I beg to move, That the Bill be now read a Second time.

The Bill’s purpose is straightforward: it is to meet our moral, if not legal, obligations to provide a mechanism for the return to their rightful owners of cultural objects held in national collections that were looted during the Nazi period. I have taken a particular interest in the issue since first being elected, as I think is shown by the number of parliamentary questions I have tabled and meetings I have held with representatives of the Department for Culture, Media and Sport. I have to say that the Government, and successive Arts Ministers, have been sympathetic throughout. I wish to compliment the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Stevenage (Barbara Follett), on the support and assistance that she and her officials have given me so far.

On 17 February 2000, in response to a parliamentary question from me, the then Arts Minister, now Lord Howarth, announced the setting up of the Spoliation Advisory Panel under the chairmanship of a former judge Sir David Hirst. He said the panel would consider and advise on claims from anyone who lost possession of a cultural object during the Nazi era where such an object was now in the possession of a UK national collection or gallery. Of course, there was still a lot of detail to work out, such as formulating and finalising the terms of reference and the membership, but the matter moved fairly quickly from that time.

In April, the membership and terms of reference were announced, and in response to a further question from me Lord Howarth said:

“The Government are determined to set an example of how a civilised society should conduct itself in making possible redress for historic wrongs committed during the Nazi era, including the looting of cultural objects.”—[Official Report, 8 May 2000; Vol. 349, c. 491.]

In June 2000, in evidence to the Culture, Media and Sport Committee, the British Museum agreed with the Committee Chair that if it held objects looted by the Nazis, it would wish to find a way to achieve the return of those objects to the victim’s family.

The first meeting of the panel took place on Thursday 8 June 2000. It was aware of only one claim at that stage, but it received some fame from it: Jan Griffier the Elder’s picture, “A view of Hampton court palace”, which the Tate had acquired in 1961. The panel looked into the claim and recommended to the Minister that an ex gratia payment of £125,000 should be made to the owners, with an explanation on the display panel next to the painting of its ownership history.

The Spoliation Advisory Panel’s website reveals that it has dealt with a further six cases since then: a still life in the Burrell collection in Glasgow, which had been taken from a Munich art dealership; a 12th century Missal in the British Library from the cathedral of Benevento, which is still under dispute as it cannot be returned for reasons I shall explain; a portrait by Nikolaus Alexander Mair von Landshut in the Ashmolean museum; four old master drawings, which I shall discuss shortly, in the British Museum; three drawings from the same collection in the Courtauld; three paintings by Rubens, again in the Courtauld; and two pieces of porcelain, one of them in the British Museum and the other in the Fitzwilliam museum.

So far so good, but the problem is that the law is such that for works held in some collections restitution is not possible and there is no power to “de-acquire”—that is the current term—items, while in other museums the situation can be different. That can lead to unjust, unfair and sometimes downright ludicrous outcomes. Let us consider the two items of porcelain from the same collection. The piece in the Fitzwilliam was returned to the rightful owners, but the piece in the British Museum could not be. In 2005, the panel recommended the return of the Benevento missal, but it still remains in the British Library because of the statutory restriction.

A key problem arose in 2006 when there was a recommendation of an ex gratia payment for four old master drawings in the British Museum. The claimants had originally sought restitution, and the British Museum had publicly affirmed its wish to restitute, but after four years and a High Court case brought by the British Museum seeking the power to restitute, which failed, the claimants gave up and asked for an ex gratia payment, which was awarded. The details of the case are interesting. There were four items, three of which the museum had bought for nine guineas altogether in 1946 at Sotheby’s, and the fourth was part of a 1949 bequest. At the time of the case, the total value was placed at about £150,000. In May 2002, the claim for those four drawings was made by the heirs of Dr. Arthur Feldman; they had been looted by the Gestapo from his renowned collection of old master drawings on 15 March 1939 in Brno in Czechoslovakia.

In July 2002, the trustees met and agreed that they should refer the dispute to the Spoliation Advisory Panel, but also sought counsel’s advice. In August 2003, because of the concerns over the law, the advice of the Attorney-General was sought. He shared the concerns about the legal position and said that under the British Museum Act 1963 disposal was probably prohibited. So, the matter went, in a friendly way, to the High Court, where the Attorney-General had brought the case against the British Museum. Everybody wanted to achieve the return of the objects, but in May 2005 the court ruled that no moral obligation could justify a disposition by the trustees of an object forming part of the collections of the museum. The British Museum wanted to return the objects but could not lawfully do so, and, as I have said, that led to a payment of compensation, which was a rather unsatisfactory result all round.

