I beg to move, in page 6, line 31, at the end, to insert:
3. Cost of professional services to be included in value payments.
The following words shall be added at the end of Sub-section (4) of Section three:—
and in computing a value payment the reasonable charges of a valuer when employed in connection with the settlement of a claim shall be treated as part of a value payment.'
The case for this Amendment is fairly simple. If hon. Members will look at Section 3 of the principal Act, they will see, in Sub-section (3) thereof, the words:
In this part of this Act, the expression 'proper cost' means "—
etc., and then:
and in computing the proper cost of any works the cost of the necessary employment of an architect, engineer, surveyor, land agent or other person in an advisory or supervisory capacity, in connection with the execution of the works, shall be treated as part of the cost of the works.
When a cost of works payment is concerned, you want to bring in all those technical experts, but, as a general proposition, when it is a question of a value payment, the ordinary person who wants advice will get it from a valuer. It seems to me that a fee paid to the valuer is as much a part of the payment as a fee paid to the other professional persons mentioned in connection with the costs of works payment. The case seems to me of outstanding justice.
My hon. Friend is quite entitled to refer back to Section 3 (3) of the principal Act, but I noticed when he read it out that he did not stress the really important words in the last line but one, which state that the payment in question is made in connection with the execution of the works. That is, in fact, the only case in the Act in which power is given for a payment of that kind. That has nothing to do with the proposal in the Amendment, which is that payment should be made for professional advice in preferring a claim, which is quite another matter to the execution of works in respect of a cost of works payment. While payment to architect, engineer, surveyor or land agent might be a legitimate charge—and Parliament decided that it was—my hon. Friend is shifting his ground from those services definitely rendered, particularly of an architectural or semi-architectural kind. He is asking that a payment should be made for the cost of professional advice in preferring a claim.
It is not, in fact, necessary to have professional advice at all in order to prefer a claim. The Commission's claim forms say that it is desirable that the claim should state the value which the claimant places upon his property, for the purpose of a value payment, but the Chancellor of the Exchequer has made it quite clear in public pronouncements—indeed, it is stated on the note which is attached to the paragraph—that the claimant does not have to place a value on his property if he does not have a professional adviser. It is not necessary for him to put in a figure. The Commission will take its own view as to the value of the property and inform the claimant. If the claimant is dissatisfied, it will then be open to him to seek professional assistance, at his own charge, afterwards. It would be a mistake to open up this possibility. My hon. Friend must not overlook the fact that, if we conceded costs for charges in respect of making claims, as a great number of the payments have afterwards to be apportioned between the property interests, straight away you would have claims for the cost of professional advice from all the subsidiary people coming within the apportionment.
While not wishing to cast any aspersions, I am certain that it is common knowledge that, in certain fields, all sorts of people turn up to try and make an honest penny out of propounding claims which may or may not be good ones. I am afraid we might easily find ourselves giving encouragement to a great number of people to enter what they might think a profitable field, if, at the end of it all, the expenses were paid for by the State. A case does not seem to have been made out for professional advice at the stage of putting in the claim—which is all that the Amendment refers to—and as it has no relation to the other kind of expenditure which is involved in the cost-of-works payment for the execution of the works, I am sorry that I cannot accept the Amendment on behalf of my right hon. Friend.
I am disappointed with my right hon. and gallant Friend's statement. Let us have a look at it. A vast number of people do not know what is a fair value to put on their houses. All they know is that some years ago they bought them at a certain figure. It may be the only property they have, and they are not familiar with the fluctuations of property values. They are forced back to placing a value on their property in respect of 31st March, 1939. How are people to make that calculation? My right hon. and gallant Friend says it is all right, because the Commission will really do it. The Commission are to value all the properties; but their statutory duty is to be as mean as possible.
It is the implication. We know that every claim settler tries to beat down the claimants as far as possible. My right hon. and gallant Friend surely does not mean to suggest that the War Damage Commission are exempt from that very human attitude. My impression is that they are doing that duty very efficiently, to judge from the communications which reach me. When the War Damage Commission has been as mean as possible, claimants who are dissatisfied with that meanness have to hire a valuer, and at their own expense. I think the case I put was not too strong. What do we want? People have houses which are worth so much. They are being compensated, and they ought to receive the net amount of the cash value which they have lost. Instead of that, they are to have certain charges made against this cash value, for the essential professional advice which they will have to obtain.
I do not know whether my right hon. and gallant Friend is a property owner. If so, I wonder whether he is putting in a claim for any property he might have lost and, if so, whether he is doing so without advice. Is he not taking the precaution of putting in the value which he thinks is justified? For that purpose one has to pay fees, which are not very large in most cases. The attitude of the right hon. and gallant Gentleman seems unduly mean. He justifies it by saying that the State should not be called upon to pay the money, but the State has not put a single bob in this kitty yet, as I pointed out on the Second Reading of the Bill. We are dealing not with State money but with the £40,000,000 a year which these people are paying into the Fund. The State has not started yet, so my right hon. and gallant Friend must not defend his case on the ground that this is State money which we are sharing out. What we are proposing to share out more equitably is money belonging to the contributors. I do not think the Minister has sustained his case. It is a reasonable precaution, particularly for poorer people, that a modest sum should be spent on getting advice so as not to be treated with undue harshness by the Commission.
I think that my right hon. and gallant Friend has taken a mistaken view of this matter. The property-owner cannot possibly know the value of his property, and he may not be helped in the matter by the price that was paid for it. He or his forefathers may have paid for it, but the value represented in the deed is no criterion of the values today. The only basis of calculation, if the property-owner is efficient enough to do it—which is very problematical—is to take his Schedule A assessment and make a series of calculations to arrive at the value of his house. The comparison of the professions mentioned in the original Act is not quite fair. It is true that the cost of works payment is defrayed on the basis of work done by the architect, engineer, etc., but those professional people have nothing whatever to do with the valuation of property. That is not the business of an architect, but of another type of professional man. If you admit that it is fair to pay a professional man for determining the cost of works payment, surely it is fair to pay the professional man who is employed to determine the value payment. I do not think it is right to say that the representative of the State if infallible or that you must willy-nilly accept whatever the valuation officer determines is the value of the property. I therefore ask my right hon. and gallant Friend to reconsider the attitude he has taken up, which appears to me to be rather untenable.
I am very surprised that my right hon. and gallant Friend is not accepting this Amendment, because it seems to me to be eminently reasonable and one which brings it into line with the granting of a payment in connection with the cost of works. Surely the person who makes a claim to a value payment is quite as much in need of advice and assistance as the person who is entitled to a cost of work payment.
I fully appreciate that, but my right hon. and gallant Friend might as well argue that it is not necessary to employ professional assistance in carrying out the works.
You might have an unusual building, but equally you will have an unusual settlement if you try to negotiate a settlement without the services of a valuer. Let me remind my right hon. and gallant Friend what the value payment is. It is defined in Section 3, Subsection (5) of the principal Act, and I would like to remind him of what the claimant has to do:
For the purpose of the last preceding Subsection, … "—
That is, to determine the amount of depreciation of the property;
… the value of a hereditament in the state in which it was at any time shall be ascertained by reference to prices current at the 31st day of March, nineteen hundred and thirty-nine, …
The owner of the House has first of all to determine prices in relation to what they were in 1939. How does he know? He might never have had occasion to ascertain prices in 1939.
