority.

In assuming responsibility for a national tourist organisation, perhaps one's first question is, "What is tourism?" It is easy to think of a hotel room or an aeroplane seat as components of tourism, but in fact these are only the facilities which make tourism possible. To me the best definition of tourism is, "Activity at a destination".

Right from the commencement of the overseas promotional activity carried out by the Travel Association, it became evident that we should not attempt to encourage visitors to come to Britain with the impression that here was another French Riviera or Costa Brava, with almost guaranteed sun. Of course publicity was given to Britain's wealth of excellent seaside resorts, and over the years many of these have welcomed increasing numbers of visitors from abroad. But we looked for attractions here which would be of particular interest to visitors, and which were to some extent different from the attractions they could find in their own or in other countries. We did not have to look far. Britain possesses such a vast treasure house of buildings of historic and architectural interest, so many towns and villages with historic areas and streets, that it seemed natural to feature this aspect strongly in overseas publicity.

I know that Britain is not alone in this. France, Italy, and many other countries can equally claim to have a vast architectural heritage, deservedly popular with visitors. But inquiries soon revealed that what many visitors especially liked in Britain were the historic houses, large and small, still as has been emphasised already, in family ownership, often owned by the descendants of families who had lived there for generations, in houses still with their collections and contents more or less intact, houses which presented a "lived in" appearance where the visitor had the feeling that he was privileged to be a guest in a private home for an hour or so. Therefore, with the cooperation of many of these private owners, the B.T.A. promotional activity has always placed considerable emphasis on these privately owned historic houses and castles, and this has proved to be a wise decision.

Please do not imagine that I am decrying the historic properties in the care of the State, or the National Trust, or the National Trust for Scotland—far from it. I know only too well how popular these are with visitors and how much imaginative effort has been carried out, both by the State as guardians of so many historic properties and ancient monuments and by the Trusts, in presenting these properties and their contents to the public. The fact remains, however, that the "family" historic home still, for many visitors, has the "edge" over all other notable historic buildings just because it is a lived-in property.

As I have said, right from the late 1940s and early 1950s the B.T.A. made good use of this built-in attraction for vistors. In this, owners co-operated, many of them being members of the old Association. Here I wish to pay tribute to the noble Lord, Lord Montagu, for the great part he has played in this effort. He has done a terrific job. The old Association was a co-operative, enjoying Government financial support but also seeking contributions from organisations throughout Britain.

During this time several attempts were made, notably by the late Sir Harold Wernher of Luton Hoo, the Marquess of Bath, and the Duke of Bedford, to bring together their fellow historic house owners in some form of association or group. In 1965 we decided that perhaps the B.T.A. could take the lead in this, so we convened a conference of owners, from which arose a small Working Party. The Working Party's main recommendation was that the B.T.A. should set up a committee of historic house owners, and in 1966 the Historic Houses Committee met for the first time and has continued to meet ever since. Mr. Hugh Wontner, a member of the board, accepted an invitation to be chairman of the committee. Sir Hugh Wontner, as he now is, and, incidentally, the present Lord Mayor of London, has continued as the chairman of the committee. It was, I feel, a wise decision by the British Tourist Authority to maintain this Historic Houses Committee as a committee reporting to its board. Private owners of the larger and the smaller historic homes are represented upon it, but—and I think this is most important—the National Trust, the National Trust for Scotland and the Department of the Environment are also represented.

I do not intend to detail all the activities of the committee, but it has advised B.T.A. on overseas marketing and promotional activities—for example, a series of films on Britain's historic houses and castles, extensively shown in many countries; publications; special promotions. Members of the committee, and a number of other historic house owners. have greatly assisted by their willingness, when on visits to the United States and other places, to give talks or lectures about Britain's heritage of historic properties, to give television and radio interviews and to meet the Press under arrangements made by the B.T.A.'s overseas offices. The value of these efforts by owners—on their own behalf and on behalf of Britain's tourist trade—has been substantial indeed.

My predecessors as Chairman of the British Travel Association and I myself were able in annual reports to show how the number of visitors to Britain increased each succeeding year. And, of course, with the increased number substantially increased foreign currency earnings came to Britain.

The first years of the British Tourist Authority's existence also showed a continuing rise in the tourist traffic to Britain. However, as your Lordships will be aware, the situation has now changed. In April of this year 8 per cent. fewer visitors arrived compared with April, 1973, although in the first four months of 1974 compared with the same period in 1973 there has been an increase in arrivals from all areas of the world with the exception of the United States. Visitors from the U.S.A. have been well below the 1973 level.

Sir Alexander Glen, the Chairman of the British Tourist Authority, has reported the need for a greater effort to be made to encourage visitors who could this year contribute as much as £1,000 million in foreign currency.

Can this country afford therefore to sacrifice, particularly at this present very difficult time, something which is not only a major part of our national heritage but such a substantial attraction for visitors in the form of the privately owned historic houses, their collections and their estates? For I am convinced that sacrifice it will be, unless urgent measures are taken to alleviate the swingeing burdens which their owners, even at the present time, face and which could become insupportable if a wealth tax is added to the present burdens.

In comparison with the loss to the nation of such a valued part of its heritage, in comparison with the loss to Britain's tourist assets, in comparison with the staggering Government money which would be required to take over and maintain even fifty of these houses from owners who could no longer struggle on, the assistance which owners need—not for themselves but for their houses and estates to ensure their survival as lived-in places so much appreciated by visitors—is minimal.

Here, my Lords, I should like to go back for a moment to the definition of tourism which I gave you at the beginning of my speech. I defined it as, "activity at a destination". Of the £1,000 million of foreign exchange which could be earned by the tourist industry, something like one quarter is spent on accommodation and another quarter on meals. Shopping accounts for something more than a quarter, and internal transport and miscellaneous for the rest. My Lords, if we impair the facilities upon which activity at the destination depends, we risk not only the loss of earnings in the historic houses but all this massive income as well, for if the interest goes tourism goes as well.