In June 2005, I followed that up by tabling a parliamentary question to the then Minister, my right hon. Friend the Member for Tottenham (Mr. Lammy). He replied:

“We are carefully considering the recent recommendation of the Spoliation Advisory Panel that legislation should be introduced to permit the return of items where possession was lost during the Nazi era. The Vice Chancellor’s judgment of 27 May provides clarity in this important area and will contribute to our consideration of the Panel’s recommendation.”—[Official Report, 14 June 2005; Vol. 435, c. 235W.]

In 2006, the Government began a consultation on how to resolve the issue. As I have said, in 2007, three further drawings from the same collection—the Feldman collection—were found in the Courtauld and were able to be restituted because the Courtauld was not caught by this legal restriction that applies to other public collections. We have the position where four of the drawings cannot go back and will remain in the Museum because compensation has been paid, whereas three of the others could be returned.

The issue was also taken up by Lord Janner in the other place. On 18 December 2007, the next Arts Minister to deal with this was my right hon. Friend the Member for Barking (Margaret Hodge).

I am following the hon. Gentleman’s timeline carefully, but I would not want him to overlook the fact that the Select Committee on Culture, Media and Sport examined this matter in June 2007. We endorsed the findings of the predecessor Committee and expressed our regret that the Government had not been able to fulfil their international obligations or previous commitments—I simply congratulate him on this Bill, which I hope will succeed in finally doing that.

I am grateful to the hon. Gentleman for those comments, and I am sorry for my oversight in overlooking his Committee’s report. I am grateful for that report, for the earlier work of the Committee under its previous chairmanship and for what he and his Committee have had to say on the issue.

As I was saying, Lord Janner took this issue up with the next culture Minister who dealt with the matter—I think that we are now on our third—my right hon. Friend the Member for Barking. In a letter of 18 December 2007, she said:

“The Government is strongly persuaded by the moral argument for changing the law in this area and that seems to have been the overriding view from the consultation responses. I…have asked officials to look into options”.

In a hand-written note at the end, she said:

“I will write to you again when I have identified a suitable slot and satisfied myself that we have an appropriate and properly constituted proposition. I hope you welcome this news”.

In another letter to Lord Janner of 30 May 2008, my right hon. Friend said:

“I am happy to reassure you that a team of officials at DCMS are working on this issue and are making good progress…There are…a number of policy issues to determine”.

Again there was a hand-written note at the end, which said:

“I am working hard to achieve progress in this area.”

In the meantime, in 2008, the panel heard a claim for two pieces of porcelain from a Viennese collection, one of which was in the Fitzwilliam museum and the other in the British Museum. The one in the Fitzwilliam museum was restituted, but the panel felt it could not recommend the restitution of the second piece because it said that there was no sign that the Government were going to change the law, so it awarded an ex gratia payment. Even the then Minister thought that the inconsistency was untenable, and issued a press statement saying that the law should be changed.

In the summer of 2008, we got on to our fourth Minister—the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Stevenage, who is in her place—and it looked as though the Government were going to resolve the issue in the anticipated heritage Bill. We were hoping that that would be in the Queen’s Speech, but that did not happen. That is why I have introduced my Bill today, some four years after the issue first arose as a result of the High Court case, during which time we have been in limbo in respect of so many of these items, which, in each case, belong to somebody else and are stuck in our national collections.

The best estimate is that about 20 certainly looted items are in UK museums, but there could be more. The process of research by families is ongoing and it can take quite a while to locate an item and document a claim, but of course not every rightful owner may want restitution. Some might, whereas others might settle for an ex gratia compensation payment or might simply want a public acknowledgement of the rightful ownership by the gallery or museum concerned. But it should be for the rightful owners to decide the fate of the object, not the institution concerned, once ownership has been decided to the satisfaction of the Spoliation Advisory Panel and on its recommendation to the Minister.

