Wedgwood Museum

Lord Vaizey of Didcot Excerpts

Tuesday 19th October 2010 Westminster Hall

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

I am grateful for the opportunity to speak under your chairmanship for the first time, Mr Hollobone. I know that you will go on to have a distinguished career as a Chairman of these kinds of debates, and in many other areas of the parliamentary process. I also congratulate the hon. Member for Stoke-on-Trent Central (Tristram Hunt) on calling this debate to highlight the plight of the Wedgwood museum. It has been very enjoyable—I hesitate to use that word—to hear him set out the case for the Wedgwood museum in the forceful style to which many millions of television viewers have become accustomed. I also express my gratitude to the number of hon. Members who have attended and spoken in this debate. I refer to the hon. Members for Stoke-on-Trent South (Robert Flello) and for Stoke-on-Trent North (Joan Walley), I thank my hon. Friend the Member for Stafford (Jeremy Lefroy) for his presence and the hon. Member for Newcastle-under-Lyme (Paul Farrelly), who intervened. I pay tribute to the speech made by my hon. Friend the Member for Stone (Mr Cash). We had not only a deep historical analysis of the importance of the Wedgwood collection, but, through my hon. Friend —he is one of our foremost and most distinguished constitutional lawyers—we were able to have a tour d’horizon of the legislative or constitutional solutions that might pertain to the future of the Wedgwood collection.

As the hon. Member for Stoke-on-Trent Central made clear, the Wedgwood collection is part of this country’s history. I make no bones about that; it is probably one of the most important crafts collections and one of the most important historic collections in the country. It is an integral collection and, as the hon. Gentleman indicated in his speech, it has been more than 250 years in the making. It stands, as it were, at one end of the spectrum of the craft in which this country continues to thrive, a spectrum that ranges from the Wedgwood collection to the creation of the Victoria and Albert Museum, which is the foremost museum of crafts in the world. Two years ago, the Wedgwood museum won the prestigious Art Fund prize and the Victoria & Albert Museum of course reopened its crafts galleries to huge acclaim.

It is absolutely clear from the remarks of hon. Members that have already been made during this debate and I hope that it will be absolutely clear from the remarks that I will make in concluding the debate that none of us would like to be in this position. We are almost, as it were, walk-on parts in an obscure Dickensian novel, in which a complicated piece of legislation has the most dramatic and unintended consequences. Potentially, those consequences put one of the great cultural jewels of the nation under threat.

Nevertheless, as a Minister I cannot circumvent the law. At this stage, I must simply report to hon. Members what I believe to be the current position and then I can perhaps extrapolate from that position where we might go with a plan A, or indeed a plan B. So I want to update hon. Members on the progress on the case; I want to outline the Government’s position; I want to set out what I believe could be the next steps to protect the museum and avoid the loss of the collection; and, as hon. Members have suggested, I also want to consider what we can learn from this case to ensure that other museums do not find themselves in a similar position in the future.

First, as the hon. Gentleman pointed out, the Wedgwood museum went into administration in April this year after it was served with a substantial pension debt by the company that was set up to manage the Wedgwood Group pension plan. The trustees of the museum firmly believe that the museum’s collection is held in special trust and should not be available to pay that debt. Therefore the administrator, together with the trustees of the museum, is preparing to make an application to court to clarify the status of the collection. That application will be made when certain administrative matters have been settled, which we are informed should be by the end of November. Then the administrator will be able to make a formal application to court. Although that application to court will be made as soon as is possible, the timing of the court hearing is not within the control of the museum or the administrator.

As the hon. Gentleman also indicated in his opening remarks, the museum is in the unfortunate position that it finds itself in because of its participation in a multi-employer pension scheme covering a number of employers in the Waterford Wedgwood Group. When the group went into administration in 2009, the museum found itself as the last remaining employer in that scheme. Therefore, the museum technically became responsible for a pension debt that, as the hon. Gentleman indicated, is in the region of £134 million. That pension debt or shortfall affects some 7,000 members of that pension scheme, including former employees of Wedgwood Ltd, Josiah Wedgwood & Sons Ltd and Stuart and Sons Ltd.

Due processes now need to be followed to establish what assets are potentially available, and the Wedgwood museum is not exempt from those processes. The pension scheme has now entered an assessment period for the Pension Protection Fund, the body that was put in place to ensure that pension scheme members receive a meaningful income in place of their pension, where an employer has become insolvent or where there are insufficient assets. However, the PPF has no control over the sale of the museum’s assets.

