Calke Abbey: Tax Laws

HL Deb 21 December 1983 vol 446 cc810-20

4.50 p.m.

Lord Strabolgi rose to ask Her Majesty's Government whether they will change the present tax laws, so that the Treasury can accept, in lieu of capital tax, the offer of Calke Abbey, its contents and park, together with an additional 8,000 acres of agricultural land, to provide an endowment fund for its upkeep by the National Trust.

The noble Lord said: My Lords, I beg leave to ask the Question that stands in my name on the Order Paper. As the House is shortly to rise for the Christmas Recess, I shall not of course detain your Lordships for long, but I have ventured to put down this Question because in my submission the assured future of this great and unique house, and its estate in Derbyshire, is crucial.

Calke is an important part of our heritage. The contents have remained untouched and virtually unchanged for well over a hundred years. Calke is a good example of what the interior of a great country house was like in the last century. The house itself dates from 1701, though there has been a priory there since long before that.

What is particularly interesting to the present age is the fact that the family never threw away anything. All the furniture and furnishings are untouched by time. Calke is a unique microcosm of the past. The house, which is listed as Grade I—and rightly so—is unique and typically English. In the words of an article in The Times on 9th of this month: Even discounting the highest flights of enthusiasm, Calke Abbey is without question worth preserving intact".

This matter has been debated in another place, and an early day Motion in another place, which has already attracted a number of signatures, urges the Government to make a decision as a matter of urgency.

The family could have taken steps to protect Calke, but they were badly advised. Here I should like to ask the noble Lord, Lord Skelmersdale, whether he will explain what his honourable friend Mr. Neil Macfarlane meant, when the matter was debated in another place on 6th December last, when he said, as reported at column 303 of the Official Report: It would be inconsistent and even unfair if we were now to 'correct' the situation at Calke by providing for its future maintenance and preservation entirely at public expense". May I ask the noble Lord the Minister whether the family is now to be punished by the Government for receiving bad advice? If they had been less unworldly, and had formed a Calke Abbey estates company, or some other quite legitimate device to keep the estate together, none of this problem would have arisen, and the Treasury would not have had the windfall of some £8 million, which is the amount of capital transfer tax payable, following the death of the former owner, Mr. Charles Harpur-Crewe, in 1981. The interest on late payments which has already been paid—and this is incredible—totals a further £1 million, and interest continues to accrue at the rate of £1,300 a day while the problem of Calke is shunted backwards and forwards between the Treasury, which is mainly interested in raking in this unexpected windfall, and the Department of the Environment, which seems incapable of any constructive action, and just stands back hoping that the National Trust and the family trustees will find some solution.

Government departments are of course always fearful of creating precedents, but Calke is not like any other house. It is a unique and unrestored survival from the past, and if it is allowed to be broken up, something precious from the viewpoint of our social history and heritage will be lost, and furthermore a house with great potential for tourism will be lost as well.

Quite frankly, the position is that Calke is at risk because of a quibble. The National Trust wants the house and park, but the trust cannot accept the property without an endowment. The life tenant is willing to make over to the trust a large amount of agricultural land which would provide an endowment income as was done in the case of Hardwick. I should have thought that this would be an excellent investment for the nation; but oh no! it is not as simple as that. It seems that under the present tax arrangements agricultural land for some reason is not considered part of the nation's heritage. A park with deer or even lions is apparently okay, and considered part of our heritage, but not a field with cattle or sheep or wheat.

Kedleston was also going to be lost through a quibble, this time over VAT. The owner of Kedleston was prepared to give the house and park to the nation in lieu of CTT. Then Customs and Excise ruled that VAT had to be paid on the notional value of the property, although no money was passing—that is, VAT on the contents totalling about £300,000, which the owner had not got. So Kedleston, with its great historical associations, would have been lost all because of a quibble. Fortunately, the Prime Minister herself took an interest and intervened with the happy result that the rules, which no one had realised would have this effect, were changed in the last Finance Act. At least one hurdle over the acceptance of Kedleston has been cleared.

I hope that the Government are now going to do something about Calke Abbey and its estate. I am sure that a solution could be found if there is a will. The tenants are getting increasingly concerned about their future if the estate is to be sold and broken up. The Harpur-Crewe family have been good and well loved landlords for many hundreds of years. All who care about our heritage are greatly worried. The Government claim that they believe in the importance of our heritage. I hope that they will now cease to stand aloof and take some action to save this unique house.

