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Westminster Hall

Tuesday 13 March 2001

[Mr. Michael Lord in the Chair]

Coram Foundation

Motion made, and Question proposed, That the sitting be now adjourned.--[Mr. Sutcliffe.]

9.30 am

Mr. Howard Flight (Arundel and South Downs): I thank the Speaker for granting this Adjournment debate. The intervention of the Attorney-General in Coram's affairs has presented major problems for Coram and the many other charities that have been endowed with works of art. The issues are cross-party, and I will be as brief as I can, as I understand that the right hon. Member for Holborn and St. Pancras (Mr. Dobson) and my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) also wish to speak in support of Coram.

I am a great admirer of the excellent child care work that Coram undertakes and a common-sense supporter of the Charity Commission and the solution that it worked out with Coram for the proper care and maintenance of Coram's unique collection of 18th-century pictures, which have been given to the foundation by trustees and supporters. If I may, I will first address the historic background and then the legal issues and arguments that the matter has raised.

Coram was established in the early 18th century as the Foundling hospital. It has discharged its charitable objects, which are directed towards children, with great success, particularly in recent years. That was illustrated by the Prime Minister's launch of the national surestart initiative at Coram in 1998 and the launch of the adoption White Paper there last December. Coram has also had substantial collaboration with the Departments of Health and Education and Employment and the Home Office in recent years.

The child care work, which covers 15 London boroughs in total, is still conducted from the original Holborn site. Every day, Coram works with more than 1,000 children and young people in the care system and some 600 families with young children. It runs 29 projects in six main areas: adoption of children with complex needs; specialist fostering contact services for children who have been separated from their parents; services for young people leaving care; family support; parenting education; and multi-agency services providing a one-stop shop for local families. In short, Coram is widely acknowledged as one of the most successful and effective child care charities.

In the 18th century, when both Hogarth and Handel were trustees, they and other beneficiaries gave the foundation paintings and other works of art for the benefit and education of the children and to attract interest in the charity and donations from people who visited those art treasures. The most important pictures are by Hogarth, but the collection includes works by Hayman, Copley, Gainsborough, Ramsay, Reynolds, Wilson and many others, and sculptures by Rysbrack

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and Roubiliac. The value of that unique collection of 150 pictures held at Coram's premises in Brunswick square is at least £17 million. However, Coram is unable to preserve the collection adequately and cannot open it to the public for security reasons.

Eight years ago, the governors of Coram began considering the feasible options open to them with regard to the disposition of the collection, in compliance with the foundation's charitable objects, the wishes of the original donors to the collection and common sense. The options included selling the collection intact to a major museum or gallery, selling it intact in situ--the collection is housed in the original 18th-century courtroom, which was reconstructed within the 1930s building in Brunswick square--selling the collection piecemeal, maintaining the status quo or following the scheme advised by the Charity Commission.

In August 1998, on legal advice and after much work by Coram and the Charity Commission, the commission issued an order under section 26 of the Charities Act 1993, under which Coram established a separate new charity, the Foundling museum, with the dual objects of supporting Coram's work and looking after the collection. The central aspect of the section 26 order and the scheme is that the collection should be managed by the Foundling museum trust for a period of 25 years, which is long enough for national heritage memorial funding and short enough for the Charity Commission to accept the arrangements as lawful.

The agreement was conditional on the new Foundling museum obtaining a grant of £2 million from the heritage lottery fund and the museum raising another £3 million. The offer of a grant from the heritage lottery fund was received, but the funding has been superseded by a heritage memorial fund grant of £3 million. The new charity has already raised £2 million, and a further £1 million is close to being raised. A fundamental condition of the scheme is that the Foundling museum is there to procure donors to Coram who will purchase pictures in the collection. Coram will therefore receive substantial on-going funding from realising the collection, which should be easier to do as it will be open to the public. It will also achieve the object of keeping the collection together and in situ. The Charity Commission has not asked Coram for any further information to satisfy it that the scheme is appropriate and lawful.

On 7 March this year, Coram received a further opinion from the Attorney-General, rejecting Coram's response to the particulars of claim and putting pressure on it to sell the unique collection of pictures. Clearly, that has considerable implications not only for Coram, but for many other charities in analogous situations. Given the self-evident larger picture, the recent opinion that was sent by Treasury solicitors, which focused, surprisingly, on minutiae, was not up to the main issue. The Coram scheme has the support not only of the Charity Commission, but of the national heritage memorial fund and many leading individuals in the heritage sector. The essence of the Attorney-General's legal objection appears to be the requirement of national heritage memorial funding that the pictures be lent to the Foundling museum for 25 years and the assumption that Coram could not therefore realise those assets for 25 years if it needed the funds for its child care objects.

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First, I think that there has been a misunderstanding of the scheme, whereby Coram would expect to realise most of the collection at best prices in a far shorter period and will in the meantime obtain an annual rent at the equivalent of market value on its building. Secondly, the Charity Commission was satisfied on the issue and that the scheme was lawful. A charity may invest its assets in any authorised investment and may also take action that incidentally confers benefit on another purpose that falls outside its strict objects. Surely the Attorney-General is out of order in, effectively, directing the governors to sell the collection now. The trustees have the factors before them. The Attorney-General's recent opinion appears not to realise that £2·25 million worth of the collection is fixtures in the building at Brunswick square that cannot be sold apart from the building. Coram's enforced retention of that part of the collection if it sold the rest as directed by the Attorney-General would mean the expense and administration costs of maintaining those assets.

The suggestion of a hasty sale seems to indicate that the Attorney-General has not considered the matter in the context of a charity that has existed for 300 years and will continue to last for ever. The opinion pays no regard to the fact that the collection was originally given specifically for the decoration of the Foundling hospital premises and to help to raise funds for the charity as well as for the children's benefit. I ask whether the Attorney-General would therefore take the view that other charities with objects such as education that have been endowed with valuable works of art over the years that are not applied directly in achieving their objectives should likewise sell their collections.

The issue arose when one of the 25 governors disagreed with the scheme and raised it with someone known to him in the Attorney-General's office. Is that individual--the acting master of Jesus college, Cambridge--now proposing that, given the recent funding cuts to Oxbridge colleges, that college should sell its art treasures forthwith to apply the proceeds to funding higher education?

The common ground for all parties is that the valuable collection of paintings should be realised, in whole or in part, for the benefit of children, which is the charity's objective. It is not legally, morally or practically right for the Attorney-General in an authoritarian fashion to substitute for the trustees' views his view of the best way to achieve that. They formed their views following deliberations over many years and using leading legal advice and a scheme worked out for them by the Charity Commission. What is the point of having the Charity Commission, which is supposed to work out such schemes, if Attorney-Generals can reinvent law on a whim and overturn its initiatives?