Conservation is an aspect where we in Britain are acknowledged to be ahead of many other countries. Indeed, the action taken in Britain through partnership between the State, the National Trust, and the private sector in preserving and showing off our historic properties and the collections they contain is much admired in Europe. Equally, Britain has been pointed out as an example of how the efforts taken by the tourist organisation, and the owners themselves, to encourage visitors has helped to keep historic houses in repair, thus lessening the calls for outside financial assistance.

Tourism is a great activity—perhaps still little understood in this country. It has something of a theatrical quality, and images are vital to it. The trend in tourism towards visiting historic properties may have been slow to formulate and develop, but it is a strong and continuing trend. If the image is weakened, because the privately owned country houses are no longer able to survive and they become "institutionalised", this strong trend will disappear—to the considerable detriment of tourism.

LORD INGLEWOOD

My Lords, before the noble Lord sits down, may I ask him one question? When he spoke of the tourist interest—and he knows that I also have an interest in that—he spoke of the house, he spoke of the contents and the collections, and he spoke of the personal interest of the family living in the house—and I hope, also, as part of a neighbourhood and not just a home. But there were two points that he did not mention which are very important from a tourist's point of view, and I hope he will agree. May I ask him whether he agrees that our gardens in this country are still the finest in the world and are an immense addition to the attraction of coming to see houses? Secondly, following what the noble Marquess, Lord Exeter, said of the questions which are frequently asked of him, in my experience visitors—Americans and others—are more interested in ghosts than in the collections, and the ghosts in our houses are also a very big tourist attraction. I hope that they, at least, will be free from any wealth tax that noble Lords opposite may devise.

LORD GEDDES

My Lords, my answer to the first question about gardens is that of course it was a stupid omission on my part. They are an integral part of the establishment.

LORD INGLEWOOD

And they cost money to maintain, my Lords.

LORD GEDDES

Yes, my Lords, they cost money to maintain. With regayd to ghosts I would say, Yes, one or two, but I still think that a room of Canalettos is a bigger attraction than a room of ghosts.

7.12 p.m.

THE EARL OF DUNDEE

My Lords, the noble Duke who moved this Motion asked me to say a few words in support of it, because for five years I was Chairman of the Historic Buildings Council. I am very glad to do this, but it must be a very few words at this late time of night. The noble Duke made an extremely fine speech in moving the Motion, and one reason why I am grateful for it is because I learned from it a great deal of information which I did not know before. I do not think it was his intention in any way to extract from the Government any advance information about the wealth tax, which is, anyhow, always an unsuccessful and futile Parliamentary operation. I believe what he tried to do, and what I hope he did successfully, was to warn the Government against the possible adverse consequences of a wealth tax on historic buildings and works of art, before the Government had yet fully decided exactly how the wealth tax should be applied to different items of wealth. I think he did that very successfully. How the Government will try to temper the tax in the coming years or the coming months, as the case may be, depending upon how long the life of this Government endures, we shall see, but we have cried out before we were hurt.

I am afraid that all I can say about the wealth tax is that I do not know what it will do, but I am sure that it will not do the principal thing which the noble Lord, Lord Shepherd, would like it to do; namely to redistribute wealth in this country between those who have too much and those who have too little. On the contrary, in my view the main thing it will do is to enrich no one and impoverish everyone. For a long time, indirectly at least, taxation has been adjusted in this country with a view to helping historic buildings and preventing them from decaying and being destroyed. It was Winston Churchill in 1925 who introduced the differentiation between death duties on agricultural land and on all other kinds of property. It was a substantial differentiation, amounting to 55 per cent., and one of the reasons that he gave for doing that at the time was that the homes of England were in danger. I do not think Winston Churchill meant only the stately homes; I think he meant all homes, both large and small, which are part of our history and our tradition and our way of life, both in the English and the Scottish countryside.

I was the first Chairman of the Scottish Historic Buildings Council. The noble Viscount, Lord Eccles. appointed me in 1953 when it started and I remained with it until 1958, when I joined Harold Macmillan's Government. We had £450,000 a year which we had to share between ourselves and the English Historic Buildings Council. The wonderful thing was that we got on very well with each other, without ever quarrelling about how the money should be divided. In Scotland, we helped a number of the great houses which we thought needed it—I believe very effectively, despite our small resources—but we also rather concen trated on restoring and taking steps to preserve the very large number of small houses dating from the 16th, 17th and 18th centuries which are such a wonderful feature of so many parts of Scotland. I think the main danger now is not increased capital taxation alone but capital taxation combined with inflation, which appears still to be advancing at an accelerating speed.

I will conclude by quoting one example of how that affects the subject, and it will be the example of a very small property because I think a small example shows so much more easily the kind of thing which is now just beginning to happen all over the country in a great many agricultural properties, both large and small. The example I have in mind is an owner-occupied Scottish farm—a small farm of not much more than 100 acres of fairly third-rate marginal agricultural land—with a beautiful little house. It has not any Rembrandts or Leonardo da Vincis in it, but it is a beautiful old home. I am a great admirer of Lord Perth's beautiful home but it is even smaller than his, and we helped a great many houses which were much smaller than that of my noble friend.

This farm would have been worth about £1,500 capital value before the war; after the war I suppose it would have been worth about £3,000 with vacant possession. In 1965 its value would have been reckoned to be about £10,000, so quickly were prices rising. Last year, in 1973, the owner, who was getting old and had no son, put it up for sale. He received various offers, one being from a man who had just sold some land in London and wanted to get rid of his money. He flew in a helicopter, inspected the little property from the air, was satisfied with it, so flew back to London and sent an offer of £90,000, which was accepted. Of course, that meant capital gains tax had to be paid on £80,000, the difference between the 1965 and the 1973 value. But that did not matter, because the owner wanted to sell anyhow; he had to pay only £24,000 and was still left with more money than he expected at first, so we can congratulate him, and wish him luck.

