Finance (No. 3) Bill

Baroness Quin Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Thursday 7th February 2019 Lords Chamber

[Baroness Quin (Lab)]

My Lords, I am pleased to take part in the debate, although it must be said that the wider context, described so well by my noble friend Lord Tunnicliffe, is dramatic and alarming.

Brexit hangs like a pall over everything, not least over this Budget and the previous two. To fund Brexit, £3 billion was announced in the 2017 Budget and £1.5 billion in the previous Budget. The Chancellor warned that austerity would continue for five more years if Britain leaves the European Union with no deal and that an emergency Budget would be needed in that situation. Given this, I implore the Government to take no deal off the table—particularly given the views of industry and trade unions, as well as the clear views expressed through Motions passed in this House and the passing of the Spelman/Dromey amendment in the other place. Like my noble friend Lord Tunnicliffe, I welcome the fact that during the course of its Budget deliberations, the Commons passed the amendment tabled by Yvette Cooper. Obviously, that is now on the record.

However, I want today to raise a narrow specific point of which I gave the noble Lord, Lord Bates, prior notice, having met him earlier this week to raise my concerns. Obviously, I know that we in this House cannot amend the Budget, but by raising this issue I hope that Ministers will look sympathetically on ways to resolve it. I am pretty confident that if the full implications had been known earlier, it would have been raised by some honourable Members in the other place.

The issue relates to the museums and galleries exhibition tax relief brought in by the Government. Overall, it is a good scheme, but the way it is written is also a good example of unintended consequences. Before I continue, I declare a relevant interest in the register as the chair of the strategic board of Tyne & Wear Archives & Museums, one of our major regional arts organisations. I am proud to be associated with such an innovative and entrepreneurial organisation. It does great work in Tyneside schools in some of our least well-off areas, and has an excellent management team with whom it is an absolute pleasure to work. In accordance with the government-commissioned Mendoza review on the functioning of museums, and very much in accordance with the Government’s express wish to see museums form partnerships with other organisations, Tyne & Wear Archives & Museums set up TWAM Enterprises to manage exhibitions. The organisation is funded by four Tyneside local authorities, with Newcastle University operating as a charity.

However, in adopting this structure, TWAM has found itself, much to its surprise, ineligible for museums exhibition tax relief. I should stress that TWAM had changed its structure before the tax relief regulations came into effect. It had done so because it was a good thing to do and because it felt that that would accord with government priorities. Ironically, TWAM took part in the government consultation which took place before the museums exhibition tax relief regulations were brought in. As the Minister knows, but perhaps the House as a whole does not, the regulations stated that for an organisation to benefit, it had to be funded either by a local authority or by a charity. Unfortunately for TWAM, it was funded by both a local authority and a charity. In some ways you could say that it was doubly eligible for tax relief, but so far it has been deemed ineligible for such relief.

We have had discussions with officials from the Treasury and HMRC, and DCMS, which is obviously concerned about this issue. They were all were sympathetic when we raised a number of possibilities in our meetings, such as using the Interpretation Act 1978, which I certainly was not familiar with before this issue was raised. The Act gives guidance on interpreting how legislation should be implemented:

“In any Act, unless the contrary intention appears … words in the singular include the plural”.


We wondered whether that might mean that, given that TWAM is funded by a local authority and a charity, it could be covered by the 1978 Act.

Incidentally, as far as I am aware, no other organisation has inadvertently fallen foul of the regulations in the way Tyne & Wear Archives & Museums has. However, if the regulations are unamended, that might inhibit other museums in forming the kind of partnerships they have said they are in favour of. That point needs to be borne in mind. Certainly, this seems an absurd situation that is contrary to common sense.

It could be said that TWAM should change its structure again. However, that would be a time-consuming and costly process, involving legal advice and so forth. Given that TWAM is funded by public money, it seems crazy to have to spend that money on changing its structure when TWAM clearly fulfils the spirit—if not the actual letter—of the regulations. To have to do that at a financially challenging time is very hard. I do not want to widen the argument to the whole issue of local government finance, but since 2010 TWAM has seen a 60% reduction in funding from local authorities. It is because the organisation is innovative and recognised as such by the Arts Council that it has continued to build on the excellent service it provides to our area.

In conclusion, I know that the Minister is fully aware of the importance of museums and the cultural sector generally to the north-east economy. He knows too how successfully our museums have engaged with the different communities in the area. I am sure that he does not want difficulties to be imposed on museums, so I hope he will be able to respond positively to my remarks.