HL Deb 28 November 1978 vol 396 cc1136-45

3.8 p.m.

Lord REIGATE

My Lords, I beg to move that this Bill be now read a second time. I must apologise to your Lordships for the fact that this is a repeat performance because on 23rd June 1977 I introduced a Bill with the same title, the same contents and the same purposes. As not all of your Lordships will recall either the occasion or my speech, I am sorry to say that I must, very briefly, repeat my explanation.

The National Land Fund was instituted by Dr. Dalton in his Budget speech in 1946. He allocated the sum of £50 million, which had been received from the sale of surplus war stores, to a National Land Fund as, in his own words, "a thank-offering for victory". Its purpose was the preservation of the national heritage.

I do not propose, and nor is it necessary, to cover the whole history of the Fund in the years since 1946, but it should suffice to say that the Fund now stands at £18 million; that its original purpose has been widened to include both works of art and historical houses; and that the Treasury has decided that expenditure from the National Land Fund must be regarded as public expenditure. Her Majesty's Government have also retained full control over all expenditure from the National Land Fund—not only what it should be spent on, but when it should be spent.

My Bill has one main purpose, which is to remove the control of the National Land Fund from Her Majesty's Government and place it, with suitable safeguards, under independent trustees. There is a two-fold aim to this. The first is to eliminate delays in reaching decisions which are often inevitable with Government Departments. Your Lordships will understand that when a work of art or a house comes on to the market through adverse circumstances, it is sometimes essential that a decision should be taken quickly, and it is, frankly, very often impossible to do this when as many as three, four or even five Government Departments may be involved.

The other aim is to remove any expenditure from the Fund being considered within the purview of the public sector borrowing requirement. I shall not burden your Lordships with any detailed explanation of the clauses; at this stage it is quite unnecessary. In 1977 I withdrew my Bill in the face of the obvious opposition of Her Majesty's Government. Your Lordships will appreciate that no progress can be made in the other place with this Bill unless it has Government support. Why, then, do I seek to reintroduce it now?

Much has transpired since June of last year. A sub-committee of the Expenditure Committee in the House of Commons has examined the National Land Fund, It completed its task within one month and the report was published in March, 1978. It is an outstanding and thorough report, and I would recommend its reading to any of your Lordships who are concerned with the future of the national heritage. I was not invited to give evidence to that committee. Therefore, to me it is the more remarkable that by a process of telepathy, coincidence or common sense the committee came to the same main conclusion as I had embodied in my Bill in 1977; namely, that the Fund should be transferred to independent trustees, as set out in Clause 1 of my Bill.

The committee made certain other recommendations, not all of them necessarily for legislation. There are certain recommendations which, if your Lordships give the Bill a Second Reading, I should hope to leave to a later stage. However, there are two which I should like to mention. First, the committee recommended that the name of the National Land Fund should be changed to the "National Heritage Fund" and, secondly, that the sum of the Fund should be raised to £50 million.

On the first, I am in entire agreement with the committee and would seek to change the name at later stages. On the second—namely, the raising of the Fund to £50 million—it is obviously inappropriate to seek to do that in your Lordships' House. But to me the most interesting part of the whole report was the fact that the committee totally repudiated the Treasury view of the Fund—namely, that payments from the National Land Fund are to be regarded as part of the public expenditure and, therefore, subject to the varying and various controls which are applied to other Government expenditure at different times. However, that is Treasury doctrine or, as I would call it, Treasury dogma.

A wise and, dare I say it, witty writer once said: Any stigma is good enough to beat a dogma with". The committee has supplied the stigma and repudiates the dogma in this robust and trenchant statement which I shall quote: Your Committee believe that payments from the Fund, as presently constituted, are not public expenditure. Public expenditure took place in … 1946, and not in the succeeding years in which the capital was applied". It goes further and give excellent reasons for justifying that statement. The committee then recommends: … that payments from the … National Land Fund should not be regarded as public expenditure, and that HM Treasury ceases this accounting practice forthwith". If the Fund was transferred to independent trustees, it would then become possible for it to revert to its original intended role of a contingency fund. Here again I should like to quote the report when it says: This principle of contingency fund, although implicit in existing legislation, is denied fulfilment because of administrative convention". On why a contingency fund is needed, I should like to quote the late Lord Crawford and Balcarres, who was chairman of the National Trust and of the National Art Collections Fund when, in 1967, he referred to: … the need for the Government to set up an independent national fund which should be administered neither by Parliament nor by the Treasury. In other words, there should be the possibility of making a major purchase at a time when politics are not too rosy and politicians are out of humour, when the balance of trade is bad, or when any of the thousand and one excuses for not giving a grant crops up. Until such a fund is set up there can be no security". Those were very wise words indeed, and the situation, alas! has not changed in 11years.

