HL Deb 29 July 1999 vol 604 cc1672-4

3.22 p.m.

Lord Chesham asked Her Majesty's Government:

What advice they would give in relation to security measures to be taken by owners of conditionally exempt chattels for inheritance tax purposes who are required by the Inland Revenue to open private houses to the public.

Lord McIntosh of Haringey

My Lords, the Inland Revenue does not make owners open their private houses just to show their chattels. Many owners have already chosen to give public access by opening their houses, and others may find that that is the most convenient way to give improved access for the future. Owners know their own circumstances best and know best where to look for security advice if they want it.

Lord Chesham

My Lords, I thank the Minister for that reply. Will the Minister comment on the fact that items may in fact now be placed in museums or galleries and not actually be on display but be available for view because there is a great shortage of display room available in galleries and museums? If the items were simply kept in museums to be viewed by appointment, might that solve the problems of a great number of people?

Lord McIntosh of Haringey

My Lords, I believe that the noble Lord is referring to the response I gave to a debate on that subject at the end of May, in, which I said that we were open to any suggestions about how to achieve the reasonable public access, which is the requirement of conditional exemption and which has so far not been achieved in far too many cases. Clearly, I cannot give any answer which could he taken as a judgment on what negotiations might take place between an individual owner and the Inland Revenue. However, the idea of a clearing-house which I put forward is being actively pursued by the Department for Culture, Media and Sport. The idea to which the noble Lord refers of achieving access on demand rather than by prior appointment through the deposit of an item in a public space is certainly one of those being considered.

The Earl of Kintore

My Lords, I ask the Government what security advice they would give to owners of exempt chattels, a description of which must appear on the Internet in such detail as to make it obvious who owns the chattel and where it is probably located.

Lord McIntosh of Haringey

My Lords, I do not know whether my noble friend has interrogated the Internet. I have, and while it gives details about the chattel itself, the only detail of its location is that of an agent identified by the owner of the exempt chattel. I can find no way of identifying the location of the chattel except by approach to the agent. Our objective for the future is that there should be enough detail on the Internet and on the V&A list to ensure that there will be reasonable public access to the chattel.

Lord Saatchi

My Lords, I do not wish to appear in any way churlish about the friendly answer given to my noble friend a moment ago. Just for the sake of students of the history of that particular branch of tax law, does the Minister agree that this is in fact a textbook case of the law of unintended consequences? In this case, the Government, wishing to correct the vagueness of a certain tax law, have in fact ended up creating an even worse muddle. If I have understood correctly, having abandoned their first idea of a public right to roam over people's private houses, the Government's new plan is that the owner of a piece of 16th century Chinese porcelain should put it in a van, drive it 100 miles to a museum, place it in a dark basement for between five and 25 days, then collect it and put it back where it was in the first place. Have I understood that correctly?

Lord McIntosh of Haringey

My Lords, I do not believe that the noble Lord has understood the position from the very beginning. Conditional exemption—which is exemption from inheritance tax—was given on the basis that there would be reasonable public access to the chattel exempted from tax. That was the deal. It was intended that access by prior appointment would be the very last resort. The change which has taken place is not that of the 1998 Budget, but in the application of the original deal, which has been widely disregarded so that access by prior appointment is the norm rather than the exception. The result has been that a large number of chattels which the public are entitled to see because tax revenue on them has been forgone are not in fact available.

Lord Strabolgi

My Lords, is my noble friend aware of the large exhibition at the Fitzwilliam Museum in Cambridge of those conditionally exempt items? That is a precedent which could well be followed. What will he do to encourage other major museums in different parts of the United Kingdom to follow that excellent precedent?

Lord McIntosh of Haringey

My Lords, my noble friend is of course right. It is an excellent precedent. Alan Howarth, the Arts Minister, visited the Fitzwilliam Museum recently and confirmed that he would like to encourage an extension of that precedent. I must admit that the Fitzwilliam has the power to pick and choose the works of art which it wishes to show. It is likely that a large number of exempt works of art are not of sufficient quality under the previous definition for open exhibition in the Fitzwilliam Museum. However, we are certainly pursuing the extension and addition of the idea of access in public arts spaces and we shall continue with those efforts.

Lord Hamilton of Dalzell

My Lords, since this provision is part of a Finance Act, will the Minister tell us whether the Treasury has any estimate of the yield in terms of money which it is likely to produce, and how that corresponds with the amount of money which the Government hand back to people running the country's heritage who do not have enough money in terms of grants?

Lord McIntosh of Haringey

My Lords, the estimate which we have and which I gave at the time of the debate is that the revenue forgone by the conditional exemption agreement is approximately £30 million net of any costs. That is the exact answer.