Trade Marks (Amendment) Bill

HL Deb 15 May 1984 vol 451 cc1351-96

8.25 p.m.

Lord Campbell of Alloway

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.—(Lord Campbell of Alloway.)

On Question, Motion agreed to. The National Heritage: Works of Art

8.26 p.m.

Lord Fanshawe of Richmond rose to ask Her Majesty's Government what steps they are taking to protect and preserve this country's heritage, works of art and cultural objects, having regard to the immense buying power of the Getty Museum.

The noble Lord said: My Lords, I beg to ask the Question standing in my name on the Order Paper. First, I must apologise to the House and to my noble friend for keeping him here at such a late hour. He has had a very heavy day and has had to cope with two major speeches on an important piece of legislation. I trust that he will forgive me for inflicting this further burden upon him this evening.

I have no major interest to declare, unfortunately, as I was not lucky enough to inherit a stately home or a work of art of national importance, although I am a trustee of the National Army Museum. However, I raise this question because we are now confronted with an entirely new factor which, like it or not, is having a disruptive effect on the international art market and, by extension, a similar effect on the values of individual works of art. What is this factor? It is the massive and unprecedented sums which have recently become available to the Getty Trust in California. Is it generally realised that under United States Federal law, Getty is obliged to spend at a rate of over £1.25 million a week out of a larger income of over £1.65 million a week, the unspent balance of which goes to increase the capital sum?

In addition, the pound sterling, which stood recently in the region of 2.40 dollars to the pound, last week dropped below 1.38 dollars to the pound. I need hardly stress in these surroundings that this alone puts us in difficulties in attempting to retain in this country our inheritance of works of art and cultural objects which still remain in private possession. Whatever the Getty Trust does or says it is going to do, this problem must be faced now, and it must be faced fair and square and without equivocation.

My comments this evening are intended to imply no criticism whatsoever of the Getty Trust. They are, in my view, doing a fine job. All of those interested in the arts can only praise Paul Getty's generosity and the skill of the trustees and staff in the way they are carrying out the role he devised for them. Of course, as we all know, there are other institutions and private individuals in America and elsewhere which have funds enabling them to compete successfully for our works of art against any sums which we in this country can at present command.

For example, the Kimbell foundation at Fort Worth, Texas, has more formidable resources than any of our great museums. Nevertheless, its financial muscle is in a wholly different league from that of Getty. In addition, the fact should not be overlooked that American citizens have long enjoyed income tax incentives to support their public museums, with the result that many American institutions have become the envy of the civilised world in the latter half of this century.

But what is the position in the United Kingdom? Let no one doubt that private owners still constitute the major source of supply. For the past quarter of a century, our export controls have been fair and liberal, and I am delighted to see that among those who will be speaking tonight is my noble friend Lord Eccles, who was such a distinguished Minister for the Arts and who helped to oversee those controls several years ago.

Until now, those controls have served us well, with only a handful of major losses—such as the Radnor Velazquez, which left the country a few years ago. It is now time for us to wake up and anticipate the future rather than shut the proverbial stable door after horse upon horse has bolted. I need not remind the House that the current horse nearly out of the stable is the Siennese Crucifixion, already bought by Getty, which the Manchester City Art Gallery is fighting to retain. In this connection, I welcome the National Art-Collection Fund offer of £½ million to help Manchester. I also welcome the fact that the noble Lord, the Marquess of Normanby, who is chairman of that fund, will be speaking tonight.

I personally am not in favour of restrictive actions or the extension of the current system of export licences. This is because, in my view, too much protectionism distorts the world art market and because there is a positive answer available to us anyway. There is no mystery as to what should be done. A number of knowledgeable, far-sighted bodies and individuals have repeatedly not only sounded warnings but have offered highly constructive solutions related in one way or another to fiscal reform. Some of these suggestions have been implemented, but none in any depth—and the overall situation is that no fiscal measures have been taken or seriously considered by successive governments.

I wish, then, to concentrate on the fiscal area this evening—particularly in view of the Conservative Party election manifesto of one year ago which said that we would: examine ways of using the tax system to encourage further growth in private support for the arts and the heritage".

The first aspect of the tax system which requires such examination is that relating to income tax. There is a necessity in present circumstances for substantial contributions from private sources to assist in financing specific additions to our museums and galleries in public ownership. But such contributions on an adequate scale will not be forthcoming unless and until sufficient tax incentives are made available to them. These could take the form of allowing, at the discretion of the Treasury, deductions from income tax up to a certain percentage of total income of monies expended for the purpose of adding objects carrying the approval of my noble friend the Minister for the Arts to the collections of our public museums and galleries.

This will have a similar effect to certain provisions in the United States tax laws, to which museums in that country owe so much and which I mentioned earlier. In this regard, it is ironic that those provisions can be made use of by United States taxpayers to benefit the museums of this country provided that certain formalities have been observed by the recipient institutions. But, of course, no such inducements are available to taxpayers in the United Kingdom.

Secondly, I turn to capital transfer tax, which regularly precipitates the sale—often overseas—of so many of our art treasures. There exists, of course, the statutory possibility of settling such liabilities in kind by the surrender to the state of works of art and museum objects. However the total amount of tax debts discharged in this manner during the whole financial year just ended was less than £1 million. It is obvious enough that the system cannot be working in such a way as to have an appreciable effect on the problems confronting us.

I may remind the House again that the Getty Trust has to spend at a rate exceeding £1 million a week—and that many sales at auction of course exceed that figure at a single session. Why, then, is this possibility proving less attractive than it ought to be? In order to answer that question, the terms for the payment in kind of capital transfer tax debts have to be examined. The position is that although any object accepted for this purpose is by statute exempted from tax, the treasury withholds, in accordance with an administrative decision made more than 25 years ago, three-quarters of the benefit of this statutory tax exemption when arriving at the amount of tax debt that can be written off in its books. This high proportion was criticised as excessive only recently by a Select Committee in another place, which, in effect, urged a reduction to one-quarter.

Many distinguished bodies and informed persons have taken the view that, in any event, the benefit of the statutory tax exemption ought in future to be divided more equitably. It should be done in such a way that, although the state would still come into possession of a heritage object at a reduced figure, the other party to the bargain—that is, the owner—would receive increased encouragement to enter into it. An equal inducement or douceur to both parties to the transaction—the 50/50 division very reasonably favoured by the Museums and Galleries Commission—obviously has a great deal to recommend it.

Such a reform would not only benefit our public institutions but would also enable fuller use of the far-sighted provisions for some of our treasures to remain in situ, in their historic heritage. Many of us feel that very strongly. This action by owners could be encouraged by cutting back the time taken to reach decisions. As my noble friend will know, his department, the Department of the Environment and the Treasury are all involved; any delay often causes excess interest payable to the Revenue, and this is bitterly resented. Another aspect is the ceiling for total acceptances laid down by the Treasury, and I believe that this should be removed. It is worth bearing in mind that in France, where payment of succession taxes in kind is possible, no percentage of the agreed value of the object surrendered to the state is withheld for the purpose of discharging the tax.

The third area I wish to cover this evening is an indefensible Value Added Tax anomaly. Both my previous suggestions were for incentives to be provided to induce the private sector to become involved in a positive way. But VAT, which can arise in certain circumstances on sums payable by public museums for acquisitions for their collections, has a negative effect—thus causing an irritating disincentive to private generosity playing its part in contributing to those very acquisitions. Municipal museums can claim relief but national institutions and universities cannot do so. And as is well known, VAT on sales to all foreign purchasers is zero rated for reasons intrinsic to the tax. But since this incentive for overseas sales is to the detriment of our public institutions, sales to the latter ought at least to be put on an equal footing by being zero-rated also. This could be done for the sole and sensible reason that the financing of additions to our public galleries and museums ought by definition not to entail any payment whatsoever to Customs and Excise by these institutions or by any private support which they may attract.

In conclusion, I am putting to my noble friend the Minister that, first, he should recognise—and I am certain that as a very distinguished, hard working and successful Minister for the Arts he does recognise this—that there exists a very real problem of potentially massive dimensions which it would be unwise to brush under the carpet any longer. Secondly, that the Government should consider taking the initiative themselves, by acting to deal with that problem in advance, before they are constrained to do so by the predictable march of events.

In other words, I am asking that the Government should put into effect as a matter of urgency the undertaking given a year ago in the election manifesto. I have drawn attention to three divisions of our taxation system in which constructive action could ensue. I recognise that my first suggestion, relating to income tax, will require time to work out and will have to be postponed until next year's Finance Bill. But, given the necessary goodwill, the other two could in theory be put into effect without delay. The reform in CTT accounting is merely an administrative rather than a statutory matter, and the zero rating of VAT on sales of works of art to our public museums and galleries could be added to the Finance Bill at present before Parliament. Such action—and I am sure my noble friend would agree if his colleagues in the Treasury would agree with him—would unquestionably meet with a welcome from all quarters.

The Treasury may consider that these proposals would increase public expenditure. I cannot accept that. We have a radical and far-sighted Chancellor of the Exchequer who, by implementing my suggestions, would be instituting a major and important reform of our tax system and would provide investment for the future, which all of us wish to see. I am glad that my noble friend Lord McAlpine of West Green, who is a distinguished collector in his own right, is to make his maiden speech tonight, as is the noble Earl, Lord Munster. The number of your Lordships who are intending to speak this evening shows the great interest that this subject has aroused. I hope that my noble friend the Minister for the Arts will be successful in persuading his Treasury colleagues to accept the gravity of the situation and to put in train the fiscal reforms which are so urgently needed.

8.41 p.m.

Lord Beaumont of Whitley

My Lords, the number of your Lordships who have put down their names to speak—an almost unprecedented number for an Unstarred Question—is token enough of the debt that we owe to the noble Lord, Lord Fanshawe. We are particularly lucky tonight in having two maiden speakers, both of whom have great practical experience in this field. Your Lordships' House has a reputation for producing experts on any given subject. I remember that I made my maiden speech on an Unstarred Question on primary schools in Hong Kong on the basis that, as the only member of your Lordships' House who had actually been governor of a primary school in Hong Kong, I was keeping up the record of your Lordships' House for expertise.

In this particular field of the national heritage your Lordships have a very great wealth of experience, but outstanding is the fact that the noble Earl, Lord Munster, has the practical experience involved in this field and the noble Lord, Lord McAlpine, has a series of collections of art for which all of us who have been interested in and treasure modern art in particular, and who have had the opportunity of seeing them, have been grateful over the years. We are grateful, too, for his munificence in his gifts to museums.

I must not be caught by any of my colleagues in saying that this Government are actually preserving the country's heritage. Indeed, I would not because in a number of ways they are not. However, in the sense that the noble Lord, Lord Fanshawe, uses the term, I confess that I think that the Government are probably doing as much as they can, or should. We have—and the noble Lord, Lord Fanshawe, paid tribute to this—the satisfactory and meticulous machinery for identifying those objects which really are a part of our national heritage and which we should make every effort to keep in this country. The original griddle on which King Alfred burnt the cakes and the original copy of the British Consititution are objects which we rightly wish to preserve. We should make every effort to keep them in the same way as we respect the wishes of the Scots to hold the Stone of Scone and the Greeks to have the Elgin Marbles. Perhaps more importantly, it would seem fitting that where there are native artists, in whatever field, we should try to keep together at least a representative selection of their work. It is proper, for instance, that the best selection of Turner's works should be held in this country, even if we are not prepared to abide by the wishes of the artist as to how they are to be preserved and shown.

The doctrine of free trade, like all doctrines, is one which needs to be kept within certain bounds. I believe that it is right, for example, that we should not barter our native heritage for a mess of pottage. Let us by all means treasure that which we have produced ourselves and which is part of our proper heritage. On the other hand, when we start complaining that our heritage is being dispersed by the sale of pictures brought out of another country by our rich ancestors, I believe that we are going too far. To say that a Leonardo or a Cimabue are part of this country's heritage in anything except the most dispersed sense of the phrase is taking the argument too far. Our only proper interest as a nation is. surely, a respect for art itself and a real care that the works in question should go where they can be looked after.

I say a real care because too often, as in the case of the Elgin Marbles, such an argument is deployed by those who would fight to retain them even if they knew for a certainty that they would be looked after at least as well as they are here. If we really care for art, and are to be honest and not hypocritical, it seems to me that we should be eternally grateful to the Getty Museum. Indeed, the noble Lord, Lord Fanshawe, has already paid tribute to it. Those of us who care for art—and that is surely the great majority here—could hardly imagine anything more blessed than a foundation with a very great deal of money which is dedicated to the preservation of art. Think of it—an institution with pots of money dedicated to the preservation and display of the best of art! Pictures which have been tucked away in your Lordships' stately homes would at last be displayed for all to see. Objects of virtue which have been stored for generations in vaults because there has not been the money to display them, restore them or even in some cases preserve them would be at last released, cared for, restored, cherished and available both to scholars and to the public at large. What more could any true art lover want?

It is true that the Getty Museum is not just up the road. But the problem of distance is not one which has been wholly ovecome in human life altogether. A stately home in Cumbria is not just down the road from Los Angeles either, or from us here. Wherever pictures are kept there will be the problem of distance for the majority of people. But again, it is a good thing that works of art are in an institution which can afford to catalogue and reproduce them adequately and to disseminate the results.

