Earl of Kinnoull contributions to the Ivory Act 2018


Mon 10th September 2018 Ivory Bill (Lords Chamber)
Committee: 1st sitting (Hansard): House of Lords
5 interactions (883 words)
Mon 10th September 2018 Ivory Bill (Lords Chamber)
Committee: 1st sitting (Hansard - continued): House of Lords
3 interactions (195 words)
Tue 17th July 2018 Ivory Bill (Lords Chamber)
2nd reading (Hansard): House of Lords
3 interactions (806 words)

Ivory Bill

(Committee: 1st sitting (Hansard): House of Lords)
Earl of Kinnoull Excerpts
Monday 10th September 2018

(2 years, 5 months ago)

Lords Chamber

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Department for Environment, Food and Rural Affairs

3: Clause 1, page 1, line 23, at end insert—

“( ) For the avoidance of doubt, nothing in this section shall be deemed as applying to bona fide insurance or re-insurance transactions involving UK-licensed insurers.”Member’s explanatory statement

This is a technical amendment designed to address various insurance and re-insurance problems.

Earl of Kinnoull Portrait The Earl of Kinnoull (CB)
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My Lords, I declare my interests as set out in the register of the House, in particular as a director or trustee of several museums and in respect of the insurance world.

This is a technical amendment to do with some insurance issues, so I hope to gallop through it, as I am sure not many of your Lordships would be that interested. I should like to add my own thoughts to the messages to the noble Lord, Lord Carrington, because I was going to start by citing something that he said in his Second Reading speech. He quoted a figure, which I have also seen, of there being somewhere between 2 million and 3 million objects that have an ivory content in the UK in personal collections and museum collections. He said that he felt that was an underestimate, and I agree with him that it probably is an underestimate. The UK is a heavy buyer of insurance. I can say with confidence that the majority of those objects are the subject of insurance, so I am talking about a large number of objects all round.

As I looked at the Bill, there were three areas where I felt there could be problems for the way in which the insurance world works today. The first was in simply paying a claim. I am sure that many of your Lordships have not made a claim and so may not realise this, but the point is that, when paying a claim, the insurer will pay out a sum of money, but the title of the object insured will transfer to the insurer. There would probably also be another agreement, a release agreement, between the insured and the insurer. Therefore, there is a tremendous amount of consideration moving and, certainly, the title of the object moving. That knowledge was with me as I read Clause 1(3), as I was very worried that the paying of the claim may be problematic under the way the Bill is currently drafted. For museums and private individuals, I thought that was regrettable.

Secondly, another thing that goes across to the successful claimant is a right of repurchase. Certainly all of the specialist insurance markets grant this right and I think all markets now in the UK grant it. This is a right whereby, if an object is stolen and comes back—quite a lot of stuff does come back, particularly the more valuable stuff, because if there are photographs of it, it is difficult for people to dispose of it—people have the opportunity to repurchase the object at the lower of the market value or the amount of money that was paid out in the insurance claim. For private individuals, that is often very attractive because many people are underinsured, so maybe they can buy something back that is worth more at a lower price. Certainly, for many private individuals, it is attractive because the sorts of things that are stolen are often things with great sentimental value to them. This is a very valuable right for private insurance. For the museum-insured area, which I am deeply involved with, it is important because often what is stolen is the key part of one or other of their collections, and it is very difficult to source replacement parts. I feel that this repurchase right is very difficult under Clause 1(3).

A third problem, which is much more technical, is to do with the way that insurance companies and Lloyd’s syndicates set themselves up, and that is that they move around the salvage rights within themselves. Naturally, this happens in a series of transactions that take place—most famously in the Lloyd’s syndicates, where there is a fresh syndicate every year—and so they move around these rights of repurchase further down. A Lloyd’s syndicate will need to be able to trade with a successor syndicate in order to preserve this right of repurchase. Of course, there are many latent rights of repurchase out there at the moment, which will all be covered, I assume, by this Bill. So this is not about fresh thefts but about stuff that comes back.