But if we look further ahead, what will be the effect of this on his neighbours?—other people with similar possessions in Scotland and elsewhere, who do not want to be uprooted and to sell their homes and do something else. Supposing another farmer in similar circumstances is getting old, and thinks the time has come to make over to his son, who may be keen to take on his father's work on the farm. It will then be the duty of the district valuer to say to the farmer, "You have made this over to your son. It is now worth £90,000, which I can show by comparing it with similar sales elsewhere. The April 1965 value was £10,000; therefore you must pay capital gains tax on £80,000, which is the difference in value". He can only get that money by borrowing from the bank at 11 per cent., whereas the livelihood from his farm is actually less than 11 per cent. on £20,000 because it is only about 2 per cent. on the whole value of the farm. This makes the situation impossible. He cannot give the farm to the son£it is suicidal. So he waits until he dies. When the farm was worth £3,000 death duties did not affect it, but now it has risen to a death duty bracket at which death duties will be probably more than the capital gains tax would have been, so again the farm will have to be sold.

Of course, people who live in the towns may take a quite indifferent view of this. I am afraid there are a great many townsmen and not many countrymen in the Treasury. I think their natural reaction often is, "What silly country bumpkins these are! Can they not see that it is to their advantage to sell their stupid little farms right away for this wonderful price, more money than they have ever handled before? After they have paid the capital gains tax they will still have £70,000, which is enough to set them up in a new industry in some nice modern town, or they could afford to play bingo every night for the next two years until it is spent." A great many people take this view. But it is not a good thing. It is a bad thing socially for any State or any nation that its rural population should be obliged by taxation, even though they get a lot of money in the end, to uproot themselves, to change their occupation and to do something they do not want to do. I do not think it makes things much better that they should for the time being receive a sum of money which is far more than they have been accustomed to handle, but which in our inflationary economy may very soon prove to have been a deceptive illusion.

7.25 p.m.

THE DUKE OF WELLINGTON

My Lords, in an extremely interesting debate it is not easy to introduce any new aspects, but I think there are one or two that other noble Lords have not mentioned, and I should like to touch on these. Two weeks ago, in your Lordships' House, we heard a most interesting debate on the subject of leisure and recreation. None of us who heard that debate can have left this House without feeling that it was a subject that needed earnest consideration by the Government, as being a subject of great importance for the future of the country. During that debate, some mention was made of the contribution which historic houses and their land can make towards the provision of leisure. I shall ask for the indulgence of the noble Duke, the Duke of Grafton, and your Lordships if I widen the terms of the Motion to include not only historic houses and their contents, but their land as well; and by that I mean their gardens, pleasure grounds, parks and even agricultural land.

We in this country have a great heritage of country houses, which has always been much strengthened by the links which exist between the country house and its estate. In my view, one cannot consider the future of one in isolation from the other. Their bond is indivisible. The country house has always been the heart and nerve centre of its estate and its agricultural land. This relationship between the landed estate and the country house is important to appreciate. It is the land and the income deriving from it which not only gives the country house owner the ability to live in his house, but also gives him a sense of purpose and responsibility for the house and estate, which would be totally lacking were he just to be the occupant of the house. It is the fact that our country homes are sometimes occupied by families who have been there since the house was built, that gives the British country house that indefinable atmosphere of family continuity which is of such interest to tourists, especially foreigners.

In contrast, many great houses on the Continent, for a variety of reasons, have become separated from their land. As a result their contents have been disbursed, and their owners have disappeared. At best they become museums, such as many of the chateaux in France—interesting but, in my view, soulless. At worst, some have become ruins. In this country there is a grave danger of a similar process taking place. Mainly for economic reasons, many hundreds of country houses—we have heard to-day that the figure is 800—and their parks, gardens and estates, have disappeared since the beginning of the century. Some of these were of great architectural interest. Although the operations of the Historic Buildings Council, the National Trust and the Land Fund have helped to slow down the process since the war, the burden of taxation, to which is now added the possibility of wealth tax, is accelerating continually the difficulties of country house owners and, indeed, is undermining their confidence in their ability to carry on.

My Lords, if, indeed, the wealth tax is to be applied to country houses and estates, it is a very serious prospect for owners. This is a tax on capital as opposed to income and could prove a disaster for them. In many cases their only capital is the land or contents of the house, and one or other would have to go. I believe many owners would choose to sell the contents rather than the land. Whichever the choice, neither would be in the national interest. What may not be appreciated in some quarters outside your Lordships' House, is that owners do not regard themselves as such, but as custodians of the heritage which they hold in trust for future generations. They may be wealthy men on paper when the value of the land and property is added up, but they do not see this wealth unless something is sold. Until that happens they are happy to accept a low return on capital, perhaps as little as 1 per cent., if they believe they can hand on the heritage to future generations. If their capital is now to be eroded how can this be possible? Tax on capital does far more damage to a great historical heritage than to the individual at whom it is aimed.

My Lords, I hope your Lordships will now forgive me if I draw a little on personal experience. Two years ago when my father died, my wife and I were faced with a decision as to what to do about Stratfield Saye House, prior to opening it to the public. We knew much work was needed and that there would be many problems. They were, in fact, far greater than we anticipated and I wonder whether we would have felt like tackling them now in the present financial climate. Deathwatch beetle, woodworm, dry rot and sheer decay made restoration of the house a difficult and very expensive task. However, we did it, and it is difficult to say this, I must admit, without sounding rather priggish, but we did it because we believed that it was in the national interest to do so. We believed that something which a grateful nation had given to my ancestor should be preserved for the nation. Moreover, we have done it at no cost to the nation because the Historic Buildings Council did not help me—rather a sore subject at the moment. Am I now, in common with other owners, to be penalised when there are still outstanding requirements for capital for the house and the grounds? It would seem to me most inequitable if this were the case.