… and shall be taken to be the amount which the fee simple in the hereditament in that state might have been expected to realise on a sale thereof made in the open market on the said day with vacant possession,…
How does he know unless he has been in the open market? He cannot know what he might have expected it to realise.
… subject to any restricted covenant, easement, quasi-easement or other right inuring for the benefit of other land, any public right of way, right of common, or other right inuring for the benefit of the public or of any section thereof, …
Those words are sufficient to frighten anybody who is not familiar with these things, but he has to value his land in relation to them all.
… and any restriction or liability imposed by or under an enactment, to which the hereditament was subject at that time, but free from any other encumbrance:''
Is my right hon. and gallant Friend saying for a moment that he is going to value his land himself without requiring the services of a valuer, in the light of Section 3, Sub-section (5)? It seems to me that if an owner attempted to do so, he would be placing himself entirely in the hands of the War Damage Commission, and indeed I gather from the remarks of my right hon. and gallant Friend that that is really the position he is in. The owner need not even state what his claim is. The War Damage Commission will kindly tell him what his claim is, and then he is all right. He does not need any assistance, he does not need the services of a valuer. Let me ask my right hon. and gallant Friend to consider this position. Suppose the War Damage Commission offered, say, £750, which the owner thought was inadequate. Suppose the owner then went to a valuer, as my right hon. and gallant Friend suggests that he should, and as a result of the services of the valuer received an increased offer something like what he thought would be fair. Is it fair that he should have to bear the burden of the cost of the valuer's services? It is true that he is getting more than the War Damage Commission originally offered, but in a case like that, which I am sure will arise, it will have meant that the War Damage Commission's offer was inadequate and that it was necessary to employ a valuer to get a fair offer. I submit that in a case like that it would be only fair and proper that the War Damage Commission should pay the cost of the valuer's services.
My right hon. and gallant Friend made some play with the fact that this might open the door to a horde of valuers, all hungry for large fees to be paid out by the War Damage Commission. I am sure, however, that that is not the case, and that it is quite possible to lay down a scale of fees which would not be particularly attractive to valuers. Nobody is asking that they should be made rich by the War Damage Commission. It is quite possible to safeguard that point, and in my own personal experience there are not so many valuers about for the work which is available at the present time. I am finding it extremely difficult to get valuers to undertake work in the ordinary way, and I am sure my right hon. and gallant Friend knows that, and therefore there is no danger, in conceding this Amendment—it is a very small point—of opening the door to large numbers of valuers touting for the fees that would be available for them. I hope he will again give serious consideration to this Amendment, because in the main it will be the poor person, who has already suffered because his home has been destroyed, who will suffer under this provision. In any case he will not receive the value of his home, because the value payment is not a generous one, it is based on 1939 values, and surely he ought not to be out of pocket merely because he considers it necessary, in view of the complexity of the legislation, to secure reasonable assistance in making and settling his claim.
I hope that my right hon. and gallant Friend will give the Committee a rather more satisfactory answer than he has done already, because as the hon. Member for Peckham (Mr. Silkin) has just pointed out, there must be some real and proper valuation of these properties. Let me quote a case. Let us consider a street of houses in which all the houses are alike and were all purchased in the year 1937 for about £750. Four of them are utterly destroyed and are, accordingly, the subject of value payments. One owner wisely goes to a valuer and has an estimate made, based on that valuer's knowledge of the market price in 1939. Another man, knowing that such houses are selling now at about £800 or £900, puts in a claim for £900. The third owner says he will leave it to the War Damage Commission, while the fourth owner decides that the house could not be worth as much as it was in 1939 and puts in a claim for something less. All those four claims are received at the office of the War Damage Commission. There is a great disparity, and somebody has to decide what is a fair price to pay for each of the four houses, which are to all intents and purposes identical. Surely it will be very much easier for the War Damage Commission—
That is exactly what I am coming to. In come these estimates of value from two or three valuers acting on behalf of the claimants, who are not always willing to accept the valuations of the district valuer. Indeed, when cases are referred to arbitration under the Acquisition of Land Act, in many circumstances the arbitrators do not accept the valuation of the district valuer, but accept a figure much closer to the valuation of the valuer acting on behalf of the claimant, and award costs against the acquiring authority; but if you get four properties valued by various valuers of knowledge and experience and if all the values come within the same range, it is not very difficult for the district valuer to say that those properties have a mean value and to arrange some compensation. I do hope that my right hon. and gallant Friend will be a little more forthcoming here.
It seems to me that the right hon. and gallant Gentleman has entirely conceded the case in the Amendment by his intervention. He indicated quite clearly that in the case of any disparity or discrepancy in connection with the claim put forward, the War Damage Commission would go to the district valuer. At whose expense?
I thought the hon. and gallant Member was dealing with the case for similar houses where different values had been put upon them by the claimants. I understood him to say, How was anyone to know which was the right value for the lot?
Suppose I am the owner of a house which is totally destroyed, and an hon. and learned Friend tells me to claim £750, while another hon. and learned Member tells me to claim £1,000, and yet another proposes another figure.
What am I to do? Go to a valuer, just as the War Damage Commission, if they receive half a dozen different values for similar houses, would go to the district valuer, presumably at the cost of the Fund. I think that my right hon. and gallant friend, in his intervention, has conceded the whole of the case in the Amendment. The simple case is surely, Will it be necessary in even a reasonable proportion of cases for the claimant to have professional advice? I submit that he has only to look at the Section read by my hon. Friend the Member for Peckham (Mr. Silkin) to see clearly that it is impossible for any layman to calculate the proper measure of claim to be put forward, subject to the conditions set out in Sub-section (5). That is the simple question: Will it be necessary in a proportion of cases—I think probably in the whole of the cases—to have a valuer? My right hon. and gallant. Friend seemed to think that the Amendment referred only to the question as to whether a valuer should be employed in putting forward a claim in the first instance. The Amendment says quite clearly:
… in computing a value payment the reasonable charges of a valuer when employed in connection with the settlement of a claim …
That means the employment of a valuer at any stage of the matter, so to speak, not only in connection with the original putting forward of a claim, but when it comes to an offer from the War Damage Commission. Then the claimant may have to consult a valuer. In fact, if he is a wise man, he will consult a valuer. Just as it is said that a man who is his own lawyer is a fool, a man who is his own valuer would also be a fool. As the work is necessary and as certainly at present, whatever may be the position in the future, it is the case that the valuer would be paid by the claimant and not by the Government, I submit that the mover of the Amendment has made out his case, and my right hon. and gallant Friend ought to reconsider it.