Those three issues were circulating in my mind, and I feel that there is a difficulty. I do not think it is the intention of the Bill to stop people from being able to rebuy their own stuff following an insurance loss. That can have nothing to do with the admirable intentions of this Bill, so I drafted a probing amendment, merely to just raise the debate, but not to settle on the precise language of how we deal with this problem that I have identified. I have limited it to providing some sort of route for just the 200 or so professional insurers in the UK. These are carriers who are all regulated by the FCA and who, I can assure your Lordships, if they saw any naughtiness, would be out with the fines book straightaway. I beg to move.

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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My Lords, the noble Earl’s amendment would insert a declaratory statement into the Bill confirming that prohibitions in the Bill would not apply to insurance and reinsurance transactions. I am very grateful to him for our helpful conversation over the weekend, and I confirm that it is indeed the Government’s intention that insurance and reinsurance activities will be able to continue as usual.

As the noble Earl has pointed out, this sector is very important with regard to items containing ivory. We are mindful of the types of transactions that may occur, and indeed we are further investigating other types of transactions and the associated transfers of ownership and the considerations paid and received in the ordinary course of these transactions. We are therefore considering ways of making it clear that financial transactions associated with the insurance and reinsurance of ivory items are not prohibited by the Bill, and we look forward to working with the noble Earl and other noble Lords to ensure that that is the case.

I hope that, in the light of what I have said the noble Earl feels able to withdraw his amendment.

Earl of Kinnoull Portrait The Earl of Kinnoull
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I am very grateful to the Minister, with whom I had a number of amusing conversations over the weekend that involved lawn-mowing as well. I think this is a very constructive approach, and I hope we will be able to deal with the matters quickly when we get to meet. I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Ivory Bill

(Committee: 1st sitting (Hansard - continued): House of Lords)
Earl of Kinnoull Excerpts
Monday 10th September 2018

(2 years, 5 months ago)

Lords Chamber

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Department for Environment, Food and Rural Affairs
Lord De Mauley Portrait Lord De Mauley (Con)
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My Lords, many of the objects that will require registration under the Clause 10 requirements will be low in value. This will include old pianos offered for sale privately for £50 or small domestic objects such as mirrors with surrounds in mahogany inlaid with thin ivory strips selling for perhaps £30. As I previously indicated, there is no compelling reason for us to discourage the reuse of such antiques. If the registration fee is set too high, only the more valuable ivory items would be worth registering, and lower-value ones would end up being thrown away. Whether or not it is intended to charge the fee as a fixed percentage of the value of the item or a flat fee, I believe it is sensible to impose a cap. If nothing else, it will encourage efficiency in those who operate the database system. I beg to move.

Earl of Kinnoull Portrait The Earl of Kinnoull (CB)
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My Lords, I shall be brief. I will speak to Amendment 31, which is purely a probing amendment. Following Second Reading, it struck me that the success of this Bill would very much depend on the take-up rate of the use of the register, so my amendment is aimed at trying to probe a bit of that. I noted that in the Bill, while plenty of powers are given to the Secretary of State to charge fees for registration, there is no duty alongside that, telling the authorities what they should be trying to do. My amendment is aimed at trying to put a bit of duty alongside the powers.

I noticed that the success of curbing drink-driving in the UK has been very much driven by the fact that people in the country now expect people not to drink-drive. We need to ensure that nothing stands in the way of people developing a feeling that ivory has a special and difficult thing associated with it. Therefore, they should comply with this law enthusiastically, because it will help the problem that we have all been talking about. I do not think I can add any more.

Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
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My Lords, I shall speak briefly on these two amendments. I think we all accept that the cost of registration should not be prohibitive. Equally, I have to say that I think a blanket fee of £5 is unrealistic. It should not, however, be used as a money-raising opportunity, as some government fee systems have been found to do. In his letter to us after Second Reading, the Minister made it clear that the fees would be based on a cost-recovery calculation. Fine, but he went on to say that the calculation would be based on the cost of building a new IT system. At that point, alarm bells started to ring. I am sure that the Government would accept that they have a rather shaky reputation for delivering IT systems on budget.

