§ Lord Fanshawe of Richmondasked Her Majesty's Government:
Whether they will now make a statement regarding their new policy for payment in lieu of tax on works of art following their assurance given to the House.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie)As I indicated to the House on 24th April, the Government have looked again at the arrangements whereby provision for acceptance in lieu is carried on the Votes of OAL and DoE. We have concluded that a basic provision of £2 million a year for acceptance in lieu should continue as a present, for the ordinary run of smaller cases. But, recognising the difficulty of absorbing the unpredictable cost of large and important offers within a fixed annual provision, we intend in future that there should be recourse to the public expenditure Reserve, over and above the basic acceptance in lieu provision, for such cases as are justified on merits.
1540WAThe continuance of the basic provision does not indicate an absolute limit on what may be accepted in any one year. The Government will therefore also give the most serious consideration to all offers made, where they cannot be funded from the basic provision, provided that in the judgment of heritage Ministers and their expert advisers the heritage items on offer are of national importance so that a call on the Reserve may be merited. It will therefore be possible to accommodate these items in future without imposing an offsetting reduction in or detriment to the rest of the arts budget.
It is not possible to give an exact estimate of what might be accepted on such a basis in any one year, as too many unpredictables are involved. Looking simply at recent and current levels of acceptance in lieu offers, we would expect to call on the Reserve for around £10 million or so a year, taking one year with another. I must emphasise strongly that this is an estimate; it is neither a target nor a limit, as in any given year the demand could be either less or more. I believe however that this arrangement will allow the intentions of the acceptance in lieu scheme to be given proper effect.