I wonder whether my right hon. and gallant Friend would help the Committee again? He has said that the Commission are to have valuers. In other words, there are two parties to this claim; the person who is claiming as against the Commission will not be able to have his valuer's fees charged against the Fund, but the Commissioners will charge their valuer s fees against the Fund or against the funds of the State if they use the district valuer, who is an employee of the State. If district valuers are to be called upon in these cases more district valuers will have to be appointed. In the one case there is to be a valuer paid for by State funds or by the funds of the Commission, while the ordinary
|Division No. 10.]||AYES.|
|Adams, D. (Consett)||Gridley, Sir A. B.||Selley, H. R|
|Ammon, C. G.||Griffiths, J. (Llanelly)||Silverman, S. S.|
|Banfield, J. W.||Hall, W. G. (Colne Valley)||Smith, E. (Stoke)|
|Barnes, A. J.||Harvey, T. E.||Smith, T. (Normanton)|
|Beechman, N. A.||Headlam, Lt.-Col. Sir C. M.||Southby, Comdr. Sir A. R. J.|
|Bellenger, F. J.||Henderson, J. (Ardwick)||Stephen, C.|
|Benson, G.||Henderson, T. (Tradeston)||Strauss, G. R. (Lambeth, N.)|
|Bower, Norman (Harrow)||Hollins, J. H. (Silvertown)||Tasker, Sir R. I.|
|Bowles, F. G.||Hughes, R. M.||Taylor, H. B. (Mansfield)|
|Buchanan, G.||Jewson, P. W.||Taylor, R. J. (Morpeth)|
|Burke, W. A.||Leslie, J. R.||Thomas, Dr. W. S. Russell (S'th'm'tn)|
|Butcher, Lieut. H. W.||Lloyd, Major E. G. R. (Renfrew, E.)||Thorne, W.|
|Charleton, H. C.||McNeil, H.||Watkins, F. C.|
|Daggar, G.||Mainwaring, W. H.||White, Sir Dymoke (Fareham)|
|Davison, Sir W. H.||Mathers, G.||White, H. (Derby, N. E.)|
|Doland, G. F.||Maxton, J.||Young, Sir R. (Newton)|
|Douglas, F. C. R.||Mellor, Sir J. S. P.|
|Duckworth, W. R. (Moss Side)||Milner, Major J.||TELLERS FOR THE AYES.—|
|Foster, W.||Oldfield, W. H||Mr. A. Edwards and|
|Gallacher, W.||Reakes, G. L. (Wallasey)||Sir Herbert Williams.|
|Gammans, Capt. L. D.||Savory, Professor D. L.|
|Adamson, W. M. (Cannock)||Hannah, I. C.||Profumo, Captain J. D.|
|Allen, Lt.-Col. Sir W. J. (Armagh)||Harris, Rt. Hon. Sir P. A.||Quibell, D. J. K.|
|Assheton, R.||Heilgers, Major F. F. A.||Raikes, Flight-Lieut. H. V. A. M.|
|Beamish, Rear-Admiral T. P.||Hely-Hutchinson, M. R.||Reed, A. C. (Exeter)|
|Beattie, F.||Henderson, J. J. Craik (Leeds, N. E.)||Reed, Sir H. S. (Aylesbury)|
|Beit, Sir A. L.||Heneage, Lt.-Col. A. P.||Reid, Rt. Hon. J. S. C. (Hillhead)|
|Blair, Sir R.||Hewlett, T. H.||Reid, W. Allan (Derby)|
|Boulton, W. W.||Hicks, E. G.||Rickards, G. W.|
|Broadbridge, Sir G. T.||Hill, Prof. A. V.||Roberts, W.|
|Brocklebank, Sir C. E. R.||Hinchingbrooke, Viscount||Robertson, D. (Streatham)|
|Brooke, H.||Hopkinson, A.||Robertson, Rt. Hn. Sir M. A. (M'ham)|
|Brown, Rt. Hon. E. (Leith)||Howitt, Dr. A. B.||Robinson, J. R. (Blackpool)|
|Brown, Brig.-Gen. H. C. (Newbury)||Hume, Sir G. H.||Ropner, Col. L.|
|Browne, Captain A. C. (Belfast W.)||Isaacs, G. A.||Rowlands, G.|
|Campbell, Sir E. T.||James, Wing-Comdr. A. W. H.||Royds, Admiral Sir P. M. R.|
|Cary, R. A.||John, W.||Salt, E. W.|
|Chapman, A. (Rutherglen)||Jones, Sir G. W. H. (S'k Newington)||Sanderson, Sir F. B.|
|Chapman, Sir S. (Edinburgh, S.)||Lawson, J. J.||Scott, Donald (Wansbeck)|
|Chorlton, A. E. L.||Leach, W.||Smith, Sir R. W. (Aberdeen)|
|Cluse, W. S.||Lindsay, K. M.||Somervell, Rt. Hon. Sir D. B.|
|Cobb, Captain E. C.||Little, Sir E. Graham- (London Univ.)||Spearman, A. C. M.|
|Collindridge, F.||Little, Dr. J. (Down)||Storey, S.|
|Cooke, J. D. (Hammersmith, S.)||Mabane, W.||Strauss, H. G. (Norwich)|
|Cripps, Rt. Hon. Sir Stafford||MacAndrew, Colonel Sir C. G.||Strickland, Capt. W. F.|
|Crooke, Sir J. Smedley||McCorquodale, Malcolm S.||Stuart, Rt. Hon. J. (Moray and Nairn)|
|Crookshank, Capt. Rt. Hon. H. F. C.||Macdonald, G. (Ince)||Studholme, Captain H. G.|
|Culverwall, C. T.||MacDonald, Sir Murdech (Inverness)||Sueter, Roar-Admiral Sir M. F.|
|Davidson, Viscountess (H'm'I H'met'd)||Macdonald, Capt. P. (Isle of Wight)||Summers, G. S.|
|Davies, Major Sir G. F. (Yeovil)||McEntes, V. La T.||Sutcliffe, H.|
|Digby, Capt. K. S. D. W.||McEwen, Capt. J. H. F.||Thomas, J. P. L. (Hereford)|
|Donner, Squadron-Leader P. W.||Makins, Brig-Gen. Sir E.||Tinker, J. J.|
|Dugdale, Major T. L. (Richmond)||Marlowe, Major A.||Titchfield, Lt.-Col. Marquess of|
|Edmendson, Major Sir J.||Mentague, F.||Tomlinson, G.|
|Edwards, Rt. Hon. Sir C. (Bedwellty)||Morgan, R. H. (Stourbridge)||Tufnell, Lieut.-Comdr. R. L.|
|Elliot, Lt.-Col. Rt. Hon. W. E.||Morrison, G. A. (Scottish Universities)||Viant, S. P.|
|Ellis, Sir G.||Morrison, Rt. Hon. W. S. (Cirencester)||Walkden, E. (Doncaster)|
|Emery, J. F.||Mort, D. L.||Ward, Col. Sir A. L. (Hull)|
|Evans, Colonel A. (Cardiff, S.)||Naylor, T. E.||Waterhouse, Capt. C.|
|Fyfe, Major Sir D. P. M.||Nicholson, Captain G. (Farnham)||Whiteley, W. (Blaydon)|
|Gibson, Sir C. G.||Nunn, W.||Williams, C. (Torquay)|
|Green, W. H. (Deptford)||Orr-Ewing, I. L.||Wood, Rt. Hon. Sir K. (W'lwich, W.)|
|Griffiths, G. A. (Hemaworth)||Paling, W.||Wootton-Davies, J. H.|
|Grimston, R. V.||Palmer, G. E. H.|
|Guest, Dr. L. Haden (Islington, N.)||Petherick, Major M.||TELLERS FOR THE NOES.—|
|Gunsten, Capt. Sir D. W.||Pownall, Lt.-Col. Sir Assbeton||Mr. A. Young and Mr. Pym.|
I beg to move, in page 6, line 31, at the end, to insert:
3. Compensation to owners of chief rents.
In the definition of proprietary interest in Section ninety-five, after paragraph (a) there shall be inserted the following paragraph:
' (b) a rent charge issuing out of or charged upon that land or any part thereof, being cither perpetual or for a term of years absolute; and.'