I therefore hope that the Minister will take this opportunity to reassure us that the cost will not be prohibitive and that it will take into account the ability to pay of a wide range of potential traders who might want to use the system, taking on board the points that have been made that they will not always be the professionals and those who are able to pay large fees.

We have referred to the registration scheme several times and I know that the Minister says that we will have further details of it, but it would be helpful if he could clarify the timescale for it. Will we definitely have more details before Report?

Ivory Bill

(2nd reading (Hansard): House of Lords)
Earl of Kinnoull Excerpts
Tuesday 17th July 2018

(2 years, 7 months ago)

Lords Chamber

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Department for Environment, Food and Rural Affairs
Baroness Fookes Portrait Baroness Fookes (Con)
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My Lords, unlike the noble Baroness, Lady Flather, I did not grow up knowing elephants, but I do have a vivid recollection of a safari trip I made many years ago—not at Treetops but somewhere similar, with a watering hole. We were told that the animals would probably come during the night, a bell would ring and if we wished we could get up to see them. The bell rang and I shot up—I was younger in those days—and one of the things that stood out for me, among the other animals coming, was a little family of elephants: two adults and two very frolicsome youngsters. In fact, they were behaving slightly badly and one of the elder elephants gave them a bit of a cuff—you know, “Just behave yourselves”. That has stayed with me for evermore and it reminded me of the story by the noble Lord, Lord Jones of Cheltenham, about the wonderful ending of that matriarchal elephant. I saw them young; he saw one very old. They are remarkable and something to be cherished and preserved.

I do not take the view of some of those in the debate who fear that the Bill, though well intentioned, really will not do any good. I thought that my noble friend the Minister made a very strong case for the good that the Bill could do, and he was ably and powerfully supported by my noble friends Lord Hague and Lady Chalker. They have an immense knowledge of Africa and have done a great deal and, if I have to choose between the doubters and those two, I am going to support my noble friends: they made very powerful cases indeed.

We have all been horrified by the number of elephants killed, but nobody has actually mentioned the suffering in their deaths. I suspect that the poachers are pretty vicious and I am quite sure that they are capable of bringing an animal down, not killing it completely and still hacking off its tusks. I do not really want to think about that too much, but it is something we should remember because it is all too likely to happen. I realise that the Bill, when it becomes an Act, will not do everything and I think there is a very important case for trying to encourage, perhaps through other departments, the value of providing alternative livelihoods for people in these countries. It will not affect the poachers, who are obviously after something far bigger and more vicious, but we should try to encourage in every way possible that the elephants and other wildlife should be seen as an economic advantage, through tourism and various other ways of using them to best advantage while we preserve them. I hope that my noble friend will look at that, although I realise that it goes far beyond the Bill.

I am also anxious that we should take pretty urgent steps to include ivory from other animals—rhinoceroses and so forth. We can see that if there is a market—and everybody keeps telling us that there is a market for ivory, particularly in the Far East—people will obviously go for alternatives to elephant ivory if it exists. Very often in this place we do not know all the unintended consequences of Bills that we pass, but we can be pretty sure that if we ban ivory from elephants people will look for alternatives. I hope my noble friend will make full use of the ability in the Bill to act fast. I believe there are consultations going on, and I hope they will not take for ever because this is very important.

I have one other, slightly quirky point. As a former chairman of the Delegated Powers and Regulatory Reform Committee, I looked with interest at the departmental brief which the committee will be looking at between now and when the Bill comes back in Committee. I notice that there are at least five occasions when statutory guidance will be given by the Secretary of State and there is to be no parliamentary intervention. My antennae twitched slightly at that. No doubt this will be looked at it, and maybe I am worrying unduly, but delegated legislation often has a very important impact on a Bill and how it is to operate. I simply make that passing reference and hope it will be taken on board.