The trustees have concluded that the scheme continues to offer the best solution to all the various concerns. It will get the best possible prices for the collection and the individual pieces in it, and enable Coram to continue to use the collection to attract support and to raise money as the original donors intended. Even if the collection were sold, it would obtain for the charity a return that could be calculated

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in financial terms while the arrangements were being set up. There is no established legal reason why Coram should not be allowed to do that.

The latest counsel's opinion received from the Attorney-General focuses on legal niceties and detail, but in some matters it gets that detail wrong. For example, the grant made by the national heritage memorial fund was from the heritage memorial, not the heritage lottery, fund and takes the form of an endowment. Only income from the endowment can be used to make up the shortfall of running costs, and the endowment would be returned if, at any time, the collection were withdrawn from the museum.

The counsel's opinion has lost the perspective of the big picture and failed to address the real issues. The Attorney-General seems to have chosen to make a case study from Coram for the overturning of established precedents, in this case of a scheme drawn up and approved by the Charity Commission. The particular wickedness is that Coram has already incurred substantial expenditure--some £100,000 of legal expenses that should have gone to child care--and that the Attorney-General has consistently declined even to meet Coram to work out a sensible solution. It is surprising that he has disregarded his Prime Minister's public support of the charity and the consistent support of the Secretary of State for Culture, Media and Sport for the scheme.

The Attorney-General has a moral duty to co-operate with Coram to find a positive solution. He should be a solver, not a cause, of a major and unjustified problem for Coram and, potentially, for other similar charities. If the Attorney-General's authoritarian direction stands, it will, among other things, seriously threaten the gifting of works of art to charities with the intent of their retention. By the stroke of a pen, Government could instruct a charity to dispose of such assets to use their cash value for other objectives. Many charities are in analogous situations. I ask the Attorney-General and his officers to reconsider their stand and to sit down with Coram to work out a positive solution to what is a complex problem, but one for which the Charity Commission has proposed a solution, as was its brief.

9.44 am

Mr. Frank Dobson (Holborn and St. Pancras): I will attempt not to repeat too many of the excellent points that were made by the hon. Member for Arundel and South Downs (Mr. Flight).

Coram Family, formerly the Thomas Coram Foundation, is possibly the oldest children's charity in Britain that does not run a school. However, I emphasise that it does not live in the past. It has always tried not just to keep up with the times, but to lead the way in developing new methods of helping impoverished children and young people, particularly those growing up without the help of one or both parents. Today, the charity has around 130 professional staff and more than 100 foster carers and volunteers. It works with more than 1,000 children and young people in our care system and with around 600 deprived families in the locality. It runs 29 special projects, including one that deals with the adoption of children with complex needs, specialist fostering services and contact services for children separated from their

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parents. One scheme especially dear to my heart is that for children leaving care, who have been neglected for far too long. Generally, the charity provides family support and education.

For decades, the foundation pioneered improved ways of helping children, which have been adopted nationwide. It has been a continuing source of innovation. Never in its history has that been more true than in the past few years: with the assistance of Government grants from the Department of Health, the Home Office and the Lord Chancellor's Department, it has funded new developments, including the adoption concurrent planning project, which has the support of the judiciary and the legal professions, the early excellence centre, a special project for black young men in care and a pilot project for helping teenage parents cope.

Coram Family is not an old-fashioned, establishment charity that is more concerned with paintings than children, resting on its laurels and musing on its past days of glory. It is up to date and leads the way in its field, which is no doubt why, as the hon. Member for Arundel and South Downs said, the Prime Minister and the Secretary of State for Education and Employment chose it as the location for the national launch of the surestart initiative, why the Prime Minister recently launched the adoption White Paper there and why, even more recently, the Secretary of State for Education and Employment launched the national children's fund there. It has perhaps partly been chosen as a venue because the shadow Cabinet held several successful meetings in the courtroom at 40 Brunswick square in the months running up to the previous general election. It is a way of putting funds into the pockets of Corams Fields while providing excellent premises.

The headquarters of Coram Family are located in King's Cross in my constituency. Like the right hon. Member for Cities of London and Westminster (Mr. Brooke), I am proud to be a patron of Coram Family, although, like him, I am not one of its governors. I chair the separate charity, the Corams Fields and Harmsworth Memorial Playground, which is responsible for providing play facilities for local children on an adjacent seven-acre site. Both organisations take the name "Coram" from Captain Thomas Coram, the pioneer of child welfare who in 1739 established the Foundling hospital, the buildings and grounds of which covered the sites today occupied by Coram Family and Corams Fields.

It is partly because of that long-standing history that the debate is taking place today. From the outset, the Foundling hospital attracted the support of artists and musicians, none more famous than Hogarth and Handel. The collection of British art that grew up as a result included Hogarth's portrait of Thomas Coram, two of his other paintings and works by Gainsborough, Ramsay and Reynolds. The collection also comprised memorabilia relating to the generations of children who, for more than 200 years, had found shelter under the roof of the Foundling hospital. An organ and musical score were given to the hospital by Handel, who is said to have conducted the first London performance of "The Messiah" in its chapel.

After the Foundling hospital was demolished in the 1920s, the collection was moved to 40 Brunswick square, a building specially built to house the collection

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and to provide headquarters offices for the charity, which then became the Thomas Coram Foundation. The courtroom from the 18th-century Foundling hospital building was transferred to 40 Brunswick square piece by piece, including the plasterwork, murals, fireplace and doorways. The future of the collection and buildings with its intimate links with Coram Family--I cannot overemphasise the intimacy of those links--is now at stake. The governors of the foundation have found it increasingly difficult in recent years to ensure that the collection is looked after properly without imposing too much expense, in terms of both money and management time, on the funds of the charity, which must rightly and by law be devoted to the care of children.

Recently, the headquarters offices were moved out of 40 Brunswick square to a more suitable building nearby. The governors intended to take that opportunity to improve the care, display and security of the collection at 40 Brunswick square and to use the lower ground floor as an education centre for children, with particular emphasis on art and music. The governors considered a number of alternative ways of discharging their duty to devote the assets of the charity to the needs of child care, while at the same time keeping together the valuable collection with its close relationship with Coram Family. In 1998, they formulated a proposal for a separate trust, to be called the Foundling museum, to which Coram Family would lend the collection for 25 years. The proposal was to house it in Brunswick square, but better and more securely than in recent years. That would keep the collection together on its present site in King's Cross, where some of the items have now been located for more than 250 years.

During the 25 years, the Foundling museum and its premises would be used to help to raise funds for the children's charity. The governors hoped to realise the value of the collection, estimated at around £7 million, by selling individual items, subject to the condition that they remained at 40 Brunswick square. The capital thus released would be devoted to the child care objectives of the foundation. Acting in good faith, and, rightly, wishing to comply with both the letter and spirit of charity law, the governors sought the agreement of the Charity Commissioners to the proposal for a separate subsidiary Foundling museum trust. That they obtained, subject to a deadline of March 2000 for completing the necessary fundraising. They set about raising from outside sources the £6 million needed for the project.