The object of this Amendment is to extend the definition of the term "proprietary interest" in Section 95 of the original Act, to include perpetual rent charges, or chief rents, as they are popularly termed in the North of England, where they are principally prevalent. There is rather an anomaly in the principal Act, through the omission of this particular case of freehold. Persons who hold freehold or perpetual rent charges—or chief rents, as I will call them for shortness—have no rights whatever of sharing in any compensation for damage, whereas the owners of ground rents, even if the lease is for 999 years, come under the definition of persons having proprietary interests, and are protected by the Act, and receive the appropriate portion of the compensation, as provided in Section 9 of the original Act.
The matter is a little technical, but I will endeavour to explain it in simple terms. Assume that there is an acre of land, and a builder desires to purchase it for erecting eight or 12 houses. The land is worth £400. The builder says, "Instead of paying that £400 in cash, I will pay you in perpetuity a rent of £20 a year "—which is 20 years' purchase. The transaction is carried through, and the builder then erects a number of houses on the land. The position then arises that purchasers of houses are desirous of minimising the amount they have to pay in cash. A purchaser may buy one or more houses partly in consideration of a rent charge and partly in consideration of cash. A second rent charge has then been created in favour of the builder. It exceeds the original site value of the land. I am told that in Manchester, for example, where anything from two-thirds to three-quarters of the smaller properties, at any rate, are built on such terms, third charges and so on may be created. It quite often happens that a rent of £5 to £6 a year may be charged on a single house. At present, under the Act, the owners of those rent charges will receive no portion of the compensation. I will give an instance in a moment of a number of houses erected on land subject to rent charges of that character; while the owners of the buildings will receive compensation, there is no provision in the Act at present for any portion of it, however small, to be paid to the owner of the rent charges.
Such a rent charge as that which I am discussing ranks in priority to a mortgage on the property. These rent charges or chief rents are authorised under the Settled Lands Act as an investment of capital moneys and very large numbers of people in the parts where this particular tenure is prevalent have invested money in them. This is not merely a matter affecting wealthy owners of rent charges. There are a great number of quite small people who have invested small amounts in the purchase of land charges. Money charged upon land upon which houses and other buildings were erected would have been among the most secure forms of security it would be possible to obtain, but owing to the fact that war has come upon us, this particular form of security is peculiarly susceptible to damage and ought therefore to be included under the provisions which the Chancellor of the Exchequer has put in the principal Act.
It might be helpful if I gave a particular instance which has occurred. There has not been much publicity with regard to the omission of this particular form of freehold property, either in the Press or elsewhere, the reason being that perhaps not a very great deal of damage has been done and that, except in cases of hardship, payment is not made in respect of compensation under the War Damage Act until after the war. It will only be after the war in a great many cases, therefore, that owners of these securities who have put in claims will find that they are not to be entitled to anything unless the right hon. Gentleman, as I hope he will, thinks it right to amend the Act. I will now give a specific instance of a claim which has actually been put in. "A," a landowner, sold to "B," who is a builder, a plot of land containing 1,731 square yards, situated at Moss Side in Manchester. The builder erected 15 dwelling-houses on the land, having entered into a covenant to do so. The consideration for the sale of the land from owner "A" to builder "B" was that builder "B" should agree to pay a freehold or chief rent of £19 a year in perpetuity. The builder was prepared to do that instead of paying a lump sum for the land. The builder "B" created a second rent, payable on the same plot of land with the 15 houses erected upon it. This amounted to £41 5s. The right to receive that payment was sold to "C," who covenanted to pay the original rent charge of £19, and later that second rent was purchased as an investment by the trustees of a small estate for £478 7s. 6d. On the night of 1st October, 1940, these 15 houses were totally destroyed as a result of enemy action, and the person responsible for the payment of the rent of £41 5s. was killed. No payment of either the head rent of £19 or the second rent of £41 5s. has been made, and no provision whatever has been made by way of legislation for compensation. Compensation will duly be paid, no doubt, to the owner of the 15 houses, but no compensation will be paid in favour of the holder of the freehold rent charge, nor is there any obligation upon the owner of the houses to pay any proportion of what he receives to the owner of the freehold rent. The Committee will appreciate that the mortgagees would, if the houses were mortgaged, have a claim under the Act to receive the repayment of their mortgage and any unpaid interest, but the owner of the perpetual rent charge, who is entitled to rent in priority to the mortgagees, would not under the Act as at present drawn receive anything. The result would be that the site value would be worth very little or at the most no more than the original value put upon it of £19. If this proves to be the case and there is a depreciation in the investment, as clearly there must be, the trustees of the will who invested the £478 7s. 6d., producing a net income of something like £20 a year—the difference between £19 and £41 5s.—will receive no income and there will still be the burden on the second chief rent owner to pay the head rent of £19.
I am trying to follow this very intricate example of my hon. and gallant Friend's. The holder of the improved ground rent has the right to serve conditional retention notice, whereupon if a value payment is made, his whole interest ceases, although in the meantime he ceases to pay ground rent. Would my hon. and gallant Friend say whether in that case the holder of the chief rent would be entitled to receive the value compensation?
The question put by my hon. Friend is a little intricate, but I think he is in error in saying that there is no disclaimer in this case. In the case of a perpetual rent charge there is no right of disclaimer. Under legislation passed by this House some time ago leaseholders have the right to disclaim in certain circumstances, but holders of perpetual rent charges, or those who are liable to pay them, have not, by reason of the fact that they are perpetual, any right to disclaim, and so my hon. Friend's question does not really arise. I submit that, whatever the reason be, the original Act, which the right hon. Gentleman desires to be inclusive and as fair and just as possible, does not include this particular class of freehold security. The anomaly is clear, and it is unjust that the owner of a 999 years' rent charge should receive compensation but that the owner of a perpetual rent charge should not. Therefore, in moving my Amendment, I hope that in this case, which only arises in connection with value payments where the owner of the perpetual rent charge can prove that his interest has depreciated by reason of war damage, shall be entitled, as the holder of a proprietary interest, to a share of the compensation awarded by the War Damage Commission.
I hope the Government will give favourable consideration to this Amendment, which has been explained with such skill by my hon. and gallant Friend the Member for South-East Leeds (Major Milner). I cannot help thinking that, owing to the fact that this system of chief rents is confined to some parts of Lancashire and the North, this problem has not been properly considered. However much we dislike the system of perpetual rents, it is not fair that the owner of a perpetual rent charge should be in a worse position than a mortgagee.
