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Tony Baldry (Banbury) (Con)
In a speech recently, my right hon. Friend the Prime Minister rightly observed that one of the generators of new jobs in the UK would be tourism. Tourists come to the UK for many reasons. I am glad to report that Bicester village in my constituency is now the most popular destination for Chinese tourists coming to the UK. However, the fact is that many tourists and visitors to the UK, while they are here, want to appreciate and experience our heritage, and of course heritage is also important for all of us, because historic heritage has helped to shape what each of us thinks and feels about where we live—our sense of place.
An important part of our heritage in England is our historic houses. Historic houses provide character and distinctiveness, and help to create pride in the places where people live. When people talk about heritage properties or historic houses, they understandably immediately think of the National Trust and English Heritage, which are in charitable and public ownership respectively. What many of us fail to realise fully is that, out of the historic houses open to the public, those that are privately owned, managed, and funded outnumber the total of those belonging to the National Trust and English Heritage put together.
My particular interest in initiating the debate is because, just outside Banbury, we have Broughton castle, which is a moated castle of considerable history that has been lived in by numerous successive generations of the Fiennes family. Something that most people—indeed, people from all corners of the world—know about my constituency is the traditional nursery rhyme:
“Ride a cock horse to Banbury Cross,
To see a fine lady on a white horse”.
It is generally believed locally that the “fine” lady was, indeed, a “Fiennes” lady and that the nursery rhyme relates to the Fiennes family at Broughton castle, otherwise known as the Saye and Seles.
Broughton castle has been a distinctive part of the history of north Oxfordshire throughout the centuries and was a parliamentarian stronghold during the civil war. Numerous Fiennes were, on different occasions, my predecessors as Members of Parliament for Banbury. The present Lord and Lady Saye and Sele have been exemplary over the years in their commitment to the community in which they live. Both have been very active deputy lord lieutenants and have always been incredibly generous in allowing the community to use the castle and grounds at Broughton for community events. There has been everything from traditional church fêtes to charity fund raising pop concerts. Broughton castle is a local jewel. The whole community benefits not simply from the public access that is afforded to Broughton, but from the numerous and various spin-off benefits the castle provides to my constituency more widely.
Nat and Mariette Saye and Sele have been extremely generous to the extent that they have allowed Broughton to be used in aid of many local charitable and community purposes. However, the stewardship of a building as large and as old as Broughton must be a struggle. I sometimes think that there must be a risk that owners of historic houses become something of a captive of the house in which they live. For a stretch of nearly 15 years, one part or another of Broughton castle has been shrouded in scaffolding as the Saye and Seles have methodically maintained and repaired the castle. Indeed, any such historic house requires constant maintenance that never ends. Although the Saye and Seles at Broughton are exemplary stewards of an historic house, they are clearly not alone in what they do. Across the country, many such privately owned houses play a pivotal role in contributing to the local economy and supporting the local community.
The economic and social benefits of historic houses are considerable and quantifiable. Recently, the Heritage Lottery Fund published a report entitled, “Investing in Success: Heritage and the UK Tourism Economy.” That report made clear the scale of the heritage tourism industry in the UK, estimating that its gross domestic product contributed some £20.6 billion to the UK economy. Indeed, the research established that the sector makes a bigger contribution to the UK GDP than, perhaps surprisingly, the advertising or film industries or even car manufacturing. Indeed, the heritage tourism sector directly supports an estimated 195,000 full-time equivalent jobs. Four in 10 incoming visitors or tourists to the UK cited heritage as the primary motivation for their trip to Britain, which was more than any other single factor. Of course, a considerable amount of spending on UK heritage comes from UK residents on holidays and day trips. It is not surprising that the most recent report of the Historic Houses Association shows that the possibilities provided by historic houses are endless and range from ghost hunts to sculpture gardens, from art exhibitions to music festivals and from bat walks to an international jesters’ competition.
So why have I initiated the debate? Simply because, as I have indicated, it is a continuous struggle to find the money to ensure that many historic houses are properly maintained and repaired. The owners of historic houses in no way wish to be rentiers on the state, but in consideration of the fact that they continue to provide public access to their homes, and of the broader community and national benefit of historic houses, we all have an interest in trying to get the balance right.