To date, the governors have been pledged £5 million, including a £3 million grant from the national heritage memorial fund. In early 2000, they sought the Charity Commissioners' agreement to extend the fundraising deadline from March 2000 to April 2001. That appeal commanded the support of every governor except one--Peter Glazebrook, a law professor. He objected to the Attorney-General. Then, as I understand it, without seeking any information from Coram Family on behalf of the rest of the governors, the Law Officers wrote to tell Coram Family that the museum project fell outside its charitable objects and was therefore unlawful.

I do not know whether it is customary for the Law Officers to give an opinion in that way without first hearing both sides of the story. Such a procedure might be not only acceptable, but necessary in cases involving

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serious criminality such as fraud or misappropriation of funds, but it seems unfair, unreasonable and completely over the top in relation to the public actions of a long-established and reputable charity, acting in good faith and with the prior knowledge and consent of the Charity Commissioners. Such practice by the Law Officers may be hallowed by time, but that does not make it right. Sadly, subsequent dealings between Coram Family's lawyers and the Law Officers' lawyers have been adversarial--a development to the advantage of none, other than those receiving legal fees.

When I was told of that unexpected, unwelcome and expensive development, I wrote to my hon. and learned Friend the Solicitor-General and made no pretence of possessing any knowledge of charity law: I have none. I am prepared to concede that the governors' proposal may be wrong in law: I simply do not know. The procedures may be wrong in law, but again I do not know. What I do know is that it must be possible for sensible people of good will on both sides of the argument to resolve a shared problem by working together. I hope that my hon. and learned Friend will accept that that is the basic point that I have made to him repeatedly--by letter, telephone and face to face.

I was surprised and disappointed when my hon. and learned Friend indicated earlier this month that, should the foundation apply to the Charity Commissioners for an order to proceed further with the proposal, he would--I use the technical expression--"invite" the Charity Commissioners not to decide themselves, but to tell the governors to go to court. I shall spell out the possible evil consequences of such a court action in a moment. However, if instead of taking the current proposal back to the Charity Commissioners, Coram Family were to approach my hon. and learned Friend, spelling out the dilemma that it was trying to resolve and seeking his collaboration, would he be willing to help? Would he authorise his lawyers to get together with Coram Family's lawyers to work out a solution that met both the needs of their practical problems and his legitimate need to be satisfied with the lawfulness of what is proposed?

Throughout my dealings with him, my hon. and learned Friend has emphasised that it is not a political matter, but a matter of law, and that it is his duty as a Law Officer to ensure that the legal requirements are met. He is right to take that duty seriously, but an open-minded effort to establish common ground with the foundation could meet all his requirements. Surely a conciliatory rather than an adversarial approach is more likely to clear up the problem more quickly and less expensively.

I can do no better than pray in aid the support of the Lord Chancellor, Lord Irvine. He made his views clear in his keynote address to the millennium conference of the Chartered Institute of Arbitrators. He reiterated the point already made in the White Paper "Modernising Justice" that effective solutions proportionate to the issues at stake were required. He added:

I share that view.

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If the Lord Chancellor's wise words are not taken seriously, I shall fear for the child care work of Coram Family and for the historic collection. Adversarial attitudes and court actions cannot benefit the children who are supposed to benefit from the charity; they will benefit only those receiving the legal fees. It will be a bonanza for lawyers and a bonanza for art dealers may follow. I freely admit that neither of those comes high on my list of deserving causes.

I fear a bonanza for art dealers because the starting point for Professor Glazebrook and for the Law Officers appears to be that the best and only possible lawful solution would be for Coram Family to sell the collection now on the open market. That cannot be right, even from the standpoint of the fiduciary duty of the governors. It would not automatically raise more money than the disposal procedure contemplated by the governors. Lawful disposal of the listed courtroom would be difficult in practice and separate disposal of all the courtroom paintings would be impossible, as the paintings of other hospitals on the roundels on the wall are an integral part of the plasterwork. An enforced sale could result in reduced prices being secured by the charity; to sell the collection now could lose money.

That is not my main reason for objecting to the sale. I believe that it is right and proper to keep this unique and valuable collection of British art together and on display at 40 Brunswick square. If the advisers to the Law Officers say that that is unlawful, they must answer the fundamental question, "Since when has it become unlawful?" Was it unlawful for the Foundling hospital to keep Hogarth's paintings when they could have been auctioned when the paint was scarcely dry? Was it unlawful in the 1930s to build, at the charity's expense, 40 Brunswick square to house the collection? If it was not unlawful then, since when did it become unlawful and why?

Surely, it cannot have become unlawful just because Professor Glazebrook took it into his head to write to the Law Officers. Such a doctrine would surely have wider application. Are all charities, other than art charities, which hold valuable paintings and spend money on their preservation and security, held to be acting unlawfully? Does that doctrine apply to schools, colleges, universities and--perish the thought--even the Inns of Court? Surely the Law Officers do not mean to apply the doctrine to every charity, and if it does not apply to every charity, why does it apply to Coram Family? It would be a scandal if Coram Family were forced to spend precious funds on legal advice, jousts with the Law Officers and court actions. It would be an even bigger scandal if Coram Family's valuable and irreplaceable collection of British art were broken up and disposed of. How could this generation of decision makers justify such a thing in this time of unparalleled prosperity? No previous generation, even in times of war and upheaval, recession or slump contemplated forcing the Thomas Coram Foundation to sell its portrait of Captain Coram, which was painted by Hogarth, who presented it to the foundation. We should not consider it now.

I understand and accept that we are discussing a matter of law, not of politics. To break up and to sell the Coram collection would be an act not of political but of legalistic vandalism, and I cannot believe that the Law Officers would seriously contemplate such a thing. At

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present, the governors are maintaining the collection inadequately and at the expense of the charity, which benefits neither the collection nor the children whom the charity exists to serve. The governors are seeking a way of benefiting the children, while ensuring that the collection is displayed to best advantage and made more accessible to the public. If the Solicitor-General believes that what is proposed will not achieve those ends within the law, I urge him, having listened to the debate, to meet representatives of Coram Family for the first time, so that all concerned can work together to come up with a scheme that will. It cannot be beyond the wit of the finest lawyers in the land to devise a lawful scheme that benefits the children and retains the family collection. Nothing less will do.

10.3 am

Sir Nicholas Lyell (North-East Bedfordshire): I, too, am glad to take part in the debate. That it is not a party political matter was admirably shown by the excellent speeches, which I endorse, of the right hon. Member for Holborn and St. Pancras (Mr. Dobson) and of my hon. Friend the Member for Arundel and South Downs (Mr. Flight). They put the finger firmly on the problem that we must try to solve today.