Let me now turn to the theme which I introduced early in my speech, that is, the part which country houses and their lands can play in the field of recreation. I have been engaged during the last four years in the creation of a country park, something which I believe is tremendously important in those areas, such as my part of Hampshire, where we live on the fringe of great urban development. May I quote to your Lordships something written by Elizabeth Beasley in her book The Countryside on View. She writes: Those people who have not come primarily to see the building want something to occupy several hours. They are seeking the less sophisticated country park type of entertainment. In other words, it is not only the house and its contents but the outdoor recreation which a visit to a country house can provide.

Let me also quote Mr. John Corforth in his study for the B.T.A. when he says, speaking of providing this recreation: A number of owners have seen this and are doing what they can to provide for it, and what is particularly interesting, they feel a definite sense of obligation to the community to try and help in this direction. This sense of course is not a new force in estate economy. It is only the form that is new, and what is equally important in the climate of opinion in 1974, it must be realised that it is an attitude that can only last as long as the owners are left with enough capital to be able to afford to take a broad view. Both excerpts emphasise the point that country house owners with land are in a unique position to provide recreational facilities. Many feel that as well as fulfilling a social duty they are committing funds to a sound capital investment. Having financed my venture very largely from my own resources in a period of great financial difficulty, am I and others in a similar position to suffer the disability of a wealth tax which could seriously limit future capital investment in this project? If so, it is not so much I who will suffer but the public.

Let me now turn to the question of the purely agricultural interest. Some six or seven years ago the previous Labour Government introduced an eminently sensible piece of legislation called the Farm Amalgamations and Boundary Adjustment Scheme. The object of this legislation was to encourage the formation of larger holdings of agricultural land. I will not bother your Lordships with the details of the measure, which is probably well known to you, but only mention that it has been of great benefit to me in that I have been enabled substantially to reduce the number of small agricultural holdings on my property. The effect of a wealth tax on the agricultural holdings of an estate, which do so much to maintain the country house, will be the cause of further fragmentation of agricultural land. This, surely, is also against the national interest and indeed against Government policy.

In short, it seems to me that the implications of a wealth tax on historic country houses and their estates should be viewed from one angle only; is it in the national interest that the future of these houses and their land should be placed in jeopardy by the imposition of this tax? Let us forget about sterile ideology and what I call the philosophy of envy, and let us remember only that it would be a tremendous loss to this country if our great heritage or historic country houses disappeared.

7.34 p.m.

LORD ROBBINS

My Lords, thanks to the noble Duke, the Duke of Grafton, we have certainly had a notable debate to-day, and I am sure that it would be inappropriate for me to take up more than a few minutes of your Lordships' time underlining some points which have been made and bringing forward perhaps one or two illustrations which have not yet made their appearance. My Lords, if any of you need to form a vivid idea of the losses which may occur if a wealth tax is imposed covering notable works of art, I recommend you to go to the National Gallery. There at the bookstall at the moment you will find an extremely interesting monograph from the talented pen of the Keeper, Mr. Cecil Gould, called Failure and Success, in which he retails the history of 20 occasions on which the National Gallery failed to secure masterpieces and 20 occasions on which they succeeded. The story of the failures is indeed lamentable, and when one goes to the countries abroad where the pictures have found their eventual resting place it is difficult not to feel a sense of bitterness at the changes that have already taken place in this regard. My Lords, do not mistake me; I do not say that there would have been no dispersion of the great artistic heritage which was held in this country up to, perhaps, 50 or 60 years ago. Some dispersion doubtless was in the interests of the English speaking people and others. But I confess that I wish it had been much less, and I have the gravest apprehensions, which I share with noble Lords who have spoken this afternoon and evening, of the effects on the small heritage which we still possess if a wealth tax goes forward without exceptions.

It is difficult to get a quantitative notion of the matters we have been discussing this afternoon, but, sticking my neck out, I would guess that there remain in this country probably no more than 50 of the greatest masterpieces of painting. For the time being, I am confining my attention to painting, because for 20 years as a trustee of the National Gallery this has been the chief interest in this sphere of my life. It may be—and this is more difficult to assess—that there are in various hands some 400 or 500 more pictures painted before the beginning of the 20th century. I should be extremely surprised if there were more than that number of what I call National Gallery quality.

I ask myself how much of this greatly reduced heritage is likely to persist if a wealth tax of the order of 1½ or 2 per cent., which is commonly mentioned when these matters are discussed, is imposed upon the owners. I share with the noble Earl, Lord Perth, the apprehension that such a tax would provoke a flood of attempts to dispose of these properties on the market. Some people might lightheartedly say, "Of course, these can be saved for the nation". It is easy to say that. But I was at one time the predecessor of the noble Earl as Chairman of the Reviewing Committee, and I have spent much time in the last 20 years of my life trying to help to rescue pictures for the National Gallery. Recent Governments have certainly pursued a more enlightened policy than was the case 20 years ago when I first came in. In the early 1950s the purchase grant of the National Gallery was only £12,500, whereas now it is little short of half a million pounds, if one counts the amount the National Gallery sacrificed in order to get the Titian.

But at to-day's values, if two-thirds of the great masterpieces that I have mentioned were to come on the market it would require efforts quite unprecedented in our history to get money out of the Treasury, and I do not think they would succeed. I find it extremely difficult to believe that any strengthening of the International Art Collection Fund would be equal to the burden. Let us suppose that these masterpieces were saved, that at the last moment the public were so conscience stricken that we should abandon so much of our treasure that the State stepped in and that they were safeguarded for dispersion among public galleries, do we want to see the remaining few hundred pictures of National Gallery quality sent overseas? I certainly think that it would be folly to carry out any policy which ran that danger.

