§ 4.45 p.m.
§ Second Reading debate resumed.787
§ The EARL of MANSFIELD
My Lords, getting back to the National Land Fund Bill, the House will be grateful to my noble friend Lord Reigate for giving us not only an opportunity to debate his Bill, but possibly a continuing opportunity to keep our thoughts on this matter in the future. Whether the noble Baroness, Lady Birk, will welcome this further opportunity to return to the subject is a matter of doubt. On a previous occasion I think she said that the name "Mentmore" was written on her heart. It may well be that before the hopefully short life of this Government comes to an end the words "Land Fund" may be marked on another portion of her anatomy.
It is not for me to go into the questions posed by the deplorable affair of Mentmore—if I may so call it—at this stage. I say that for two reasons: first of all, I opened at considerable length a debate on this subject in March. I spoke for longer than I have ever spoken before, or intend to again in this House. More especially, the Order Paper for this afternoon is crowded and it would not be justified to detain your Lordships for too long, although equally it must be said that this is an important subject, one which is going to be of continued and increasing importance in the future.
When we debated Mentmore, I criticised the Government—gently, I hope—for what I considered to be their dilatory behaviour over this affair. There is no doubt about it, a great deal of time was spent in discussing what form the Land Fund actually takes; what use can be made of it, and in what circumstances. A great deal of ignorance was shown, not least by me. But it is a complicated subject and I hesitate to ask the question, but one wonders whether all the Government advisers were totally sure of what advice they were giving at any particular time. I can justify that comment if necessary.
We were all more or less convinced at the end of the day that the National Land Fund was a notional, almost fictitious, sum of money. If ever it had existed in the mind of Dr. Dalton, it pretty soon vanished into thin air. Since then, it has been a mere paper exercise, in effect to provide the Government with a means of spending money without at that stage having to have a Vote in Parliament, but which would have to be justified on a later 788 occasion. That was the sum total of how the matter came to be understood.
I was "re-perplexed"—if such a word exists—on looking through the Official Report for the Commons of 12th June, at column 293, when I saw an answer to a Question put by my honourable friend Mr. Cormack to the Chancellor of the Exchequer. He asked, in effect, if the Chancellor would state whether during the 20 years since 1957, any of the investments held from time to time by the National Land Fund had been purchased on the open market and, if so, whether he would specify the total sum expended on the acquisition of such investments. The Answer was:During the past 20 years stocks totalling £44,120,269 were purchased on the open market through the Government Broker on behalf of the National Land Fund. In addition Treasury Bills totalling £79,869,935 were purchased in the same period".Whatever the transactions regarding Treasury bills, to me the effect of that Answer seems that cash was used to buy securities on the open market. If that be the case, the whole artificiality—if that is the word—of the National Land Fund is once more thrown into question, if not doubt.
Since this is a debate which is ranging over the whole subject of the National Land Fund, may I ask the noble Baroness, when she comes to reply, whether, if these figures are right—and of course they must be, since they came from no less a person than the Chancellor of the Exchequer—public expenditure has already taken place in respect of the investments now held by the Land Fund. If that is the case, when we come to what I might call, "a Mentmore situation", surely it is then wrong to say that the Fund cannot now be used to meet such a situation, because that would imply new public expenditure in the future. That is how the situation seems to me, my Lords. It may be that I have got hold of the wrong end of the stick—if I have it will not be for the first time—but I just wonder. This is important, because it throws into question the Fund and its use and also, of course, my noble friend's Bill, which seeks to place the matter beyond doubt.
I know that my noble friend will not take it amiss if I say that I am not going to comment in any great detail upon his 789 Bill because, as he himself said, it is perhaps deficient in one or two instances, excellent though it may be as a vehicle for its purpose. However, there are one or two matters I should like to take up, because it seems to me to be important that if this matter is going before a Select Committee in the future, no false premises should be laid either now or in the future.
Clause 2 of the Bill says:The Trustees may in their discretion acquire any land, buildings, property or chattels which may be in the market at any time, or which shall have been offered to the Treasury in lieu of tax, duty or for any other reason,".Pausing there, it seems to me that Clause 2 lumps under the same heading that form of property, either in the form of chattels or of real property, which is offered by a tax debtor in satisfaction of a capital debt (imposed of course by tax) which has existed since, I think, the 1959 Finance Act and which is something which falls completely outside the National Land Fund.
I know it may be said that, when such chattels, or whatever it is, have been offered and accepted in satisfaction of a debt, it has been the practice of the Commissioners of Inland Revenue to be reimbursed in effect from the Land Fund in respect of that expenditure. If that is so—and I believe it to be correct—that reimbursement is a practice which has grown up. It is not mandatory; not only is it not mandatory but it is not compulsory. Therefore, in those circumstances, in my submission, it would be wrong necessarily to equate the acceptance of works of art or real property as a part or whole discharge of a capital tax debt as something which inevitably is going to fall on the Land Fund, because it does not need to. Therefore, if I quarrel with my noble friend in the drafting of his Bill, it is over that.