It is plain that a crisis has developed in the affairs of this ancient and marvellous charity, and it is important that it be thoroughly considered and resolved in public. It is not a party political matter, but in the wider sense it affects the governing of this country. It involves the Charity Commissioners, about whom I have no criticism, and the Law Officers in their role as protectors of charity advising the sovereign as parens patriae--the parent of the country, one of Her Majesty's roles.

I am glad that the Solicitor-General is to respond to the debate. Having heard such strong feelings expressed about the foundation and having been properly appraised of the breadth of the matter, I hope that he will, in collaboration with the Attorney-General and the Charity Commissioners, steer it towards a satisfactory outcome, which meets the needs of Coram Family, Britain's most ancient and one of the most deeply respected child care charities. The charity has possessed from its earliest days--270 years ago--some of the most important heritage assets of English art and music. I support the right hon. Member for Holborn and St. Pancras. I am confident that there is a way ahead that can square the circle, if only the good will and close attention of all those involved can be brought to bear on the matter.

I do not apologise for going over the history of the charity because it sets the scene. The Foundling hospital was set up by royal charter in 1739 after 17 years of tireless and selfless work by Captain Thomas Coram, a retired sea captain and shipbuilder. He must have been one of the most remarkable personalities to arise from humble origins in the 18th century. He almost ranks alongside Wesley. It was the age of Hogarth and Daniel Defoe. Given the poverty of a rapidly growing London in those days, prospects for thousands of illegitimate children were terrible and usually ended in an early death.

For years, the taint of illegitimacy and the alleged fear of encouraging prostitution frustrated Thomas Coram's efforts. Eventually, following the French example of

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Les Dames de la Charite, Thomas Coram, having failed with the husbands, turned to their wives. They joined him to give the lead and the impetus. By 1739, the original royal charter contained on its lengthy roll at 40 Brunswick square the names of hundreds of supporters from the great and the good of the day. At the end of that list were the names of Thomas Coram himself, and the painter William Hogarth, who was to become one of the most significant painters in British art and the architect of the original Foundling hospital.

Moved by compassion and what Edmund Burke described as enlightened self-interest, Hogarth had the brilliant idea that, when the new Foundling hospital opened on 1 October 1745, British artists should give paintings to decorate the hospital and make it Britain's first public art gallery. Among those who contributed, apart from Hogarth, were the famous sculptor, John Michael Rysbrack, Thomas Gainsborough, Joshua Reynolds, Benjamin West and Richard Wilson. Many of those artists were governors of the hospital. They dined together in the courtroom once a year on St. Luke's day. It was at those dinners that the discussions took place that led to the eventual formation of the Royal Academy of Arts.

Hogarth was childless. He took an active part in the running of the Foundling hospital. Handel, who was also childless, provided the organ for the chapel. He gave an annual fundraising concert that regularly raised £1,000 for the charity. He wrote the Foundling hospital anthem, which was performed every Sunday. The great chapel of the Foundling hospital became one of the most fashionable places to worship on a Sunday. After the service, members of the congregation would visit the hospital, see the pictures and the foundlings, and donate money to the charity. The future of what Thomas Coram called his "darling project" was thereby assured.

I pay tribute to Sarah Richards for providing me with much of the historical background that I have outlined. She is the secretary to my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) who, with the right hon. Member for Holborn and St. Pancras, is a patron of the charity.

Over the next two and a half centuries, the charity changed and adapted. Originally, it cared for 600 foundlings from infancy until their teens, when they left for the world of work, often in the armed forces or in service. By the beginning of this century, the need for such residential care had diminished and the charity's objectives were altered to provide advice, guidance and help in the care and upbringing of children in their early years. As the right hon. Member for Holborn and St. Pancras said, the charity has always moved with the times and is frequently ahead of the times.

In the 1920s, the great old Foundling hospital was pulled down. In its place were built the charity's current premises at 40 Brunswick square and, later, the adjoining premises at 49 Mecklenburgh square, where its principal child care work is today carried out. The Foundling hospital was magnificent but otherwise austere and impractical. When it was pulled down, everything in its central governing rooms, including the courtroom, was carefully removed. The articles that were removed, which included original fixtures, were transferred and built into the new premises at 40

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Brunswick square, where they remain today. The right hon. Gentleman rightly asked whether that was illegal. I do not believe that it was.

The charity continued to develop. It does magnificent work. The right hon. Gentleman is right to say that, in the past few years, the charity and its director, Gillian Pugh, have been one of the main sources of inspiration and guidance in the development of the Government's child care policies, including their surestart programme. That is absolutely as it should be. Those of us in opposition should do as we did when we were in opposition before and get alongside charities in the voluntary sector. We should think ahead as we prepare for our return to government in order to get the right policies for the future, just as Labour Members did when they were in opposition. That is how our country is governed. I pay tribute to any charity that plays such a role, whichever party it is helping. The charity has been visited by a succession of senior and middle-ranking Ministers, from the Prime Minister downwards.

It is one of life's sad ironies that the wonderful collection of paintings, sculptures and other works of art, including Handel's original organ and other such Handeliana left to the charity by the composer, should have now become an object of dispute and disagreement. The dispute needs a fresh eye and good will, energy and imagination must be brought to bear. A lawful and constructive solution must be found. Above all, the problem, the charity and the future of this great collection must not be allowed to sink in a morass of pettifogging legalism that wastes charity funds on legal costs, which is what threatens to happen. It is to that noble end that the charity's 25 governors have been bending their minds and efforts for 10 years. Tragically, they have become bogged down in a legal dispute that I am convinced is capable of sensible solution, but which, without help, threatens to engulf the charity.

I was personally alerted to the problem less than four months ago and I have been doing my best behind the scenes, as has the right hon. Gentleman, to encourage a sensible solution. I salute him and the Secretary of State for Culture, Media and Sport, who made his views extremely plain to the Law Officers as long ago as 10 December 2000.

The charity's assets consist of its buildings, works of art and some £14 million-worth of financial investments. The works of art are insured for £29 million and are considered to have a value in the open market of between approximately £14 million--roughly the same amount as the financial investments--and £20 million. However, they are in serious need of preservation and conservation. The charity has always, rightly, concentrated its funds on child care work rather than heritage matters and it wishes to continue to do so. The expenditure on conservation over the past 100 years has been kept to a minimum of approximately £45,000 per year, which includes the funding of much of the operation of 40 Brunswick square itself. That building is now in deep need of refurbishment and the pictures need significant attention.