The objects which we have in view in submitting this Amendment have been fully set out by my hon. and gallant Friend the Member for South-East Leeds (Major Milner). The whole idea of the War Damage Act was to mitigate hardship—to cause compensation to be paid in cases where hardship could be proved to exist as a result of enemy action. Cases of hardship will be numerous and serious for the class of people to whom this Amendment refers unless this question is dealt with. I can only think that it is because it is rather a local problem that it has not been included in the principal Act. The problem however is not confined to Manchester and Liverpool. Other towns in Lancashire, notably Rochdale, where the Law Society specially asked that the question should be taken up are involved. To some extent also this system of perpetual rent charges is spreading to the South of England; little by little it is beginning to creep in generally. The Chancellor of the Exchequer will, I hope, give his most earnest consideration to the very sincere request that we make to him to-day. The Council of the Law Society did bring the matter before the Lord Chancellor and many representations have been made by the Manchester Law Society to both the Chancellor of the Exchequer and the Attorney-General. It is only fair and right that compensation should be shared by the owner of the land and the owner of the rent charge, if the owner of the rent charge can prove that the rent has depreciated through the destruction of the building. I cannot see that any difficulty will arise, because no claim can be made unless the owner of the rent charge is able to prove that the marketable value of his rent has depreciated. I think the position is amply safeguarded and I urge the Chancellor of the Exchequer in the strongest possible terms to accept this Amendment.
I entirely agree with the hon. and gallant Member for South-East Leeds (Major Milner) who proposed this Amendment. It affects a considerable number of my constituents in Manchester. Perhaps there is no part of the Kingdom where the system of chief rent charges has obtained more than in South-West Lancashire. It will be a considerable shock to a number of chief rent holders to realise that they seem to have no security whatever under the principal Act as it is at present. Perpetual yearly rent charges, where the rent charge system is in vogue, are a favourite investment for trust funds, and this is particularly so in the county to which I have referred. Many wills and trust instruments give direct authority for trust money to be placed in these as a form of investment. Moreover, such rent charges are authorised by law as an investment for capital moneys arising under the Settled Lands Act. The owner of a perpetual rent charge has a local interest in fee simple and for practical purposes, there should be little or no difference between perpetual rent charge and the freehold revision in respect of long leasehold ground rent. It is, therefore, inequitable that the latter should receive protection while the former has no protection whatsoever. For that reason I support the Amendment.
In the South of England we would deal with this question in a different way. The freeholder mentioned by my hon. and gallant Friend the Member for South-East Leeds (Major Milner) would have leased his land at head rent and the head lessor would have-leased his land at an improved ground rent. I understand that in the North of England the head lessor is really the man who holds the chief rent and the man who pays the £41 5s. improved rent is actually not holding a long lease at that ground rent but holding it in perpetuity subject to payment of that £41 5s. If that £41 5s. is to be paid to somebody, and there is a superior interest above him, I should have thought it would have been quite simple to have included this in the definition in Section 95 of the original Act, under which proprietary interest includes not only those holding fee simple in the land, but also any tenancy on that land other than a short tenancy. Surely the case stated by my hon. and gallant Friend of the man holding land in perpetuity at a rent comes under this definition of "any tenancy in land." There should not be any great difference in principle in this matter. It is only something in the drafting, which the Chancellor can put right.
I will give consideration to all that has been said by hon. Members on this matter to-day. I had the advantage of receiving a deputation introduced by the hon. and gallant Member for South-East Leeds (Major Milner), who was accompanied by a number of Members. As he has indicated, the question wants examination, and I will consider what is to be done and how it shall be done. I know that the hon. and gallant Member put forward the Amendment mainly for the purpose of securing a discussion I, also, wanted the Committee to hear hon. Members' views on this question and to have those views fully ventilated here. I suggest that the hon. and gallant Member has achieved his purpose in bringing the matter forward. I will examine the proposal sympathetically with a view to being able to bring something forward for the Report stage which will meet the case put by hon. Members.
I am grateful to the Chancellor and I hope that the combination of Yorkshire and Lancashire will result in something being done. - May I say that there is no one who could give the Chancellor better advice on this matter that the hon. and learned Gentleman the Solicitor-General, because he has practised with considerable success on the Northern Circuit, and no one knows more about this matter than he does. I am grateful to the Chancellor, and I beg to ask leave to withdraw the Amendment.
I beg to move, in page 7, line 5, at the end, to insert:
(3) Interest at the rate of two and a-half per cent. per annum shall accrue on a value payment from the time of the occurrence of the war damage, and shall be payable in half-yearly instalments as and from the date of the ascertainment of the value payment, and Subsection (2) of Section eight of the principal Act is hereby amended accordingly.
This Amendment is a simple one, but it deals with a matter which is serious for the people concerned. The proposal in the Amendment would enable those who are liable to do so, to continue the payment of various items of expenditure on property which is destroyed. It would assist many hundreds of persons—perhaps I might say thousands, although I have no desire to exaggerate—who have, through the loss of their property, lost their livelihood. If the Chancellor will consider the Amendment in the light of the arguments that I shall put before him, I feel that he will accept it on grounds of equity. Many of the arguments for my Amendment have been stated already by my hon. and gallant Friend the Member for Holland with Boston (Lieutenant Butcher), in moving a new Clause or the Order Paper in his name.
With regard to the pre-payment of the 2½ per cent. interest, which is, after all,
money that is due to those persons who have paid their quota in connection with War Risks Insurance, I think it is not asking a great deal to suggest that they should be able to get that amount before the end of the war. The end of the war may not be this year, next year, or even the year after; it may be four or five years before the time comes for these payments to be made; to say that is not to suggest that it will take all that time for the war to end, but after the end of the war, many things will have to be done before this money is paid. Since this Amendment appeared on the Order Paper, there has been a great deal of comment on the matter in the Press. For instance, an eminent journal, the "Sunday Times," stated that two concessions might be made—
First, when a property is completely destroyed compensation consists of a value payment which will be forthcoming at some future date, together with the interest at 2½ per cent. accrued as from the date of the damage. The underlying idea is to hold up these payments until rebuilding is practicable after the war. There is a good case for releasing the interest payment at once. It would help the recipient to meet the cost of his new accommodation and to pay his mortgage interest. Two-and-a-half per cent. is so low a rate that it would only mitigate the income lost and would leave no margin available for general expenditure.
One of the arguments against the payment of the interest before the end of the war is that it would cause unnecessary expenditure, and expenditure on things other than property reconstruction. I realise, moreover, that the Chancellor may say that in many cases it will not be known until the end of the war whether a cost-of-works or a value payment will be made, or even, if the latter, what will be the amount of the money due. If the Chancellor is not prepared to go as far as the Amendment suggests, I suggest that the payment might be limited to property which is entirely destroyed and in connection with which there is no question of a cost-of-works payment.
Many of the persons whose property has been entirely destroyed are not rich people. They have to pay mortgage interest of 4½ per cent. or 5 per cent. perhaps. Even if the Chancellor stipulated that these half-yearly payments as suggested in the Amendment should go in payment of part of the mortgage interest, it would be of very considerable assistance to the people who have lost their property and their livelihood, and who are in many cases in dire distress. The 2½ per cent. interest allowed on a value payment is not so much compensation for loss of income as a recognition that the State has borrowed money which is due to the claimant. Its purpose is to enable a person whose property has been entirely destroyed either to pay off some of his commitments or, preferably, to pay part of the mortgage money. I trust that the Chancellor will soften his heart on this matter. After all, the money belongs to the person whose property has been destroyed, and it is not equitable to hold up the payment of the money for perhaps four or five years.