A second matter worthy of comment is the fact that under this clause the trustees, according to subsection (2), seem to be treated as principals, because it says that they:…shall be empowered to dispose by sale or otherwise of any fond, buildings,".and so on through the subsection. My quarrel with that is that in such an instance trustees of this nature should never be principals. They should be 790 monitors; they should review the situation; they should hold the cash and advise the Minister how, when and in what circumstances it shall be used. If anything, they should be advisers of the Secretary of State, but they certainly should not be creatures of the Secretary of State; nor should they be principals acting on their own behalf. That is something which I hope will be considered in the future, but otherwise I think that the Bill is a good vehicle for further discussion, as I have said.
I think we have to take in the lessons of Mentmore, because future consideration of a Land Fund, or whatever sum of money is going to be devoted to this purpose, must get straight what the sum is to be used for. To my mind, the whole purpose of a Land Fund should be to act as a safety net to save properties in certain instances when otherwise either they or their contents would be dissipated by sale, by virtue of the inability of the former owner to meet his commitments one way or another. They do not have necessarily to be concerned with tax.
When the noble Baroness replied to the Mentmore debate, if I may so call it, she said that she intended to prepare what she was pleased to call "a league table" of properties which would be designated as worthy of salvation in some kind of order. I was horrified by the whole idea and I hope it has been quietly put in some pigeon-hole, where if ideas can gather dust it is gathering it. The effort, expertise and judgment required to put items of our national heritage in some kind of league order would defy the wisdom of Solomon, in my respectful submission. The Land Fund, I repeat, should be used when all else has failed to save a property in circumstances which should be conveyed to the Minister by a body of responsible people who are there to give advice. The real way in which the historic houses, and indeed our heritage in general, can be preserved for the future is to devise a tax policy which will ensure that as few as possible of them come on to the market, unless their owners are either extravagant or foolish, so that they can no longer keep up their commitments.
The Times today contains word of an Amendment which apparently the Liberals or the Government—they are more or less synonymous these days—are tabling 791 in another place during the Committee stage of the Finance Bill. That will, as I understand it, lower the penal tax rate to be paid by the trustees of a maintenance fund for the upkeep of an historic house. Due to some dispute, I have not been able to get the Official Report. However, that is the kind of change of policy and consideration which we on these Benches will continue to urge upon the Government and, in particular, upon the unfortunate noble Baroness, Lady Birk, while the Government remain in Office, because we are convinced that unless and until the Government realise that the future of historic houses lies in putting them in a position where they do not need to be saved, then the Mentmore situation will recur, all too frequently. However, taking the Bill as we find it, it is one which I am sure your Lordships will unhesitatingly welcome. I very much hope that the House will, at a later stage, decide to send it to a Select Committee.
§ 4.59 p.m.
§ Viscount NORWICH
My Lords, I think all Members of this House will agree that we owe a great debt of gratitude to the noble Lord, Lord Reigate, for having once again called to our attention this vitally important question of the future of the artistic and architectural heritage of this country and for having produced such an admirable vehicle, at least at this stage, in the form of this admirably simple yet at the same time most promising and potentially effective Bill.
The noble Earl, Lord Mansfield, and the noble Lord, Lord Reigate, have already spoken at length about the problems of our heritage. I do not think there is any reason for me to repeat what they said, except to point out once again that the historic houseowners of this country are, in greater and greater numbers, finding themselves unable to keep up their properties. I am not just talking about the great stately homes; I am also talking about the little village manor houses and almost every other historic building between the two. There are more and more who are now forced by the increasing weight of taxation and the financial situation—having struggled heroically and valiantly for many years—to give up. What can be done to save what remains of the heritage and, above all, to see that Mentmore does not occur again?
792 Until a few years ago, we could point to the National Trust which, in the first 20 or 25 years after the end of the Second World War, certainly let very few important houses of architectural value slip through its fingers when there was no other way to save them. Here I should perhaps declare an interest, as I have done so frequently, and say that I am a member of the Executive Committee of the National Trust. I should also say, in the same breath, that here I am speaking personally for myself, and for the Party from whose Benches I am speaking, and not in any sense for the Trust. But the Trust, I am afraid, much as it grieves me to say it, can no longer be looked upon as a lifeline, except possibly in very few cases.
We have always had to ask for a very substantial endowment in order to keep up a house, but the endowments which we are now forced to request from donors are such that it is extremely unlikely that any donor will be able to contribute anything like enough. Indeed, we are having appalling trouble with the endowments of houses which are already in our possession, endowments which were very carefully calculated only a few years ago, but which now, thanks to galloping inflation, are wholly insufficient to keep the houses going.
