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 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."—[ Hansard, 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 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."—[ Hansard, 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 Margaret Hodge.