It is a slight pity that such an institution should be established in a country which is one of the major participants in the cold war. Let us pray that the kind of skirmishing which has just dealt such a blow to the Olympic Games—or, rather, which dealt such a blow four years ago when it started at the Moscow Olympic Games—does not invade the art world. But perhaps even then it is preferable that such collections should be subject to that kind of action than that they should be in the Lebanon or Nicaragua. For all our fears, we are probably right to trust the powerful nations who, for all their posturings, in the last resort display that sense of self-preservation which we are told distinguishes even the lower animals, and export their wars to other countries.

In no way do I denigrate the art galleries and museums of this country. They do a wonderful job of work. However, if there is any money to spare—and that sentence contains enough material for several debates that we have had in the past and the several more that we shall no doubt have in the future—let it be given to them so that they can do their work properly with the works that they have at present. There is far too much tucked away that comes out only for special exhibitions. The Friends of the Guggenheim are at present in this country viewing our treasures. I am delighted that we have treasures to view; but I grudge neither the Guggenheim nor the Getty such treasures as they can afford. The only treasures that we should weep over are those that are closeted away or left to deteriorate, and there are still far too many of them in Britain for us to waste tears, time, money or a great many more words on works which will be both cared for and shared with the world at large.

8.50 p.m.

The Earl of Minister

My Lords, this is my first opportunity to speak in your Lordships' House and I ask for your indulgence. As a nation we cannot compete with the Getty Trust in the acquisition of works of art. We must accept that fact, and indeed congratulate the trust on the apparent restraint it has shown to date. Published comments from the director of the trust demonstrate that the trustees are fully aware that the eyes of the world are turned on them, and they are also aware of their responsibilities and are keen to discharge them honourably. The trust has in fact stated that it intends to encourage scholarships in connection with the arts from the creative, conservation and research aspects. Perhaps I should declare my interest in the subject in as much as I was employed for some years as the conservator of the stained glass at the Burrell collection in Glasgow.

An apparently excellent proposition was made some years ago to invite the Getty organisation to exhibit on a permanent basis in this country. This does not appear to have been taken up, and so I would urge the Government to revive the idea. I suggest that a satellite museum would increase enormously its prestige in Europe and would make a significant contribution to the life of our country, particularly if it were to be established in one of our more deprived areas, such as the West Midlands or the north-east, apart from increasing the respect for the trust among international arts circles and allaying the fears that have been expressed about its unparalleled spending powers. The benefits to the area of the establishment of such a museum would be manifold and would bring building work for some five years. On completion, it would attract visitors, both local and international, who are unable to travel to Malibu, thereby boosting the economy of the area.

The Burrell collection in Glasgow is an excellent example. Since last October, when Her Majesty the Queen opened it, it has had in excess of 354,000 visitors, and during the past few Sundays, when it was open for only three hours a day, over 9,500 people passed through each day.

The proposal would bring cultural facilities to a district that could not afford them, and it would cost not a penny on the rates. I am sure that it would give the people an interest and a feeling of pride to have a feature in their area, apart from the fact that it would give permanent employment to both maintenance and administration staff, as well as to those who conserve and care for the museum objects. I feel very strongly that the actual title to the works of art is of less importance than their availability to be seen, possibly for the first time by the people of this country. Finally, I should, as a new Member, add my thanks to the noble Lord, Lord Fanshawe, for raising this important subject.

8.53 p.m.

Viscount Eccles

My Lords, it is a privilege to be the first to congratulate the noble Earl on his maiden speech. We shall listen to him with great interest on future occasions. I think that we all know what expert knowledge he has on stained glass, and that and other subjects in the arts field greatly appeal to this House. I hope that he will make many contributions.

I should like to thank my noble friend Lord Fanshawe, who we are very glad to see with us in this House, for making a splendid case on behalf of tax reliefs for works of art which are offered to public institutions. I could support that case only if at the same time more money were made available for the living arts. I want to look for just a moment or two at the tension between heritage and contemporary art. Whatever we mean by heritage, it is something that does not stand still. Land use changes, buildings fall down, pictures are lost, and sculptures are broken. All the time we must hope that new works of quality will be added to the tradition. The heritage lobby is now so strong that we might get the balance wrong between the past and the present and not show enough confidence in our own artistic future.

My views have not changed on the export of works of art. I have always said that I would do everything possible to prevent leaving this country objects which were directly connected with our history, and especially works by British artists if the work in question would fill a gap in one of our collections. On the other hand, I would not withhold a licence if the object, however rare and beautiful, was of foreign origin and was in this country only because some discerning collector bought it when it was on sale. That category of art is international. Until the United States came into the market no country was more responsible for the movement of international art than we were. It would be bad mannered now to turn protectionist and refuse others the chance to do what we did on such a grand scale in the past.

Another practical reason should make us hesitate to ask for tax relief as put forward by my noble friend, I think really only in respect of objects going into museums and galleries. The value in money of objects of the highest quality is bound to go on rising, and rising faster than the general price level. That is because the supply dwindles as more and more of them are locked up in museums and galleries and, for reasons well known to your Lordships, because the quantity of money chasing these works increases continually. In the United States you cannot get a peerage, but you can have your name in big letters on a museum. The Getty Museum is the last, very well managed example of that fact.

The boom in art will continue and so it will require more and more public funds to compete with American, Japanese and other foreign collectors. How far we should provide larger acquisition grants and further tax reliefs ought to be considered only in conjunction with what we are providing for the living arts.

I would ask your Lordships to reflect on two current examples of that dilemma. As has been mentioned, an export licence was refused for the Duccio. It is a rare and very fine picture, but it has nothing whatever to do with British history. The money required to keep it here happens to be exactly the same as one whole year's grant to the Crafts Council. The Crafts Council is mainly responsible for the strong revival in British crafts, but there is a great deal more to be done to broaden the market for the work designed and made by some 20,000 men and women who are trying to make a living out of crafts. Many more young people coming out of the art colleges, and a great many amateurs, would like to become professional or semi-professional craftsmen. Another £500,000 or £1 million a year to the Crafts Council would enable it to build on its success and greatly to extend employment in an area which today, as we all know, badly needs further employment. Now, which is more important, the Duccio or the living crafts?

My second example is Calke Abbey. Putting that dilapidated house in order, providing an endowment and reckoning the revenue loss to the Treasury by taxes forgone, a Minister in another place said that all that added up to between nine and ten million pounds. This figure is four times the sum which the Arts Council, with many tears and groans, is to squeeze out of its budget to give a little extra help to the regional arts associations. Then, which is more important— Calke Abbey, with its clutter of junk and hundreds and hundreds of stuffed birds, or the living arts in the regions?

That fine but eccentric poet, Ezra Pound, said that keeping up with the arts means keeping living artists. So it does. And while the money should be found to hold on to objects directly connected with our history and to maintain buildings of the highest quality, it is at least as important to encourage the spread of artistic activities to all parts of the United Kingdom.

In time past, religion was the catalyst which integrated art into the life of society. Money has taken the place of religion and the result, as the right reverend Prelate the Bishop of Liverpool, said in his latest book, is that not only the poor but the affluent and the influential are caught in the trap of a divided society. How do we get out of that trap? Surely, one obvious way is to multiply civilised experiences which we can all share from wherever we come. Without doubt, the love of our common heritage is one such experience and another is the spread of the living arts. But if we do not keep a good balance between the two, we shall discover that heritage rhymes with dotage.

9.3 p.m.

Lord McAlpine of West Green

My Lords, time and again we become embroiled in a great debate as to whether this painting or that suit of armour or another work of art should be allowed to pass into the hands of some wealthy foreign collector. There is a tendency to view such activities as being a particularly damaging form of foreign subversion. Surely this is wrong. We should not view our national heritage as some form of fossil. It is not a monument in danger of collapse because one or two pieces of the brickwork have been removed. If we view our heritage in that fashion, it simply encourages stagnation and a closed mind, which will not save our heritage but will stifle it.

The world of art is dynamic, and constantly growing. We are doubly blessed in this country by having both a long history of artistic achievement, and also an artistic base today which is perhaps more vigorous and productive than it has ever been. We are not in the painful position of watching the erosion of our artistic wealth, as some would have us believe. We are in the enviable position of watching our treasures added to every day.

We have the world's greatest living sculptor in Henry Moore; Francis Bacon is arguably its greatest living painter. We have immense national assets in the form of painters, musicians, potters, silversmiths, jewellers, sculptors, designers and craftsmen. Our theatre is the envy of the world, and our film industry is once more building an international reputation for excellence. We may not yet know which of today's practitioners will become tomorrow's legends, but we do know with total certainty that many of them will.

If we were in Japan, many of our artists would, even in their own lifetimes, be called living national treasures. But in this country we are more timid about rushing to such judgments, although we must remember it is a wonderful thing to live for posterity. It is, however, more difficult to live on it.

Without doubt, in generations to come, the names of many British artists will shine. So we should not be totally preoccupied with saving the fragments of past years, as valuable in artistic terms as some of these fragments are. Our concern should not only be with yesterday, but with today and tomorrow. We should support and expand the appreciation of the arts in Britain so that we can create a climate that attracts great artists to our land. In the long term, it is most important that we should ensure a vibrant cultural heritage to pass on to future generations.

But how will this happy situation come about? By jumping on the bandwagon of subsidies and Government support? Is this the way to combat wealth from overseas? I do not think so. Excessive Government subsidies are not necessary. Indeed they are wrong. Government and its bureaucracy are no more able to decide how much money is required to support the arts and where the money should go than anyone else. Indeed, I might well argue that government and its bureaucracy are probably least of all able to make such decisions.

Government has a role to play, and this Government have given very extensive financial support to the arts, even during a recession. But I do not want the Government and their agents to become the arbiter of our national taste or the paymaster of our artists. Indeed, if it had been left to governments to decide on the components of a nation's cultural heritage, many of the world's greatest artists would have lived in obscurity. Committees cannot create art, and at the end of the day, committees cannot really decide on art. That must be left to the taste of the individual, who has the freedom to be wrong.

Throughout the ages, it is not Government intervention which has ensured the survival of the arts, but the support of individuals. Gainsborough, Constable and Turner (whose great patron was John Ruskin) survived and occasionally prospered, because of the support of individuals during their lifetimes. And it was not governments but individuals who helped them.

In fact, the great sponsors of the art world today are still individuals. For instance in the United States there are the Gettys, the Armand Hammers, the Mellons. Some may dislike them for their wealth and their great ability to sponsor the arts, but nobody can deny the immense contribution they are making to future generations of their countrymen by collecting these treasures. Anyone who cares to criticise them should first acknowledge that many of these men are truly international supporters of the arts.

Governments can help, of course. These American art sponsors all take advantage of the tax concessions offered by the United States Government. I note the encouragement given to our Government by my noble friend Lord Fanshawe for a similar system in this country. But, even without these advantages, individual art sponsors can still play the major role in this country.

We should not forget that the overwhelming majority of exhibits at many of our major art galleries have been donated by individuals. The National Gallery was founded by an individual. Perhaps 75 per cent. of the collection at the Tate, and most of the Scottish National Gallery were provided by individuals, not by the state.

But is it right that wealthy foreigners should be allowed to come and buy art treasures in Britain and take them to museums halfway round the world? I have to smile when I remember where so many of these treasures originally came from. It is certainly not apparent to me that Velasquez, Titian or even the Elgin Marbles owe too much in origin to the Anglo-Saxon culture. We have benefited throughout the ages from what might be termed a system of cultural exchange and we should not get unduly hysterical because some of the exchanges occur in the other direction. The export of some of the fragments of our great collections should not cause us undue concern. We must remember that our cultural wealth is not a stagnant pool but a growing one from which others should be allowed to drink and from time to time without any great harm to the rest of us.

How can we ensure that this cultural exchange is conducted in moderation? No one wishes to see our museums, galleries, and stately homes denuded. It is simply by taking on the Americans, the Germans and the Japanese at their own game. They come shopping here because they can afford to, because they are citizens of wealthy societies. In the long term, the only way to ensure that we retain our existing national heritage and provide the base for a growing national heritage for generations to come is to encourage a wealth-creating society which will be able to sponsor not only our hospitals, our schools and our other social services, but also the arts.

There is no other way. The alternative would be to condemn ourselves to relative poverty and squalor—circumstances in which the possession of great art treasures is impossible, irrelevant or even offensive. I believe in the creation of wealth as deeply as I believe in the arts. The two are not only compatible; they are inseparable. Our ability to preserve our cultural wealth is based on our ability to produce financial wealth. Just as I believe that cultural wealth should be shared as widely as possible, I also believe that the opportunities to enjoy financial wealth should be shared as widely as possible.

I feel sure that we shall return to both subjects many times in the future and I look forward to being allowed to speak again on those occasions.

9.10 p.m.

Lord Charteris of Amisfield

My Lords, it is my privilege to be the first speaker to be able to congratulate the noble Lord, Lord McAlpine, on his vigorous, humorous, imaginative and sensitive maiden speech. I am sure that all noble Lords hope that we shall hear him on many other occasions. I should also like to join in congratulations to the noble Earl, Lord Munster, on his maiden speech. I am grateful to the noble Lord, Lord Fanshawe, for having initiated this discussion. I venture to speak in it as chairman of the National Heritage Memorial Fund. I and other trustees of the fund have the privilege, I may say the pleasure, of spending in defence of the heritage such sums of your Lordships' money and that of other taxpayers that are allocated to the fund from time to time by Her Majesty's Government.