What else is there, failing the National Trust? Fortunately, there is the Land Fund. Unfortunately, in recent months the Land Fund does not seem to have been working any too well. So what can we do to make it more effective, to give it power, to give it teeth? Even before we get on to that question, it is important to say that the Land Fund is not the answer, nor can it ever be the answer. There is only one possible answer; that is, to alter the whole climate of taxation in this country in such a way that historic house-owners do not feel themselves impelled to give up the fight. Until that happens, problems of this kind will continue to plague us all. But, obviously, that can be achieved only in the longer term and there is no time to lose. Therefore, the Land Fund, representing as it does a fire brigade, must be put into the best order that is possible. It seems to me that this is what the Bill of the noble Lord, Lord Reigate, does extremely well.
So far as I can make out—and I know that this is an over-simplification—there 793 were two principal problems that bugged the whole unhappy saga of Mentmore. The first was the extremely cumbrous machinery by which the whole Land Fund could be brought into operation, involving correspondence and endless very long, slow communications between the Treasury the Department of Education and Science, the Department of the Environment, the Inland Revenue and possibly, at certain moments, several other Government Departments as well. That was one problem. The other was the problem which has already been discussed in some detail this afternoon, and which I shall not go into again at length, of public expenditure.
It seems to me that the present Bill admirably manages to get rid of these two stumbling blocks. First, it streamlines the administration of the Land Fund, taking it away from heaven knows how many hundreds of civil servants, in heaven knows how many Government Departments, and putting the whole thing in the hands of just half a dozen highly trained and highly experienced people. Secondly—and I confess that here I am not an expert, and certain doubts hang over my mind, just as they do over the mind of the noble Earl who has just sat down—so far as I can see, the question of public expenditure has also been solved. But I think that we should all like a little more information about that, because it is difficult to know whether arty future expenditure from the Land Fund will be so treated. For the rest, it seems to me that it works very well.
At the same time, there are one or two points which I, too, should like to bring into slightly greater relief and ask for further elucidation about. I do not agree with the noble Earl, Lord Mansfield, about the Trustees of the Land Fund. My view is that they should be principals. If they are to be only creatures of the Treasury, if they are to be only advisers to the Treasury, then we are in very serious danger of getting back into the same position as we started from. The whole of this glorious streamlining will not do anything, and we shall have to start all over again. I think that they should be principals, and I see no reason why they should not be.
I would even go a little further than that, and express some slight doubt about 794 subsection (3) of Clause 3, which states:In any given financial year the Trustees shall not spend more than one-sixth of the capital sum standing to the credit of the Fund at the commencement of that financial year".If I am not mistaken, that would not have enabled the Land Fund to solve the Mentmore crisis. The Land Fund at present standing at, I believe, £17 million, the sum of £3 million having been asked for Mentmore, the Government offering £1 million on their own and asking for £2 million more, the Land Fund would presumably have been asked to pay the full £3 million, which is more than one-sixth of its present total. I should have preferred that clause to say,…shall not spend more than one-sixth of the capital sum without prior authority from the Treasury,or something like that. There should, at least, be some kind of let-out clause, which could be used under given controls at a given time. But these are obviously points for Committee stage if, as I very much hope, your Lordships give the Bill a Second Reading this afternoon.
There is one other point which I am not suggesting should be written into the Bill, for the very good reason that I do not see how it possibly could be. I was extremely surprised to learn recently that there is no machinery at all, even with the subject's consent, by which the Treasury can be informed of the tax position of an individual who may or may not be a potential vendor of his property. I understand that even Treasury Ministers may not be confidentially informed of the tax position of an individual, even if that individual is perfectly prepared that they should be. This problem also caused endless delays and unnecessary complications over the whole Mentmore trouble. How lovely it will be when we do not have to talk any more about Mentmore!
Anyhow, if this is so—and I am open to correction—could there be some directive by which people, who find themselves in a position very roughly akin to that in which the noble Earl, Lord Rosebery, found himself some time back, could at least be asked whether they would give authority to the Inland Revenue to send copies of relevant documentation about their tax problems to the Treasury? After all, they have nothing to hide since 795 the Inland Revenue knows it already. Probably it would be very much in their interests, as well as everybody else's, if this information could be transferred.
Having said that, I do not think that I need to detain your Lordships any further—there is a great deal more business to be done this afternoon—except to repeat once more what I have already said: that this is only a holding operation and that until the general question of the taxation of historic houseowners can be changed in such a way as to allow them to keep their houses for themselves, and for the general public to whom they should by all means be obliged to give reasonable access, then our historic heritage will continue, alas! to be in danger.
§ 5.10 p.m.
