Oral Answers to Questions — War Damage to Property.

– in the House of Commons on 6th February 1940.

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Photo of Mr Ian Hannah Mr Ian Hannah , Wolverhampton Bilston

asked the Chancellor of the Exchequer whether he or his advisers at the Treasury have completed consideration of the memorandum forwarded to him on the 16th December last, by the Association of British Chambers of Commerce, on the subject of war damage to property; and whether he can now express a view upon the suggestions put forward therein?

Photo of Mr John Simon Mr John Simon , Spen Valley

Yes, Sir. I have carefully considered the observations and proposals of the Association of British Chambers of Commerce and I will circulate in the Official Report a copy of the reply which I have sent. The House will see that I have come to the conclusion that the Government's policy, as outlined in my statement of the 31st January, 1939, and confirmed by the Statement of Policy on the Weir Report, cannot be abandoned in favour of these proposals.

Following is the copy of the reply:

Treasury Chambers,

Whitehall, S.W.I,

3rd February, 1940.

Dear Sir,

I am desired by the Chancellor of the Exchequer to say that he has now given careful consideration to the observations on the subject of war damage to property contained in the report enclosed with your letter of the 16th December, 1939.

The principal proposals in the report are that the Government should undertake to pay full compensation in respect of such damage to fixed property as soon as possible after the war; that legislation should be introduced to give effect to that undertaking; and that it should be compulsory on all property owners to contribute towards the cost of compensation by means of a small wartime premium and, if necessary, an annual premium after the war of not more than 10s. per cent. by way of fixed charge on the property, the latter to continue for such period as would ensure that the yield of the premiums, together with the Government's contribution, covered payment of compensation in full. The post-war premium would not be payable in respect of the first £500 of the total value of any owner's property. The scheme would apply to fixed property only.

Sir John Simon fully appreciates the helpful spirit in which the committee of your association have approached this matter and the care which they have devoted to their study of it. He regrets, however, that he does not find in their observations or their recommendations any grounds which would be adequate to justify a departure from the policy which the Government have hitherto adopted. It remains the view of the Government, and this is confirmed by the Weir Report, that the extent to which compensation can be given in respect of war damage to property can only be determined after the end of the war, when the total extent of the damage is known, and in the light of the then financial circumstances of the country. This fundamental consideration makes it impossible for the Government to promise now that full compensation, or a specified proportion thereof, shall be payable.

Nor does Sir John Simon see how that position can in any way be modified by a scheme which seeks to divide the provision of compensation between the Exchequer and a fund provided by an annual charge on fixed property. Whatever total compensation is ultimately payable, and however it may be provided, it will represent a draft on the financial resources of the country: the amount of such a draft which can properly be made must depend on the one hand on the total calls on those resources and on the other hand on the total demand which the Government will at the end of the war feel able to make, in any form, on the taxable capacity of the country, including that of owners of property.

In these circumstances, Sir John Simon has reached the conclusion that the Government's policy, as outlined in his statement of 31st January, 1939, and as confirmed by the Statement of Policy on the Weir Report, cannot be modified, and he cannot therefore undertake to introduce legislation on the subject at the present stage.

(Sgd.) B. Trend.

The Secretary,

Association of British

Chambers of Commerce.