As your Lordships will know, the fund was established in 1980 as a safety net for the national heritage. The trustees of the fund have the responsibility of giving financial assistance for the acquisition, maintenance and preservation of not only what I may describe as movable heritage—pictures, sculpture, documents and books which, if they come on the market, are, of course, liable to be bought by the Getty Foundation or, indeed, by any foreign buyer—but also our real estate heritage—houses, woodland, wetlands, wilderness—our industrial heritage, which, incidentally, we find includes some extremely beautiful trade union banners, and also film archives, submarines, aircraft, and even bats.

The Earl of Gowrie

And belfries.

Lord Charteris of Amisfield

In the four years of our existence we have been amazed to discover how rich and varied has been what we have understood to be the heritage. I am often asked if we have enough money to fulfil our responsibilities. Of course, the superficial answer has to be, no. One cannot have enough of a good thing. That being said, however, I am glad to go on record as saying that it is my opinion that hitherto, within the ambit of what is reasonable and practicable, Her Majesty's Government have given us an extremely square deal.

The proof of the pudding is, as usual, in the eating. I can say with conviction that until recently—by which I mean until the beginning of this year—the trustees of the fund have not been forced to decline grant aid for any project that was in their opinion of supreme importance to the heritage simply because of lack of funds. So far, I believe, our funding has been about as well-judged as such things can be.

More recently, however, we have come to realise that our available resources are becoming increasingly modest in relation to the demands likely to be made on them. Of course what is sometimes called the Getty factor—the entry into the market of very large sums available to the Getty Museum to purchase movable heritage—is partly responsible for this change in the situation.

Certainly it is a changed situation, but I do not think that in any way it is a new ball game. Britain's movable heritage—as has already been mentioned, a great deal of it was moved here from the continent by the great collectors when this country was the leading economic force in the world—has before now been open to purchase from across the Atlantic by well-endowed organisations. Therefore I do not believe that the Getty factor is as unprecedented as some might believe. Nonetheless, it is a real factor, and I am sure the Government ought to do everything possible and reasonable to make it easier for Britain's heritage to be preserved and retained in this country.

However, I do not believe that we ought to contemplate, at least for the time being, making the export of works of art illegal or, indeed, much more difficult than it is now. I say this for three reasons. First, I believe that the Getty Trust are a thoroughly responsible organisation, and quite apart from any more lofty considerations they, who know the score just as well as we do, are unlikely to intervene in the market in such a way as to inflate prices grossly. They will not wish to kill the goose that lays the golden eggs. Of course, they will be able to pay the top price and as a result will acquire quite a few golden eggs. But bearing in mind also that these eggs will be extemely well preserved and available to scholars and to the increasingly more mobile general public, this is something with which we must live.

My second reason is that because our attitude to the export of works of art is reasonably liberal, London is one of the great centres of the art market of the world, and I believe that to be generally beneficial. My third reason is that I do not believe that this country, which has lived by trade, has ever really benefited from protectionist policies. I do not believe that it would be to our advantage to be over-protectionist about our movable heritage.

This, of course, does not mean that we can afford to be complacent, nor that there are not things which the Government ought to do to make it less necessary for private owners, in whose hands so much of our movable heritage remains, to put their possessions up for sale. They ought also, as far as is reasonable, to increase the resources available to the National Heritage Memorial Fund. I hope I may say a few words about those two matters.

The export of works of art presents us with a very difficult dilemma, because so much property that we have and cherish and regard as our national heritage is in the hands of private owners, whose right to dispose of their own property must be recognised. The owners of works of art may have perfectly respectable reasons for wishing to sell. Very often they have to do so to make both ends meet, to support their families, or to put the roofs back on their houses. Sometimes the sale of a single item from a house or a collection can go a long way towards safeguarding the future in this country of whatever remains in it.

We could go a long way towards safeguarding our national treasures by taking off private owners the pressures to sell. Other noble Lords have already dealt quite extensively with the various tax reforms that are required and therefore I hope not to be repetitive. But there is no doubt that the real security of the heritage lies in the tax system. This is our first line of defence. When there is no choice before an owner but to dispose of a work of art, we should make sure that offering it to the nation in lieu of tax or selling it to a public collection is more advantageous than selling it on the open market. Here I agree that the douceur, which has already been mentioned, should be increased, possibly to 50 per cent.

I accept that increased funds may have to be found to fund this system, but this would still be cheaper than having to buy on the open market on behalf of the nation. A tax credit scheme for heritage items, to be operated within the procedures for their acceptance in lieu of capital taxes, would be a major help, particularly as it would apply to those more expensive items which would strain the limits of grant-aid or which would lie beyond its cash resources.

I think there is evidence that some private owners have not yet appreciated the advantages that they would gain by selling to a public collection under the private treaty procedures. The Office of Arts and Libraries has done excellent work in publicising this system, and I hope that this will continue. For this system is vital to public collections and of considerable advantage to the private owner.

Then there is the third line of defence—the Reviewing Committee on the Export of Works of Arts. I have already expressed the view that the right to sell must be respected and that, in the long run, absolute protectionism will not be to our advantage. But one useful amendment of the existing export control procedure would be to suspend the issue of export licences for more expensive items for periods much longer than the three or six months applied at present. If, for instance, a period were to be more than one year, this would allow the resources of more than a single financial year to be used and allow more time to mount an effective public appeal.

In regard to ensuring that the National Heritage Memorial Fund is able to fulfil the role given to it by Parliament, I hope that noble Lords will forgive me if I indulge for a moment in fantasy. Let us remember the £50 million voted by Parliament in 1946 for the National Land Fund. Let us suppose that the money had been placed in the hands of a body of trustees, like the trustees of the National Heritage Memorial Fund, which is, of course, the successor of the National Land Fund. Let us also suppose that this money had been allowed to grow, as money is inclined to do if it is sensibly invested, and that it had not been largely clawed back by the Treasury. If that had happened—if that dream was a reality—it is probable that the National Heritage Memorial Fund would now have at its disposal, for the defence of the heritage, resources as formidable as those of the Getty Trust.

Of course, one man's dream can be another man's nightmare, and I fully understand that no well brought up Treasury official would feel comfortable if there was an independent body with that amount of public money to spend outside Treasury control. Nor do I think that any reasonable man could expect Ministers—even Ministers as sympathetic to the arts as the noble Earl the Minister for the Arts—to argue that resources of the scale of which I have spoken should be provided for the National Heritage Memorial Fund. We must, alas, be realistic.

However, I believe that Her Majesty's Government should allow the resources of the National Heritage Memorial Fund to increase in real terms as the years go by. The trustees of the fund can only do their job properly if they have—and if they are known to have—adequate resources. Let us remember that one of the reasons why the fund was set up by Parliament was to take out of the political arena difficult decisions about which bits of the heritage ought to be saved and which ought not. In my view, it is better if Ministers are distanced from such decisions. The fund was able to find the money from its existing resources for the National Trust to take over Belton, and so this never became an awkward issue. But when Calke Abbey came along our resources were inadequate and the matter was embarrassing and time-consuming for Ministers.

So I say, give the fund adequate resources and the trustees can then discriminate, and be seen to do so. We had to do this in the case of the Siennese Crucifixion and, if that was the wrong decision, we must take the blame for it. I think that that is the way it should be. After all, if the trustees of the fund make a hash of it, they can always be sacked.

9.24 p.m.

Lord Vaizey

My Lords, those of us who have seen the stained glass in the Burrell have ample reason, other than the maiden speech itself, to welcome the noble Earl, Lord Munster, among us, and those of us who for long have been friends of my noble friend Lord McAlpine of West Green also welcome him and his brilliant maiden speech.

As the Motion so persuasively moved by my noble friend Lord Fanshawe mentions the Getty Museum, I think that it is about time that we put on record some of the facts about the Getty Foundation, which is in danger of becoming a kind of spectre at the heritage feast, and is invoked whenever anything seems to go wrong. The Getty Foundation is not required to spend all its money simultaneously on the art markets in London. Indeed, only a small proportion of its total income is actually spent on acquiring works of art. It has embarked upon substantial programmes in conservation, which are important to us here, as has been mentioned already. It has embarked on a major programme for computerising arts history records which promises a major breakthrough in arts history scholarship, and it has a promising programme in the humanities and social sciences in relation to the history of art which also will be a big breakthrough.

In fact, I think it has bought only six or seven works of art in the United Kingdom since its foundation. Its remit of course is the whole art of Europe from the beginning of time down to 1900. Therefore, it would be surprising if the objects in this country loomed particularly large in the purchases that the Getty Museum happens to make. It is important to recognise that Los Angeles is not some primitive tribal area where the works are going to be destroyed. Los Angeles is a city nearly as big as London and grossly under-provided with the things that Londoners can take for granted. There are only three major museums on Los Angeles: the County Museum; the Norton Simon, and now the Getty; it has also the superb Huntington Library, which has been host to many British scholars of distinction.

It is not surprising that one of the richest and most important cities of the world should wish to show to its inhabitants and to its many visitors some of the cultural history of the West. I very much agree with other noble Lords who have spoken in the debate who have said that how on earth a work attributed to Duccio is supposed to be specifically part of the British heritage rather than part of the heritage of the whole Western world is difficult to imagine. Surely it must be the case that in a country like ours, which is so lavishly endowed with works of art and which has grave difficulties in preserving many of them, the interests of the country are served by a measure of free trade in the arts world. It was free trade that brought many of these objects to the United Kingdom. It is free trade which has established London as probably the major centre for the arts trade in the world. Therefore many objects are to be seen here which will only occasionally be seen elsewhere.

It surely is wholly in the interests of Western civilisation that we should preserve ourselves as an open society. This is not to argue that I think everything we possess should be dispersed immediately in other directions to Australia, New Zealand, or the United States, but we need to have a certain measure of realism when we realise that these extremely wealthy cities with highly-cultivated populations of art lovers are, relative to our great wealth of art treasures, deprived. Nothing in the world is going to stop the efforts of the citizens of those cities from acquiring works of art as and when they come on the market. I feel that narrow nationalism is always to be deprecated, and nowhere more than in the traditions of the Western arts, which are the great international tradition of our civilisation.

The important point which we ought to impress upon Getty and other wealth creators like Getty is the point made by the noble Lord, Lord Beaumont, and by my noble friend Lord McAlpine of West Green, and that is the importance of sustaining and maintaining the living tradition of the arts: something in which we in the United Kingdom are blessed probably more than any other land in the West—in the variety of talents which are available to us.

The problem is not to keep one or other work attributed to Duccio here, possibly in Manchester—it is desirable that it should be, but I am not sure than £ 1 million is the right price to pay for it; the important point is to have theatres, opera houses and ballet companies up and down the length and breadth of the land and to have, as the noble Viscount, Lord Eccles, rightly said, the living tradition of craftsmanship which regenerates the whole of our national life. It is important to have great festivals like the Garden Festival now going on in Liverpool, which will do more for Liverpool, probably, than any other single thing for a number of years.

I begin to feel at times that this desire on the part of those who own beautiful objects from the past and who want to evade the tax man and invoke the national heritage is getting a little bit too strong. The visits which a number of us made to Calke Abbey caused me to have some second thoughts about the expenditure of nearly £10 million on something that my noble friend Lord Eccles has—moderately, in my opinion—described tonight. A little caution, perhaps, in tax giveaways to people threatened on the whole with rather moderate taxes, compared with what they used to be, would seem to me to be desirable.

9.32 p.m.

The Marquess of Normanby

My Lords, I should like first to associate myself with the expressions of gratitude to the noble Lord, Lord Fanshawe of Richmond, for having initiated this debate on a matter of such current importance.

I find that it is often difficult to avoid focusing too much attention on the Getty Museum itself and its many important purchases at the present time. The new threat to the effective protection of a few of our greatest works of art is the Getty-enhanced values which now obtain everywhere. These are paid by other museums and private collectors throughout the world as well as by the Getty trustees.

The problem is really one of market values which have escalated beyond all belief. The noble Lord, Lord Fanshawe of Richmond, was kind enough to mention the National Art-Collections Fund, of which I am chairman. This body has no grants from the Government and is entirely supported by legacies and gifts. The policy of Her Majesty's Government has, of late, been centred on the importance of enlisting the help of the general public as well as businesses to retain, when desirable, works of art which are to be sold. That is exactly what the NACF does or tries to do. But neither we nor the government-financed National Heritage Trust, which has such a wide field to cover, have sufficient funds to help match these Getty-enhanced values.

The solution can only lie, in my opinion and as has been pointed out many times this evening, in the Government giving effective tax reliefs. I know that noble Lords will agree that it is factually true that the owners of nearly all the great private collections in this country are highly responsible and very patriotic people However, at times, as has been said, they need hard cash, and it is then that the present taxation incentives are totally insufficient to prevent the best works of art being put on the open market.

In America and elsewhere, taxation arrangements on gifts to museums are on a scale which is commensurate with present-day values. Our attitudes here are out of date. We even, as has been said by the noble Lord, charge VAT on the auction or dealer's commission when sales are made to a national or university museum or gallery. In the case of an overseas buyer, no VAT is payable: so the overseas buyer is thus actually favoured over the domestic purchaser even when the latter is buying for the national patrimony. It would appear, if I may say so, that the Treasury still holds the view expressed in a minute of 1856 advising the National Gallery—and I should like to quote the words: only to buy works from abroad because, as regards the finer works of art in this country, it may be assumed that although they may change hands they will never leave our shores. In the following year, as your Lordships will remember, there was held in Manchester a great exhibition of treasures from English private collections. It is estimated that, during the next 50 years, over half the treasures exhibited at that exhibition had left the country. I am afraid that, now as then, we are living in a fool's paradise. Today, the new factor is Getty-enhanced values If we are to retain the very best privately-owned works of art, this can only be by a thorough reappraisal of two aspects of taxation—first, the reforming of the accounting relating to in-lieu acceptances and, secondly, additional encouragement by income tax concessions for benefactors in cash towards the acquisition of works of art for our public collections.