§ Lord COTTESLOE
My Lords, if I may come hack to the Bill, let me say at once that I strongly support it and that I very much hope—although I have fears that it is not very probable—that the Government will give it their blessing. It is not very probable, because, having succeeded in stultifying the purposes of Dr. Dalton in setting aside the National Land Fund to help in preserving our national heritage as a memorial to those killed in the First World War, a purpose that was endorsed by Parliament, it is evident that the Treasury will fight tooth and nail to keep the National Land Fund sterilised in their own hands.
No one can study the history of the Fund objectively without becoming aware that the behaviour of the Treasury in this matter has been monstrous and disgraceful. I cannot use any other words, although I know that the noble Lord, Lord Donaldson of Kingsbridge, will think I am using terms that are too strong. The Fund, established by Parliament at Dr. Dalton's instance in 1946, was originally a sum of £50 million, raised from the sale of surplus war stores. It was not part of the general revenue. Since that time, although grants have occasionally been made from it, in every year but one the interest has been underspent. In fact, in each of 30 years, it has been underspent. There has never been recourse to the capital, and the accumulated interest has grown and goes on growing.
The Treasury have somehow managed to establish the picture, first of an unnecessary Fund, with the result that 796 Parliament agreed in 1957, under a Conservative Government, to their eternal shame, to the Fund being raided to the tune of £50 million. And ever since that time the facade has been put up that it is not merely an unnecessary Fund but that it can hardly be said to exist—that it is a mere book entry. So far from that being the fact, it is now clearly established by the Written Answer to a Question asked in another place on 17th June last by Mr. Patrick Cormack, the Answer to which was quoted by my noble friend Lord Mansfield, that during the past 20 years stocks totalling more than £44 million were purchased on the open market on behalf of the National Land Fund; in addition, Treasury bills totalling nearly £80 million had been purchased. I am bound to say that I find it difficult to understand those figures, and when she comes to reply I shall be grateful if the Minister can enlighten us on how they are made up. But however that may be, so much for the myth, sedulously propagated, that the Fund does not exist or, if it does exist, it exists only as a book entry. Of course it exists and we have all—Parliament and the public—been shamelessly hoodwinked.
The question then arises, what can be done to enable the Fund to be applied for the purposes for which it was established by Parliament, the preservation of our heritage: historic houses and their surroundings and their contents, and our most beautiful countryside. Funds for that purpose are more urgently needed now than ever before. Mentmore is only the tip of an iceberg, the main bulk of which, forced to the surface by penal rates of taxation, will become more and more disastrously evident in the next few years.
It is perfectly clear that if the Fund is ever to be applied for the purpose for which it exists it must be taken out of Treasury control. The purpose of the Bill is to remove the Fund from Treasury control and to place it in the hands of independent trustees. Only in that way can we hope that the Fund will be used, and used for its proper purpose. That is why I strongly support the Bill and I hope that the House will agree to refer it to a Select Committee.
§ 5.15 p.m.
§ The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)
My Lords, this question seems to have come round again to me fairly quickly, although answering on behalf of the Government I have changed my Department of the Environment hat for a Treasury hat, which is filled with thorns at the moment. The noble Lord, Lord Reigate, will not be surprised to learn that I cannot accept all that he has said, or agree with it. Nevertheless, I welcome the opportunity which is afforded by this Second Reading to make the Government's position clear, and in particular to clarify the various misconceptions about the National Land Fund itself which, possibly with the exception of the noble Lord, Lord Reigate, seem to be shared by everybody who has spoken. I think the noble Lord, Lord Cottesloe, was rather hard on it; but he was hard because, if I may say so with great respect, he has got it wrong.
I shall not go into the history of the Fund because the noble Lord, Lord Reigate, did so most succinctly and admirably, and time is getting on. My only quarrel with him about its history is that I thought he was unduly harsh about Hugh Dalton, who was a most distinguished and able man. Perhaps I may explain what the National Land Fund has done and some of its pluses, since we have heard so much about the minuses.
The National Land Fund accounts, published each year, provide an impressive inventory of what has been preserved with its help—for example, the Penrhyn Castle estate, Denbighshire, land in the Lake District and Cornwall, Ickworth House, Bury St. Edmunds, Hardwick Hall, Derbyshire, Brodick Castle, Tatton Park, Cheshire, Brownsea Island, Dorset, Sissinghurst Castle, Kent, works of art associated with such great houses as Chatsworth, Petworth and Knole and, most recently, Cragside in Northumberland which was acquired specifically through the National Land Fund. Quite recently, the Stackpole Estate in Pembrokeshire, parts of the Foxwold Estate in Kent, chattels associated with Cotehele House in Cornwall, Erdigg Hall in Denbighshire, Van Dyck portraits from Althorp and the Blenheim archives have been preserved. I am sorry to have gone into such a long list, but it seems to me that sometimes we should remember what has been achieved by the Fund, 798 which has been battered with words—including, I agree entirely, my own from time to time.