I emphasise that what I am talking about here are historic houses that are open to the public and are regularly open to the public. For example, Broughton castle is advertised as being open to the public 50 days a year. In addition, it has booked groups on a further 50-plus days. Moreover, schools and other groups can book by appointment on pretty much any day of the year. These are historic houses that are regularly and frequently open to the general public.
Over the years, successive Governments have made honest attempts to provide support for historic houses. Heritage maintenance funds have been developed, the thinking behind which is straightforward and sound. The proposition is that it is not sufficient to protect designated heritage property from capital taxation if the supporting assets that are essential to maintain that heritage property are themselves whittled away by successive bites of capital tax.
The Finance Act 1976 provided that assets dedicated to supporting a designated heritage property, both in terms of maintenance and of the provision of public access to it, could be ring-fenced and settled in a heritage maintenance fund, which would itself be conditionally exempt from inheritance tax.
Comparatively few—135 or so—heritage maintenance funds have been set up over the past 30 years. The problem is that very few of them provide income and capital proceeds to support the maintenance and repair of historic buildings and land designated by the Treasury as being of national importance and usually with a public access condition. Very few are actively being used, and very few new HMFs are being created.
That is because income generated within HMFs is taxed at the trust rate, which is now 50%; capital gains generated within HMFs are subject to capital gains tax and there is now no indexation; and, as an unintended result of drafting of tax legislation in 2006, the active use of HMFs is effectively frozen for six to seven years every time there is a resettlement of the HMF. For every HMF in which the historic house is taxed as a business under case 1, schedule D, a resettlement is needed each time there is a transfer of ownership. It is estimated that about a third of HMFs are currently caught in this trap and many more will be sooner or later.
HMFs are not working as they were intended to work. That matters because HMFs were designed to help owners of nationally important heritage to maintain that heritage in the public interest. It is estimated that the owners of historic houses as a whole are putting £139 million into the maintenance of their own houses every year. That is a considerable amount of money, but not enough to stop the build-up of a backlog of urgent repairs worth some £390 million. An additional £20 million of maintenance a year is necessary just to keep up. All that happens is that the backlog of urgent repairs continues to grow, which is unsustainable.
The Historic Houses Association estimates that with some fairly modest improvements in the tax treatment of HMFs, one could generate an additional £12 million in maintenance each year, thus making significant inroads into the annual maintenance shortfall. Such a scheme would cost the Exchequer only about £6 million a year. The suggestions are to reduce the tax on income generated in HMFs to the basic rate, currently 20%, recognising that HMFs can be used only in support of the maintenance of the designated historic property; to exempt disposals of assets within HMFs from CGT so long as the proceeds are used for maintenance of the historic property, or reinvested in assets within the HMF; and to correct the drafting of the tax legislation so that HMFs would not be frozen each time there was a resettlement.
The cost to the Exchequer of the first two would be no more than £6 million per year, and the third— the technical correction—would be cost free. No CGT is being collected from HMFs caught in the trap because no disposals are being made.
Put shortly, HMFs have been on the statute book for more than 30 years. They need to be made workable and to fulfil the purpose for which they were intended—to provide a reasonable mechanism to enable owners of historic houses to maintain their houses and keep them open to the public. I hope that my hon. Friend the Minister’s Department, as the sponsor Department for heritage and tourism, will work with officials in the Treasury and Her Majesty’s Revenue and Customs to ensure that HMFs are made to work properly.
Will the Minister’s Department have an overall look at how it is possible to reduce the regulatory burden and red tape on historic houses? Indeed, shortly after coming to office the coalition Government pledged to review and reduce regulation. Five areas have been highlighted in which action would be relatively simple to take at little or no cost to the Exchequer, and which would bring worthwhile benefits not only to those promoting historic houses and tourism, but to the wider economy. The first is licensing and the implementation of the 2006 Elton review recommendations, which called for changes to the fee structures for larger events; permission for historic rural venues to host occasional events; and for a de minimis approach when the licence or activity is small in relation to the overall activity taking place.