9.37 p.m.

Lord Cottesloe

My Lords, we must be very grateful to my noble friend Lord Fanshawe for raising a subject which is a matter of concern to all of us who are interested in the arts and in our heritage in this country. It has also had the peculiar benefit of enabling us to hear two quite admirable maiden speeches from the noble Earl, Lord Munster, and from my noble friend Lord McAlpine of West Green. Looking back over the years, there has been constant anxiety and constant pressure on successive governments that not enough has been done to foster the arts and to preserve our great heritage from the past. But, in fact, very much has been done, and it would be churlish not to acknowledge the advances made, especially in the difficult period of inflation since the war.

To take one or two examples, there is the Arts Council, founded during the war by my friend the late Lord De La Warr, at the instance of Lord Keynes, with a grant of no more than £250,000—thousands, not millions. Even a quarter of a century ago, when I was appointed chairman of the council in 1960, we received grant of no more than a million and a half. This year, it has a Government grant of £93.5 millions. The Tate Gallery purchase grant, which, when I became a trustee soon after the end of the war, was no more than £2,000—thousands, not millions—in this year is more than £2 million; while the National Gallery purchase grant is now £3⅓ million.

These are great advances by successive Governments, and there have been others, too. Much has been done by local government and by individual enterprise—the creation of the Chichester Theatre, the Barbican for the Royal Shakespeare Company, the creation of the Burrell Museum in Glasgow, the building by the LCC of the Royal Festival Hall and the creation of the whole South Bank Centre for the Arts, culminating in the National Theatre, an enterprise in which the Government and the GLC collaborated.

The fact is that, in the whole field of the theatre and the arts generally, this country, for so long so backward, now leads the world. And, of course, there was the recent setting up, as a result of the debacle of Mentmore, of the National Heritage Memorial Fund after the long frustration of Hugh Dalton's noble gesture when he was Chancellor in 1946 of setting aside £50 million from the sale of surplus war stores for the preservation of our national heritage as a memorial to the war dead, a gesture emasculated by the Treasury. I need not remind your Lordships of the shabby history of that affair about which the noble Lord, Lord Charteris of Amisfield, has spoken.

Much has been done but now the entry into this field of the Getty trustees, armed with the staggering sum of 2 billion dollars of which they are required by the American tax laws to spend 90 million dollars—that is more than £50 million—in three out of every four years, presents us with a new and dominant factor. They can if they wish easily outbid all the galleries and museums in this country put together; and not only that, they inevitably introduce with their immense resources a steeply inflationary effect on the international market for historic objects and fine works of art.

I am told—and I entirely believe—that the Getty trustees wish to be, so far as they are able, helpful and considerate in their use of the dominant power that their vast resources give them. If that is so, and I am sure that it is, and if their powers allow of it—as to that I am not fully informed—it might be that a suggestion put forward some years ago to my friend the late Mr. Joe Hirshhorn might be considered as a helpful precedent.

Mr. Hirshhorn was an American citizen of great wealth, who had of his own initiative formed what was undoubtedly the finest collection in the world of modern sculpture, some 1,500 pieces by sculptors from Rodin to the present time. He was anxious to put his collection into a trust that would prevent its dispersal after his death, and he offered it to New York if they would provide a setting for it in Central Park. The collection was valued I was told at that time, a quarter of a century ago, at some £25 million. The authorities in New York were not enlightened enough at that time to consider such a desecration of Central Park, and it was suggested to Mr. Hirshhorn—not by me—that he might be willing to establish his collection in London, where it would fill a conspicuous gap in our museums.

The suggestion so far commended itself to the Government here that they sent, at short notice, very surprisingly, a senior civil servant to see Mr. Hirshhorn in the United States and to discuss the matter, with the result that he came to London, was entertained by the Government at Lancaster House, and was offered a site in Regent's Park for a museum to house his collection if suitable arrangements could be made.

In the event the London project failed to mature, and the Hirshhorn Museum is now one of the great cultural glories of Washington. But it occurs to me as a possibility, even though it may be a remote one, that if the Getty trustees are not restricted in their operations to California or the United States, they might be persuaded to consider setting up a museum over here, perhaps in London, perhaps at Sutton Place where Mr. Paul Getty lived when he was in this country for 15 years, and if they were so disposed that would solve, or at least ameliorate, some of the problems that they present to the rest of the world.

Another aspect of these matters is VAT, the arrangements for which present a number of anomalies. The Government's recent announcement that VAT will not be charged on restoration and maintenance work on historic buildings is a great encouragement. There are other aspects that I hope may receive attention. One is the charge of VAT on the sale of their work by living artists, which is a strong disincentive of which I hope they may be relieved.

Another aspect of particular relevance to the preservation of the heritage lies in the fact that while an owner who is selling a treasure in this country has to pay VAT on the sale, if he sells it to an overseas buyer, it does not attract VAT. He therefore has an inducement to sell it for export and the foreign buyer has an advantage over the home one. That must be wrong.

A general imposition of VAT on sales for export is obviously not desirable nor indeed defensible. But perhaps the Government would consider, where a case can be made out, a reference to the Reviewing Committee of important objects to be sold at auction, for advice on their national importance, so that where they are of "heritage quality" (to use that current but rather deplorable phrase) they may be sold free of VAT, or something of that kind. The solution is not easy to see, but the problem is a real one, and I hope that my noble friend may be able to take these matters on board.

9.47 p.m.

Lord Annan

My Lords, I am not going to elaborate on the difficulties of our major national collections because that has already been done admirably by other noble Lords. I just want to thank the noble Lord, Lord Fanshawe, most warmly for initiating this debate and to congratulate both our maiden speakers on their excellent speeches.

I should like also to say that the trustees of the National Gallery have considered this matter as a result of the initiative of the noble Lord, Lord Fanshawe. I speak because the National Gallery, perhaps more than any other institution, is concerned by the issue which has been raised in this debate. Last summer I attended a dinner with the chairmen and directors of other national collections and, of course, with the noble Lord, Lord Charteris, who presides so admirably over the national heritage. It was a dinner which the Getty Foundation generously gave. There, they did their best to reassure us and to explain why they would not make "a pre-emptive strike" against our national treasures. Indeed, they made it very clear that buying works of art was only one of the programmes they had in mind and that in fact a very, very large proportion of their wealth is going on programmes, some of which obviously have a finite end, like the building of an enormous new museum in Malibu. Another, of course, is the excellent work they are doing in compiling a computerised catalogue raisoné of all paintings all over the world. These are just some of the things they are spending their money on, but it does not alter the fact that we are facing a genuine problem.

I do not doubt the sincerity of the trustees but times change, trustees change, and policies change; and it would be quite wrong to imagine that the Getty Foundation is the only American institution which is capable of outbidding British museums and galleries. Last February I had the mortification of seeing "The Resurrection" by Dirck Bouts in the Norton Simon Museum at Los Angeles. We particularly wanted it, as it was one of a pair of paintings and we own the other. But this great painting was not going to come to this country and we were outbid at auction.

May I start by saying what remedies I think are futile? It is sad to have to say it but, as the noble Lord, Lord Charteris, has already said, the Land Fund that Hugh Dalton set up just after the war would have seen off any American offensive if it had not been raped by successive governments. The trouble is that governments are always going to ravish such a lady, because the lady is so attractive and grows so rich. So any suggestion that we could resurrect the Land Fund, I rule out. In any case, the National Heritage Memorial Fund is supposed to have taken its place, though its resources are certainly not what Hugh Dalton had in mind.

Let me turn next to tax concessions. The United States gives far more generous tax concessions to its citizens. So, the argument goes: why not go on extending the principle which the Government have wisely applied to donations to charity? Surely the Government ought to ask some body such as the Reviewing Committee, reinforced with expert financial advisers, to consider ways and means of revising fiscal procedures to give potential donors more incentives to enrich the national collections. This was admirably dealt with by the noble Lord, Lord Fanshawe, and I shall not go over that ground again. I am bound to say that I think most of his recommendations would come up against very strong Treasury opposition.

The real difference between America and Europe is that America is the willing purchaser, and therefore finds it to its advantage to have tax concessions of this kind, whereas European countries are mostly unwilling vendors. So the systems of tax concessions on one and the other side of the Atlantic are bound to differ. I also feel bound to say that American experience shows that some of their procedures are widely abused. Institutions of art and learning suddenly appear in the guise of pirates ripping off the state, and a lot of phoney foundations which benefit nobody but the donor's family and entourage are seen to have been created.

The American system of tax relief has been responsible more than any other single factor for the escalation of the prices of works of art. I think, however—and I am with the noble Lord, Lord Fanshawe, here—that there is room for manoeuvre, but I suspect that the Chancellor and the Treasury will attempt to keep it as small as possible.

Then what about the douceur? Would the country benefit if this were doubled, as has been proposed tonight? It already stands at 25 per cent., with strong governmental indications, however, that when an item costs millions some figure considerably below 25 per cent. will be considered more appropriate; and here we have tonight a suggestion that it should rise to 50 per cent. I must say that to raise it more would not necessarily be dangerous, but it would simply mean that the purchase grant of museums and galleries would be depleted far sooner, because it is they who would have to pay the extra 50 per cent. douceur.

I shall not follow the argument about VAT, except to say that, of course, the trustees of the National Gallery are entirely behind what the noble Marquess said, and what the noble Lord, Lord Fanshawe, aired very properly in his opening speech. I should like to say, too, that it is thoroughly supported by that great-hearted collector Mr. Denis Mahon, who was a former trustee of the National Gallery and who particularly asked me to raise the matter.

May I now turn to another suggestion that has been made? Some people have suggested that the Government should designate a super-class of objets d'art which at present market prices might be expected to fetch £7 million to £10 million for each item. Why should not the Government—so the argument runs—set a figure of £7 million as a ceiling; below that the Waverley rules would operate, but above it they would not. Above that, it would have to be understood by any would-be purchaser that he would never get an export licence. I suspect that if that were the case we would find a steady number of sales taking place at the figure of £6.999 million. The remainder of the far higher purchase price would be paid by private agreement outside this country, after the transfer of property had taken place. I do not believe that the solution to our probems lies along those lines.

It is always said that in cases of emergency the Government can find the money; why not, therefore, have a contingency fund? The noble Earl has done wonders in screwing large sums of money out of the Treasury to replace the commitments which were hitherto borne by the metropolitan authorities. He has recently come up with a special grant to save Calke Abbey. He has found extra money for the Royal Opera House and the Royal Shakespeare Company. I would despise myself were I to grumble that the purchase grant to the National Gallery has, as a result, had to remain static.

No Minister can reinforce every sector every year. I just hope that the noble Earl will not mind if every so often I call to his attention the fact that old masters, more perhaps than any other single work of art, have long ago outstripped our grant. But there must be a limit even to the noble Earl's powers. If he continues to be so successful as he is, I suspect that he will be moved to a much more prestigious post and that his successor will be chosen so as to be much less successful. So if I pleaded for a special contingency fund I would expect the noble Earl to say that the Treasury would laugh him to scorn, for would not every spending department in the country put in a claim for its own contingency fund?

There will be those who will say that as we are members of the European Community we should do as our partners in Europe do and impose a ban on the export of any work of art above a certain value. The French are most strict, perhaps the strictest of all, but their procedures are flexible. A licence refused in 1960 will, in some mysterious way, be granted in 1985, because circumstances have changed. By that I mean that if, in 1985, France were to receive a benefit by the import of a work of art in return for permission to export, permission might be given. So there is a good deal of give-and-take in the French system.

Of course, Britain is by far the most generous and fair to private owners and the Waverley rules are designed to enable private owners to get a fair price. But it can be argued: is it not feasible to designate a very small number of exceptional masterpieces—shall we call them delectissima desiderata—whose owners would be told that they could never be exported? If their owners needed to sell them, they would be able to do so under private treaty. They would be able to agree a price with a national collection and obtain all the tax advantages and the douceur benefit. I do not suppose for one moment that the owners of these works of art, quite a number of whom are Members of your Lordships' House, would welcome any such change.

I would urge, however, despite the experience of the noble Duke, the Duke of Devonshire, whose recent negotiations with the British Museum broke down, that very rarely in my experience has it been the case that owners, advised by their own expert advisers and highly reputable art dealers, have questioned the valuation which in the end has been agreed with the particular museum or gallery, because without such agreement no private treaty sale can take place.

I assume, however, that that course of action will not commend itself to the Government. If that is the case, it is up to the Minister to make use of the powers which he already possesses. It does not seem to me that there is any reason why the Minister should not declare publicly that the day has now come when he is prepared to advise the reviewing body to lengthen considerably the time before which an export licence can be granted. This would enable the National Gallery, for instance, to find time to accumulate funds from its purchase grant over a period of, say, seven years, to launch a public appeal, which takes time—you cannot do that in six months—and to find foundations and sponsors who will be prepared to save a particular painting for the nation. One should remember that private benefactors such as foundations may well be committed for one or two years ahead, or even longer. They would only be able to make a substantial contribution, say, four years or so after the first approach. When we are dealing with these very large sums, that is a factor that ought to be taken into account.