The charity's governors include the wife of a senior chancery division judge, as well as a Lord Justice of Appeal, Sir Mathew Thorpe. Having originally taken legal advice from Mr. Edward Nugee QC, a most

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distinguished charity silk, the charity recognised that it could not expend significant moneys on its heritage as the matter was outside its objects and changing those objects would be inappropriate. The governors therefore devised a thoroughly sensible plan to set up a separate charity that would be known as the Foundling museum. That charity would raise money from the public and from public bodies, including money from the heritage lottery fund and the heritage memorial fund. The works of art would be not alienated but transferred on temporary loan to that charity, which would take responsibility for housing and conserving them.

The key point, which those advising the Law Officers have not adequately taken on board, is that, with the governors, the charity would try to find a benevolent purchaser or purchasers, who would buy the works of art at their full monetary value--thus releasing that monetary value for child care uses--but, as an act of heritage charity, redonate them to the Foundling museum, where they would remain close to the charity to which the artists gave them and, unlike now, would be available for the public to see daily. They would also be available for one of the uses for which the artists originally intended them--as a continuing aid for fundraising for the charity and, if appropriate, for the education of, among others, the children for whom it cares.

I am glad to say that that objective had the constructive support of the Charity Commissioners in exercising their new and enhanced function under the Charities Act 1993, which I piloted through the House when I was Attorney-General. I believe that the Charity Commissioners were right then and continue to be right to try to achieve that end. To cite a passage from section 26 of that Act that is much quoted by counsel advising the Law Officers, it is

to take that approach.

Unfortunately, as we know, the matter has given rise to controversy, which no doubt started in the utmost good faith but is now getting out of hand. A technical question has arisen because of a dispute over the length of time for which the works of art should be loaned to the new charity--the 25-year loan--and the precise terms involved. It is also the result of the mistaken scepticism of one governor, Dr. Peter Glazebrook, acting master of Jesus college, Cambridge, and was encouraged, in good faith but mistakenly, by an over-narrow approach, which may have been based on inadequate instructions, by those including counsel entrusted by the Law Officers with handling the matter.

I do not want to demonise Dr. Glazebrook. All the governors are trying to do their best according to what they consider right, but he is only one of 25 distinguished people. The charity has taken careful legal advice and I am worried by the excessive weight placed on Dr. Glazebrook's views.

Mr. Anthony Steen (Totnes): Is it right that Dr. Glazebrook used to run a children's charity, an adoption service at Cambridge, which experienced

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financial difficulties when he was chairman? Exactly the same thing is now happening to the Coram charity, of which he is a governor.

Sir Nicholas Lyell : I am grateful to my hon. Friend, who has a deep knowledge of the matter and will, I hope, catch your eye, Dr. Clark. I do not want to speak for too long, but I understand that that is true. It would be a great pity if Coram Family, having picked up what I believe is called Anglia Adoption and helped it out of financial difficulties, should thereby be mistakenly steered into financial difficulties of its own.

Dr. Glazebrook referred the matter to the Attorney-General and the Charity Commissioners have been frightened off. Having been told by the Attorney-General's legal advisers that what they were planning to support was unlawful, they felt unable to remake the order under section 26 of the 1993 Act, which they had previously made, but which had expired with the passing of time, as it was intended to apply only for a limited period. The efforts of the charity to get alongside the Attorney-General and his officials and counsel in meetings formal and informal have so far been frustrated. The right hon. Member for Holborn and St. Pancras rightly emphasised that point. However, I am not sure how far either the Attorney-General or the Solicitor-General has been personally involved in detailed meetings on the matter. I hope that the Solicitor-General will be able to tell us about that. I want to encourage, not to criticise him. I look to him to solve the problem.

In November 2000, the charity and Farrer and Company, its new solicitors, received a 37-page document, described as the third draft of particulars of claim in the name of the Attorney-General as claimant, purporting to claim that the governors' entire plan was unlawful. It is a long, highly tendentious and one-sided document, clearly based on detailed notes and instructions from Dr. Glazebrook--I can think of no other possible source. The delivery of it in draft was no doubt made with good intentions to follow the guidance of Lord Woolf, who is now the Lord Chief Justice, in the reforms of civil proceedings that bear his name. However, I doubt whether that is what Lord Woolf had in mind.

The charity, through its solicitors, has had to prepare a detailed point-by-point response that rightly puts the picture in a different light. It has thereby incurred to date some £100,000 worth of legal costs, with the prospect of far more. Those of us who have expressed our concerns and felt it right to raise the matter in the House are disappointed that the meeting between the Solicitor-General and the Charity Commissioners to discuss the subject constructively has been postponed. We understood that it was to take place soon.

The charity has now received a further opinion from counsel, of which I have been sent a copy. I am sorry to say that those advising the Law Officers still fail to see the matter properly in the round. In a number of key places, the document either mis-states or shows that they fail to understand the governors' true intentions. They do not appreciate the governors' genuine intention to facilitate the sale of those objects in the circumstances that I have described.

The document seems to set out to rubbish the governors' methodology, suggesting erroneously that they might have had it in mind to go ahead without a

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section 26 order. They certainly did not intend to do that. It ends by suggesting--it does not specifically state this--that the only available course, if maximum return is to be obtained for the charity, is to sell the pictures on the open market, even though the collection will thereby be dispersed. Thus the opportunity will be lost for ever to continue to benefit the charity by encouraging fundraising in the way in which Hogarth and others intended.

What should the charity do? Should it spend more money on legal costs? Unsurprisingly, the governors are frightened of that, faced with the unlimited financial might of Government, by whom key points are simply overlooked.

The key points that I ask the Attorney-General to take into account are as follows. For many years, the governors have sought a solution that would raise the full value of the collection for the child care charity, while keeping it together. They have sought, too, to maintain the close links between Coram Family and the museum, albeit through the Foundling museum, the new charity. The Charity Commissioners--provided that they are not frightened off by the Attorney-General--have assisted the governors in finding a lessee for 40 Brunswick square, which is in desperate need of refurbishment. The lessee is prepared to refurbish that building at a cost of £2.5 million and a saving of £60,000 per annum on the maintenance of the collection. In addition, the national heritage memorial fund has offered an endowment of £3 million to run the museum. The pictures are to be loaned or leased to the museum for 25 years, but there is no intention for them to remain there. The clear intention--it has been expressed time and again to those acting for the Law Officers but it does not appear to have been accepted--is to find a charitable buyer of the pictures at a much earlier date, so that the full value of the collection can be released for child care purposes. Those suggestions, put together, must constitute the ideal solution.

Clearly, there is a risk that a charitable purchaser will not come forward and that the lease might therefore last the full 25 years. However, counsel seems to be simply writing off the attempt as speculative. That is too narrow a view. It is founded on the notion that a charity that owns substantial artistic assets that could be sold to provide funds for its charitable work and the preservation of which is not a direct part of its objectives, is under a direct obligation to sell them. That is a false notion. If it were correct, it would rightly cause an outcry.