The Select Committee reported last March. We have had no sign of the Government's views, and I do not think that we shall be any wiser today. But in my view the delay is not justified. There is a principle involved and it is a question of saying "Yea" or "Nay" to that principle. The Press comment on the report was unanimously favourable. I am also glad to say that the Conservative Party seems to have given it general support. Judging from a quotation published in the Daily Telegraph on 6th November, these proposals have the blessing of Sir Geoffrey Howe and the benediction of Mr. St. John-Stevas, who are respectively the Opposition spokesmen for Treasury Affairs and the Arts. The Select Committee's own report was all-Party and unanimous. It is the Government alone who are out of step or, more correctly, who are marking time.

So what happens next? On this occasion I shall not withdraw my Bill. There are, then, two courses open to me: first, if your Lordships approve, it could be sent to a Select Committee; or, secondly, I could let it go through all stages in the normal way. It is true that a Select Committee involves delay. Most of the work has already been done for such a Select Committee by the Select Committee from another place. Therefore, I have decided not to ask your Lordships to set up a Select Committee but to let the Bill proceed normally, in the hope that by the time your Lordships' House reassembles and we reach the Committee stage, the Government will have made up their mind on the principle.

This Bill will not in any way solve the problem of preserving our national heritage. I have never claimed that for this Bill. Many precious possessions will continue to leave the country; there will continue to be destruction of the countryside; many lovely homes will be torn down. The times are out of joint. This Bill will not alter all of that. But I believe that it could make a small contribution towards a change that we desire. On occasions this Fund could act, to borrow a phrase that was used in the last debate by the noble Viscount, Lord Norwich, as a fire brigade by cutting out the delays which are inherent in any State administration. There are other occasions—and perhaps this is even more important—when it could take a decision which is impolitic or unpopular for the Government. It is a small step forward, and I hope that your Lordships will agree to give the Bill a Second Reading. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Reigate.)

3.21 p.m.

Baroness ROBSON of KIDDINGTON

My Lords, I rise to support and thank the noble Lord, Lord Reigate, for reintroducing the Bill before us today. We on these Benches welcome the Bill in principle. In particular, we welcome the proposal to recreate the Fund as an independent organisation administered by trustees and free of Treasury controls. Like most Members of your Lordships' House, I have been disturbed over the years at the use, or the non-use, of the Fund since it was set up; all of us, as laymen, believed that it was set up as a capital fund of £50 million in the 1946 Finance Act as a permanent war memorial, as has already been said.

This was a wonderful vision at a time when this country had very limited resources available. I believe that the use of the Fund since then has not lived up to the great ideals envisaged for it. Indeed, I think it was only at the time of the Mentmore dispute that it became obvious to many people in this country that the National Land Fund was not what we thought it was. That was the first time that I became deeply aware of the fact that a Government Department such as the DOE accepting money from the Land Fund would have to accept equivalent cuts in its own Vote. No wonder the Land Fund was under-used.

This reinforces the comment of the noble Lord, Lord Reigate, that the Fund was used and treated as current public expenditure subject to all the normal constraints on such expenditure. Had the £50 million created in 1946 been invested as a capital fund for the use of the preservation of our heritage, however conservative you are in your estimates of what it would have been worth today, we should have had an income of at least £15 million a year purely from the investment of the original sum. That would have gone a long way to help us in the problems that face us.

I am very happy that as a result of the introduction of this Bill, which I am sure your Lordships' House is going to accept, we shall once and for all properly safeguard the money in the Land Fund, and the Bill is deeply welcomed. The only reservation I have about the Bill is the purposes for which it appears to intend the Fund to be used. I refer to Clause 4(2), which deals with the appointment of trustees by the Secretary of State. It says: those who appear to him to have knowledge of architecture and the fine arts, finance or administration". When Dr. Dalton introduced the Fund in 1946, he said: I should like to think that through this Fund we shall dedicate some of the loveliest parts of this land to the memory of those who died that we should have freedom". I believe therefore that the Fund was originally conceived mainly for the purchase of land; yet 75 per cent. of all spending has been on works of art and to acquire houses in lieu of death duties. Of course we want to safeguard houses and works of art. These are treasures that we want to keep. But we do not want to do that with this particular Fund to the exclusion of beautiful parts of our country threatened by modern so-called civilisation. After all, if we look at the kind of assistance that exists for the preservation of our heritage, we have other organisations such as the Historic Buildings Council—which I admit gets a not at all adequate grant from the Arts Council. In actual fact, the grant to the Historic Buildings Council from the Arts Council, which has to cover the whole of the United Kingdom, is less than the grant given to Covent Garden. I do not mean that I begrudge Covent Garden its grant, but we have to have a sense of proportion. What I am concerned to ensure is that the National Land Fund, which, by its very name, was meant to preserve the most beautiful parts of our countryside, should not be used purely for the preservation of ancient buildings and for the purchase of important works of art. That is my only reservation, and I hope that at Committee stage we shall be able to resolve those problems. Apart from that, I wholeheartedly welcome the Bill.