The other point which the Chancellor may make is that this interest should be available for post-war reconstruction. Surely, that argument is not one that can be substantiated, since the value of the property might be thousands of pounds whereas the sum here involved would be a matter of £100, or so, extended over four years. Moreover, if the Chancellor wished to make a limitation concerning the way in which the money should be expended, I and my hon. Friends would be prepared to agree to that. There is, then, the question of proving hardship in connection with the payment of this money. Why should these people have to prove hardship before they can get money which is due to them? I know that there are several provisions by which these people could possibly get some relief, but in most cases they have to be broken before they can appear before a tribunal. If the Chancellor accepted the Amendment it would give the people concerned a chance to meet their commitments, particularly when 4½ per cent. or 5 per cent. has to be paid on a mortgage.
Another objection that may be made is that the money might be dissipated on other things and not used for reconstruction. I submit that that can be safeguarded by the Chancellor of the Exchequer. He should consider these cases of hardship without compelling a man to go before a tribunal to prove that he has no money and therefore must unfortunately have this interest. The Chancellor of the Exchequer may point out that provision is made for this type of case under the Courts (Emergency Powers) Act, the Landlord and Tenant (War Damage) Act and the Liabilities (War-Time Adjustment) Act, but in all these cases the man has to be down and out before he can go before the tribunal. I do not think it is fair that people should have to suffer this hardship in order to obtain this amount, which is small compared with the total amount of property destroyed, and I sincerely trust that the Chancellor will consider this matter favourably on the grounds of equity.
My hon. Friend the Member for Balham and Tooting (Mr. Doland) has been very skilful in moving his Amendment. He has answered all the points which he thinks I am going to make against it instead of defending it. I do not know whether he has seen any of my notes, but he has very cleverly anticipated one or two of my points. Under Section 8, (1, b) of the principal Act the time when the payment may be made in the case of a value payment will be:
Such time or times as may be specified in regulations made by the Treasury either generally or as respects payments to be made in different circumstances.
The Section goes on to say that:
Interest at the rate of two and a half per cent. per annum shall accrue on a value payment from the time of the occurrence of the war damage, and shall be payable when that payment is discharged.
That is to say, it will be payable when the value payments are payable, which under Section8 is such date as may be specified in due course by the regulations. At present, as far as Parliament is concerned, there is no date fixed by legislation when these payments are to be made, but, of course, the 2½ per cent. is accruing. This Amendment sweeps that away and says that the interest, at 2½ per cent. on the future value payment, should be payable from the time of the ascertainment, which is a capricious date as between one claimant and another. The Commission, skilful as it is, cannot make all ascertainments on one date, and the Act lays down that in due course these value payments will, in Parliamentary language, fall into course of payment at a particular moment of time so that it will be the same for everybody. My hon. Friend's suggestion would mean that Mr. "A," who has had his ascertainment made, will be getting his 2½ per cent. under this Section, whereas his neighbour, whose case is at the bottom of the pile, may not have his ascertainment made until 12 months later, and will therefore not have his 2½ per
cent. payment in the meantime. Surely we must do justice as evenly as we can to all sufferers of war damage? We cannot allow one man to receive his 2½ per cent. payment just by chance—because his application was dealt with earlier than another. If the hon. Member bears that aspect in mind he will see that his proposal is not fair. Indeed, the matter goes further than that. It is not, in fact, until considerably later that you can be quite sure whether there is to be a cost-of-works payment or a value payment. From the point of view of the claimant, it may be extraordinarily disadvantageous to insist too soon on a value payment.
I know that that is the case. The Commission had a tremendous amount of work to do in dealing with emergency repairs before they could get on to these problems. As I say, it would in many cases be contrary to the interests of the claimant to determine too precipitately, that he shall have a value payment, and that is my second reason for asking the Committee to reject the Amendment. Firstly, it would be capricious, and, secondly, it would not be to the interest of the claimants, in view of the fact that it is not until a considerably later date that these determinations can be made.
My hon. Friend thought it would be a good plan for the Chancellor of the Exchequer to direct the Commission to make the 2½ per cent. payments in a certain way. He said he would be prepared to have a ruling laid down that the 2½per cent. payments should go towards the payment of mortgage interest. I know that this mortgage interest is a sort of refrain which goes through all these Debates and seems to pop up on almost every Amendment. I ask my hon. Friend to consider what would be the position of the Commission if they were to be told that they could pay 2½ per cent. to Mr. "A," but that they would have to see that it went towards his mortgage interest. The Commission has a great deal to do without being collectors of mortgage interest. I hope, therefore, that, on reflection, the Committee will see this is not a proposal which would be in the interest of the persons it is designed to help.
I think that my hon. Friend the Member for Balham and Tooting (Mr. Doland) has put up a very good case. The Government will not part with any of the money they have collected, which is due to the people who are insured. The argument put forward is very deep. Taking the Attorney-General's argument that there are poor mortgagors, I would point out that their only hope is that some of the money due to them may be paid from time to time to enable them to meet their liabilities. I do not think it is any part of the Government's duty to say what is to be done with the money. If they want to safeguard that, they can say that it will be advanced only where there is a mortgage liability. If that is done it will meet a very real hardship. It is all very well for the Government spokesman to seek to sweep away the case for the Amendment by referring to the original Act and treating this matter as if it was something to be dealt with at the end of the term. It is nothing of the kind; it is an immediate matter for all these people who are being pressed. At present a man has to turn out his pockets and go before a court to prove he is insolvent while the Government actually owe him money. This is a matter of common equity to people who are suffering great hardship. I ask the Chancellor of the Exchequer to soften his heart and to have another look at the matter. I do not see any administrative difficulties, but I do see the difficulty that the Government do not want to part with any money before they are really forced to do so.
I beg to move, in page 7, line 5, at the end, to insert:
(3) Interest at the rate of two and a half per cent. per annum shall also accrue on a cost of works payment from the time of the occurrence of the war damage until such time as that payment is discharged:
Provided that no interest shall be payable in respect of any period of less than three months.
I move this Amendment because there does not seem to be any logical reason for making a distinction in the case of a cost of works payment as regards the 2½ per cent. interest which, in the case of a value
payment, accrues from the date of damage to the time of payment. The class of case with which the Amendment is designed to deal, is probably rather rare at the moment but is likely to become more frequent as time goes on and as it becomes more difficult and less in the public interest, owing to scarcity of labour and materials, to carry out immediate repairs on a substantial scale. The present position, as I see it, is that, if a house is completely demolished, the owner gets a value payment which carries with it ultimately 2½ per cent., and this operates as a set-off, although an inadequate one, against the rent of another house. If the house is not completely demolished but badly enough damaged to be rendered unfit for habitation, and the damage is so extensive that the necessary repairs cannot be done immediately, or even until the end of the war, the owner still has to pay the rent of another house but he does not get the great advantage of any set-off in the shape of 2½ per cent. interest. In a case like that the owner falls between two stools and gets the worst of both worlds.