My Bill would provide a process, with appropriate safeguards, to achieve that outcome. It aims to work by agreement and by consensus. If there is a huge dispute, it would not work and the item would not be returned. The process is straightforward. The item claimed is referred to the panel. If the panel finds the object to be spoliated, it makes a recommendation for restitution to the Secretary of State, if it thinks that that is the proper remedy. If the Secretary of State accepts that restitution is appropriate, he or she can trigger a power—not a duty—of de-accession to the museum concerned.

The Bill also contains safeguards. It does not override any special conditions or trust under which an object may be held. That would require complex legislation and I baulked at even attempting that because it would not be appropriate for a private Member’s Bill. It is limited to a finite and definitive list of institutions, which are set out in clause 2. It also has a 10-year sunset clause to provide, on the one hand, sufficient time to facilitate claims and identify objects and, on the other, to provide some long-term certainty to the public collections concerned.

Above all, the Bill is strictly limited as to time, place and perpetrator of the original deprivation of the object from its lawful owner. It is not a Trojan horse for the Parthenon sculptures—that is my next Bill—or for any other artworks or cultural items. It is a discreet, modest measure, limited in scope and time to rectify decades of injustice, and I commend it to the House.

I congratulate the hon. Member for Hendon (Mr. Dismore) on introducing the Bill and on his admirably brief speech. I do not think that I have ever heard him finish so quickly on a Friday—it has not happened in living memory. He is right to say at the outset that the holocaust was an event of such overriding horror, cruelty and depravity that, as my hon. Friend the Chairman of the Culture, Media and Sport Committee pointed out, parliamentarians on both sides of the House would support any form of restitution.

I declare a sort of interest on this issue. As many hon. Members will know, I served in the Army for just over a decade, from the mid-1980s to the mid-1990s, and saw active service in four separate war zones. The issue of art looted from war zones and their periphery is therefore unfortunately familiar. I look back on my time in Sarajevo in the early 1990s and well remember the destruction of the fabulous old Ottoman library, and the looting of many priceless Islamic texts. We also saw the appearance of several valuable Serbian Orthodox icons, which had obviously been looted from Serbian churches, in the antique shops of the Muslim quarter of the city. Plunder and looting are as old as war itself, and it is right that we should do everything in our power to prevent it and, if we cannot, to restore objects to their rightful place when possible.

I am delighted to say that the Bill has my strong personal support and that of my party. However, I also strongly support the principle that cultural property residing in our national collections should be held by trustees at arm’s length and for the public benefit, rather than being subject to the particular political whims of the day. Any alteration to that principle should be enacted only by Parliament in exceptional circumstances. In my view, the holocaust is such a circumstance.

Several issues would benefit from further exploration during the subsequent phases of this Bill. First, on the question of the time periods and the sunset clause in the Bill, is a fixed period of 10 years the most appropriate means of measurement, as opposed to a rolling period? The latter would allow a reasonable period after the inclusion of an object on the appropriate statutory list, whereas an absolute, fixed period could leave a claimant disadvantaged if, for example, an object appeared on the list toward the end of that fixed period.

It is also worth noting that in the nine years since the Secretary of State set up the Spoliation Advisory Panel, it has reported on only eight cases. Inevitably, as the time since the end of the second world war lengthens, it is unlikely that the number of applicants bringing cases to the panel will increase. The reasonable expectation must be that the numbers will decline. Museums—a number have contacted me in the past couple of days—have carried out considerable research into the Nazi-era provenance of their collections, which has been published online with the involvement of the Museums, Libraries and Archives Council. In many cases, museums feel that they have exhausted the reasonable efforts that can be expected of them within the confines of their budgets to establish the 1933 to 1945 provenance of their collections. For many museums, documentation to establish the ownership of objects whose provenance has not already been traced to that period simply no longer exists.

Secondly, the various Acts under which the boards of trustees of the national museums have been established range over a considerable period and give different powers to the boards of different museums. Clearly, further detailed examination of the interaction of each board’s powers is necessary, which hopefully could happen in Committee.

Thirdly, as the hon. Member for Hendon set out in his speech and in the short title of the Bill, the measure applies only to the holocaust. Sadly, there were many atrocities before that time as there have been subsequently—in Bosnia, as I said, there was clearly considerable looting of works of art. Sad though each of those atrocities is, they should be dealt with individually, case by case. The Museums Association’s code of ethics, which was updated two years ago, already covers claims on objects in other periods and sets out the agreed ethical codes and standards that allow museums to return items from their collections. The MLAC ensured that its accreditation scheme incorporates that code.