If anyone is going to say that such a long delay would be unfair to the owner or to the new purchaser of the treasure concerned, I wonder whether he would consider the political implications. The Waverley rules have been a remarkable example of consensus politics. They have been accepted by both sides of the House—but such agreement depends on both sides being satisfied that owners get a reasonably fair deal and that the nation gets a reasonably fair deal. If it were seriously to be argued that, say, a seven year delay on granting an export licence were unjust to owners, I suspect that before long there would be a reaction and owners would be pilloried for putting their own interests before the nation. I very much agree with what was said by the noble Marquess. They do not get criticised at the moment because they are extraordinarily and conspicuously patriotic in the way in which they think about their treasures and think about their ultimate disposal.

But it requires only two or three dilectissima desiderata paintings to leave this country and an outcry might arise for the country going over to the rules which operate everywhere else in Europe; namely, that no major work of art can ever be exported. That would be followed by smuggling and by the collapse of London as the centre of art dealing. What I am proposing is a modest change which only very rarely would come into effect.

I commend to the noble Earl three ways of meeting this new challenge. First, to declare that the length of time which he will in future grant to the national collections to match the would-be exporter will be considerably lengthened and might well extend to 10 years—perhaps even longer. Secondly, that he should consider establishing a list of dilectissima desiderata; treasures which are so precious, rare and exceptional that it would be scandalous if they left the country. It is for consideration, as I have said, whether they should receive an export licence.

Thirdly, I ask the Minister to reconsider in due course the purchase grants available to the National Gallery. I cannot speak for the five other national collections—including, of course, the British Library—but I think it is the National Gallery above all which has put most forcibly its case for an increase. I say that because I believe that the Getty Foundation and other American would-be purchasers guess that there will always be great obstacles put in their way if they attempt to lasso these absolutely super, major treasures. What they have their eyes on are the items just below the dilectissima desiderata list—such as the Bouts Resurrection.

Meanwhile, I thoroughly agree that the Minister should retain his present right to refuse to grant an export licence for 10 years if the purchaser refused to sell the to the national institution which had matched his offer. This right has already been exercised once, and I believe that the purchaser in question lent the object to the Victoria and Albert Museum—and therefore it did not leave the country.

This has been a very interesting debate and one which shows, extraordinarily, that the art lobby does not speak with one voice. There have been many voices here this evening. I suggest that the noble Earl may find that that makes it longer for him to reply to the debate—but it will certainly make it easier for him to pick and choose which advice he finds most to his taste.

10.4 p.m.

Lord Saint Oswald

My Lords, it must be extremely appropriate that tonight's debate will be answered by my noble and profound friend Lord Gowrie, for it allows us to examine the problems of the national heritage across his joint responsibility for the arts and the Treasury—added to which he has responsibility for employment. I wonder what other Minister would have been given the burden of both major debates in the course of one day.

As the noble Lord, Lord Annan, has just said, there has been no consensus in this debate. In an ideal world art should follow the market, but the ideal world has not yet been achieved. Losses of pre-eminent works of art from this country are reaching alarming levels. Export licence applications to the Department of Trade for pictures and objects valued at over £8,000 are now running in excess of 500 a day. The Reviewing Committee on the Export of Works of Art, chaired by my noble friend Lord Plymouth, has reported that cases brought before it for the year ended 30th June 1983 were more than double those for the previous 12 months, due in large part to the enhanced value of the dollar. We await its report for the present year with some anxiety.

It is, happily, Government policy—as in any enlightened country it should be—to stem these losses as best possible. It is also, however, continuous Government policy to operate a tax system which does much to force on to the open market those objects whose loss abroad we most deeply lament. I refer of course to capital transfer tax. I wonder whether my noble friend the Minister for the Arts can tell us in the wind-up how far he regards CTT as a principal culprit behind the break-up of historic collections and the loss of works of art abroad He will hopefully be able to tell us how long it will continue to have a part in this tax-reforming Government's scheme of things On 1982 figures, it yields about £500 million a year at what I fancy to be high collecting cost. It is widely seen as an ill-drafted survival of the rushed legislation in 1974 It seemingly raises even less in money terms than estate duty in its final years; but it wreaks, I would guess not much less damage than a simple and punitive wealth tax would on the artistic fabric of this country.

Exemption from CTT for pre-eminent works of art is, of course, a long-standing concession; but the noble Earl, Lord Plymouth, now tells us in his report that the practice of seeking such exemption is decreasing. Perhaps my noble friend Lord Gowrie can shed a little light on that. Might it be in part because the Treasury has not played a proper part in advertising the terms and conditions of exemption? For a Government which believes in free and undistorted markets, the heart of the matter is surely to attend to the tax stimuli which force art treasures of long standing in this country to be sold and therefore lost abroad. It is my hope that if the Government identify CTT as the forcing house for such sales—as, fuelled by the strong dollar, it appears to be—then prompt action will reform it.

I turn now from the domestic culprits in forcing sales to the main external threat to our heritage within the international art market. It is one that has been mentioned several times today in different terms—the J. Paul Getty Museum in Malibu, California. In common with certain other noble Lords, I cannot feel apologetic for singling out that museum because, armed with funds which it computes this month to be 90 million dollars per annum, it is moving on to the offensive against us Mr. John Walsh, the new director at Malibu, is quoted in the April issue of Art News—the largest circulating art magazine in the United States—as saying: It's amazing how stones about the Getty ripping off the art market get going in England None that I've ever heard had any relationship whatever to the truth. They are essentially fabrication by people in the trade to strengthen their hand". The Getty organisations have become, though perhaps a little close to eventide, acutely sensitive to the suspicion in which their activities are held in some quarters. Today I received—as, no doubt, did other noble Lords—a substantial document from their London advisers. It is a defensive, closely-argued and self-confident tract, composed to allay and contradict all such suspicions. Like my noble friend Lord Fanshawe and others who have spoken, I agree that indeed the existence of a powerful body, dedicated to acquiring the art treasures of the world specifically for public display must inspire in itself admiration, acclaim and approval.

To support his line that far from ripping off the art market in England, the Getty Museum is no threat, Mr. Walsh and his colleague, Mr. Harold Williams, President of the J. Paul Getty Trust, publish figures that acquisition in Britain since 1981 amounts to a harmless 11 per cent. of all purchases. That figure is of course to signify volume and not value—the number of items bought or to be bought. Therefore it is not related directly to value.

Both Mr. Walsh and his statistic avoid the point. The Getty Museum, as Mr. Williams explained at what we have been told was a rather splendid dinner at Brooks's Club last October for our museum directors, is at this period devoting around half its funds to the 100 million dollar creation of a computerised centre for the history of art and the humanities in Santa Monica, California. That means fairly simply that the Getty's full weight in the art market has yet to be felt. After 1986, with the computerised centre complete and paid for. things will be far more menacing than now.

More alarming yet to those who believe that supply and demand in a free market will eventually find each other is the inevitability that Britain will prove the favourite hunting ground for that museum. Mr. Getty, like other American millionaires before him, such as Mr. Mellon. Mr. Pierpont Morgan, Mr. Huntington, Mr. Frick and Mr. Kress, has set out to find immortality through financing a world class art collection. In 100 years no schoolboy will remember Getty for oil; only for art.

Worldwide, museum-worthy works of art are no longer plentifully found in private hands. In the West there can be no dispute that Britain is by far the most important repository of these, endowed as we still are with country houses not yet emptied of acquisitions made in the 17th century and on the Grand Tour— acquisitions of which certain noble Lords seem rather ashamed. The Italians bolted their stable door far too late. The French, though now vigilantly operating a pre-emption scheme, have seen much sold from the chateaux and from the Paris hôtels. Germany and Switzerland, though retaining important private collections, are no longer a major force on the international art market. Like it or not, it seems to me inevitable that sooner or later Getty's 90 million dollars per annum and those major privately-owned art treasures left in Britain will home in on each other.

It is small relief that, as Mr. Walsh tells us, his museum employs no agents in this country and makes no probing telephone calls. It does not need to. The fame of its dollars is world-wide, and conceivably immortal. The fact is that we have works of art which this modern Maecenas dearly desires. In the end, unless we take steps to prevent it, the "Getty factor" mentioned by Lord Normanby, may easily swamp us.

May I say briefly to those of my own closely associated noble friends who do not believe that we have any right to interfere in a free market of willing sellers and a willing buyer that the Getty Museum does not operate in a free market at all? Armed with a purchase grant 12 times that of our own National Gallery, as we have been told, and many times that of the Louvre, the Rijksmuseum or other American galleries, it has created its own market—a market in which it can theoretically obtain anything it wants. It is a wholly one-sided market, and those of us at its mercy are entitled to take protective steps should the Getty Museum in the future abuse its tremendous power.

Mr. Walsh tells us further that, some people still won't admit that it's quite plain that it's not in our interest to spend one dollar more than we need to spend for something". Now if this is intended to suggest that Getty never overpays, and cannot therefore be guilty of raising market prices, an element of irony is introduced. Numerous recent transactions have seemed, if correctly reported, to be generously priced. Of course, at auction Getty can claim that it pays just 10 per cent. more than an underbidder. But to further claim, on the strength of this, that it is not inflating the auction market is a visible mockery. Its very entry at the top of the old master drawings market in 1982 to 1983 has lifted prices dramatically throughout the entire range. To underline this point, Getty is now seeking an export licence at a record price for the Rubens drawing of the "Man in Korean Costume" formerly owned by Lady Head, on an offer of £301,000.

The Getty directors have lately, as mentioned, been trying to establish trust in England, for instance by direct contact with, I understand, my noble friend the Minister for the Arts and the Museums and Galleries Commission. We've been trying to avoid trouble for ourselves". writes Mr. Walsh. by attempting to find out when one or another of the national collections has a serious enough interest in something on the market to try to raise funds to keep it in England. In that case, we'll try to get out gracefully. But we've never said that we would stop trying to acquire works of art in England. What we've said is we would do it fairly and observe both the letter and the spirit of the export laws". Mr. Harold Williams, the Getty Trust President, used the operative word "consultation" in his October speech at Brooks's Club, according to a transcript which has been placed in my hand. Mr. Williams was not over-precise about the details but the gist of this form of "consultation" was. as I understand it, that, if Getty became aware of a major conflict of interest with a British collection, it would back off. The interest of good relations was of the highest importance to them.

Now these kind words have been slightly shaded over because it appears that, even as Mr. Williams spoke, his museum was already negotiating, without consultation, to buy the Crucifixion loosely attributed to Duccio or perhaps to Ugolino or another early Sienese painter. His consultations, if any, did not reach Scotland—whose National Gallery was a natural resting place for that Crawford-owned picture—or Manchester, where the director, Mr. Timothy Clifford, has shown vital enterprise and enthusiasm in recent years in building up that collection. Mr. Clifford, after an enforced late start, is now trying to raise funds to buy the Duccio, and the Getty is showing no signs, to quote Mr. Walsh's scrupulous phrase, of "trying to get out gracefully". So much for the value of words as distinct from actions.

I would add that it is not persuasive for the Getty to say that it did not consult Mr. Clifford because it did not know of his interest last November. He showed no interest then for the very good reason that, like other British directors—and I think I shall find agreement with the noble Lord opposite—he was unaware that the Duccio was on the market.

I do not wish to. and shall not. swell the chorus calling on the Minister for the Arts to find exceptional monies to help purchase that picture. The message is reaching him continually. I do wish to urge on him the importance of establishing with the Getty, beyond all doubt, whether or not a promise to "consult" is now in existence. If so, we need to know beyond all ambiguity what are its terms and whether they extend to all purchases in Britain or simply those at auction. We shall certainly obtain some clues if the Getty proves to outbid the British Museum on the most desirable drawings from Chatsworth House in July.

It is the voracity of the museum's craving and the potential quantity removal and concentration onto one continent which excite the alarm of a nation such as ours. Moreover, despite a kind of holier-than-the-Pope posture in public towards our own national heritage, the Getty has no less alarmingly and subtly devalued the original promise to consult with our museums and galleries made last November.

First, Mr. Williams announced in January that the promise to consult referred only to auction purchases made by the Getty. Secondly, Mr. Walsh announced last month that the Getty will attempt to find out when a national collection—and I repeat "national collection"—is concerned to keep a work of art in Britain but not, one deduces, when a university or provincial museum seeks to do so—and they are probably likely to be most anxious of all to succeed in doing so.

Thirdly, in a document which the Getty Trust kindly sent me this morning, I see that the promised consultation is now described only as informal. The Getty Trust now adds that it is inevitable, no less, that the museum will end up competing for British works of art despite—and here I quote, our best efforts to take our colleagues' interest into account". To my own innocent mind, that has the implication that so far from being a genuine promise to consult, it is a simulation of slithering through the long grass in the quest for its required prey. We do not yet know whether Getty will exceed the appetite in an earlier epoch of William Randolph Hearst, who stalked through the churches and palaces of Europe and who would have accepted with gusto the advice of W. C. Fields: Never give a sucker an even break". That may seem harsh, but in the long run I fear an inevitable seduction by Getty's overwhelming funds of our own remaining major works of art. No self-denying ordinance or "consultation" will hold the swell. Action will have to be taken to protect our art market, though perhaps not for many years yet if the Getty behaves responsibly. What form that protection should take is open to dispute. Enhancing the reviewing committee's powers by increasing delays on export licences to over one year is a good solution, it seems to me. The committee wisely imposed only last week a longer than usual delay of six months on the Hogarth destined, I believe, for the Yale Center for British Art. That is the road along which we are probably destined to travel.