If it is a question of money, may I remind them what Mr. Norman St. John-Stevas said in the last Parliament for the Government when he was a Cabinet Minister and was speaking on the Second Reading of the National Heritage Bill on 3rd December1979. I quote from Hansard of that date, col. 63. He said: The grant-in-aid for the fund and the reimbursement to the Inland Revenue will both be borne fifty-fifty on the Votes of the Department of the Environment and the Office of Arts and Libraries. Of course, if a really big house or other piece of property came along for consideration either by the trustees of the fund or for acceptance in lieu of tax and it exceeded, or would unacceptably deplete, programmed expenditure, the Government would have to consider whether it would be possible to make the necessary funds available". That is what they said when the Bill was going through Parliament.

I am advised that there is nothing in the present tax laws to prevent the Government from accepting this property for the nation. I am advised that a change in the law is not required. What is required is a change of attitude on the part of the Government, and the will to save this important part of our national heritage. My Lords, I beg to ask the Question.

4.59 p.m.

Lord Montagu of Beaulieu

My Lords, this is the first time that I have addressed your Lordships' House since my appointment as chairman of the Historic Buildings and Monuments Commission. It was a great honour and pleasure for me to be invited to take on the leadership of this commission, and also a great privilege and challenge. I hope that there will be many occasions upon which I shall be able to offer the help of the commission in its work—and statutory duty, indeed—of preserving our historic heritage and advancing the knowledge and enjoyment of the public of that heritage. The commission has not yet, in fact, taken on its full responsibilities. It does so on 1st April next year. However, I hope that the commission can play some part even before then.

The importance of Calke Abbey has already been described and I shall not repeat what has been said. However, I should like to underline the unquestionable importance of Calke Abbey in the eyes of the commission. The house is a Grade 1 listed building. There are fewer than 6,000 Grade 1 listed buildings out of the millions of buildings in the country. Of course, even within those 6,000 buildings one may on occasions have to make a very difficult choice, but, by virtue of its Grade I listing, Calke Abbey must be regarded as being of exceptional importance.

Nor is it just the building itself which is of special importance. It is the surrounding landscape and the timeless contents of the house which make the entity unique. The Historic Buildings and Monuments Commission wishes to see the house, its contents and the surrounding land preserved and wishes, if possible, to contribute to the work of achieving that result.

A great deal of work has already been done in seeking ways of preserving Calke Abbey, and much time and ingenuity has been spent. No solution has yet been found. Nevertheless, I welcome unreservedly the recent initiative of Lord Charter is in calling a meeting in early January to see what more can be done. The commission has been invited: it will go and it will play its part. There are several instances where historic buildings have been preserved as a result of, at the right time, the initiative and enterprise of a family or group of individuals, even when the immediate prospects have seemed extremely bleak.

Recent publicity has created considerable interest in Calke Abbey. It is no longer unknown and will not be so in the future. It should be possible to build on the goodwill and interest which has been created and perhaps to let tourism contribute to its upkeep. However, expressions of goodwill are insufficient and I should, therefore, like to offer practical help on behalf of the commission.

The commission will be glad to support the initiative, first, of Lord Charteris. For example, if it is decided to open Calke Abbey to the public, it will be ready to give practical advice on the presentation and on other ways of opening the abbey to the public. It may even have some part to play in giving other commercial advice as to how the property can be developed. But above all it will be ready to consider sympathetically any request for grants towards repairs. It will be ready to help in any other way within its statutory powers and the resources available to it.

Although we do not take our powers until 1st April, we think that we should be failing in our duty if we did not offer our good services to help solve this problem. Let us hope that together we shall be able to do so.

5.3 p.m.

Lord Gibson

My Lords, I am grateful to the noble Lord, Lord Strabolgi, for raising this matter. I am also grateful for the opportunity it gives me, as Chairman of the National Trust, to state the Trust's views, which have not always been clearly understood. I think it is clear that no change in the tax laws is needed. There is nothing in the present law which would prevent the Government from accepting what we call, by way of shorthand, non-heritage land as an endowment for this house if they pleased. But what I understand the Government to be saying is that the case of Hardwick, which has been quoted as a precedent when non-heritage land was accepted as part endowment for the house, is not an appropriate precedent now because in those days there was no National Heritage Fund, and this is now the appropriate national pocket to draw upon for conservation or preservation purposes.