This means that disbursements from the National Land Fund have amounted to some £10½ million since 1957. During most of this period, the income earned on the investments held by the Fund has exceeded disbursements, so that the capital of the Fund has appreciated. This is despite the plundering of the Fund in 1957. I share the feelings of those who believe that this was a very bad and wrong step to take.
The Fund is still comparatively sizable and amounted to £18.3 million at the end of March this year. Nevertheless, recently expenditure has exceeded income and the Fund's capital started to run down during last year. If we continue to draw on the Fund at the rate of between £3 million and £4 million a year, we shall have preserved for the nation a very impressive list of buildings and works of art on a scale even greater than seen in the past, but the Fund will be extinguished in about five or six years. That is the answer to the point made by the noble Lord, Lord Reigate: how is it possible to have spent this money and for the Government to have been able to offer even £1 million towards Mentmore?
Any spending, whether as grants for repair of historic buildings, or capital taxes exemption, or special grants to the national galleries and museums is a direct cost to the Exchequer. I must remind noble Lords opposite that they, together with other Members of the Conservative Party, have been calling constantly for restriction of public expenditure. Although the Fund is a central Government Fund and payments from it either to the Commissioners of Inland Revenue or to the Secretaries of State exercising their powers under the 1953 Act are internal transactions, they still count as public expenditure and as such are subject to the same constraints as apply to other public expenditure. In the case of expenditure by the Secretaries of State under the 1953 Act the position is easy to understand.
The Secretaries of State are acquiring property from the private sector, by using, in effect, the resources of the National Land Fund. The reimbursement to them from the Land Fund of the expenses they 799 incur is scored as public expenditure, instead of the payments the Secretaries of State make directly themselves to the private sector. In cases where the Land Fund meets the cost of Inland Revenue of accepting a property in lieu of tax this transaction is counted as public expenditure, to represent the purchase which is implied in this arrangement. If the arrangement were not treated as two simultaneous transactions, first the purchase of the property by Government and, secondly, the surrender of the proceeds of Government as tax, the transaction would be left out of the accounts completely, implying the writing-off of a tax liability for no consideration and acquisition of valuable property at no cost.
§ The Earl of MANSFIELD
My Lords, perhaps I may intervene there as I think it is a convenient moment. Perhaps the noble Baroness, Lady Birk, could answer the question—
§ The Earl of MANSFIELD
—which I postulated, where objects are taken in discharge of a capital debt. Perhaps the noble Baroness is coming on to it but I thought she had gone past it.
§ Baroness BIRK
My Lords, I was coming to the point made by the noble Earl when he raised the question of the National Land Fund investments and purchases on the open market, and—
§ The Earl of MANSFIELD
My Lords, that was not what I asked. My point was that if under the 1909 Finance Act objects are taken to satisfy a capital debt it may be the practice for the Commissioners of Inland Revenue to be reimbursed from the National Land Fund but it is not a mandatory duty for such reimbursement to take place and therefore—and I am putting the position a little stronger now—it is idle to pretend that in effect that is a drain on the public sector borrowing requirement.
§ Baroness BIRK
My Lords, I wonder whether the noble Earl will allow me to get through this part of my speech and come to that particular point at the end because I do not think it is as relevant to the Bill—or the context in which I am trying to 800 set it—as the other points and it will spoil my flow of argument. So perhaps I may deal with that as a "one off" at the end. The point put by the noble Earl during his speech was that of the investments and purchases on the open market and I think he particularly asked me to comment on that. This really demonstrates nothing more than that the fund is not a myth but that the Treasury is managing the Fund's portfolio. It has nothing to do with the main issues, but is a means of managing the Fund because it is still in Government securities, even if some are sold and some others are bought on the open market. Thus payments out of the National Land Fund are necessarily subject to the same disciplines and constraints as other items of public expenditure and, unless total public expenditure were to be increased, any payments from the Land Fund in excess of the provision made for them by the Government in their public expenditure programmes would have to be met by off-setting savings in expenditure elsewhere.
I agree that the whole subject is extremely complicated, but this is a point which I find one simply has to keep in mind. I do not think there is any need for me to stress the many competing claims and priorities that the Government are faced with in all areas of public spending, as the noble Lord, Lord Reigate, appreciated and acknowledged but which, on the other hand, the noble Viscount, Lord Norwich, did not appreciate when he said that the public expenditure problem has been solved. If it had been solved there would have been no problem at all because the underlying problem is that of having a sufficient amount of money. Too rapid a rise in public expenditure not matched by increased revenue forces up the borrowing requirement; this in turn has its effect on interest rates and the rate of inflation. And it is this very rate of inflation which has been responsible for the sharply rising costs of the maintenance of our valuable historic heritage. This is the canker which has been competing with death watch beetle in destroying our national heritage.