I shall, however, end on a heartening note. It is to express my delight at the element of consensus, though it is not complete, that binds us on both sides of the House and in the other place on the problems facing our heritage and on the proper solutions. That has been the case, rather miraculously, for the 40 years since Mr. Hugh Dalton's magnificent initiative in endowing the National Land Fund with £40 million in 1945, later raised to £50 million.

It is striking, and true, that we agree so deeply, all of us, on the importance of heritage matters. Not all of us agree on the way to set about it, but I believe that we all know that no generation will forgive us if we allow the mass of our greatest remaining treasures to leave our shores.

10.23 p.m.

The Earl of Perth

My Lords, when I saw the Unstarred Question of the noble Lord, Lord Fanshawe, I thought that it was a little hard on the Getty Museum.

Lord Strabolgi

Hear, hear!

The Earl of Perth

Various noble Lords who have spoken so far—the noble Lord, Lord Vaizey, the noble Lord, Lord Annan, and I have forgotten who else—to a degree defended it. The noble Lord, Lord Saint Oswald has attacked it very strongly. I think he is wrong 1 shall come back to that. I accept that there is a threat, but I think that the noble Lord was wrong to have said some of the things that he did. Perhaps there is a moral to that; namely, not to circulate what I would call propaganda—because that is what happened—to your Lordships just before a debate. So often it has precisely the wrong effect. I shall come back to certain activities of the Getty and how I think that we can do better by helping rather than trying to fight.

Getty, as other noble Lords have said, is the tip of the iceberg. The fact is that there are many museums in America—the noble Lord, Lord Fanshawe, mentioned Kimbell, and others are the Metropolitan and the National Gallery of Washington—and, above all, an enormous number of rich individuals who can, if they wish, easily find five million or 10 million dollars and not notice it. There we are.

However, let us recall that in the eighteenth and nineteenth centuries we were in exactly the same position in relation to Europe. What we have and what we talk about today as our heritage is undoubtedly arising in large degree from what we did to Europe in the eighteenth and nineteenth centuries. It would be a mistake if at this time our attitude was too much that of a dog in the manger in relation to certain works of art going to America If they pay, all right; we still have great things in our galleries and museums and will continue to have them because, as I hope to demonstrate, we have got considerable defences at the present time. We cannot be over-greedy about this.

Let me come back for a moment to the Getty Museum. It is quite true that they have this enormous sum to spend, but they have said they want to do a considerable amount of building. They want to build a new museum and a centre for education and for the arts and humanities. These are going to cost many hundreds of millions of dollars and will automatically make less the amount of money they have to spend on acquisition. A lot of this work they are doing is not just for themselves; it is for the benefit of the art world universally. Ask the Courtauld Institute how much help they have had from Getty. I hope that shortly the British Architectural Library, with which I am connected, will find that its great collection of drawings, its archives, its records of building, will be helped similarly by Getty, because this is an international need.

Above that, undoubtedly Getty are going to have problems on how to spend. Our job should be to try to encourage them in certain directions. For example, I have in mind that they should promote, sponsor international exhibitions either of things that they have acquired or things they will collect and sell elsewhere in the world. When I say that I have particularly in mind American works of art. By that I mean the paintings by Americans at the end of the last century, and also since the war. We do not know enough about them. Why? Because on the whole these American works of art are kept in their own country. If that happens the proper recognition of artists is not seen or known.

The noble Lord, Lord Cottesloe, referred to Hirshhorn. I was closely associated with that attempt to get the Hirshhorn Museum over here. It was a Labour Government who were in power in those days and I should like to pay tribute to all that they did to try to achieve the end, which was merely a small addition to history.

In those days I was Crown Estate Commissioner and we were in a position, with the approval of the Government, to offer a site in Regents Park. Mr. Hirshhorn said, "What sort of a museum will you put up?" We said, "What are your requirements?" Within five days Mr. Dennis Lennon produced a model which so attracted Mr. Hirshhorn that it very nearly turned the trick. It did not quite do so because Mrs. Lyndon Johnson, wife of the American President, put her arm round Mr. Hirshhorn and said: "Look, we want it". Who could resist her blandishments? But that is another story.

I hope I have done enough to show that what we should try to do is collaborate with the Getty Museum and help them spend their money to the advantage of the world, if I can so put it. I am sure that that is the right direction, though I recognise that there is a problem in regard to the funds that they have for acquisition.

What are our defences in that event? They are pretty formidable. As many of your Lordships have said, to begin with we have the Reviewing Committee on the Export of Works of Art. If in its judgment something is worth saving, then, judging by the Waverley criteria it is in a position so to say. I would plead with the noble Earl, Lord Gowrie, not to change the Waverley criteria. My experience—and I am sure that it is the experience of the noble Lord, Lord Cottesloe—is that they have stood the test of time and are very good.

It was the noble Lord, Lord Annan, who suggested that the length of time should be extended. I am totally opposed to that. Have noble Lords thought of what it means if we suggest that matters are put off for seven years? Let us assume for the moment that there is the fantastic figure of £10 million and for seven years the owner is without that money. At the present rate of interest that would cost him over £1 million a year. Is that fair?

I am quite clear in my own mind that we must treat fairly our own individuals who happen to own these great treasures, and we have to go by the market value. All the same, it is valuable that the reviewing committee can give us a period of time. There is at least one example when they gave us a year. That was the case of the famous Leonardo cartoon, which was saved for the nation as a result of the special efforts of the then Lord Crawford. However, I think that those should be very exceptional circumstances, because it involves great hardship.

What is our second line of defence? It is the monies that we have available from one source or another. First come the Government grants to the various national museums and other museums. As the noble Lord, Lord Annan, said, they run into many millions of pounds in relation to the National Gallery. Secondly, we have the heritage fund. The noble Lord, Lord Charteris. who is its splendid chairman, told us of its activities, and it has done great work. There is always a longstop in that if Parliament thinks that something is really important, it can make a special extra grant at a special time. Perhaps one of these days we may face the problem of the Bridgewater pictures of the National Gallery of Scotland. That might be the time to ask Parliament to consider offering some special help, though happily an arrangement has been reached that that will not arise during the lifetime of the present Duke. Long may he live—for two reasons: first, because the problem will not arise and, secondly, because he deserves to live a long time.

Then we have the private sources: the National Art Collection Fund, about which the noble Marquess, Lord Normanby, has spoken, the Pilgrim Trust, the friends of the museums, and in certain cases special appeals when you get individuals and institutions all anteing up to save some particular work of art.

Having said all that, we have a further defence; namely, the in lieu or private treaty arrangements. But I am a little unhappy on how they work. I believe that if the Treasury cannot make the douceur up to 50 per cent., it should at least be a little more flexible. It is quite true that it has to agree what a value might be, but in the art markets at present it may well be that the owner can see the sky is the limit in auction rooms, because today one does not know what prices works may fetch. Therefore I would say to the Treasury, "Be a little more flexible". It is within their power to do that. A good example is the Devonshire drawings. If the Treasury had been a little more flexible there the Devonshire drawings would not be coming up for auction, and they would have been in a position to spread them all over the country. Not just to the British Museum, where some could have gone, but all over the country for the benefit of all the country.

The Earl of Gowrie

My Lords, while the point is fresh in the mind of the House, I would remind the House that it was the National Heritage Memorial Fund and the Trustees of the British Museum who did not want to purchase the Devonshire drawings at that price. It was not a question of the Treasury being mean.

The Earl of Perth

My Lords. I take the point. I would say equally that the National Heritage Memorial Fund and others should be a little more flexible, given that we know that at this time it is a rising market.

The only other point I would raise about having in lieu or private treaty is that often these works of art which are saved should remain where they are. particularly if the house is open to the public. I know it has happened once or twice; it should happen more often. Lastly I am going to make a controversial suggestion; namely, that other museums should follow the example of the Maritime Museum in making entrance charges. I say that but there are three things which go with it. First, the Treasury must undertake that the proceeds from those entrance charges must be available to the museums, and they should not dock the grants.

Secondly, all museums must have at least one day in the week free so that those who cannot afford it, or do not want to afford it. have an opportunity to go in free. Thirdly, each museum, or its trustees, must choose for themselves. This is not something that the Government should bring in. It is something which each museum should be able to decide, knowing that as a result they will have more money to spend, and whether it is for running their museum or whether it is for acquisitions is for them to decide. This question of museum charges has been for too long bedevilled by sentiment rather than practicalities.

My noble friend Lord Eccles made a good point, and we all know what we owe to him on the encouragement of the arts. Let us not forget that what is today's current work of art is tomorrow's heritage. I disagree with him however when he says that we should try to save only works of this country. I think we have enough Gainsboroughs, Constables, Stubbs', and so forth, but we may not have enough of some of the great European works of art. Therefore, I do not think that that is a good criterion. Let us leave it as it is today, which is that the reviewing committee decides these matters.

I have talked too long. We cannot keep everything here, and nor should we try to do so. I believe that our control system is as good as can be obtained. There are possibilities which I have tried to outline for further defence, and 1 feel that VAT as it operates today is a nonsense.

10.39 p.m.

Baroness Airey of Abingdon

My Lords, there is a certain advantage in speaking towards the end of such an important and erudite debate, because so many things have been said which one would have liked to have said oneself. Therefore, I shall be extremely short. I should like first to thank the noble Lord, Lord Fanshawe, for giving us the opportunity of this debate, and to add my congratulations on the excellent maiden speeches that we have heard this evening.

I should like to take up one point from my noble friend Lord McAlpine of West Green. He spoke about modern works of art. May I just speak briefly about a small and modest experience of my own. For a number of years I have longed to have a portrait painted of my daughter and at last I found an artist, who I much admired and who I thought was the right person to paint her. He has done something which gave me such pleasure. It is a modest watercolour, but it gives me very special pleasure. I wrote to him telling him about this and I received something that moved me very much indeed because he wrote back saying what an exceptional thing it was to be commissioned privately by somebody who really appreciated so much what he had done. This is where I join forces with my noble friend. It is very important that we should, where possible, remember that the heritage is for tomorrow as well as for yesterday.

I should like to speak briefly about what your Lordships know I feel deeply about and that is the small manor houses. There was an exhibition at Sotheby's called "Treasured Possessions." It was over Christmas in December and January for one week this year and I went. I was bowled over because by each piece of furniture or picture stood the proud owners. The pictures resembled the owners who stood beside them. One might compare it to Cruft's, but I should not like to do so. Beside the piece of furniture, looking glass or picture was the owner and everything was in absolutely mint condition. I was amazed at the wonderful quality.

When I looked at the list of houses, although there were one or two great and well-known houses, there was a large number of, to me, unknown small manor houses. Much has been said this evening about helping those who may have great and wonderful possessions, but in quite small houses. I was pleased to hear the proposals that have been put forward and I hope that the noble Lord the Minister will do his best to help those who are not only guarding their treasures but looking after them so marvellously.

Thirdly, and again briefly, I return to the question that we have to the fore this evening about the Getty Foundation. I carefully read that document which most of us have received which described exactly the aims of the Getty Trust. I noticed that throughout this document it is sought to show that it is not only works of art that the trust is out to buy—which may be a great relief to all of us—but a constant emphasis on what they were to build: the constant emphasis on building housing for guest scholars. This particularly interested me because guest scholars immediatley turned my mind to thoughts of Leeds Castle.

I am sure that many of your Lordships know all about Leeds Castle, but I shall briefly recapitulate. Leeds Castle was bequeathed to the Leeds Foundation by Lady Bailey largely with American money. One of the aims of the foundation is to promote and encourage medical research and education and to disseminate the results of such research and education. It is a charitable organisation and under the laws of England free of taxes in this country. What could be more attractive as an outpost to the Getty Museum, with possibly a revolving exhibition of European and perhaps American art acquired by the Getty Trust and for the study of guest scholars to which it attaches such great importance working in situ in a situation which would be very congenial, I believe, if it were anything approaching the beauty of Leeds?

When we look in Country Life we see. alas! that there are a large number of country houses which are on the market. This made me feel that the story had perhaps turned full circle when we think of the Pilgrim Fathers setting out over 300 years ago for the New World. This is a story which was made doubly poignant for me after an evening when I was at the American Embassy. The then American Ambassador explained to me that the "Mayflower", in which they sailed, was only the length of the drawing room, which is not enormous, in the house which was built by Barbara Hutton and is now the American Embassy. Would this not carry out the further aim of the Getty Trust: to promote, as they wish and as they say in their document on their aims, the understanding of the nature of man and the development of civilisation?

10.46 p.m.

Lord Dormer

My Lords, I believe that all sections of the House and many people beyond will be grateful to the noble Lord, Lord Fanshawe, for initiating this debate. It is a matter which goes to the very heart of the cultural life of the nation. I should like to mention, too. how much I enjoyed—as, I believe, did everyone in the House—the two excellent maiden speeches that we have heard tonight. Both were extremely well informed and of great interest and both showed much promise for the future. The heritage of England is a national matter which ought to be preserved in its natural setting. It is not only the great country houses and the great collections or the national museums which contain them: very often, a lesser country house or a beautiful manor house of the 16th or 17th century will contain objects and items of great historical importance.