Nor would outright sale be free from difficulty. As my hon. Friend the Member for Arundel and South Downs said, 40 Brunswick square is a listed building. Its fixtures are worth £2.5 million of the charity's heritage assets. They cannot be removed. As a result, the purposes for which the building can be used are severely restricted; for example, to strip it out and convert it to office use is not an option.

The pictures were donated by great artists to benefit the charity and the children in its care by enabling it to raise money. The charity has held the assets for 270 years. Its governors have proposed an imaginative scheme that attempts to implement that noble aim in 21st-century terms. It should be given a chance to work.

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The Solicitor-General's suggestion that the charity should not be allowed to proceed without an application to the court freezes the blood, particularly if the attitude towards its sensible scheme continues to be as destructive as is suggested, sadly, by the legal documents to which I have referred. The cost of such protracted legal process could be horrifying. It has been hinted that the Attorney-General might be prepared to enter into an alternative dispute resolution. Even if that were pursued along strictly legal avenues, the costs would be likely to be little less alarming.

The right action would be to put the litigious approach on hold. Even if the full 25 years passed without a sale, little would be lost in terms of the charity's 270-year history. It is worth remembering that the last time that the charity was reconstructed, 56 acres of north London were sold, which, with hindsight, was a mistake. Judgment must be exercised in such matters, and the right people to exercise it are not the Law Officers but the governors, provided they are properly advised and act in accordance with law.

The Solicitor-General seems to be proposing to force the matter into court. That would be wrong. The scheme could, no doubt, be improved. It might be possible to shorten the overall time limit without some of the benefactors falling out. There is always room for compromise on details in such matters, but when an ultimate objective is noble, it is the duty of the protector of charity to facilitate rather than to impede. I look to the Law Officers to bend their energies to do so.

Several hon. Members rose--

Dr. Michael Clark (in the Chair ): Order. The two hon. Members who are winding up the debate must be given the maximum time as the matter is complex. Only 12 minutes remain and three hon. Members wish to speak. I hope that they will bear it in mind that all hon. Members want to have enough time to get their points across.

Mr. Edward Garnier (Harborough): I trust that I shall not speak for long, although, when lawyers or politicians say that, they should usually be disbelieved. I shall fit my remarks into the time available.

Dr. Michael Clark (in the Chair ): I shall try to call the hon. Gentleman to speak at 10.40 am. If he is brief, the Solicitor-General will have longer to wind up the debate on this complex matter.

10.28 am

Mr. Tim Boswell (Daventry): I wish simply to associate myself with the arguments that have been advanced. That will allow my colleagues more time to participate.

I knew nothing about the matter until, by chance, my wife and I had an opportunity to view the collection last Thursday, as a result of a private invitation. I have not been nobbled by the trustees. I told their chairman that the cause was so good that I wanted to help and that I would attend this debate.

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The situation cannot continue as it is. That, at least, is agreed by the Attorney-General and the Law Officers. The matter must be resolved. The dangers of the present situation are that, if prolonged litigation occurs, we will reach the 21st-century version of Jarndyce v. Jarndyce and dissipate the assets.

At the same time, there is potential for the collection to be damaged while everything is being sorted out, without means, opportunity or funds that can be drawn down for conservation. None of that would benefit Coram Family, the children's charity that is the trust's main objective. I emphasise that both conservative and heritage activities and child-based activities have legitimate charitable purposes.

I tell the Attorney-General that we must find a solution, either by agreement or adjudication. I could suggest a third route of, if necessary, introducing legislation to facilitate the matter, although that would not be without cost and difficulty. The Attorney-General and Solicitor-General may know that the last time that affairs of the Foundling hospital attracted legislation was 1953, when the matter of birth certificates of foundlings was resolved. If we had to introduce such legislation, we would. Of course, we cannot ask Law Officers to whitewash the law or to remove its interpretation. We do not seek special favours from them.

My hon. Friends have made clear points about the law and, as a non-lawyer, I defer to them. However, I have experience of charity law and we all know that there are difficult cases. Once, as a trustee, I owned an alabaster altar, of which I had to dispose. At the time, I thanked God that I had neither the context nor setting to justify keeping it. It was duly disposed of, although it probably did not meet a good fate.

Such issues are difficult and we beg only for a constructive attitude that seeks to find a solution rather than to frustrate. As the newest boy on the block, that is all that I wish to say, albeit strongly, as the collection deserves a positive solution rather than an eon of legal wrangling.

10.32 am

Mr. Peter Brooke (Cities of London and Westminster): I shall not rehearse all the arguments that have been admirably and magisterially deployed by my hon. Friend the Member for Arundel and South Downs (Mr. Flight), my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell), who was formerly Attorney-General, and my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). I genuinely call him my right hon. Friend. I amicably share a constituency boundary with him and a patronage of the charity. The latter link derives not only from the changes and chances of personal and parliamentary friendship, but from my recent trusteeship of the Handel House Trust, which is in my constituency. We Handelians stand together.

I declare my interest as a patron of the charity that we are discussing. I also declare an interest as president of the British Antique Dealers Association and the British Art Market Federation. Although that is not necessarily relevant, one must be careful in such politically correct times.

I request that the Solicitor-General address the wider and consequential implications of this matter for museums, educational charities and other trusts, either

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in today's response or publicly following the debate. We all know about the controversial issues of inalienability of assets that are bequeathed to the National Trust, which is sometimes placed in the crunch of a separate public affairs crux. Dramas surround museums that choose to rid their cellars of works that are seldom shown, although they cannot be certain whether such works will reacquire relevance.

I am an old boy, as is my hon. Friend the Member for Daventry (Mr. Boswell), of a school that heaped coals upon itself by selling Gainsborough's largest portrait, which was bequeathed to it while I was at the school. By chance, the school's old boys included directors of two national portrait galleries. In Coram's case, artists and musicians gave their genius and the products of that genius to the foundation but what of an Oxbridge college, or similar institution, which has always commissioned outstanding portrait painters to paint its masters or most famous alumni?

I still bear the scars of the row that arose when I was Secretary of State for National Heritage, as the post was called then, and Royal Holloway college sold abroad three great pictures derived from the larger collection of its founder, which still hung in the college, ironically just for the purpose of supporting the college's educational aims. Would that today's case were but a cloud no bigger than a man's hand. We are dealing instead with a potential typhoon, whose happy definition in the Royal Navy's handbook begins with the words:

The spirit of Captain Thomas Coram would concur with that definition.

10.35 am

Mr. Edward Garnier (Harborough): I will endeavour to be as brief as I can because I feel sure that my hon. Friend the Member for Arundel and South Downs (Mr. Flight) and the right hon. Member for Holborn and St. Pancras (Mr. Dobson) want to hear from the organ, rather than the organ grinder.