I listened with interest and some concern to those who are interested in the world of works of art, who spoke about the possible impact of the limited exemptions which will exist. That is not something I feel particularly confident about pontificating on, but I hope that during the passage of the Bill reasonable points can be made, perhaps in Committee, to deal with some of that. Broadly, I think the exemptions are right and provide a very good balance between banning all ivory products entirely and allowing exemptions. I look forward to more detailed progress, but in the meantime I warmly support the introduction of the Bill.

Earl of Kinnoull Portrait The Earl of Kinnoull (CB)
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My Lords, it is a great pleasure to follow the noble Baroness, Lady Fookes, who made another compelling speech in this very interesting Second Reading of the important Bill before us. Like every noble Lord here this afternoon, I am wholly behind the central aim in the Bill of doing what we can to frustrate elephant poaching.

A few years ago, I was in the Selous in Tanzania. This area, the size of Switzerland, has no resident human population. On successive days our party saw a recently vacated poachers’ camp and was charged by an elephant in rude health. Those two experiences very much stimulate my enthusiasm for the Bill’s central aim. I declare my interests as set out in the register of the House: in particular, as chairman or trustee of three charities that run between them five museums; and, for reasons that will come later in my remarks, in respect of the insurance industry where I have had decades of experience of insuring heritage objects. I will confine my remarks to the exemption provisions in the Bill and to considering the positions of ordinary citizens, museums and insured parties.

On ordinary citizens, I was looking through the catalogue of a major regional auction house’s fine furniture sale last week and noted that just over 10 items out of 400 or so had ivory inlay or other low-ivory content. Examples from the catalogue were a dressing-table mirror with four small ivory embellishments, a chest of drawers with ivory surrounds to the keyholes and a box with ivory inlay. The estimated prices for these objects were mainly below £200 and the lowest was £80. I visited our local antiques centre last weekend in Perthshire and started looking around for objects with low-ivory content. They started at less than £10 and a substantial number of such objects was available.

I conclude, and I think everyone knows, that the total number of low-ivory-content objects in the UK is enormous. The Explanatory Notes refer to an online government registration website with alternative telephone and postal methods. These could be very busy. Could the Minister give some further detail about the registration system and its cost? I feel that getting this right, with particular emphasis on the low-ivory-content objects, is an important part of encouraging ordinary citizens to buy into the Bill, which involves the change in attitude that the noble Lord, Lord Hague of Richmond, who is not in his place, spoke of. If everyone is to ignore the registration, we will not change any attitudes and the Bill will have little effect.

I turn to museums. In my long experience, the buying and selling of solid-ivory objects is pretty rare. Indeed, in all my time on various boards, I can recall only one sale of a small number of ivory objects a few years ago, which was done because they were not core to the museum’s collections and we needed some help with the roof. Far more common is the lending of objects for specific exhibitions. Again, in my experience the large majority of loans affected by the Bill concerned objects with low-ivory content. For many years, ivory inlay was a popular way of embellishing special items. The standard museum loan agreement does not normally share gate money, although occasionally it does. What is very common is to agree to share money from images sold, for example, from postcards. In addition, the lending institution may receive catalogues and other benefits, and will definitely receive invitations to opening receptions with glasses of champagne. Can the Minister therefore provide some comfort that such loan arrangements, including the sharing of gate money, would not constitute a hire under the Bill and therefore be an offence, and that nothing in the Bill is intended to interfere with current, ethically sound inter-museum lending practices?

I close with some insurance difficulties. The problem here is what happens following a theft. Under an insurance contract, the insurer pays the insured but then becomes the owner of the stolen object. An insured item of low-ivory content may or may not be registered and may or may not have been photographed. I am therefore concerned that the change in ownership under an insurance claim could be illegal, and thus no claim could be paid for an unregistered item. This would seem an undesirable result, given that I do not believe that the payment of such a claim could in any way detract from the Government’s admirable central aim of frustrating elephant poaching. A solid-ivory object owned by a private client would not be insurable for theft. Would the Minister agree to meet to discuss whether a bona fide insurance payout should also be represented in the “Other exemptions” under the Bill, with whatever safeguards are suitable? In the mean time I, along with everyone else, wish this important Bill a speedy passage.