As regards the country houses and their contents and lands, I do not think that I can, with profit, add anything to what has been said so eloquently by other noble Lords this evening. I agree with everything that has been said about the folly of destroying still further this heritage, of destroying the attraction to tourism, of destroying those intangible features of social living together in which the country houses play so large a part. I certainly agree with noble Lords who have said that converting them to county council offices or offices for the Coal Board. or something of that sort, is no substitute whatever.

I have been a little surprised at how many noble Lords have taken for granted the inevitability, and indeed the possible desirability, of a wealth tax. The case of the country houses, the case of the fifty-odd great masterpieces, is simply a limited part of a much larger number of cases where there will be administrative difficulties and damage to the economy as a whole if an overall wealth tax is introduced. On the general economic effects of an overall wealth tax, I feel that there is very little to add to what was said by the noble Viscount, Lord Eccles. It seems to me to be an amazing thing that, at this time, with all the other instruments of taxation at the disposal of the Government, there should be considered the introduction of a tax which, in its most general economic aspect, must have the effect either of destroying the national heritage or of providing a disincentive to saving in general, or both.

But leaving that all on one side for a moment and concentrating on the taxation not of financial savings and money property of different kinds but contemplating the broad class of land, houses. and chattels, including paintings and valuable objects of that kind, I wonder whether there is still sufficient recognition of the quite enormous equitable and administrative anomalies which are involved in an overall tax. Of course, if only a small category of houses and works of art are exempt—the listed country houses. and perhaps a list compiled by the museums of the 50 or 60 most valuable works of art—the administrative difficulties would be less, but the equitable difficulty would still be very great indeed. If the country houses only were exempted, there would exist a profound anomaly as regards pictures in the possession of people who did not own country houses.

The whole category of buyers of works painted since the beginning of the 20th century, contemporary pictures to which the noble Lord, Lord Clark, alluded in his interesting speech, would not be covered, nor would the case mentioned by the noble Viscount, Lord Eccles, of valuable books, the stock of which in this country has already been gravely reduced by export to Japan and to numerous universities and great libraries of the United States. People in such positions would ask, "Why are the country houses exempted, and we remain to bear the burden?"

Moreover, if a wider number of valuable objects of this sort comes under tax, then the administrative problems of valuation can scarcely be exaggerated. There is the problem of efficiency and evasion. We have heard that there are wealth taxes in operation in various countries abroad. I wonder whether they are 50 per cent. effective. But leaving on one side the fact that taxes of this sort make rogues and tax evaders of all sorts of otherwise honest men and women, how is justice to be secured as regards valuation? I have heard it rumoured (this may he quite wrong) that the Inland Revenue authorities contemplate using the museum officials as investigating agents in this respect. I find it difficult to believe that such a ridiculous idea should enter the heads of the very clever people who still are to be encountered in the Department of Inland Revenue. I should indeed be surprised if it had really be seriously thought about by Ministers whose ideas on these matters may be less precise.

Thihs would be a perfectly stupendous task if books, valuable china, houses not covered by a special list, and so on, were all to be eligible for an annual wealth tax. Certainly the distinguished and dedicated scholars who are the glory of our museums would not be available for snooping of the kind that that involves. There would be snooping enough to be done if the value of money were constant, but in a raging, high inflation, which the present Government inherited from their predecessor, the task would be almost insurmountable.

So, my Lords, I ask myself: why are we contemplating this sort of thing? We all know that taxation is necessary to finance Government expenditure, even when Government expenditure is carefully pruned. But why on earth should we not use the accepted instruments of direct and indirect taxation, which do not provide such a multiplicity of administrative complexities? Why should we turn to this way-out proposal, whose only justification, to my way of thinking, is in terms of statistical generalisations for which, as a professional economist, I find extraordinarily little evidence in the figures when they are minutely examined.

7.51 p.m.

THE DUKE OF MARLBOROUGH

My Lords, I should like to congratulate the noble Duke on initiating this historic and important debate. I must declare my interest in the subject we are debating, and I apologise if I give the impression of talking about my problems at Blenheim, but by doing so I believe I can help to show the very real difficulties that are associated with owning a large historic house.

When Blenheim was being built, its architect, Vanbrugh, said he looked upon it much more as an intended monument of the Queen's glory than as a private habitation for the Duke of Marlborough. Doctor Evans (though it is sometimes attributed to Alexander Pope) had the following to say about Blenheim: See, sir, here's the grand approach, This way for His Grace's coach; There lies the bridge and here's the clock, Observe the lion and the cock, The spacious court, the colonnade, And mark how wide the hall is made! The chimneys are so well design'd They never smoke in any wind. This gallery's contrived for walking, The windows to retire and talk in; The council chamber of debate, And all the rest are rooms of State! 'Thanks, sir,' cried I, ' 'tis very fine But where d'yc sleep, or where d-ye dine? I find by all you have been telling That 'tis a house, hut not a dwelling.' Notwithstanding those views and difficulties, my family has tried to keep this house as it was originally intended to be, namely, a national monument. However, to-day we are faced with the threat of a wealth tax on these houses and their contents; therefore, in addition to the numerous problems already associated with owning large country houses we have yet another one. For them the future indeed looks gloomy.

My Lords, some people will no doubt argue that owners of historic houses are a privileged society, but is one really privileged when one shares one's home and possessions with visitors from this country and from abroad? One's privacy has gone, and the public probably see more of one's own possessions than one does oneself. At Blenheim we have had the park open to visitors from the local town of Woodstock since before the last war, and they have always been able to walk in free of charge. I think this applies to other owners of large houses and historic parks. I consider that a much more realistic name would be, "owners of inherited responsibilities" who have shown themselves responsible citizens, responsible to the nation, and for that they should be classified in exceptional circumstances as "preservers of our national heritage" or, as the noble Earl, Lord Perth, said, "custodians for the nation".