I congratulate my hon. Friend on initiating the debate. It has been an interesting and somewhat esoteric debate on charity law and, in particular, on how it affects the future of the old, but still active and valuable charity, the Coram Foundation. As a result of the Attorney-General's intervention, the charity has had to spend around £100,000 in legal costs. That is doubtless good for the lawyers, but whether it is good for the future of the charity is a matter of some dispute. Among the many interesting points made by my hon. Friend, I was struck by the fact, which was emphasised by my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell), that at no stage has the Attorney-General or any of his representatives met directly with the charity. My hon. Friend was entirely right when he said that they must meet to work out a solution.

The right hon. Member for Holborn and St. Pancras candidly said that he had no knowledge of charity law, but asked that the Attorney-General invest a little common sense into the dispute. I have a confession to make to the right hon. Gentleman. I have no knowledge of charity law either, but I recognise common sense, especially when it wears a beard and grabs me warmly

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around the throat. The Solicitor-General should pay particular attention to what has been said by the two patrons of the charity present in the Chamber this morning. The right hon. Member for Holborn and St. Pancras, as the constituency MP, knows the work of the charity not only in his constituency, but outside it at first hand, and my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) speaks as a former Secretary of State for National Heritage. There is a huge reservoir of knowledge here, both legal and personal, which the Solicitor-General would benefit from listening to. I have no doubt that he will do so.

I also am grateful to my right hon. and learned Friend the Member for North-East Bedfordshire, the former Attorney-General and the longest serving Law Officer, for his speech. He gave us a brief history of the charity. The more one learns of the past and current work of the charity, the more one wonders whether the Attorney-General's intervention will prove useful. He described a situation that ran the risk of sinking into a morass of pettifogging legalism and a massive waste of charity funds on legal costs. Those were all strong and well made points, reinforced by the brief speech by my hon. Friend the Member for Daventry (Mr. Boswell). It was only due to his self-restraint that we did not hear from my hon. Friend the Member for Totnes (Mr. Steen) who has a personal interest in the matter.

I have been shown a letter from the Secretary of State for Culture, Media and Sport to the Solicitor-General dated 12 December 2000 in which he complains of the emotive language used by the Law Officers' advisers in their approach to the matter. Apparently, he says that selling the collection is not a satisfactory answer to the problem and a practical way forward must be found.

Has the Solicitor-General or the Attorney-General met the Secretary of State to discuss the matter? Have they or their senior representatives met either of the two patrons who are in the Room or any of the governors or their legal advisers--in person; I do not mean exchanging pleadings--to talk through the problem? It cannot be beyond the wit of the Attorney-General and Coram to reach agreement on the facts, the foundation's intentions and how best to exploit--I use that word in the neutral sense--the art collection for the benefit of the foundation's aims. It is time that the Law Officers came out of their entrenched position and condescended to discuss, at first hand and at close quarters, the issues that our interesting debate has revealed.

The implications of the Attorney-General's attitude are that the collection should be sold and dispersed. They go beyond that, however, as my right hon. Friend the Member for Cities of London and Westminster made clear. As my hon. Friend the Member for Arundel and South Downs said, the problem has wider consequences for the charitable world as a whole, especially those charities that own valuable art collections or other chattels.

Traditionally, the Attorney-General does all he can to save and to preserve great collections. I fear that in this instance--I do not want to descend into discussing the merits of the case--unwittingly or not, he is losing sight of the real purpose of the charity and the best aims and interests of its beneficiaries.

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The right hon. Member for Holborn and St. Pancras mentioned the remarks of the Lord Chancellor about the need for proportionality in legal disputes. That chimes well with the aims of the Woolf reforms of civil procedure. As I have said, until I am bored of saying it, although some cases will need a sharp injection of adversarial justice, that is not always the case. I am new to the issue, but it is an example of a case in which an adversarial approach is not best calculated to assist the progress of the foundation and its aims.

As a general rule, Law Officers do not publish advice to the Government or to others, but, in this case, at the very least, the Solicitor-General should tell us why he and the Attorney-General hold their present legal opinion. The Law Officers should use the opportunity provided by the debate to act as facilitators of a mutually satisfactory and economically sensible solution, not promoters of another Jarndyce case.

I know from family experience what happens when cases get stuck in chancery; my family had a case that began shortly after the second world war and was completed only when I was called to the Bar in 1976. It killed off two chancery judges and went to the House of Lords twice. As far as I can tell, no one much benefited from it--certainly not I.

Let us move out of the chancery fog described in the opening paragraphs of "Bleak House" to somewhere more beneficial, where the atmosphere of discussion is more conducive to the provision of a sensible solution, and hear from a Law Officer whose legal expertise is greatly respected in academia and in Government. Let us see whether he can persuade us that the attitude of the Law Officers is now more constructive than it has been.

10.44 am

The Solicitor-General (Mr. Ross Cranston ): There is no question but that the charity does valuable work. It is known in this country and abroad for its innovative work. It might help hon. Members to understand the concerns that I have and that other hon. Members and hon. Friends have properly raised if I begin with two preliminary points.

The first relates to the role of the Attorney-General in charity matters. As the right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell) said, that role, which is carried out on behalf of the Crown, is as a protector of charities--I undertake it on the Attorney-General's behalf. He represents the public interest in ensuring that charities are properly administered. A charitable trust has no beneficiaries in the sense that a private trust does, and the Attorney-General therefore represents the beneficial interest.

It is important to note that that role as protector of charities is carried out independently of the Attorney-General's role as a Minister. It is one of the many cases in which Law Officers do not act as members of the Government, but represent the public interest. The Lord Chief Justice recently emphasised what he regarded as the important constitutional position of the Law Officers. Our position in relation to charity matters, individual criminal cases and other matters falls within that category. It is fundamental to the integrity of that

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position that we discharge those public interest functions in accordance with the law, irrespective of political advantage, expediency or personal popularity.

The second preliminary point is on the role of the Charity Commission, a role which, as the right hon. and learned Member for North-East Bedfordshire said, is set out in the Charities Act 1993. I do not answer for the actions of the Charity Commissioners and I do not superintend them in the performance of their functions. Indeed, part of the Attorney-General's role can be to review decisions taken by the Charity Commissioners.

Having made those background points, I turn to the history of the Attorney-General's involvement in the matter. In April 2000, Dr. Peter Glazebrook--whom, I should point out to the hon. Member for Arundel and South Downs (Mr. Flight), I do not know personally--a member of the court of governors and of the general committee of the Thomas Coram Foundation, wrote to the Attorney-General. Dr. Glazebrook expressed concern about the legality of the proposal that the Coram Foundation should loan to the new charity of the Foundling museum, gratuitously and for a period of 25 years, its picture collection and premises in Brunswick square.