Let me give a concrete case of the sort of thing that can apparently happen under the present law. A constituent of mine had his house bombed in October, 1940. A surveyor came along from the local council and condemned it outright immediately. He refused even to meet the owner's architect and told the owner to put in for a value payment. He did so but heard nothing about it for approximately 10 months. In August, 1941, another surveyor came along and reversed the previous decision to the extent that he said he would not make up his mind one way or the other. Shortly afterwards a third surveyor came along and said that in any case one wall was dangerous and would have to be rebuilt and the property would then be handed over to the War Damage Commission. The work was put in hand, the wall was rebuilt by December, 1941. The War Damage Commission, running true to form, took 3½ months to pay the bill for the repairs authorised by the council. Apparently the Ministry of Works and Buildings took a hand in the game and issued licences for repairs up to £200 out of a total of some £600 which would have been required to put the house into full repair and make it habitable but at the same time said they could not issue any further licence. Any other repairs would have to wait until after the war. The owner is, therefore, in the position that he has to pay a high rent for another house and wait until the end of the war, when he will eventually get the balance of his cost of works payments without any 2½ per cent. interest to offset the cost of alternative accommodation which he now has to occupy. That seems to me a grossly unfair position. I hope my right hon. Friend will see the matter in the same light and accept the Amendment.
I am indebted to my hon. Friend for his statement and for the case that he has put before the Committee, because it is right that a matter of this kind should be ventilated here. I should like first to say a word about his references to the War Damage Commission. I hope he was making no reflection on them because, in view of the very difficult task before them, they have accomplished a great deal of good work in the time available to them. They are a semi-judicial body. They are not in the same position as a Government Department and their sole anxiety is to deal with these claims as speedily as possible. I have had many opportunities of looking at their work and I think, although there may have been slips here and there, taken as a whole, they have done their work very well indeed.
That brings me to this further comment on the Amendment. The fact that payment has not been made in the case of a cost-of-works decision, has nothing to do with the War Damage Commission. They are quite willing and able, and funds are freely at their disposal, and they are anxious that the work should be put in hand as speedily as possible and that the payment should be made. Wherever it has been possible for that to be done, their whole anxiety has been to get the work completed as quickly as possible. There is no difficulty as far as their intention and actions are concerned. Their difficulty—and it is also the difficulty of the owner—is the availability of labour and material, and it is when that difficulty arises that delays in payment occur. My hon. Friend cited a case of a man who, apparently, had suffered £800 or £1,000 worth of damage but a licence was only given for the expenditure of some £200 worth of material and labour. I do not know the facts of the case but I should imagine that that was a very wise decision because you have to be fair as between a very large number of claimants in view of the material and labour available. I should imagine that, in this case, a survey of the property was made and it was ascertained what expenditure really would be sufficient to make the property habitable. As regards the remainder of the payment they probably said that it might be in respect of repairs which in peace time could very well be made but that regard must be had to the availability of labour and material, and they would do what they could. It is in order to do justice among various applicants that that attitude has been adopted.
Notwithstanding the damage that has been done, the number of cases where first aid repair has been done by direction of the War Damage Commission is remarkable, and notice should be taken of the excellent work done by the local authorities themselves. When we survey some of the ruin due to enemy action, it is remarkable that in a very large number of cases it has been of a very minor character, and that in a large number of cases immediate steps have been taken to make property habitable again. It would not be possible and it would not be fair to say that some interest should be payable on a cost-of-works payment in cases where the delay arose, not from any question of war damage, but from the question of whether labour and material are available.
My hon. Friend indicated that this might be regarded as some form of compensation for loss of the use of the property or of the rent. That argument is exceedingly dangerous from the point of view of equality and fairness as between different claimants. There might very well be two claimants, each owning a house of practically the same value as the other and in the same road, with one house having suffered a considerable amount of damage and the other house very much less damage, and in one case the claimant might get twice as much interest as the other, although both had been unable to use their respective properties for exactly the same length of time. It is difficulties like these with which one is confronted when attempting to deal with a situation of this kind. I think that perhaps my hon. Friend will be content with having brought forward this matter and will take my assurance that we—and I am sure also the War Damage Commission—will continue to do our utmost to get these cost-of-works payments made as quickly as possible, and we only hope, from our point of view, that the labour and materials will be available in order to enable us to achieve our object.
The Chancellor of the Exchequer might have been saved many of these difficulties if we had enabled the War Damage Commission to carry out the wording of the Act. It was because I felt that that I put down the first Amendment, which was ruled out of Order. I shall not break into lamentations and tears because it was ruled out of Order, but the Act does say that the Commission shall be:
charged with the duty of executing the provisions of this part of this Act relating to the making of payments in respect of war damage to land and shall exercise such other functions as are conferred upon them by this Act.
The War Damage Commission have not been permitted to do that. So far as the technical officers of the Commission are concerned no words of praise can be too high for the way in which they have done their work.
I apologise if I have done something which was not in accordance with the Rules of the House, but I was merely saying something which the Chancellor had said and for that reason I thought I was in Order. The Chancellor said that cost of works cases present no difficulty. Let me give the Committee the real difficulty which does exist. A man's house is bombed. He sends in a form to the district valuer. The district valuer refers him to the War Damage Commission. He sends in a form to them. The War Damage Commission refer it to the Ministry of Works and Buildings. That Ministry operates under Defence Regulations. For the moment it has passed out of the hands of the War Damage Commission. They therefore cannot make a payment. Then what happens? The Ministry of Works and Buildings, instead of dealing with it, hand it over to an outside surveyor, and then the matter goes back to the Ministry of Works and from there on to the War Damage Commission. This roundabout procedure is preventing any prompt payments being made. I can give the Chancellor particulars of a case where a man's premises were destroyed and where adjoining property was partially destroyed and all this process which I have described has been going on for more than 18 months without the man receiving a single farthing, although his business has been destroyed and his property is partially destroyed. There is a general feeling among the public that the Government are deliberately withholding the money, which really belongs to the contributors. They tell the public, "We have paid such and such a proportion," but the case which was mentioned by the Mover of the Amendment is not singular or uncommon and really the Chancellor ought to give consideration to this matter. May I suggest that the Chancellor should consent to receive full details of these very bad cases in order that, before the Report stage is reached, some provision may be made in this amending Bill to ensure that justice is clone to those who have suffered.
I should like to thank the Chancellor for the consideration which he has given to this matter, but I can assure him that in the particular case to which I referred the house has not been' rendered habitable. I do not dispute what he says about the necessity of conserving labour and material, and repairs which are not necessary should not be carried out at the present time, but that is rather hard upon people who are in this category seeing that it is through no fault of their own that repairs cannot be made. I would like to thank the Chancellor for his assurance that he will do his best to see that cost of works payments are speeded up, and I beg to ask leave to withdraw the Amendment.
I beg to move, in page 7, line 32, at end, to insert:
5. Power to make a cost of works payment where a dwelling-house complying with the Housing and Town Planning Acts has become a total loss.
The following proviso shall be inserted at the end of paragraph (a) of Sub-section (1) of Section four:
Provided that where the damage involves a total loss of a dwelling-house erected with the consent of the local authority after the first day of April, nineteen hundred and thirty-three, a cost of works payment shall be made.