My Lords, there are two alternatives. One is to tax the owner out of his house and home; and the second is to preserve our heritage. With the first, one would be left with, at best, a museum, and a costly one at that, with the chain of tradition broken and with a house that would probably have been stripped of most, if not all, of its contents. The consequence would be that very few visitors would want to come to see it. Take Blenheim, for instance, my Lords. Would anybody seriously consider that the Blenheim tapestries, which were specially made for the rooms, should hang anywhere else? But if one were turned out of one's house and home that might have to happen.

The second alternative is to preserve our heritage. How do I think this could best be done? At the moment, objects of national importance can qualify for exemption from estate duties. I consider that all such objects should be exempt from a wealth tax. If the owner sold them, then, as in the case of exemption, the necessary taxation would apply. In addition, I believe that the house and any amenity areas, the gardens and all objects on view to visitors should be exempt from the threat of this wealth tax.

The owners of houses which are open to the public are providing a service and, as such, they are an asset to the nation, and should be given some relief from the penal taxes which already exist and from others which are being envisaged. The alternative, as I have said, would be to destroy and disperse our national heritage.

Next year is European Architectural Heritage Year. Is our contribution to be a wealth tax on our stately homes and their contents? Is our contribution to be starting the destruction of our heritage while the rest of Europe is trying to restore and refurbish theirs? Up to now, ours has been the envy of the world. Why do we get so many tourists to Britain? Not, as the noble Duke, the Duke of Grafton, has already said, and as I venture to suggest, because of our weather. They come here to see our glorious English homes and gardens and their possessions.

I have been considering for next year—in fact, we have now started it—restoring, as our contribution to the European Architectural Heritage Year, a temple in the garden, called the Temple of Diana, where the late Sir Winston Churchill proposed to Lady Churchill. I should like to put therein a commemorative plaque, but will a restored temple increase the value of that temple and therefore increase the wealth tax? If one restores a picture it automatically increases its value. Will it increase the wealth tax payable? Those are the sort of questions all owners of historic houses are asking themselves.

In 1704, my illustrious ancestor won a famous victory, the Battle of Blenheim. For many years now my family has been fighting another Battle of Blenheim, the battle for the preservation of our great family house. It has been going on for a very long time and it has been very costly. To give your Lordships some idea, in 1956 the then Ministry of Works gave an approximate estimate of £190,000 for immediate restoration work that had to be done. Since then, with a 50 per cent. grant from the Historic Buildings Council, over £300,000 has been spent on external repairs and restoration—I repeat, external only; all internal ones have been the responsibility of the family—but, because of ever-increasing costs through inflation, an estimate recently given by the Department of the Environment in conjunction with the architect came to the staggering sum of £400,000 worth of work still needing to be done. Therefore, your Lordships will appreciate that the maintenance of a large house and its contents in these days of high costs and heavy taxation can be a very great burden.

Blenheim and other large houses have the same sort of problems as the Firth of Forth Bridge—before you get to the end you have to start again at the beginning. But, unlike the Forth Bridge, large houses have roofs and contents to be looked after as well. I look forward to the day when I might be able to start again at the beginning, but I fear that this dream is unlikely to be realised in my lifetime. My illustrious ancestor was never defeated in any of his battles and I intend not to lose my "battle of Blenheim". I doubt whether I will ever win the battle of repairs and restoration in these inflationary times which, without the help of the many thousands of visitors, would already be lost.

Finally, I believe that I am speaking also for many other owners when I say that provided I am not driven out of ownership by further penal taxation, I would deem it my duty to try to continue to contain the enemy of ever-increasing costs of maintenance and repairs in this inflationary time. I would hope to show, as I said at the beginning, that through my inherited responsibility I have contributed something, not only to Blenheim, but indirectly to our nation.

8.1 p.m.

LORD SANDFORD

My Lords, this month has been an exhilarating one for a mere Baron. Only a fortnight ago we had a debate distinguished by the presence of the Prince of Wales. To-day we have had one graced by no less than three Dukes. I start by adding my tribute to those of other noble Lords to the noble Duke, the Duke of Grafton, not only for having introduced the Motion in such a timely way, but for having combined with it such a distinguished speech which set the tone for what has been an admirable and memorable debate. I feel a little presumptuous to be entering this discussion, as far from owing a country estate I am a mere tenant of a council house in that small 18th century estate which is all that Westminster City Council has managed to save from the office development of Smith's Square. It is the kind of house which the noble Lord, Lord Holford, was talking about, distinguished enough to be listed but not distinguished enough to attract an H.B.C. grant.

However it is not necessary for me to intervene at any great length because almost everything that has needed to be said has been said. I would agree very much with the noble Lords, Lord Goodman and Lord Perth, when they stressed how important it was that we should have this debate and that what has been said should have been said. I am glad to know from the noble Lord, Lord Shepherd, that the major points will be heeded and possibly acted upon. I am sure that all of us look forward to further reassurances from the noble Lord, Lord Strabolgi, that the debate will influence him and his friends in taking up a decision about the wealth tax.

My Lords, as a Minister in the previous Government in whose fields these matters lay for three years, I would also pay my tribute to those who set up and have since been operating the system under which our heritage has been conserved. I particularly single out those officials in the Department of the Environment in whose hands so much of the detailed day-to-day work lies, as well as those who have created the legislation and chaired the committees and the councils.