It is quite impossible to discuss this without seeing it in the context of the economic climate and that is why it is essential for us to have the strongest all round support for the policies which are being pursued by my right honourable 801 friend the Chancellor of the Exchequer to bring down the rate of inflation, to control the growth of public expenditure and ensure that interest rates are brought down. It is only in these circumstances that we shall be able to develop a soundly based coherent policy and be in a better position to create the greater resources necessary to preserve our heritage, as we would all wish.
At that point, perhaps I should say that as far as preserving the heritage is concerned and the anxiety not to see it disappear, there is no difference between those who have spoken so far—and probably many who have not spoken—and myself and my colleagues. It is not a question of those who want to destroy the heritage and those who want to save it but the best way one can do it in the present very difficult economic circumstances.
In a situation of severe economic restraint where difficult choices have to be made, the question is which works of art and which buildings can we preserve? The only way to make this very difficult, and at times tightrope—balancing choice, is to seek the best advice and therefore we go to experts like the Director of the National Gallery, the Director of the Victoria and Albert Museum, the authorities in the British Museum and the Historic Buildings Council, which advises me in my capacity as a Minister at the Department for the Environment. These advisers have helped to direct and guide the Government's decisions since the Fund was set up over 30 years ago. But at the end of the day whatever system we have and whatever machinery we have the Government still have to decide what can be afforded.
Further, since the Government are not in a position to run historic buildings or to care for all the works of art, they have to ensure that before accepting property there are institutions—national and local galleries, the National Trust or local authorities—who are willing to take on the day-to-day task of preservation. The question of management and maintenance costs cannot be ignored and the noble Viscount, Lord Norwich, quite rightly pointed to the problem of the National Trust at the present time. Given the size and value of our national heritage, together with all the other demands on 802 public expenditure which we really cannot forget, the Government cannot possibly agree to an open-ended commitment.
I will now turn to the noble Lord's Bill which is being given a Second Reading today. Understandably there are many technical deficiencies in the Bill and since the noble Lord, Lord Reigate, has said that he recognises them and as there is a great deal of business facing the House after this debate, I do not propose to go into them in detail. I would only point out that there is already one interesting dichotomy where the noble Earl, Lord Mansfield, made the point that he considered the trustees should be in the position of being advisers, in the same way as the Historic Buildings Council are my statutory advisers, whereas on the other hand the noble Viscount, Lord Norwich, felt they should be the principals, as indeed the noble Lord, Lord Reigate, obviously does, because he put it in his Bill.
There are two legitimate and complete differences of opinion over that and one immediately sees within the Bill itself, even with its imperfections, how the problems will arise. But these imperfections—and some others which I will not go into at the moment—could be resolved and it is not really these that concern me. Unfortunately the noble Lord's Bill does not solve the basic problem. This really is the core of the Government's opposition to it. The noble Lord has, alas!, not produced the key to the national Land Fund which I was searching for in the last debate and which he promised me he had found today. He has not, I am afraid, been able to do so, although I must certainly give him top marks for trying extremely hard.
First, it does not deal with the difficulties about priorities. Second, it provides for less expenditure than we plan, which is currently £32½ million a year. The noble Viscount, Lord Norwich, pointed this out. Third, it does not consider what happens when the Fund capital is run down. Even with the one-sixth, with this type of revolving Fund at the end of the day you are going to have one-sixth of less and less.
§ Lord REIGATE
My Lords, if the noble Baroness will forgive me, on that one point about the one-sixth, the next clause—and I do not defend either of these clauses because I put them in only to satisfy the 803 Treasury—says that the Treasury can instruct them to make that good.
§ Baroness BIRK
Yes, my Lords, but you still have to find the money in order to make it good, and, alas!, the noble Lord does not seem to have satisfied the Treasury because he still does not deal with what happens when the Fund capital is run down; it would mean feeding it again, and, as I am now coming to it, it again involves public expenditure. If the Fund is transferred out of the public sector into the hands of trustees, as the Bill proposes, this amounts in the first instance to £18 million of public expenditure, and would lead to a call on the Contingency Fund, and it immediately would be a direct competitor with other claims on it.
What happened in the past, I am sure the noble Lord will agree, is water under the bridge. Whether it would have been possible in 1946 for it to be set up differently, one does not know. The noble Lord, Lord Reigate, feels that Hugh Dalton was, so to speak, done by the Treasury. I do not know. We had a very big debt at that time and it may have been very difficult to get support in other ways. As the noble Lord recognised, we are currently constrained by our undertaking in the Letter of Intent to the IMF. This undertaking is a crucial plank of the Government's economic strategy and cannot be undermined. The proposal in the Bill would seem to go straight against this.