By some miracle, these houses have been preserved through the centuries by the families to whom they belong and who have accumulated superb collections of possessions which, taken together, mirror the history, customs, costumes, sport and life not only of the district but also of the nation. Some may be open to the public; others may not. They may lie undisturbed until capital transfer tax strikes and the contents are offered to the nation in lieu of tax or, sadly, the entire house and its contents are dispersed. Then the Government have to act.

There is no short cut to preserving historic objects of great national importance which are offered for sale. To keep them in this country, the Government must refuse an export licence and must provide the necessary funds for their retention here. It is common knowledge that the various organisations which can help to buy objects, not only of great artistic merit but also of national importance, are, if not short of funds, in need of funds. This very valuable debate has shown the way towards a possible solution to this great national problem. I earnestly hope that the Minister may have sympathetic ideas which may possibly pave the way towards constructive action in the future. The nation deserves it, and it will be the nation in future which will be grateful.

10.50 p.m.

Lord Strabolgi

My Lords, in company with other noble Lords, I should like to say how grateful I am to the noble Lord, Lord Fanshawe of Richmond, for tabling this Question. It has given rise, as has been said, to a most interesting debate, and indeed also to a particularly well informed debate, which is not surprising, if I may say so, considering the wealth of experience that there is in your Lordships' House. The debate has further been notable, as has been said, for the two excellent maiden speeches. I should like to add my congratulations, if I may, to the noble Earl, Lord Munster, and to the noble Lord, Lord McAlpine, for their contributions, and I hope that we shall hear from them on many other occasions.

I was particularly interested in the speech of the noble Lord, Lord McAlpine, and what he said about the artists of today. I think that this was very pertinent, and he reminded us that theirs is the heritage of tomorrow. Also, the noble Lord, Lord Dormer, who has just preceded me, reminded us too that our country houses are an important part of our heritage. I think it was Sir Sacheverell Sitwell who wrote somewhere that they were probably one of the greatest contributions that Britain has made to the arts. We welcome the fact that the noble Earl, Lord Gowrie, is to reply, especially as he has been taking part in the previous debate and has been here really since the beginning of the proceedings. I am sure that the House is looking forward to hearing the Government's views.

As has been said throughout this debate, a great many works of art have left this country during this century for other countries, notably the United States. This is not surprising and of course it is the result mainly of our tax system, as was made clear by the noble Lord, Lord Fanshawe, at the outset.

I must say that, except for objects that are closely bound up with our cultural history and tradition, which I would fight to the last ditch to preserve, I tend, like the noble Lord, Lord Vaizey, to be a free trader. Surely, my Lords, the life-enhancing qualities of a great work of art transcend its ownership, and indeed belong to the whole world. The Americans and the heirs of our European culture and tradition enriched with much culture of their own, and the works of art they acquire are surely just as well displayed and appreciated in the United States as they are over here.

The Question mentions the Getty Museum in particular; but, as has been said, there are other institutions in the States which have been endowed by generous private donation and which have built up magnificent collections in recent years, notably the Norton-Simon Foundation, which I had the good fortune to see last summer. Indeed, I have hardly ever been in a gallery in my life such as that one in which I would have liked to own without exception every single painting. Then there is the Mellon Foundation of British Art that has been built up and from which Mr. Mellon has been most generous in lending to exhibitions here.

It is therefore rather unfair to suggest, as one hears it so often suggested these days—not in this debate but I have read it often in the press—that a work of art leaving these shores is somehow drained away and lost to view. I regret with the noble Lord, Lord Annan, the loss of the Dirck Bouts from the National Gallery; but it is now one of the glories of the Norton-Simon, and surely, my Lords, they have as much right to a Flemish painting as we have.

We in this country have also been great collectors in our time. The last two centuries saw great collections formed of European and Asian art, and there have been notable collectors as well during this century—I am thinking particularly of Samuel Courtauld and his magnificent collection of French impressionists. We tend to take the Courtauld Collection and other collections for granted as part of our heritage. Yet to many French people, as a French friend of mine reminded me the other day, these paintings are part of their heritage. They regret their loss; and their loss, of course, is our gain. In this case we happen to be one of the importing countries. I do not know if the noble Lord, Lord Fanshawe, was thinking only of the United States when he drafted his Question, but the generous Felton bequest has enabled Australia to acquire some first-class paintings of all periods, with the benefit of advice—and very good advice it was, too—from the late Lord Clark. That is surely to be welcomed.

I suggest, therefore, that we need to put the matter in perspective. This is particularly important, I submit, in the case of the Paul Getty Trust, concerning which there has been some ill-informed criticism, much of it coming from people—and I do not refer to speakers in this debate—who have never visited Malibu and have not the slightest idea what the museum is like or what they are trying to do. I welcome very much the remarks of the noble Lord, Lord Beaumont of Whitley.

I am glad that in one or two of the speeches in this debate something has been said to clear up some of these misconceptions about the Getty Trust and the museum. I must say. in spite of the robust attack by the noble Lord, Lord Saint Oswald (which he was perfectly entitled to make if he wished), that, after all, they are only doing what many of the great families in this country have done in previous centuries: importing works of art from other countries. But it is right to say that they are not obliged to spend their entire income on purchasing works of art: and the other operations that they are using this great fortune for have been well described in this debate.

It has also been suggested that they should start an out-station in this country. One of the difficulties of this, of course, is that they have not got enough works of art to fill it. Getty itself is not a very big collection. It is not as big as the Norton-Simon; nor indeed is it as good at present—they are trying to improve it—as Mr. Walsh would be the first to agree. But they have in the past, before he took over, been buying too fast, and not works of the greatest quality. They hope to impove this later on.

Getty do not employ agents to ask British owners of important works of art to sell. I know there have been cases where dealers have gone to an owner in this country and said: "Would you like to sell this? I think we can get Getty to be interested". And then they have gone to Getty and said: "So-and-so wishes to sell". Mr. Walsh told me himself that if they do this they never have anything further to do with the dealer: he is put on to their black list.

There have been several instances, too. when Getty have withheld bidding for a work of art where they believed it was better for this to be retained in the country of origin. The most important recent example was the Gospel Book of Henry the Lion, which was bought recently by the West German Government at auction in London for, as we know, over £8 million I believe that was the highest price ever paid at auction for a work of art Getty did not bid, although they were widely expected to do so, and indeed are on record as wanting to possess this outstanding 12th century manuscript—as who would not? But they did not bid, my Lords they kept out of it because they thought it was right that The Gospel Book should go back to West Germany, after an absence of fifty years, where it is regarded as a national treasure. I was told that; I also know it for a fact because I know who the under-bidder was because he told me so himself There are also four specific cases, which must remain confidential, in which Getty has recently stood down in favour of British galleries.

In spite of what has been said, too. Getty do not want to pay inflated prices and it is surely not in their long-term interest to do so, as the noble Lord, Lord Charteris of Amisfield, said. They bid at auction in the usual way. We tend to forget that at every auction there is usually an under-bidder, so there is someone else who wants to bid for the work of art as well.

However, if we want to keep some of these outstanding works of art here, then certainly I agree with all the speakers in this debate that a more favourable tax regime will be needed I hope that the Government will take on board some of the suggestions that have been made so that we can have some further tax concessions. But I agreed with the noble Viscount, Lord Eccles, when he said that we must not let this get out of hand. I also agreed with so much of what he said about striking a balance between the art of the past and the artists and craftsmen of today Let us. too, remember all the other claims on the public purse—the schools, the hospitals and everything else. So we must not let this get out of perspective.

The Conservative manifesto promised to examine ways of helping the arts and encouraging donations by giving more generous tax concessions. If this was a serious commitment, perhaps the noble Earl will tell us whether he is making any progress with his colleagues in the Treasury, because this is a system that has been working well in the United States and also, too, in Italy, which has recently adopted it This idea has been canvassed now, I believe, for at least 20 years, but nothing ever seems to be done by any government I believe that the noble Earl himself is rather interested in it I hope that he will really be able to take it a step further, because this could be one of the monuments to a distinguished tenure of the arts portfolio.

There is the proposal to increase the in-lieu percentage, known as the douceur, from 25 per cent. to a more attractive figure As has been said, this was recommended by the Select Committee of another place and that, I think, would do something to help Also, I must say that I do not think the acceptance-in-lieu provisions seem to be working very well The total value of works of art accepted in lieu of CTT for the period 1984–85 amounted to around £815, 000, which is surely a fairly modest sum when we remember that it covered as many as 30 paintings. They were all fairly small things—although of interest historically, I am sure—and no big outstanding works of art such as the noble Lord, Lord Annan, mentioned in his list. I think it used to be called the paramount list, though he called it something else.

A further concession, which I fully agree should be given, is the removal of all VAT from private treaty sales. It is quite outrageous that a national gallery or museum has to pay VAT on the auction or dealer's commission, which can often be considerable, when municipal galleries are exempt and when foreign buyers are also exempt, so there is every inducement for dealers to offer works of art overseas. This would be a small concession, but it is one which I hope the noble Earl will get his colleagues in the Treasury to accept. I agreed very much with what the noble Lord, Lord Cottesloe, said.

I realise that, in fairness to owners of important works of art, the true price has to be determined and this can surely only be the world market price. In spite of much help from the National Heritage Memorial Fund, the NACF and others, it is often difficult to match this price during the period when the export licence is withheld, which, in fairness to the buyer, can only be for a few months.

I do not agree with the noble Lord, Lord Charteris of Amisfield, and other noble Lords that this period should be very considerably extended. If you buy something from abroad, you are very keen to have it, so it is not fair to expect you to tie up a considerable sum of money for a very long period. Either you lose the interest or you are paying interest on a loan. I should have thought that the few months we allow are quite long enough, unless we want to go down the road of requisitioning all works of art and saying that they belong to the state and no private owners have any rights to them. If we want to go down that road, all well and good, but we in this country have always displayed a sense of fairness towards the owners of works of art. The Waverley criteria are probably about right and the period of the delay should be no longer than it already is. I know that the noble Earl put a rather longer period recently on the Hogarth; but I do not think it should be longer than that.

The only hope, therefore, at present is for a more flexible and helpful tax régime. It is important, for all the reasons which have been described today, for us to have a free trade in works of art. We have to establish a world price, in fairness to the owners. Yet we have to enable our own museums and galleries to compete fairly. The only way to do this is to bring in some form of tax concessions. These have been very successfully organised abroad and they have enabled foreign buyers to buy works of art. Therefore I believe that only a regime of this kind will enable us and help us to retain more of our works of art in this country.

11.7 p.m.

The Earl of Gowrie

My Lords, on this as on many other issues, I am delighted to welcome the noble Lord, Lord Strabolgi, to the ranks of the free traders. I hope that he will spread the gospel of this admirable economic doctrine among his friends on other issues as well. I can say to the noble Lord, because one figure which he gave me was a little gloomy, that the Godman Collection of Islamic Pottery was accepted in lieu by the British Museum in 1983 at a net value of £1.2 million and a gross value of about £4 million. Added to the other items he mentioned, that is quite a satisfactory picture. May I also say to the noble Lord and to the House generally, before we get too anxious, that the British Government remain very substantially richer than the Getty Foundation. That is a consolation, I imagine.

This is, I believe, the House of Lords at its best, most interesting and informed. I congratulate my noble friend Lord Fanshawe of Richmond on three things: first, on his speech and the way in which he introduced the Motion; secondly, on slipping in, under the guise of an Unstarred Question, what may be of one of the major and most important debates of our year—nice wristwork from the noble Lord there, during a crowded Session; thirdly, on attracting two wonderful "maidens" in the form of the noble Earl. Lord Munster, and my noble friend Lord McAlpine of West Green. Looking round your Lordships' House one can say that we need a professional conservator in the form of the noble Earl. I hope that he will soon give us some of his expertise—preferably, as he did tonight, for nothing. It seems an awfully long time since the scaffolding above the noble Earl's head was first erected. He will be well aware that there is much fine Victorian stained glass to claim his attention but, in the intervals between attending to our conservation issues I hope that the noble Earl will address us on many other issues.

My noble friend Lord McAlpine of West Green belongs to a small group of human beings who, where I am concerned, can do very little wrong. He is always a respository of immense sense and wisdom. I happen to know—and I will not embarass my noble friend by passing on this information—what an enormous amount he has done for the arts in this country. Long may he thrive to continue to do so, and long may he continue to regale your Lordships' House with common sense and wit of the kind that he gave us tonight.

My job is to set out as quickly as I can, given the lateness of the hour, the Government's general position. It is of course our policy to preserve and protect the British heritage both in public and private hands. To this end, a system has been devised over the years, which, although it is not perfect, and although one has to keep a close and watchful eye on it, does give a substantial measure of incentive to private owners to participate in this policy and also provides opportunities for our great public collections.

It does, therefore, remain a major plank of government policy to encourage private ownership, in the belief that this is both the most satisfying and the most economical way of preserving and indeed extending our national assets. The availability of conditional exemptions from captital transfer tax has greatly encouraged private owners to retain the ownership of outstanding works of art. I believe that the total exemption from tax which can be claimed for objects of museum quality remains an enormously important concession; one that I should like to see even more fully used. I am, therefore, currently considering whether further publicity to this end will be helpful. I hope that may be of some encouragement to my noble friend Lord Saint Oswald.