Fourthly, although the existing panel can offer swift, independent and transparent assessment of claims in a way that is cost-effective for all parties, its claims are, correctly, advisory only. The Bill should not undermine the arm’s-length principle on which national museums and galleries are governed. Our national collections are vested in the boards of trustees of the various museums and galleries, and the decision whether to de-accession from those collections must reside with those trustees.

Finally, and in some ways least importantly, three small tax implications need to be considered. First, the Bill will need to decide the appropriate level of capital gains tax payable if an object is sold after being returned to its original owner. Furthermore, careful thought needs to be given as to whether any ex gratia payment is free of tax. Secondly, on inheritance tax, it would be harsh indeed if an object returned to a claimant subsequently had to be sold to pay death duties. Some form of exemption may be appropriate. Thirdly, donors to museums do not always know that their objects were stolen during the holocaust. In such cases, which need careful investigation, there should not be a tax penalty—in effect—for doing the right thing.

I should like to conclude by saying three things. First, to go back to where I began, I congratulate the hon. Gentleman on securing his place in the ballot and on introducing the Bill. Secondly, my party and I look forward to the Public Bill Committee, when we can examine in greater detail a number of the issues that we have outlined today. However, thirdly and most importantly, the Bill, particularly in view of the circumstances pertaining to the holocaust, ought to enjoy our full support.

I, too, congratulate the hon. Member for Hendon (Mr. Dismore) on introducing the Bill and providing this opportunity for a short debate on what it attempts to do. I welcome the measures in the Bill. It is right that it refers only to the holocaust. Had we had a debate in which we were dealing with all sorts of other issues, such as the Elgin marbles, different points of view might have been expressed. Given the extreme circumstances of the holocaust and the subsequent events, however, it is right and proper that we should establish a system to deal with what the hon. Gentleman described as a loophole in the spoliation procedure, which does not allow trustees and museums to return looted art to its rightful owner.

I agree with what the hon. Member for Faversham and Mid-Kent (Hugh Robertson) said about the sunset clause. We support the idea of such a clause, but there needs to be further discussion about the fixed time of 10 years. We have received advice from the British Museum that it would favour a time frame of, say, six years from the date of the publication of an item on a published statutory list of objects with doubtful provenance from the 1933 to 1945 era, with a view to completing the process within a further six years. This would provide museums with the comfort of knowing that, once the item had been listed, anyone wishing to claim that art would have to do so within a set time period. That would be a useful way forward.

The hon. Gentleman also mentioned taxes. If someone had donated an item to a museum, and it was subsequently proven to have doubtful provenance, they should not lose the tax advantage that they gained by donating the item. Notwithstanding those two points—and provided that there will be ample opportunity to discuss them in Committee—we will be happy to support the Bill.

I should like to add my congratulations to my hon. Friend the Member for Hendon (Mr. Dismore) on successfully introducing the Bill to the House. No one could question his dedication to this issue. His sleepover technique is well known in Parliament, and it has resulted in his gaining prominent positions for his Bills. He has considerable expertise in taking forward this type of Bill, and I know that it will be well managed in his hands.

The Government fully support the general intentions behind the Bill, but we will wish to table amendments in Committee to refine the text. I think that that desire is shared by Opposition spokespeople as well. So many years after the end of the holocaust, it is high time that we fulfilled our commitment to change the law in this area. As long ago as 2005, the Government announced that they intended to do just that, and my hon. Friend has given us a good potted history of the events since then. He rightly said that we had long sought a legislative opportunity to take this forward. We had intended to include relevant clauses in the heritage protection Bill but, sadly, it failed to make it into the 2008-09 legislative programme. Thanks to my hon. Friend, however, we now have a solution.

In 2000, the United Kingdom made its own important response, partly in recognition of the internationally agreed 1998 Washington declaration, by establishing the Spoliation Advisory Panel. My hon. Friend took us through what the panel has managed to do. I would like to take this opportunity to thank Sir David Hirst, the panel’s chairman, and its other distinguished members for the first-class advice that they have provided to us over the years and for all the hard work they have done.

Even though the number of cases that the panel has dealt with is very small, the Government believe that the moral arguments are sufficiently strong to justify the changes that we are seeking to bring about by working with my hon. Friend on this Bill. There are inconsistencies in how claims made to the panel may be resolved. The Bill gives us an opportunity to do something about them.