I have very great sympathy with the noble Lord's view, when referring to Mentmore, that we could have spent £2 million, that it is very little out of a gross £9,000 million expenditure. I had that sort of feeling myself about it. But when you look across the board and realise that at the same time there are claims for housing, schools, hospitals, all sorts of things on which people may put different priorities, then you have to see it in that context and not just as what seems to be a comparatively small amount out of a very large total expenditure. Some form of planned disbursement is necessary. The Fund has also to be able to deal with contingencies, the special cases, the special work of art or properties offered unexpectedly. This is a fundamental problem which I cannot believe a Select Committee or a group of trustees can possibly get round.
804 The noble Lord has referred—he did not mention it here, but he has done so in conversations with me—to the Select Committee on which I believe he sat, on the Sex Discrimination Bill. One of the big differences between that and this situation today is that there was a general all-round agreement that there was need for some legislative action in that field, and there was no question of public expenditure being involved except to a very minor degree. But this is an entirely different situation. This is why I am convinced that a Select Committee, looking at this Bill, cannot come up with any answers to the perennial problems of expenditure priorities. The Committee cannot produce more money and could not make the Bill acceptable to the Government.
The Government's commitment to the saving and protection of the national heritage is not in doubt. Indeed, the noble Viscount spoke about the Historic Houses Association. I was this morning at Woburn, opening their conference, and my noble friend Lord Donaldson was speaking there at lunch. The acknowledgement by the members of the HHA of what this Government have done in order to help the historic house owners is appreciative; they are extremely frank about it and say that no other Government, certainly no Conservative Government, have done as much as this Government have. The noble Viscount also mentioned the further tax concession, to ease the burden of maintenance, which is now going to be introduced into the current Finance Bill.
Nevertheless, we shall have to face problems of the exhaustion of the National Land Fund, and this would come to the same thing, even without its other imperfections. If one is looking at the noble Lord's Bill, it would still have to be funded very much more, even putting into it what is in the National Land Fund at the moment, though that itself, as I have explained, would still be a public expenditure transfer. It is premature for us to take specific decisions now, but we are very aware of this problem of the future running down of the Land Fund itself and we are looking very hard at it.
In changing circumstances any element of administrative machinery, including the National Land Fund, which comes 805 under very considerable odium, has to be kept under review. I can assure noble Lords that the Treasury, in close consultation with their art advisers, the Department of the Environment, the Department of Education and Science, the Scottish Office, the Welsh Office and the Historic Buildings Council, are doing this. That is a lot of Departments, I agree, but there are a lot of people and many interests involved.
I am only too aware—and it has been stressed again this afternoon—that noble Lords and many others were concerned about the way in which Lord Rosebery's offer of Mentmore and its contents to the nation was handled. I will not go again into the Mentmore argument, arguing about whether what somebody said was right or wrong; but let us look forward and use some of the lessons of Mentmore to take a positive line towards the heritage in the future. It prompted what I said in an earlier debate about the need to establish which houses with their contents are of paramount importance to the nation. I am sorry that the noble Earl, Lord Mansfield, feels that this proposal should have been left to gather dust. I think it is extremely important. If we begin to discuss and see what is of great importance, this, I would submit, is taking a rather broader view than we were taking when I was replying to the Mentmore debate, when I referred, in shorthand, to a league of historic houses.
This is something I think we have to do, because, apart from anything else, it puts us on the alert; it brings these things constantly to our minds so that we are not taken by surprise with the eruption of a Mentmore situation, which did, quite frankly, at the time take everybody by surprise. Therefore, I am currently asking a group from the Historic Buildings Council—probably with additional experts to supply the expertise which they have not got on the Council—to advise quickly on this. I hope, too, that at the same time they will be able to offer advice on a generally acceptable interpretation of what we mean by the national heritage, which really is by no means crystal clear.
This came out very strongly in the whole Mentmore debate. I do not mean just in this House, but in the newspapers and in the country generally. There were the people who felt very strongly 806 pro-Mentmore. I was glad that the noble Lord, Lord Reigate, at least admitted that he had not been down to see the house and contents. Most of the people who spoke in the debate which I answered had not seen it either, although they spoke as though they knew every inch of the way and every object and picture there. What we have realised from that is that we have to try to find some sort of definition, because so many of the people who are not quite so articulate and vociferous about it, now that the sale is over, have said quietly, to me and many other people—and some of them are extremely distinguished people in the art world—that in their view Mentmore is not a part of the national heritage. I am not adjudicating either way. I am simply saying that there is a degree of disagreement over many of these places and we should start by saying that there are certain houses and contents together on which there is practically total agreement that they are part of our national heritage and then go on to find those which are more marginal. As I keep saying, this is a very complicated subject and naturally the Government are concerned about the misconceptions and confusions which appear in connection with it.