However, the House has recognised that there are circumstances where works of art come on to the market, and that we should not seek to prevent this. It is no place of government—and of this Government particularly—to interfere unnecessarily with the operation of market forces. I am grateful to my noble friend Lord Fanshawe that, in voicing his anxieties, he fully recognised that. What we can do—and do do—is offer incentives which make the possibility of sale to a public collection, for public benefit, considerably more attractive. These have been in operation for some years and my wish is to make them more fully understood.

Essentially, they are the arrangements for private treaty sales to public institutions and for the Government themselves to accept certain items in kind in lieu of tax, if they are of the requisite quality. In the four years that my office and the Department of the Environment have together administered the acceptance of in-lieu arrangements, more than £6.5 million has been spent on the acquisition of important heritage property for the nation. Over the same period a great many private treaty sales have taken place. My office issued a pamphlet on these arrangements less than two years ago, and we recently issued further guidance on the circumstances in which certain acceptance-in-lieu objects may be offered in situ—that is to say, in the original setting. Awareness of what I would call the "heritage system" has therefore been building up steadily, and this in turn has played an important part in securing many valuable assets for public enjoyment.

In addition, the National Heritage Memorial Fund stands as a vital long stop—or, perhaps, deep extra cover—able to give financial assistance over a very wide range of marvellous items. This House will know that the Government have pledged themselves to support the fund and only recently made a substantial addition to it, whereby the fund will have some £8 million of new money in 1984–85 for its heritage work.

This has been done in the knowledge that certain great houses needed help. It has enabled the fund, in addition to securing Belton, to safeguard the future of Calke Abbey. Whatever the arguments about the merits of particular additions—and there always will be arguments—a lot of people felt very strongly about Calke Abbey, and I certainly believe in the independence of the National Heritage Memorial Fund in making these decisions.

I am grateful for what was said by my noble friend Lady Airey about the work of the fund. She drew our attention to the more modest parts of our heritage that it helps—and they are no less important. I am grateful also to my noble friend Lord Charteris, who, although we do not give him enough money (and as he said, one cannot get too much of a good thing), was nevertheless kind enough to say that he had a square deal from the Government.

The idea of gifts to the arts, whether donations of works of art or financial support for the performing arts, being allowable against taxable income, on the lines of arrangements in the United States, clearly has attractions from the donor's viewpoint. But I remind the House and all of my clients—and there are many in the performing arts, too; not just on the heritage side—who urge the American system on us of one thing: most people here, when they recommend it, usually mean that it should be in addition to, rather than instead of, our present system of public funding. We must remember that very little of what we would call public money in that sense goes into this field in America. I therefore ask the House to consider the full implications of such suggestions.

It is scarcely conceivable—and the noble Lord, Lord Strabolgi, recognised this—that the Government could easily give such a concession for the arts alone when there abound so many other worthy causes, from children's hospitals to help with the elderly. I am very mindful in my work of what I call—with no disrespect, but a lot of admiration—the Jimmy Savile factor. A concession in one field would be bound to lead to enormously strong claims for equal treatment in others. There would be no equable way of holding the line. The potential cost to the Exchequer could then be enormous.

Secondly, in any event, how could we in practice ring-fence the arts? How could we define them without creating anomalies and endless accusations of unfairness? Donations of heritage quality works of art to public collections are, as I have said, already totally exempted from capital taxation. This in itself is a considerable incentive and a great benefit to museums. But to go substantially further and offset donations against income tax would constitute a major change in the system. I think that it would, too, exacerbate the tension between the heritage and the living arts; as my noble friend Lord Eccles so wisely urged us not to do.

I draw the attention of the House to the fact that through the covenanting system donations can be exempt from both income and corporation tax. The Government have already altered the tax rules in favour of donors by reducing the minimum period for covenants from seven years to four. That should help to encourage individuals and businesses to take advantage of the tax relief that can be claimed. The totality of the package is an attractive one.

It is also an exaggeration to say that the system of acceptances in lieu of capital transfer tax is inadequately used. As I said, since the summer of 1979 the Government have accepted important in-lieu offers from 31 estates in satisfaction of tax liabilities of £6.5 million. The suggestion that acceptances in kind of this type should not be accounted for by Vote payments to the Inland Revenue from the heritage departments, including my own, is a long-standing objection. But I must say that, as the Government have previously pointed out, property in lieu of tax does count as public spending. There can be no open-ended commitment, therefore, by the Government to accept objects in lieu of money.

I agree with the noble Lord who said that my right honourable friend the Chancellor was far-sighted and imaginative. But my right honourable friend cannot buck arithmetic or gravity. The present arrangements have certain advantages which must not be overlooked. They are easily understood and they bring the amount accepted in this way properly before Parliament. We could not, therefore, accept a change which would allow objects to be accepted irrespective of the tax forgone. In fact, the present acceptance-in-lieu ceiling is being doubled in 1984–85 to £4 million spread between my Ministry and the Department of the Environment—an indication of the importance we attach to this field. But to go further and make such acceptances non-accountable in Vote terms would be inconsistent with the principles of Government financing.

On the subject of VAT, which was raised by a number of noble Lords—notably the noble Marquess, Lord Normanby—it is, of course, intended to be a broad-based and generally applicable tax. From the point of view of the bodies funded by central Government, I agree that superficially it looks rather lunatic. But their grants—the grants of my client organisations, for instance—take into account the incidence of such taxes, and when VAT was first introduced the grants were increased to take account of it. I do not believe, therefore, that there is a substan-tial basis at present for changing the arrangements.

The situation with local authority museums is not analogous. Section 20 of the VAT Act 1983 allows local authorities to be refunded the tax they incur on their non-business activities. It is not borne by their ratepayers, and the concession, therefore, constitutes a rather different form of central Government support.

My noble friend Lord Fanshawe suggested that the douceur be increased. The Government have concluded that a change is undesirable here. It would only result in fewer objects being acquired at a higher price, and I think that no one put this point more trenchantly than the noble Lord, Lord Annan.

I now quickly turn to some of the anxieties that have been expressed in spite of the operation of this system. Generally I welcome the fact that the House has endorsed the value of the system. The reviewing committee has done a remarkable job in carrying out the precepts laid down by the Waverley Committee over 30 years ago. I should like to reassure the noble Earl, Lord Perth, that we are thoroughly committed to the Waverley principles. I should like to pay tribute to the work of the committee and in particular to the devoted work of its chairman, the noble Earl, Lord Plymouth, and the members and advisers who attend its meetings.

Some people have said that, in spite of the system, works of art "get away", but the system is not designed as a catch-all. It is aimed at preserving where possible the very best in a very wide range of categories, including, may I say to my noble friend Lady Airey, categories of smaller monetary value but perhaps no less heritage importance. We cannot keep everything that we deem of national importance, since our resources are finite and we have to face the purchasing power of many wealthy individuals and great overseas collections—not just Getty.

I must say that, as a visitor to California on many occasions, I absolutely endorse what the noble Lord, Lord Strabolgi, said. There simply is at present no comparison in quality between the Norton Simon collection and the Getty collection. The Getty collection as it is currently constituted in painting terms would barely rate a mention in a provincial town.

We do of course value our system of export control, which is based on a principle of no export stop unless there is an offer from a public collection to purchase. But. even so, existing powers enable me to prevent export, if required, and from time to time we have examined the other options, particularly a list of predetermined heritage items. This, I think, was suggested by the noble Lord, Lord Annan. The fact is that no one seems to me to have come up yet with a better system than the one we have. It is, I may say, envied all over the world. Certainly, I think, the French have not done so. They exercise draconian control at the expense of market freedom, though I am glad to say that from time to time they are forced against the grain of their system to exercise a little flexibility. I think we are being pragmatic and realistic—national heritage qualities of this country, if you like!

Let us recognise, too, as my noble friend Lord Vaizey, the noble Lord, Lord Strabolgi, and others did, that this country is a two-way market place for works of art and we wish it to remain so. Indeed, the official figures invariably show that more paintings in quantity and value are imported than exported, yet out of 4,500 applications for export licences in 1982–83, only a very few—that is to say, 16—were considered of such importance that a case was made for withholding a licence (excluding items which had been in the country for less than 50 years). In the end an export licence was suspended in 14 of these cases; in nine the object in question was bought back by a public institution, and in five the licence was in the end granted. It is sometimes suggested that we should go down the line, lower our criteria and oppose the export of second-tier items as well, but the damage to the art market—and again it is a two-way market—would seem to me to be hard to sustain and too high a price to pay. I therefore prefer to stick to the tried and tested Waverley criteria—and how well they have stood the test of time!

Nevertheless, it is said that the really big fish will get away. So far there is little evidence of this. It is true that two major pictures have gone to Getty—a Poussin "Holy Family" in 1981 and the Dosso Dossi in 1982. Against the Poussin, may I commend to the House the really marvellous news of the successful negotiation between the Duke of Sutherland's trustees and the National Galleries of Scotland? Again, the qualtiy of those pictures is absolutely unfathomable. Of course there was also the Dosso Dossi.

Currently there are two further pictures under export stop: the Duccio "Crucifixion"—if it is a Duccio, but in any case it is a wonderful picture—and a Rubens drawing. It remains to be seen what will happen to these last two, but we do not, as I have said, have a closed market. I really do not believe it can be said that the export of a limited number of pictures of this kind is seriously damaging to a country so rich in public and private collections.

In that connection, may I say how strongly I agree with what the noble Lord, Lord Beaumont of Whitley, and others said about the state of our museums? It is very easy to generate public outcry about the possible departure of a heritage item from our shores. It is rather hard to get a public outcry about the Victoria and Albert Museum's roof, for example, yet I am left with the bills of these institutions, founded by great and wealthy men in the past.

This said, of course we have to watch very carefully any items which are so important or so close to our own national heritage that export would be inappropriate. We do watch very closely and will continue to do so.

The last things I say will be in respect of the Getty institution itself. Much has been made, of course, of the immense purchasing power of Getty, though we have been very fairly reminded that there are other rich institutions abroad, and not only in America. As I have tried to indicate, there is at present no basis for supposing that this purchasing power is used unfairly or that the export control procedures for the export of works of art are inadequate. Moreover, Getty's interests are at present limited and specific and do not concern the whole world of the fine arts. They are, as many speakers have said, interested in other ways of helping the world's great art heritage—and we should be grateful to them for that—notably by setting up a major art institute which will document the world's inheritance, and a major conservation institute, to which I hope in time we may be able to make substantial input from this country.

I do so agree with the noble Earl, Lord Munster, my noble friend Lord Cottesloe and the noble Earl, Lord Perth, and others, that it really would be desirable for Getty to become a familiar and utile institution in this country. At the moment they are treated rather unfairly, as if they were second cousin to JR. We must remember that an institution of this kind can be an immense power for good in the art world. Obviously we want some of that benefit here, as well. We should not therefore, I think, cry wolf too quickly.

Perhaps I may say to the noble Lord, Lord Saint Oswald, who asked about consultations, that I do have regular informal contacts with Getty, who have shown readiness to seek advice in respect of pictures in which they are interested. There is no formal commitment for them to do so and nor do I think that such a thing would be suitable. Nevertheless, I have to say that so far—and I am a cautious and sceptical man by nature —they have behaved with exemplary responsibility and fairness. They are very sensibly aware that it is not in their interests to break up the market or bid up prices unreasonably.

But, more positively, one should not overlook the great number of major works of art which are still being acquired, particularly by private treaty sales by public institutions in this country. Since 1980 alone, we have seen our major public institutions acquiring great paintings by Altdorfer, Bassano, Claude, Poussin, Raphael; drawings by Michelangelo, Durer, Hogarth; a famous Tompion clock; works by Constable, Degas; Max Beckmann and Picasso; a rare ivory group from Hever; a Verzelini goblet and relics of the Spanish Armada, as well as the Islamic pottery collection which I mentioned at the beginning.

I am grateful to the noble Lord, Lord Annan, for drawing attention to the fact that we are still doing very well. I promise to try to cavort with his two delightful nymphs, Delectissima and Desiderata. Against that, it must be said that we cannot, of course, expect to retain every major work of art that comes on to this market. We can expect to be selective in retaining the very best, and this is the Government's policy; or rather, I should say, in view of the very proper arm's length principle, it is the policy of organisations such as the National Heritage Memorial Fund that receive Government money.

The Government's last Budget also pointed the way forward in other respects, notably the reduction in top rate of capital transfer tax and the abolition of the investment income surcharge. I so agree with the noble Lord, Lord McAlpine, that it is important that the wealth-creating capacities of individuals be encouraged here. Historically, these have, in the main, been used responsibly in this field. These and other reliefs should help those maintaining heritage houses to keep the great collections in private hands. Where, nonetheless, items come on to the market, the system that I have outlined, in our view at present, provides necessary and generally adequate safeguards. We cannot expect to keep everything. We want to ensure, so far as possible, that this country remains an open market for works coming in and out.

At the same time, we stand ready to look at whatever means are appropriate to secure those items that are truly essential to our heritage when the need arises. We shall also continue to keep under the closest review all the ways that the Government can preserve and enhance that great artistic heritage. I know that, where this issue is concerned, the eyes of this Parliament and of my noble friends Lord Fanshawe and Lord Saint Oswald, in particular, and of the whole country, are on me at the moment. I am immensely conscious of my responsibilities and will work very hard to discharge them.