If that is the Government's reaction to the generous offer made by the Harpur-Crewe Trustees, then we are entitled to remind them—as did the noble Lord, Lord Strabolgi—of what was said when the Bill went through another place. The noble Lord has reminded us of what Mr. St. John-Stevas then said. In fact, the Government made it quite clear that they did not expect the fund to cope with a number of important items coming up together. They went further, and the Under-Secretary of State for the Environment, at the end of the debate, said: I believe that some hon. Members have tended to think that the money we are talking about here, the £15½million, is all that is available. Of course, resources are extremely tight, but we have made clear also that should a major object come up,… the Government will themselves look at the whole issue and consider whether special treatment should be given to that important matter." [Official Report, Commons, 3/12/1979; col. 165] Of course that does not amount to a promise that every important object will necessarily be acquired, but it amounts to a promise that the Government did not intend to shelter behind the National Heritage Memorial Fund and simply say, "If they can't afford it, then we have no responsibility, and that is an end of the matter." The intention clearly was to look at each situation on its merits, and that is right and proper. That is what should be done.

What are the merits of Calke? I shall not take long talking about the merits of Calke. That has been done so much in your Lordships' House and outside. But at one time it was suggested that the trustees of the National Heritage Fund were perhaps not very much interested in Calke. Of course it is true that the strength of the desire to preserve Calke must vary and is likely to vary from trustee to trustee, but of their interest in Calke there can be no doubt whatever, and the letter in The Times from my noble friend Lord Charteris is clear evidence of that.

I can speak only for the National Trust, but in our opinion it should be preserved not because it is of top quality architecturally, though it is very fine and grade one, but because with its extraordinary contents, its wonderful park, its exceptionally fine stables, which I think have not been mentioned today, and above all what I can only describe as its Rip van Winkle condition, it is a document of social history of unique value. It is something else. It is an oasis in a region encircled with towns—Derby, Leicester, Nottingham, and Burton—and if it could be presented to the people of that area it would be an enormous boon to them.

The machinery enabling the Government to accept the Calke Trustees' offer is there, but supposing that they will not use it, is there any alternative? I believe that there is. I was much impressed and encouraged by Lord Charteris's letter to The Times suggesting a wider partnership of interest, and the meeting to which the noble Lord, Lord Montagu, has referred is to take place, and I hope that the Government will also be on the sidelines and will be ready to give encouragement. The National Trust will certainly be there. I am glad to hear that the new commissioner is going to be there, and may I take this opportunity to congratulate the noble Lord, Lord Montagu, on his appointment. We intend to work closely together, and we have known each other for a long time and it will be a pleasure to do so.

To the National Trust this proposal seems a most constructive way forward, and we are ready, like the commission to play a part if the initiative is successful. Urgency is of course essential with interest running as it has been running for so long at these high rates. But the Government would have to make a contribution beyond simply accepting the house, contents, and park. One possibility they might consider arises from a valuable examination of the landscape which was made by a distinguished landscape architect and scholar of landscape history, Mr. Bodfen Griffiths, who is on the council of the National Trust, who represents the Institute of Landscape Architects there, and who has been looking at the grounds, and who wrote to The Times saying that he had found unmistakable evidence of, a carefully planned man-made landscape extending beyond the park, deliberately planned as extensions of the park design. I only mention this because I should have thought that it might provide the opportunity for the Government to redraw the boundaries of what they are prepared to accept in lieu of tax a little broader. If that were so, a greater acreage might qualify as heritage land, and if the land has rental value it would reduce the required capital endowment. I think more than that would be required from the Government if this is to be successful, but that might be one thing that they could perhaps do.

I want to make one last point, and it is about the National Trust. We do not see ourselves as the sole solution to the future of these great houses. It would be disastrous for the heritage if one organisation was the only available agency of preservation; and it would be disastrous for the National Trust itself if it were thought of as that agency. Our growth presents us with quite enough problems as it is, without our wishing to force the pace.