University museums and those run by local authorities can return items when the panel has upheld a claim and Ministers have accepted the panel’s recommendation. However, in the case of the English national museums listed in the Bill, primary legislation prevents the trustees from removing an item from the permanent collection in this way. Claimants have been offered ex gratia payments instead. The aim of the Bill is to enable the trustees to return an item when the panel upholds the claim and recommends a return.

In 2000, the Select Committee on Culture, Media and Sport in its seventh report stated:

“We consider that the case for special treatment…of alleged wrongful taking during the period 1933 to 1945 has been convincingly established.”

Later on, it said:

“Where a claim has been upheld and restitution is seen as appropriate by all parties, it is essential that legislative barriers to such restitution be removed.”

In 2006, my Department issued a consultation paper entitled “Restitution of Objects Spoliated in the Nazi-Era”. The document considered the main question of whether the statutory restrictions on national museums should be removed and associated issues. The conclusion was that removing the statutory restrictions that stop museums from de-accessioning works of art lost during the Nazi era would be beneficial to all. They also felt that the legislation should include a sunset clause to provide clarity and certainty for everyone involved. I understand that my hon. Friend would like to see that extended to 10 years. The hon. Member for Faversham and Mid-Kent (Hugh Robertson) made several very relevant points about the length of the sunset clause, which we would like to discuss in Committee.

The Government agree with the Select Committee that the case for special treatment of alleged wrongful taking during the period 1933 to 1945 has been more than convincingly established. The aim of the Bill is to enable specified national museums to remove items from their collections and to return them to claimants when the return is recommended by an advisory body established by the Secretary of State and when the Secretary of State accepts that body’s recommendation. Such an advisory body already exists in the shape of the Spoliation Advisory Panel. We would intend to specify the museums within the Bill, as we did in the Human Tissue Act 2004, which was drafted to allow nine named national museums to be able to return human remains in their collections in cases where they decided that it would appropriate to do so.

The power to de-accession objects would apply only to those cases in which the Spoliation Advisory Panel upheld the claim and recommended the return of the object, and in which the Secretary of State had accepted that recommendation. I repeat that because it defines the narrow measure that we are trying to introduce. I should also make it absolutely clear that museum trustees will continue to take the final decision; like the hon. Member for Faversham and Mid-Kent, I defend the arm’s-length principle in this case. The measure is in keeping with that principle and recognises that trustees are responsible for the items vested in their care; it is not for the Government of the day to tell trustees what to do with them.

The Government have had discussions with the devolved Administrations on the Bill as it stands—and, as it stands, it applies to England and Wales. There is no need for the powers to apply in respect of any named institutions in Wales or Northern Ireland because the principal museums there can already de-accession works from their collections. The Government are in touch with the Scottish Executive about whether they want to be included in the Bill; if they do, we will take the issue forward in Committee. In Committee, we will also touch on the tax issues raised by the hon. Members for Faversham and Mid-Kent and for Rochdale (Paul Rowen). There will need to be discussions with Her Majesty’s Treasury and Her Majesty’s Revenue and Customs about these matters.

To summarise, I should say that the Government’s position is that the current arrangement whereby claims are referred to the Spoliation Advisory Panel works well. It is widely accepted by museums and claimants as a useful mechanism for resolving claims. The Government do not see any value in interfering with a system that is working so well. However, we believe that it is fundamentally wrong that the law should prevent museum trustees from returning cultural property when they, and the Secretary of State, accept the advice of the Spoliation Advisory Panel. The situation could be remedied simply—by amending the Government statutes of our national museums. My hon. Friend’s Bill provides a long-sought-after opportunity to do that. The Government therefore wish to support the Bill, subject to drafting changes in Committee. It is with enormous pleasure that I commend it to the House.

I thank all three Front Benchers for their welcome for the Bill. Some important points have been raised. I think that we can address most of them relatively easily, and I look forward to seeing my hon. Friend the Minister’s suggestions for amendments to refine the text. As she knows, I have worked closely with her officials to keep them informed throughout the drafting process that led to the Bill; this is the fourth or fifth attempt, and no doubt a sixth and seventh version will emerge in Committee. I hope that we will be able to come forward with a Bill that will satisfy the House on Report and on Third Reading and that we can, at long last, address an injustice that goes back more than 70 years.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).