Earl Attlee Portrait Earl Attlee (Con)
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My Lords, I support the Bill for all the reasons that the Minister has skilfully put to the House, and I agree with everything that he said. So far as I am concerned, elephants win over business and wealth. As for the timing of the Bill, I too hope that we can get the Bill passed before the IWT conference in the autumn while at the same time giving the Bill the scrutiny that it deserves. My position on my own ivory is exactly the same as that of the Minister.

The noble Lord, Lord St John of Bletso, was the first speaker to make the very good point about online sales. As I read the Bill, a person who offers ivory online is caught by Clause 1. Can my noble friend the Minister confirm that the operator of an online platform is also caught by Clause 12, which prohibits the facilitation of the sale? The difficulty is that an online offer for sale can claim that the article is certified and exempted and therefore not caught by Clause 1, and the online platform operator can therefore claim that Clause 12 does not apply either. In Committee, the Minister will have to convince us that there is no loophole with online sales.

I will seek to tread cautiously, but I detect some vested interests at play. Of course it is vital that we look at this legislation with great care. It is interesting to note that when I recently opposed provisions in a government Bill that would ban the sale of certain deactivated firearms, I had almost no support from my Back-Bench colleagues apart from, ironically, my noble friend Lord Crathorne. However, that Act—as it is now—significantly reduced the value of many people’s collections of deactivated firearms, as they could not be sold. In some cases, the loss was in excess of £1 million. Indeed, I was slightly affected to the extent of about £100. Fortunately, due to the good sense of the Home Office Ministers and officials involved, your Lordships’ House passed amendments which, in time, should solve the problem.

In this debate, we now have several experienced Members of your Lordships’ House quite properly expressing concerns about the loss of value to collectors and individuals. I have to say that in many cases the answer surely is to give the items away, not sell them. There is no need to discard the items, although I recently did so for a very small item. I hesitate to say this, but could this difference in interest be something to do with the relevant socioeconomic groups of those who collect deactivated firearms and those who collect antiques and ivory?

I have some concerns about the detail of the Bill. The first concerns inheritance tax. I declare an interest, as my family is winding up my late mother’s estate, but the effect of the Bill is at the bottom end of negligible so far as it concerns IHT—I know IHT affects only certain socioeconomic groups. Does the Minister agree with my noble fried Lord Carrington that the correct probate value now for an item of ivory caught by the Bill is zero because it will not be possible to sell it in the future?

It must also surely be possible that IHT has recently been paid on a genuine ivory antique that the family concerned would never want to sell. However, with the passing of this Bill, even if they were in severe financial distress, they could still not sell the item. It would be purely an ornament and not an asset, but nevertheless IHT had recently been paid on it. Is the Minister sure that this is a fair situation?

In principle, I have never been happy about civil penalties, except for matters such as motoring offences. Civil penalties are provided for in the Bill, and I share the concerns of my noble friend Lord De Mauley. The overall aim of the Bill is to reduce the international value of ivory in order to reduce the poaching of elephants. Once the Bill is passed, in reality no respectable person or business will sell ivory, and the desired effect will be achieved.

As I see it, three things can go wrong in terms of compliance. Perhaps two individuals might make a very small sale of ivory between themselves. If caught, a caution would be appropriate, or it could be dealt with summarily in the magistrates’ court by means of a modest fine. If an individual is contemplating making a higher value sale then the magistrates’ court, I suggest, is a good deterrent. In the case of a business illegally trading in ivory, that might be a matter for indictment that attracts unlimited fines, as noble Lords will be aware. Therefore, it is not clear to me why we need a civil penalties regime, and I fear the scenario outlined by my noble friend Lord De Mauley. I hope that my noble friend the Minister can either explain that this evening or perhaps write to me.

In conclusion, I support the Bill and will do so during future stages, while helpfully ensuring that the Bill does what it says on the tin.