The first line of defence should be the private owners themselves. Wherever they can carry on, that is much the best solution, and successive Governments have made it a good deal easier.

We now have the new commission, which may wish to add to the one great house inherited from the department (Audley End) and take on several more. As I have said, we wish them well. There are other solutions in appropriate cases.

Mr. Buxton, of Period and Country Houses, and Mr. Kit Martin, the son of the famous architect Sir Leslie, have shown what can be done in a variety of architecturally and historically important houses by conversion to apartments. Such solutions are probably more appropriate when there are no historic contents, or very few. On occasion that is a good way round the difficulty. The National Trust is only suitable on certain occasions. It is a long stop to be called on only when it is the best solution available.

I do not want to prejudge the issue, but it probably is so in the case of Calke. Calke is the English Erdigg. Your Lordships are probably acquainted with Erdigg in Wales, given to the Trust by the late Philip Yorke a few years ago. Calke is architecturally more important than Erdigg, though its furniture is less fine. They are alike in that they are both unique survivals in their respective countries of a vanished way of life. It is an extraordinary coincidence that in the case of both houses the family should come to an end with two bachelor brothers. In the case of the Harpur-Crewes there is an unmarried sister as well. They also have in common that for centuries neither family has thrown much away, and that each house retains extensive outbuildings still used for the same purposes as those for which they were built hundreds of years ago.

The Trust is felt to have made a splendid job of restoring Erdigg and ensuring that the public sees it unspoilt. Without making immodest claims, it probably is at the moment, though not necessarily always in the future, probably the best qualified agency to tackle this kind of problem at Calke.

In conclusion, I am sure a satisfactory solution can be found if all the interests concerned with Calke's future work together, but that must include the Government. Let them give us a nod of encouragement and the rest of us will get on with the work.

5.13 p.m.

Lord Skelmersdale

My Lords, I am most grateful to the noble Lord, Lord Strabolgi, for giving me the opportunity to expand on my necessarily brief answer to the recent Starred Question in the name of the noble Lord, Lord Kennet, on the future of Calke Abbey. In spite of the terms of the Question I am answering now, there is no doubt but that this is primarily a matter for my right honourable friend the Secretary of State. It does not have nearly the Treasury implications that the terms of the noble Lord's Question would imply.

Whether or not to accept Calke Abbey is not a taxation matter: it is simply a question of policy and practice in the use of acceptance in lieu procedures. The tax laws actually allow my right honourable friend to advise the Inland Revenue to accept virtually any property. There is no statutory bar to accepting farmland. Indeed, even a suburban semi or a country cottage could be accepted. However, the decision to forgo tax revenue is the same as increasing cash spending—both count as public expenditure. The procedures for the acceptance of property in lieu of tax were introduced to protect the heritage, so the sensible course is to use acceptance in lieu funds for acquiring what is actually heritage property.

There is no doubt in the Government's mind that Calke Abbey is of heritage quality. We have accepted the advice of the Historic Buildings Council on this, and my right honourable friend the Secretary of State for the Environment has already said that he is willing, in principle, to accept the Abbey, its park and contents at a cost of some £2 million or so in forgone tax provided that satisfactory arrangements can be agreed for its future maintenance and preservation.

In another place my honourable friend the Parliamentary Under-Secretary has also indicated that there could be significant Government grant towards expenditure on the much needed repairs. Given the advice of the Historic Buildings Council as to the importance of the building, I have little doubt that they would recommend substantial grant towards the expected massive repair bill. My noble friend Lord Montagu—and I hope that these little differences of title will not cause me to lose my friendship with him—has indicated that the Historic Buildings and Monuments Commission would also be willing to assist. I am grateful for his helpful intervention and I take this opportunity of recording my congratulations on his appointment as chairman of this important new body. We expect great things from him and from his commission.

These facts—not facts of my noble friend but those referred to earlier—it seems, tend to have been overlooked. The country is fortunate in having a fine heritage of important buildings, of which Calke, important as it is, is neither the finest nor, as yet anyway, the best loved. Yet already we have committed ourselves in principle to forgoing well over £2 million of tax to preserve it, provided—and this is important—that arrangements are made for future care and maintenance.