There was obviously a lack of understanding of the present system and the way in which it operated as regards Mentmore. I accept that the Government are not always very good at communicating. It is extremely difficult to communicate a very complicated subject, particularly when it is connected with finance. There was a great deal of misunderstanding of this complicated subject and not a great deal of appreciation of the need for a planned control of public expenditure was shown. Unfortunately, there was a disregard and a lack of appreciation of the agonising choices that had to he made when taxpayers' money and public expenditure was involved.
Before I conclude F shall try to answer the point raised by the noble Earl, Lord Mansfield. We are certainly not obliged to reimburse from the National Land Fund, but if we did not reimburse the Revenue from that Fund, we should have to raise the tax forgone by other means; namely, by increasing taxes generally or 807 increasing borrowing in the market. The money must be found somehow. In other words, the books must be balanced.
I would not agree with the noble Lord, Lord Reigate, that unless one is able to make a change—as he suggests in his Bill and which I hope I have proved is really not tenable—the National Land Fund should be abolished. Although it is part of public expenditure, it is hypothecated. If it did not exist, I am now convinced that it would be even more difficult to obtain money quickly for the heritage or to obtain that amount of money. At least one has it under that name. Although I agree that it is not the same thing as being ear-marked and outside the public sector—but it was not set up in that way—in spite of all the remarks that I have made about it in the past, difficult as it is and a nuisance as it can be at times, it has the advantage of being there and that is better than nothing. For those reasons and circumstances, I hope that the noble Lord, Lord Reigate, will withdraw his Bill and save me asking noble Lords to reject it.
§ 5.44 p.m.
§ Lord REIGATE
My Lords, I am most grateful to noble Lords who have spoken and particularly to those who have given me some support. My noble friend Lord Mansfield gave me one or two backhanders in the way of criticism. I was not sure that I quite understood his first point but I shall have to think about it. As to his second point, I certainly did not intend that the National Land Fund should not be principals. I am grateful for the support of the noble Viscount, Lord Norwich, that the Secretary of State and the Treasury have quite enough advisers already. We want someone who can act quickly and that would be the purpose of having trustees. After all, the National Land Fund is already a principal. At the moment I think I am right in saying that technically it owns Heveningham Hall in Suffolk.
§ Lord REIGATE
My Lords, I am grateful to the noble Viscount for the kind words that he said about it. I love his simile of the fire brigade. I have never thought of my modest Bill as being any 808 kind of a fire brigade or anything else. But it helps me greatly to clarify the purposes that I had in mind. I am deeply grateful to him for his support. My noble and old friend Lord Cottesloe quite rightly attacked the past, as I did, and I am grateful for his support. I turn to the remarks made by the noble Baroness, Lady Birk. I did not expect anything more than a dusty answer. I had hoped that she might conclude by giving me a little crumb of comfort, but I did not get even that. I do not wish to be critical. I cannot wait for her to get rid of her Treasury "crown of thorns and put on her much more becoming Department of the Environment hat, because she really is in a very sympathetic mood. I heard her make a speech that I cannot think she wrote with a full heart; in fact, I could have written it myself if I were in a hard-hearted Treasury mood. I am afraid that I found it very unconvincing. I am sorry that she thought I was unkind about Dr. Dalton. He thought that he had had the wool pulled over his eyes too. He said in that famous speech that there was a little man in the Treasury writing a brief to say that the National Land Fund really did not exist. Therefore, I think it is perfectly fair to say that Dr. Dalton had the wool pulled over his eyes.
The noble Baroness gave us a full list of the achievements of the National Land Fund. I refrained from doing so myself because it did not seem relevant to my Bill and I had read them in the various reports. Lastly I turn to the fact that the Bill is not considered to be practicable. I am sorry that the noble Baroness is against a Select Committee. I believe that her kind and polite words about the national heritage do not quite appreciate the extent to which there is continuing political concern about this matter. It is not an epoch-making decision whether to abolish the National Land Fund. However, there is a growing body of people who are concerned. I agree with the noble Baroness that the real problem is money. I am sorry, after criticising the reduction from £50 million to £10 million, that she was unable to say that she replaced it. It is one thing to criticise in 1957 and another thing to say 20 years later that it was wrong and do nothing about it. They have had plenty of time to do something about it meanwhile.
809 I still regard the whole subject as having been dealt with unsatisfactorily. The noble Baroness defended the Treasury and her own Department, but one always has the feeling of delay and the feeling that people could act quicker, and that more satisfactory decisions could be taken. My Lords, there it is. We are up against a brick wall, if I may so describe the Front Bench opposite. There is no point in pursuing this Bill unless it has Government support. I am sorry and disappointed that my modest suggestion has not received favour in the eyes of the noble Baroness. Under the circumstances I beg leave to withdraw the Motion.
§ Motion for Second Reading, by leave, withdrawn.
§ Bill, by leave, withdrawn.