What we are concerned with here, my Lords, is one particular part of our heritage. I stress that although my responsibilities ranged over most aspects of heritage, not the collections of art but everything else from National Parks to ancient monuments, that in talking of the country houses we are dealing with the quite unique British contribution to civilisation. Here we have unique balanced collections of all forms of artistic creation—vignettes of history as several noble Lords have said—which constitute a quite exceptional attraction for visitors, both people from this country and those from overseas. To put it at its lowest, it is something which earns us a sizeable amount of our invisible earnings. But it is not only our historic houses which are the envy of the world. The conservation system itself is certainly the envy of the rest of Europe. The noble Lord, Lord Shepherd, was right to claim some degree of authorship for the system for Sir Stafford Cripps.

I have given three years of ministerial service to the operation of it, but the point is that it has been built up by a succession of Governments, Ministers and other experts who have served on the Historic Buildings Councils over a number of years. As a result of this creation, four major achievements can be notched up. First, there has been a whole process of the repair and restoration by the operation of the Historic Building Council grants, very skilfully and delicately administered under the auspices of the Council itself and with the help of innumerable experts. Secondly, there has been the safeguarding from demolition by the process of listing, lists which have now reached the figure which it was estimated by Gowers would eventually be reached of about 200,000 buildings throughout the Kingdom, a process which, coupled with the legislation which has supported it, has reduced the flood of losses which was going on between and immediately after the war to a mere trickle and which has been extended meanwhile to cover not just the country houses but town houses, town centres, as well as great tracts of the coast and countryside.

Thirdly, this system has ensured in a quite unique way—this has been stressed over and over again during the debate—that the houses are being cared for and lived in by their owners and, in many cases cited to-day, by the descendants of the original owners. Public ownership, as several noble Lords have said, is better by far than any other way, and cheaper by far than any other method so far devised anywhere else in the world. The fourth achievement—and this is one I was so glad that the noble Baroness, Lady Lee of Asheridge, alluded to and stressed—is that, as part of this whole process, by far the greater part of this heritage has been open and made available to the public, amounting to several million visits to the privately-owned properties alone, which was mentioned by my noble friend Lord Montagu of Beaulieu. These were enjoyed, I am sure, not with any sense of envy but with wonder at the beauty that is enshrined in them, appreciation of the history that they have preserved and with intense admiration at the skill of the craftsmen who created them.

I would very much agree with the noble Baroness, Lady Lee of Asheridge, that one of our most urgent tasks now is not so much further tinkering with the conservation system and its legislative framework but education of the public so that year by year more people care more about these things, although I believe and hope that she would agree that in seeking to do this we will be swimming with the tide because the whole movement of public attitudes is towards the preservation, conservation and appreciation of these works of art. But, compared with the legislative system of conservation, I think the effects of taxation have been far more uncertain, far less desirable, mixed and unforeseen, and it is only too easy to take a false step in taxation policy with disastrous results, undoing all the good which has been done so painstakingly and laboriously since the war.

The best thing for me in this debate was to hear from the noble Baroness, Lady Lee, that there is someone in her Party, as influential as she is, who is fully alive to the dangers, the difficulties and the perils in the path to which her Party seems to be committed. I hope that Her Majesty's Government will take care. What is needed is not a further impost on our country houses, their contents and their owners. There is a very strong case for a better system of taxation related more to the appropriateness and the quality of their management—how they are repaired, how they are made open to the public, et cetera—than to their commercial profitability, which is where the incentives enshrined in Case 1 only too often drive us. They may be perfectly appropriate to the large country houses which can be run on a commercial and profitable basis, and which are very skilfully run, as for instance is Beaulieu, but they are quite inappropriate to a whole lot of other country houses which cannot be run in that way. Furthermore, there is considerable scope, in my view, for making it easier to establish, and for encouraging the establishment of, private charitable trusts for the care and management of the smaller country houses, and I should hope that it would be possible to make movements in that direction rather than down this perilous path of a wealth tax. But until we get the Green Paper I suppose it is difficult to say much more about this.

I should like to end my remarks on the same note as my noble friend the Duke of Marlborough, and to remind the Government that 1975 has been designated and set aside as European Architectural Heritage Year. A great trumpet call has gone out to Europe—really, the crade of civilisation—to heed and help to halt the tragic and all too rapid erosion of our common heritage there; and so far this country has been proud to be in the lead of that crusade. My hope is that, whatever else this debate has done, it will have done something to cause Her Majesty's Government to pause and to hold back, and not to be stampeded into any of the follies which have been set out so clearly before them by this debate: not to herald this next year, of all years, by abandoning the policies of all their predecessors, of their Party and of my Party, in office since the war; not to abandon what the noble Baroness so rightly stressed was a very strong and historic strand in Socialist philosophy up to this moment; not to cast themselves in a role far more Philistine than any of Cromwell's soldiers; and not by design or, worse still, by inadvertence to be the begetters of a devastating and irrevocable piece of destruction.

8.14 p.m.

LORD STRABOLGI

My Lords, it falls to me to reply to this debate, and one of the great advantages of being almost the last speaker is that one has been able to hear practically the whole debate. In fact, I think the noble Duke and I, perhaps with other noble Lords, have sat through it all. While I agree with my noble friend Lord Shepherd the Leader of the House that possibly this debate was rather premature, I nevertheless agree fully with what the noble Lord, Lord Robbins, and indeed the noble Lord, Lord Sandford, have said, that it has been a most interesting and notable debate, and indeed, I may say, one to which the Government will pay the greatest attention. But first I must pay a tribute to the noble Duke and say how grateful we are to him for putting down this Motion, and congratulate him, if I may, on his most thoughtful and constructive speech. I think that, of all the noble Lords in this House, the noble Duke is probably the most suitable for moving this Motion, because he has spent a lifetime in conservation. We know him well, first of all as the Duke of Grafton and, secondly, before he succeeded, as Lord Euston—a name which I think is almost synonymous with work and effort in this very important field.