Is this an unreasonable condition? It would certainly be irresponsible to commit resources on this scale without giving thought not just to repair bills, but to the access roads and car parks needed to open the building to the public, and to the continuing burden of future maintenance and running costs. The National Trust are keen to have the property, but have said they can accept it only if they are given an endowment of £4 million, plus a capital sum of £3.5 million spread over, say, 10 years for repairs and other works; that is another £7½million. It is something approaching £10 million altogether for just one, so far little known, building.

Can it be worth it? Are there not other ways of preserving the building without such enormous outlay by central Government? I am glad to say that, with this very question in mind, the noble Lord, Lord Charteris, has agreed to call a meeting of all the interested parties in early January to see whether it is possible to find a way forward. The noble Lord, Lord Gibson suggested that it was our joint noble friend Lord Montagu who was chairing this meeting; but I understand that it is Lord Charteris.

Lord Gibson

My Lords, it was not my intention to say that.

Lord Skelmersdale

My Lords, perhaps I misheard. We can look at Hansard in due course. I understood the noble Lord to say that. However, we are all talking about the same meeting, which is the important thing. At that meeting the noble Lord, Lord Charteris, will be exploring the possibilities for a different and, I would hope, less costly scheme for preserving the property: a scheme where future maintenance does not require massive Government funding in addition to the initial purchase. This is a most helpful move, and the Government are grateful to the noble Lord for taking this initiative. In recent weeks this little known estate, for so long unknown to the public, has suddenly become something of a cause célèbre. With the noble Lord, I recognise this. Judging by the widespread interest, there now must be people prepared to put time, cash and effort into working out an acceptable solution. So the time would seem ripe for just such a meeting, and I wish it success.

Your Lordships, you will gather from this that I do not accept the premise in the noble Lord's Unstarred Question that acceptance of 8,000 acres of agricultural land and their transfer to the National Trust is the only way of preserving Calke. Perhaps I should explain some of the background to this case more fully than I could on a previous occasion.

The main—indeed, probably the only—reason why we are now being pressed to accept the Calke Estate in this particular way is that the property forms part of a trust set up many years ago, doubtless for excellent reasons, and that the trust was still in force when Mr. Charles Harpur-Crewe died in 1981. Since that trust was set up various concessions have been introduced for historic houses, not least tax exemptions that are available on the creation of a maintenance fund. The concessions are available, but owners certainly cannot be forced to use them; and, in the case of the Harpur-Crewe estate, they were not adopted. Thus, on the death of the late Mr. Charles Harpur-Crewe, the trustees faced a huge tax bill. That much is fact. It is then argued that, because this tax was in the nature of a windfall to the Government, it ought to be ear-marked for the particular purpose of buying in land that could have been put into a maintenance fund.

It is further argued that the importance of Calke is as an historical entity—that the Abbey, the outbuildings, contents and park together form what has been described as "a unique time capsule". The noble Lord compared it with Erdigg, which I visited not long ago, and suggested that the importance of this entity overrides all normal procedures and justifies earmarking. That, my Lords, with the greatest respect, is emotion. Many people fail to organise their affairs in the most tax-effective way but there is no suggestion that all such windfalls could be earmarked to provide a benefit which might have been produced by different tax arrangements, even if they are windfalls at all, which is an attitude that I reject.

Expenditure on the heritage is not different from expenditure of any other kind. It has to be accounted for in the normal way through parliamentary Votes. This Government have a proud record of helping the heritage, but, rightly and necessarily, it is done within the normal tax and expenditure framework. If Calke had been accepted on the basis of the trustees' offer it would have cost the Government £10 million. We must not lose sight of that. Secondly, it is suggested that there are precedents for the Government buying not only historic houses but also agricultural land, as an endowment. That happened once only some 25 years ago, when Hardwick Hall was accepted. I hope that I answered this when replying to the Question of the noble Lord, Lord Kennet, a few days ago.