The second area is tourism signage and the hope that it would be possible to develop a policy to encourage the use of brown signs not just to manage traffic, but to promote tourism. Even under the current policy, there are inconsistencies in Highways Agency and local authority interpretation, resulting in some historic houses not being allowed tourism signs, or even losing their signs.
Thirdly, on planning, we need to promote a more flexible approach to the way in which planning applications for temporary structures, such as marquees, are handled. Marquees house special events that can significantly enrich the experience of visitors to historic places without compromising the historic value of the site. Indeed, the Palace of Westminster has had temporary permanent marquees on the Terrace for as long as I can recall, but they are, by definition, temporary and reversible. For some reason, some local authorities treat marquees as though they are permanent developments.
The fourth area is the application of fire safety rules to listed bed and breakfast accommodation. While recognising that fire safety is, of course, paramount, one needs to ensure that the application of fire safety regulations recognises the peculiarities and realities of historic buildings. Finally, we need to rethink the application of health and safety regulations in circumstances involving natural hazards, because, at present, it is undermining voluntary efforts to open the countryside for public access.
Historic houses are not just stone and mortar. They should be living places. The soul of a historic house is the family who live there. Those families are the most committed, responsible and, dare I say, cheapest curators of these parts of our national heritage. May I therefore urge the Minister to note that modest changes to heritage maintenance funds can bring long-term benefits at a relatively tiny annual cost to the Exchequer? Moreover, will his Department please do what it can to tackle excessive regulation?
Historic houses are inspirational places. They brighten our lives, whether through a day out, an educational visit, attending a wedding or a concert, or even through enjoying the setting of “Downton Abbey”. Historic houses are there to be enjoyed, but they require constant maintenance and repair, which are heavy costs. It is only fair that there should be some sensible compact between the community as a whole and the curators of such houses for the provision that they make of them to the community.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)
It is pleasure, as always, to see you in the Chair, Mr Williams, for this important and timely debate. I congratulate my hon. Friend the Member for Banbury (Tony Baldry) on raising the issue. He clearly has a strong personal interest and, as he has made clear, a strong constituency interest in the issues that he has raised, which I will try to address point by point.
I am the Minister with responsibility for tourism and heritage, and I think that the Government accept that there is a very close and entirely appropriate link between those two elements of British life. I accept and agree with my hon. Friend’s central principle that heritage is a tremendously important part of British national life not only from a tourism perspective, but because, as he has rightly pointed out, heritage assets—be they houses, museums, prehistoric monuments or any of the things that we are lucky enough to have in this country—create a sense of place and convey the individual history and sense of character of a particular village or town. They are an essential part of what makes us us. We would be the poorer if we tried to pretend that that was not so, and it would be foolish to ignore what is one of our most central and important national assets.
My hon. Friend has rightly pointed out that heritage is one of the most frequently cited reasons for tourists to visit Britain in the first place, and it would be perverse of us to ignore or downplay that. He is, therefore, absolutely right to put the issue front and centre, and I could not agree more with the central principle that he is enunciating.
My hon. Friend is also right to applaud the work of the Historic Houses Association, which represents about 1,500 owners of historic houses up and down the country. Those owners are incredibly careful and committed stewards of the properties for which they are responsible, looking after them for themselves and for future generations of not only their own family but the communities in which their houses are located and the wider public in general, because, as he has rightly pointed out, many of those houses are open to the public, either permanently or periodically, giving us all a chance to enjoy one of the things that makes Britain unique among countries.
The HHA does some tremendously good work and its members are tremendously important, particularly because—as my hon. Friend has pointed out—it is easy to assume that heritage is just something that the state or government do. I am pleased to say that nothing could be further from the truth. We are lucky in this country to have a variety of different types of ownership and stewardship of our national heritage in its various forms. First, there is public ownership of some essential assets. English Heritage’s properties, which my hon. Friend has mentioned, are a good example of such assets. Secondly, there is ownership by charitable or third sector—the voluntary and community sector—organisations. The National Trust is the biggest, most prominent and certainly the most famous of those organisations, but there are dozens—indeed, probably hundreds—of other charitable trusts and other such organisations that run other parts of our national heritage, and they all do extremely good work. Thirdly and finally, as we have already mentioned, there is of course private ownership. It is instructive—is it not?—to note that all three of these types of stewardship or ownership have extremely strong advocates and that all three perform tremendously good work in looking after our nation’s heritage.