3.27 p.m.

Lord COTTESLOE

My Lords, we must be grateful to my noble friend Lord Reigate for bringing forward this Bill. I much hope that the House will approve it and that the Government will give time to carry it through both Houses of Parliament into law. The history of the National Land Fund is a sorry story, as my noble friend has said. The spendid concept of Dr. Hugh Dalton when, as Chancellor of the Exchequer in 1946, he had available some £165 million from the sale of surplus war stores, in setting aside £50 million to establish this Fund for the preservation of our national heritage as a memorial to those who fell in the war has been effectively stultified by the conventions that the Treasury at once established to control its use.

By an ingenious use of semantics—a use that some people might think hardly quite honest—they persuaded successive finance Ministers of both Parties that the Fund did not really exist, or that if it did exist it was no more than a book entry. I rather think I heard the Minister on a previous occasion using precisely those words. This the Treasury still maintain, even though each year they publish the accounts of the Fund, including a list of the investments held as the Fund's assets.

They established a convention, as my noble friend said, that any expenditure from the Fund on the national heritage must be treated as public expenditure, and that, if any part of the national heritage (land, historic houses, and, after a few years, contents of such houses also, or whatever it might be) was accepted by the Treasury in lieu of death duty, the Fund must reimburse the Treasury for it, I cannot see that such reimbursement can properly be regarded as public expenditure: it is a reimbursement.

The Fund is invested in Government securities. The application of its income, as envisaged by Dr. Dalton, is no more public expenditure than if I, holding on my own account some Government stock and applying the income from it for my own private purposes, were to be told that that was public expenditure. Furthermore, the Treasury, who really act as trustees for the fund, so advised successive Ministers that the interest from the Fund was grossly underspent, so that it rapidly accumulated. Then, when the Fund had grown after a few years to £60 million, they persuaded the Minister—I think it was Mr. Enoch Powell who was then Financial Secretary and who should have known better—to take back the original £50 million and throw it into current revenue. Ever since, they have underspent even the interest on that interest, except in one year, so that it now stands, or stood last year, at £18.3 million.

I ask noble Lords to consider what would be the position if, as trustees of a charitable trust, having so underspent the income that it had rapidly accumulated, they then returned the original capital to the donor and then continued to underspend even the interest on that accumulated income. They would of course expect to be taken to court and held up to public execration. But that is what was done by successive Ministers of both complexions on the advice of the Treasury, and they have got away with it for 30 years. It was, as the noble Baroness, Lady Robson of Kiddington, pointed out, not until the Government refused to apply the Fund to the purchase of Mentmore, with all its splendid contents, at a bargain price—less than one-third of what they realised when they were dispersed at auction—that the gaff was blown and Parliament and the public began to realise how they had been duped.

It has been a sorry story. Public concern was so great that the Environment Sub-Committee of the Expenditure Committee of the House of Commons were asked to examine the National Land Fund and its workings. That all-Party Select Committee took evidence from Government Departments, Members of Parliament, private individuals and various organisations concerned with the national heritage—the National Trust, the Standing Commission on Museums and Galleries, the Museums Associations, Heritage in Danger, the Historic Buildings Council and many others—and it is all embodied in the 341 pages of this monumental report, together with 37 pages of the Committee's summary of evidence and 18 unanimous recommendations. I stress that the 18 recommendations are the unanimous recommendations of an all-Party Select Committee.

This Bill embodies one of those 18 recommendations, namely, that the National Land Fund be placed under the control of independent trustees. The Bill says that they are to be appointed by the Secretary of State, but I prefer the Committee's recommendation that they be appointed by the Prime Minister, but no doubt that could be amended at a later stage of the Bill's progress. It must be clear from what I have said that, if the Fund is to fulfill its purpose, it must be taken out of Treasury control and put into the hands of independent trustees, and that is clearly a matter requiring legislation.

Other recommendations of the Select Committee propose that payments out of the Fund be not regarded as public expenditure; that its present rather misleading name be changed and it be renamed the National Heritage Fund; and that the original £50 million be made good. I might say in passing that, as that original sum of £50 million must now be worth over £200 million, even if the £50 million were now made good, the Treasury would still have got away with three-quarters of the sum. These recommendations and much else are all there in the report.

I hope the Minister will tell us not only that the Government will look favourably on my noble friend's Bill and help to pass it into law, but that they will also accept the other 17 recommendations of the Select Committee, most of which evidently do not require legislation. Perhaps she will tell us which of the 17, if any, would require legislation. I strongly support the Bill and wish it every success.