With the new and much improved arrangements introduced in 1980 the Government now makes provision in the Annual Estimates only for buying through acceptance-in-lieu procedure property which is itself of heritage quality, where the recipients of such property, including the National Trust, also need endowments which they are not able to finance from their own resources and they can apply to the National Heritage Memorial Fund. The trustees of the fund, whose work has commanded widespread respect, have the difficult task of assessing priorities. I have no doubt that their decisions reflect the fullest possible consideration of the competing claims on their resources. While clearly no open-ended commitment can be given, it is only fair to remind the noble Lord, as indeed he has half-reminded me, that certain assurances were given at the time the National Heritage Bill of 1980 was passing through Parliament. We gave assurances then that if a really important property, such as Chatsworth, were offered, we would consider increasing the amount provided for the acceptance of offers, but this can be done only by re-allocating resources from elsewhere or by drawing on the Contingency Reserve.

Your Lordships will of course note that the example quoted in that case was Chatsworth. Happily, I have no grounds for believing that that fine house is at risk, but it does give some indication of standards. While there could be some properties for which as much as £10 million of public money or even more might be an entirely defensible price, I do not myself think that Calke comes into that category. There must be another way.

Thirdly, the impression has been given that unless the property is transferred to the National Trust more or less immediately, it will be irretrievably lost. I agree with the noble Lord, Lord Gibson, that black holes may exist in outer space but not in Derbyshire. There is no reason to suppose that Calke will disappear into a black hole unless the Government accept the solution which the trustees have proposed. The Government readily accept that the National Trust, with its fine record, would be an admirable custodian of Calke, but we cannot accept that it is the only possible custodian; or that the property must be transferred to the National Trust regardless of cost. I think it was the noble Lord, Lord Gibson, who referred to a recent Times letter. I would only say that in the meeting to which we both referred it is my view that there is a little "give" on all sides.

To answer what was possibly the main point made by the noble Lord, Lord Strabolgi, I hope I have explained by now that there is no question of penalising the trustees or the owners of Calke Abbey. The point is that many owners of historic houses have made appropriate provision for the future maintenance of their property. We cannot turn the clock back every time someone does not arrange his affairs so as to optimise his tax position, and I find it strange that the noble Lord should invite me to do so. We are where we are now.

As I have already said, this country is fortunate in its superb architectural heritage. Few of the great country houses are as little known as Calke, so it is relatively easy to speculate on others that may sooner or later be offered to the Government. In all cases, we must look at all possibilities. We cannot leap to the conclusion that direct transfer to the National Trust with an endowment is necessarily the only or best way of dealing with them.

There has been some publicity given to claims that, in offering the Calke Estate to the Government, the trustees are making a broad and generous gesture. While I know that the offer is made from the highest motives and that the present life tenant Mr. Henry Harpur-Crewe and his trustees honestly believe that the offer they have made represents the best and safest way of ensuring that this unique place is permanently and fully accessible to the public, nevertheless the offer as it stands does not require any financial sacrifice by the trustees. On the contrary, it leaves the estate better off at least by the value of the douceur; that is, the special rebate given to owners when heritage property is acquired by the Government. And there would also be certain practical and financial advantages in direct transfer to the Government as a single package.

I make this point in no carping spirit; indeed, I recognise that, because of the form of the trust deed and the fact that the ultimate heir of the estate is as yet untraced, the trustees face exceptional legal difficulties. Nevertheless, I am encouraged to learn that they are now looking for ways in which they themselves might contribute towards the future maintenance of the property. I have no doubt that the trustees would like to make such a contribution if it is legally possible for them to do so: this is what they have always said. But I cannot accept that their offer in the form it has taken so far would represent anything but a normal commercial transaction.

On the last occasion when Calke was discussed in this House, the noble Lord, Lord Strabolgi, said that the Government should "show effort and imagination". By this he appears to mean finding £10 million simply because that was the sum requested. There must surely be other ways. The Government do recognise the importance of Calke and are, in principle willing to accept the heritage property. But they are not prepared—I repeat "are not prepared"—to breach the principle that the procedures for accepting property in lieu of tax should be reserved for property which is of heritage quality.

It is precisely because effort and imagination are needed that we welcome the initiative of the noble Lord, Lord Charteris, in bringing together all interested parties to look for a way forward. I know that everyone entering these discussions does so in the most constructive frame of mind. It is my earnest hope that a way can be found of securing the future of this unique property. Provided that that can be done, the Government will take pride in fulfilling their conditional pledge to accept the heritage property through the acceptance in lieu procedures. This debate has added to our consideration and I am grateful for the opportunity to respond.