So there is not a preconception that only one system of ownership will work. In the UK, we are lucky to have a mixed economy—if I can call it that—in this sector and long may that continue. It is an essential part of ensuring that we do not have all our eggs in one basket and that our heritage is properly looked after in a number of different ways.
My hon. Friend made a series of points, and I will try to address them one a time. He began by explaining the background to heritage maintenance funds and some of what I think is their noble purpose. He said that a central theme underlies them, which he believes is, “Sensible is good sense,” and I agree with him on that. However, he also pointed out that there is a fair degree of frustration, not only in the membership of the HHA but more broadly in the heritage world, about the limitations of HMFs and the fact that they are not necessarily working as many people would like them to.
I must say that, as the Minister with responsibility for tourism and heritage, nothing would give me greater pleasure than being able to turn around and promise my hon. Friend that all those issues concerning tax and the other details of HMFs can be dealt with by the wave of a magic wand or the stroke of a pen. Sadly, however, given the state of the national finances in particular, I cannot make that promise here today, although I suspect that my hon. Friend did not really expect me to do so. Nevertheless, it is important to note the concerns that he has rightly identified and outlined for us in the Chamber today.
It is also important to note some of the constraints on HMFs. It is worth while pointing out, as my hon. Friend did, that there are only 135 extant HMFs and that not all of them are active. Even if we were able to wave the magic wand that I have mentioned and remove some—or perhaps even all—of the constraints that he has pointed out, most estimates are that only another 40 or so HMFs would be established in the next five years. Given that the members of the HHA are responsible for 1,500 houses, we are talking about a comparatively small proportion of houses that would be affected, although some of them are tremendously important national assets—indeed, some are among our most famous and well recognised national assets. Nevertheless, the HMF scheme is quite a narrow one, as it currently stands. Therefore, there are many other assets—many other heritage properties—that are managing well without using that particular mechanism.
It is also true to say that the Treasury is rightly cautious about some of the proposals from the HHA. That is not because it dislikes the notion of heritage or trying to support it, but simply because it is concerned about the wider budget questions that this entire Parliament will be remembered for trying to grapple with and about the major issues that we face on the national deficit. It also needs to be clear that it cannot necessarily create a special deal for heritage charities, funds or trusts, because that might create the thin end of a rather larger wedge for other classes of asset.
The Treasury is interested, it is listening and it is concerned to address the issues that the Historic Houses Association has raised. I have spoken with the association, which has come to see me at the Department for Culture, Media and Sport. I understand that there are also ongoing discussions between the association and my opposite numbers at the Treasury. I want to make it clear that my Department and the Treasury are also discussing these issues. A great deal of conversation is therefore going on, but it is subject to some fairly severe financial constraints, as I am sure that my hon. Friend will understand. Although, we both, I suspect, wish that those constraints did not exist, they are real, and it would be remiss and wrong of us to pretend otherwise.
Some of the proposals that the association suggests would be at least fiscally neutral are probably slightly easier for the Treasury to view more favourably than others, but I need to leave that to the Treasury, as I am sure my hon. Friend will understand. I am afraid that I cannot commit the Treasury in this debate, and there would be fairly serious repercussions if I tried. None the less, discussions are ongoing, and I hope that the association understands that it is being carefully listened to and that its audience is, wherever possible, being receptive to its concerns.
My hon. Friend has mentioned two issues concerning the broader deregulation agenda. One is licensing, particularly of live music and entertainment events. He gave some good examples of the great breadth of entertainment that is frequently provided by owners of historic houses up and down the country. The creativity and range of those events is continuously growing, and we can all cite examples of the events being held at historic properties in almost every constituency around the country, which is all to the good. The fact that such events take place is superb, because it provides a sustainable reason for many of these properties to continue to exist. It will make sure that they are living and thriving and that they are not just museums or mausoleums, but have a current purpose, which is excellent.