In response to the intervention of the hon. Member for Totnes (Mr. Steen), I say that I believe that Dr. Glazebrook acted with absolute propriety in carrying out his function of trustee of the charity. Dr. Glazebrook was concerned that the proposed transaction fell outside the objects of the charity, a defect that he considered could not be remedied by an order under section 26 of the Charities Act 1993.

As the right hon. and learned Member for North-East Bedfordshire said, that section gives the Charity Commissioners the power to authorise dealing with charity property where it is in the interests of the charity to do so, whether or not that would otherwise be within the powers exercisable by the charity trustees. However, section 26(5) of the Act provides that the Charity Commissioners can make no order under that section that would extend or alter the purposes of the charity. As has been said, the Charity Commissioners reached the view that an order under section 26 would be appropriate. The charity entered into heads of agreement that were purportedly approved by the Charity Commissioners in August 1998.

On receipt of Dr. Glazebrook's letter, I considered the matter with standing counsel to the Attorney-General on charity matters and with legal advisers in the Government Legal Service. I reached the conclusion that, on the basis of the material available at that time, the proposal fell outside the objects of Coram and that the Charity Commissioners did not have the power under section 26 to authorise the proposal. On my instructions, the Treasury solicitors department raised my concerns with the solicitors acting for Coram in July 2000.

In my view, the objection to the proposed scheme can be simply put: if the scheme goes ahead, for 25 years, the Coram Foundation will be diverting some £13 million to £18 million of assets--I do not know the exact value--from child care to arts and heritages purposes. I emphasise that those latter purposes are worth while. Right hon. and hon. Members have set out the charity's history and drawn attention to the importance of those

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works of art. However, arts and heritage are not the purposes for which those assets should be applied. The objects of Coram are, broadly, the support and maintenance of poor children--objects that stem from the royal charter in 1739, as amended by subsequent legislation, most recently the Foundling Hospital Act 1936.

Acting on behalf of the Attorney-General as protector of charity, it is my duty to ensure that charities act in accordance with their objects. The position in respect of the collection would be different if there were evidence that the individual paintings were held on special trusts, or subject to a requirement that they be retained unsold. I have seen no such evidence. Indeed, Edward Nugee, QC advised the Coram Foundation in 1997 that the pictures were not held on special trusts.

In those circumstances, Coram holds the collection in the same way as any other charity holds any asset. That is what distinguishes the collection from pictures which may be held on special trusts by, for example, colleges and Inns of Court. I therefore see no read-across from Coram to other charities that hold art collections on special trusts. In those cases, the works of art hold a clear functional value for the charity--evident in the educational value for colleges and Inns of Court. It is also possible for charities to keep works of art as an investment. As I said, there is no necessary read-across from other cases to this one, an issue that was raised by the right hon. Member for Cities of London and Westminster (Mr. Brooke).

I should add that the governors of Coram were not unaware of the legal problems when they were developing the proposals. Indeed, in 1997, Lord Phillips of Sudbury, a charity law expert, made it clear that the proposed scheme was outside the charity's purposes. In 1997, a small panel of representatives of the governors interviewed several solicitors with a view to their possible retainer. At interview, Lord Phillips informed the panel that it simply could not do what it proposed by way of setting up the museum and loaning the collection to it. He later reiterated that point forcefully in writing. Let me quote a passage from his letter:

He went on to emphasise that point. I should mention that his firm was not retained to do the work.

I am aware that some of the governors of the foundation regard the art collection as fundamental to its aims. I have seen comments from governors to the effect that, without the collection, Coram would be just another child care charity and would never move out of the second division. Such views tend to suggest that the proposed scheme was not aimed primarily at advancing the objects of Coram, but was calculated to further the ulterior purpose--I use "ulterior purpose" in the legal sense--of advancing heritage or museum objects.

Sir Nicholas Lyell : Before the hon. and learned Gentleman concludes, will he address the fact that the governors made it perfectly clear that their aim in lending the pictures and undertaking proper conservation work was to facilitate a sale, so that money

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could be raised and used for child care purposes, none the less retaining the link? Why is that not expedient for the interests of the charity?

Mr. Cranston : It might be. I will discuss the way forward at the end of my remarks.

Hon. Members raised the point--it relates in part to the intervention--that we are putting pressure on the charity to sell the collection. That is not the case. In fact, Coram has accepted that it will sell the collection to the museum. It is not as though we are pushing Coram in a direction in which it has not already decided to go. I believe that I, and those acting on my behalf, have acted constructively throughout the discussions. We drew up the draft particulars of claim, setting out our concerns in considerable detail. Those particulars were sent to the Charity Commission and to the solicitors then acting for Coram. I hoped that, by setting out our stall and asking Coram to come back with proposals, we would be able to move the matter forward.

It was our understanding that Farrer and Company, who has now been instructed on behalf of Coram, was to come forward with new proposals after reconsidering the matter from first principles. Indeed, Coram has come forward with further material since the start of the year. In the light of the seriousness of the matter and in view of the strong representations made by right hon. and hon. Members, I decided to seek further advice. I received a joint opinion from Peter Crampin, QC and William Henderson last week. In the spirit of co-operation, I have made that opinion available to Farrer and Company, and I am arranging to place a copy in the Library, in response to the point raised by the hon. and learned Member for Harborough (Mr. Garnier).

Mr. Dobson : Will my hon. and learned Friend seek an opinion from learned counsel about a lawful way forward that would meet the requirements of the charity?

Mr. Cranston : There are three possible ways to move forward. The first, that the objects of the charity might be changed, was raised by the hon. Member for Daventry (Mr. Boswell). That would be a long-term project, but it is a possibility.

The second way forward is for the matter to be considered by a court. That is undesirable but, given the stand-off, it might be the only way forward. I have set out my reasoning, but I might be wrong. If I am wrong, costs will be ordered against the Attorney-General. I would not wish to appeal if the court held against me.

The third way forward is for Coram to do more fundamental thinking about what it should do. One possibility--it is only a possibility; it has been raised this morning--is a sale on a deferred payment basis. The original 1997 scheme proposed a sale to the museum over three years. We have said that we could live with a three or perhaps five-year period, so a deferred payment scheme to the museum over that length of time might be acceptable.

I have every sympathy with the concerns that have been expressed during the debate. I do not want to be inflexible or awkward, but I am sure that hon. Members will appreciate that I have specific obligations to the

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charity that I cannot ignore. To do so would mean compromising the integrity of the role of the Law Officers. If--

Dr. Michael Clark (in the Chair ): Order. I am sorry, Minister, but we have come to the end of the debate. If you have been unable to say all that you wanted, perhaps you would like to write to the hon. Members present. We now move to the next debate.

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