My Lords, the noble Earl, Lord Gowrie, said that country houses are really second in importance only to our literature, and with that I fully agree. Indeed, the noble Duke quoted from the Gowers Report that probably they are the greatest contribution that this country has made to the visual arts. I should like to associate myself with the tribute paid by the noble Viscount, Lord Norwich, to the owners of these houses. I think we owe them a great debt. Possibly during most of this century there have been the greatest difficulties, but I think they have shown very considerable enterprise, tenacity and enthusiasm in keeping their houses and estates together. I think that, as a nation, we owe them a debt, and that this should be put on record. Indeed, there is no need for the noble Duke, the Duke of Wellington, to apologise for extending this debate, because a country house does not mean only the house itself, but also the agricultural land and the farm land, as the noble Duke said, and the parks as well—beautiful parks by Capability Brown and others—some of which, in many ways, arc more important than the house itself, when in some cases the house has lost its contents.

Some noble Lords have of course expressed considerable concern that there may be a flood of works of art on the market. One hopes, of course, that this may not happen. I may say that I agreed very fully with the noble Lord, Lord Clark, who, in his notable speech, spoke about so much of the vulgarity of the present art market. I agreed very much with him when he deplored the kind of international art sales we have now—the sales à la chandelle, with the international hook-ups, television and all the ballyhoo; these beautiful things, many of which have been produced and painted by poverty-stricken artists, being bid for in the most vulgar conditions. I agreed very fully with what he said on that point. Indeed, it needed saying, and I think that, coming from him, it has considerable significance; because in my modest way I have often felt like that.

As I said, a large number of noble Lords have expressed apprehension at the possible effects of the proposed wealth tax on significant art collections remaining in private hands, and I can assure them, as I have said, that the Government will take full account of these points in considering the precise form that the legislation should take. But, my Lords, it would be quite wrong for me to give any impression that the Government have weakened in any way on the principle, as opposed to the ultimate details, of a wealth tax. In spite of the measures for greater social equality that have characterised the actions of various Governments since the war, there still remains a most unfair distribution of wealth.

My right honourable friend the Chancellor of the Exchequer has made quite clear in another place that a further attack must be made on this maldistribution. This is important not only for its own sake, but because the Government's social policy must be seen to be fair if we are to achieve a fair and orderly society. It is an undoubted fact that gross fortunes have been made in recent years at the expense of ordinary people and with little apparent regard to the social conscience. Having restated the Government's determination of the principle of the wealth tax, I must repeat what my noble friend has already said about the importance of full public discussion of the Government's proposals in the forthcoming Green Paper.

My Lords. the noble Lord, Lord Goodman, said that he was not sure of the value of a Green Paper. I am sorry he is not with us now, but he had the kindness to write to me and say that he had another important long-standing engagement and was not able to stay to the end of the debate. The purpose of the Green Paper is to promote discussion. The noble Lord said that he did not know how representations were going to be made. Surely he must know that the various associations—the Association of National Property Owners the National Trust and all the other associations with which the noble Duke, the Duke of Grafton, has been associated all his life, will make representations to the Chancellor and the Treasury and these will be considered and no doubt discussions and meetings will ensue.

There have been many pleas made for the exemption of country houses and their collections from the effects of this wealth tax for a variety of reasons. It would be premature for me to give any indication during this debate of the Government's position on this particular area of concern, as opposed to other problems with which the proposed legislation will have to deal. But I can assure noble Lords that this aspect, that has been so fully aired to-day and so movingly put forward by so many noble Lords will be considered very carefully. My noble friend Lord Shepherd has already referred to the present fiscal arrangements for encouraging private owners to retain significant works of art for the benefit of the public and, if they wish to dipsose of them, to sell them advantageously to a public collection. Whether such treatment can be extended in the case of a wealth tax is a matter for careful consideration by the Government, after hearing the views expressed in this debate and also by the public at large.

There is hardly any need for me in winding-up to dwell further on the difficulties, many of which have been alluded to in this debate—difficulties such as who is to decide whica works of art and which country houses should be classed as significant for the purpose of any exemption. Of course, the debate today has been about country houses, but if country houses are to be exempted how are the owners of town houses and, indeed, penthouses with fine collections to be treated? I hope therefore that enough has been said to show both the Government's acceptance of the necessity for a wealth tax and their readiness to listen to reasonable arguments on its sensible administration and the possible effects on the national heritage of this country. I have noted very carefully what has been said by noble Lords in this connection.

It would, however, be wrong to leave the House with the impression that the Government are concerned only with country houses and their works of art. The living arts (if I may call them such without disrespect to the main subject of this debate) which were alluded to by the noble Lord, Lord Robbins, the noble Earl, Lord Perth, and the noble Lord, Lord Clark, and others, are equally the Government's concern and we are determined to provide, as economic circumstances allow, a growing amount of financial support in this field. So, my Lords, let us not only look backwards because by the living arts I do not mean merely collected pictures. It is just as important for the public to have equal access to orchestras, theatre and the creative arts of to-day as it is for them to enjoy the unparalleled heritage of country houses and their treasures of which this country and its overseas visitors are so rightly proud.

8.25 p.m.

THE DUKE OF GRAFTON

My Lords, after such a long and, I venture to think, outstanding debate I am not going to detain your Lordships any longer but I should like to thank all noble Lords who have contributed in such notable and diverse speeches. It is really very encouraging for people like me who have spent a lifetime on this subject to find such complete unanimity and I like to feel that all Parties surely agree that our heritage must be preserved. I would particularly thank the noble Baroness, Lady Lee of Asheridge, for her most sympathetic speech. My only disappointment in the debate is that there have not been more speakers from the Government Benches. I think we must now leave it, and, in the light of the remarks of the noble Lord, Lord Shepherd, that what has been said to-day will be duly noted, and what we have just heard from the noble Lord, Lord Strabolgi, we must hope that action will be taken. We must now wait for the Green Paper which I feel will certainly provoke discussion to no mean tune, and we must see what it has to say. I now beg your Lordships' leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.