The second issue that my hon. Friend has mentioned is heritage signs—brown signs, as they are frequently called—on our motorways and other roads. In both cases—licensing and heritage signs—policy ideas are being discussed in my Department. I am afraid that I cannot give my hon. Friend a categorical promise at this stage, because the discussions are ongoing, and there would have to be sign-off all around Whitehall in the usual Cabinet government collective responsibility fashion, as I am sure that he understands as a former Minister himself. However, I promise that both ideas are under active discussion.
In the case of the licensing regime, a great many people have concerns. Musicians’ unions, for example, are calling for deregulation. My hon. Friend will understand that if one chose to go down that route, it would be important to make sure that there were no unintended consequences. There are real risks associated with live entertainment of one kind or another, simply because it can involve a large number of people in a comparatively small space. There are therefore concerns about health and safety, the disturbance caused by people arriving at and leaving a venue, public order and so on. All those issues have to be dealt with, so the devil in deregulating, or reducing the amount of regulation involved in, the licensing of entertaining is very much in the detail.
I am, however, happy to reassure my hon. Friend that we are in the middle of discussions. I hope to have something to announce in due course, but that will rather depend on collective responsibility. My hon. Friend will understand that other Whitehall Departments are concerned to ensure that the right things are done on, for example, health and safety legislation or public order. The Department for Work and Pensions would be involved on health and safety, while the Home Office would be involved on public order. They have to sign off and approve these things, which have to be carefully and properly considered so that everybody is sure that we are not creating an unintended consequence.
My hon. Friend also mentioned his concerns about the red tape surrounding fire and health and safety regulations. He is absolutely right that due to dramatic changes in building styles over many centuries, historic buildings often create and deliver a unique set of complexities and difficulties for fire and health and safety inspectors. Because they are, by definition, unusual and rare, they present issues that are not necessarily common or frequently encountered in modern buildings. Therefore, a degree of sensitivity is required on the part of health and safety and fire inspectors. A fire regulation solution that might be normal, natural and fairly straightforward in a modern building might be deeply antithetical to a historic building and fundamentally undermine its essential historic character. An approved and appropriate set of solutions to many problems commonly encountered in historic buildings is increasingly widely available.
Of course, it is not sufficient to say, “Well, there’s one answer that suits historic buildings and one that suits modern buildings.” The sad and difficult point is that an answer to the problem of fire doors and so on in a 19th-century building could be completely inappropriate for an 18th or 17th-century building, and a timber-framed building would need a different set of solutions again. It requires an in-depth understanding of heritage issues and of the available solutions, but a widely understood range of solutions is increasingly being developed. However, I am sure that my hon. Friend is absolutely right that it would not hurt for those solutions to be more widely known, simply because it is easy otherwise for an individual inspector to fall out with the owner or heritage guardian of a historic house, which is unhelpful for all concerned.
Increasingly, there is a trend toward a risk-based approach to fire and health and safety inspections. Five, 10 or 15 years ago, some parts of the country had a rotational system where everybody was inspected every year, two years, three years or whatever, whether the property in question was well or badly run. Nowadays, I am pleased to say that there is a move in many parts of the country—I am told that it is spreading steadily—towards a risk-based approach. For a property that is known to be well-run and can be checked as such, perhaps a longer time can pass, whereas a property that causes grave concerns should perhaps be inspected more frequently and regularly. Such a flexible approach, particularly toward many of our excellently run heritage properties, is entirely sensible and appropriate.
I hope that I have reassured my hon. Friend and given him answers to some of the issues that he has raised. I repeat that he is absolutely correct that heritage is crucial to this country. It is one of the things that makes us what we are and distinguishes us from any other part of the world. I know that he and I are both committed to ensuring that our heritage assets are kept in good hands for future as well as current generations. I am sure that he will hold me to account for how we do so as ably as he has done in the past half-hour.