We must follow the correct processes. If schemes such as the Wedgwood Group pension plan were to be admitted to the PPF without pursuing the debts owed to them, a greater burden would fall on pension schemes that pay the pension protection levy. That would then undermine the financial sustainability of the system and its ability to serve its purpose. Unfortunately, as I have already indicated, in this case there is a view that the Wedgwood collection could be a potential asset.

The Charity Commission was asked to provide a view on whether the collection is held in permanent endowment or whether it is part of the charity’s corporate property, which is available to creditors. The issue was considered at the very highest level by the Charity Commission. Despite the commission’s sympathy for the museum and its recognition of the importance of the collection, it reached the conclusion that the museum’s collection was not protected.

The commission cannot exercise any discretion in that decision and it must reach a conclusion based on the facts of the case and the law. However, it is a regulator and it can only reach a view on whether the collection is held in permanent endowment. The only body able to give a definitive ruling remains a court of law.

Given what is at stake here and the need for absolute certainty, the commission has confirmed that it would give consent for the museum to take court proceedings. The process of administration intervened before those court proceedings could commence.

The Government have not ignored this situation and fully recognise the implications for the people of Stoke-on-Trent and the potential loss of their heritage and indeed the nation’s heritage.

[Mr Cash]

I just want to raise the question of equitable relief. I hope that the court, in its generosity, might be able to take account of matters of that kind, because of course this issue affects trusts.

[Mr Vaizey]

It has been a while since I studied trust law, but I am not quite sure on what grounds equitable relief would be available in these cases. However, I would defer to more senior counsel on that point.

I would like to return to what I was discussing before my hon. Friend’s intervention, which is my Department’s involvement in the issue of the future of the Wedgwood collection. The Department has worked closely with the museum’s director and trustees, their legal advisers and the Charity Commission to assist in this matter. Under the last Government, the Department provided assistance to the Wedgwood museum, and since I have been in office I have also given as much assistance as I have been able to.

I will recap on the Department’s involvement so far. First, the chairman of the museum approached the Department in October 2009 to ask for help in clarifying the status of the collection. Department officials set up a meeting with the Charity Commission, in which the commission agreed to review the museum’s evidence. That led to the commission taking the view about the collection that it did.

More important, in January of this year the Museums, Libraries and Archives Council awarded a grant of £200,000 to the museum to support its legal costs. I know that hon. Members will agree with me, particularly as it happened under the previous Government, that that was an important injection of financial support given the situation that the museum finds itself in. The Department also gave a one-off grant of £25,000 to support the museum’s operational commitments.

As the hon. Member for Stoke-on-Trent Central pointed out, the Heritage Lottery Fund had already generously funded a substantial proportion of the new museum, but since January of this year it has awarded a grant of £50,000 towards the museum’s educational work with schools, its volunteers’ programme and staff training, to enable the museum to meet the new challenges that it faces.

In July, I wrote to the new owners of the Wedgwood company to alert them to the museum’s predicament and to emphasise the importance of the museum’s collection. I am pleased to say that the museum now has a good relationship with the new owners of the Wedgwood company.

Throughout this time, my Department, the Heritage Lottery Fund, the Museums, Libraries and Archives Council and the Charity Commission have all worked as closely as possible to support and advise the Wedgwood museum, and to try to plot a way forward. As a result of that work and the efforts of the museum’s director and its excellent staff, the museum is still open to the public and receiving a steady flow of visitors. It has made strong partnerships with the local cultural and tourist industries, and it has a business plan in place to ensure that it can continue to operate if the courts should rule in its favour.

To sum up, I believe that my Department and its sponsored bodies have acted quickly and effectively to support the Wedgwood museum during the past year, when there have been two different Governments.

[Tristram Hunt]

I just want to ask whether the Minister will be having talks with the PPF. In particular, if the judgment goes against the museum and therefore its assets are considered liable, what is the space that the PPF has, in terms of giving time for raising money and for appeals, so that we do not have Sotheby’s and Christie’s crawling all over the collection on a Tuesday morning and so that we can work to save it?

[Mr Vaizey]

Let me continue with what I was going to say, because some of my points may address that issue. As I was going to say, we must await the outcome of the court case. However, I will happily discuss with the PPF what more needs to be done. In terms of a plan B, we have had discussions with two national museums about what should happen if there is a problem, and we will work for a solution that way—