I should like to explain in moving this Amendment, which stands in the names of a number of hon. Members as well as my own, that the War Damage Commission have a discretion to order a cost of works payment in case of total loss. It is submitted that in place of that discretion the owner of a dwelling house which has become a total loss should, if that house had been erected in conformity with the housing and town planning laws, culminating in the Town and Country Planning Act, 1932, have a right to have the house re-erected in conformity with the original plans. I know it will be said that during the Debate upon the original Act the Chancellor said that the State could not afford to provide new houses for old, but in this Amendment we are dealing with new houses, houses erected since the passing of the Town and Country Planning Act, 1932, which came into operation on 1st April, 1933. It is submitted that those houses, built according to modern planning and designs, should be re-erected from a cost of works grant.
I appreciate the case which my hon. Friend has put forward, but I think that a little examination of the proposal will show how difficult or almost impossible it would be for the Committee to accept it. The proposal is that as regards a particular class of houses which was authorised by local authorities after a certain date a cost of works payment shall be made. That is very different from the principle which was approved by the House when the War Damage Act, 1941, was passed. It was laid down in Section 7—and I think the Committee will desire to adhere to it—that where war damage in respect of which a value payment would otherwise be appropriate is made good in the public interest, the Commission shall have power to make a cost of works payment. In other words, the test as to what kind of compensation is to be given is dependent on what it is in the national interest to do. It would not be advisable to lay down definitely that for a particular kind of house which has been authorised by a local authority, namely, those erected after the 1st April, 1933, a cost of works payment should be made. The first question which comes to mind is why the Amendment should be limited to houses built after that date. Many good houses were built before then, and if it is a question of replacing particularly good houses it should not be decided by the date when they were erected. We must adhere to the test which was laid down in the Act, whether it is in the national interest that one or other kind of payment should be made.
In asking my hon. Friend not to press the matter further I would like to say that we shall have to consider later whether any further alterations to Section 7 of the Act should be made in the light of the determination of the House about proposals which the Government may be making in connection with future town and country planning and matters of that kind. When those questions come before the House we shall have to cosider Section 7 and see whether any alterations will have to be made to it in order that it may conform to whatever proposals the Government put forward.
I beg to move, in page 8, line 19, to leave out "the Commission shall" and to insert "then."
The object of this Amendment is to make it plain what is to happen in the case where a partially damaged hereditament is compulsorily purchased; what is to be the date of the compulsory purchase, after which no works will be paid for; and the fact that compensation for the compulsory purchase will be assessed with due regard to the fact that no works done after the date of the purchase will be paid for. The acquiring authority shall acquire the property as it stands and will pay for it on that basis.
Further Amendment made: In page 8, line 21, leave out from "hereditament)," to the end of line 31, and insert:
(a) the Commission shall make a payment or payments in respect thereof as follows, that is to say, in respect of the damage so far as made good before the date of the acquisition, a payment of costs of works, and, in respect of the damage so far as not made good before that date, a value payment, of the amounts respectively mentioned in heads (a) and (b) of the preceding sub-paragraph; but
(b) no payment of costs of works shall be made by reference to the cost of any works executed on or after the date of the acquisition, and compensation for the acquisition shall be determined accordingly.
In relation to any such acquisition as aforesaid references to the date of the acquisition shall be construed as references to the earliest date after the occurrence of the damage on which any such action as the following is taken, namely, the service of a notice to treat for the acquisition of or of an interest m land constituting or forming part of the hereditament, the taking of any other action by virtue of which the acquisition of or of an interest in such land becomes obligatory, or the making of an agreement for the acquisition of or of an interest in such land without any such notice having been served or any other such action having been taken."—[The Attorney-General.]
I beg to move, in page 9, line 7, at the end, to insert:
(6) Where both a payment of cost of works and a value payment are made under this paragraph, Sub-section (6) of Section three and paragraph I of this Schedule (which relate to the reduction of payments by reference to the value of articles becoming available as materials) shall not have effect in relation to both payments to the full extent, but the appropriate reduction in respect of the value of any articles shall be made in one or other of the payments or partly in one and partly in the other as the Commission may determine.
Under the original Act there is a provision that if there is scrap or surplus material of any value available, its value shall be deducted from either the cost-of-works payment or the value payment. Under this Bill there may be a case in which in the same hereditament both cost of works and value payments may be made. This Amendment is to prevent a double deduction in respect of the same scrap value.
I beg to move, in page 9, line 11, to leave out paragraph 6, and to insert:
6. Disposal of value payment substituted for payment of cost of works in favour of persons who would have benefited from payment of cost of works.
(1) Where a value payment is made by the Commission in exercise of the power conferred on them by sub-paragraph (1) of the last preceding paragraph, or by virtue of sub-paragraph (2) thereof, or in exercise of the power conferred on them by subsection (2) of section seven, in respect of war damage in respect of which a payment of cost of works would have been payable if the nature of the payment had fallen to be determined under subsection (1) of section four, apart from any other provision, the following provisions of this paragraph shall have effect.
(2) The disposal of the payment shall be regulated by reference to the title to the hereditament at the date of the determination of the Commission to exercise that power, or at the date of the acquisition, as the case may be (in this paragraph referred to as 'the material date'), and accordingly the payment and the interest thereon shall be paid—
For the purposes of the last preceding sub-paragraph the depreciation in value to which an interest was subject by reason of war damage shall be taken to be the difference between—
and those amounts respectively shall be dedetermined as provided by subsection (5) of section nine in relation to the determination of the value of a proprietary interest in a hereditament.
The specified exceptions referred to in this sub-paragraph are the following, that is to say,—
(4) The principal Act shall have effect as if the provisions of the two last preceding sub-paragraphs had been inserted in section nine after subsection (3) thereof, and those provisions shall accordingly have effect subject to the provisions of subsection (4) thereof.
(5) If any person makes application to the Commission in that behalf and shows that, having regard to any agreement made during the period between the occurrence of the damage and the passing of this Act as to the disposal of any payment which might be made in respect of the damage, or to any transaction or disposition entered into or made or contained in a will or codicil executed during that period on the assumption that a particular "kind of payment would be made in respect of the damage or that any payment to be made in respect thereof would be disposed of in a particular way, or to any other circumstances occurring during that period, the disposal of the payment in accordance with the preceding provisions of this paragraph would involve serious injustice to him, the Commission may dispose of the whole or any part of the payment or of any share thereof as if subsection (2) of section nine had had effect in relation thereto or otherwise as may appear to them to be just and equitable in all the circumstances.
The Commission may make orders as to the costs of the parties on applications under this sub-paragraph and as to the parties by whom such costs are to be paid, and may tax or settle the amount of the costs to be paid under any such order or direct in what manner they are to be taxed, and any such order may be enforced in like manner as an order of a referee as to costs made under the Second Schedule.
(6) In relation to a value payment made as mentioned in sub-paragraph (1) of this paragraph
section forty-six (which relates to the mode of disposal of a value payment or of a share of such a payment in certain circumstances) shall have effect subject to the following modifications, that is to say—
This Amendment is really a redraft on somewhat different lines of the original paragraph 6 of the First Schedule to the Bill. The problem with which it deals is one which arises where the Commission decide to make a value payment under one or other of the powers which enable them to do it in the case in which they would, by applying the strict rule, make a cost of works payment. No trouble really arises where special interests in the property have not changed between the date of the damage and the date when the decision to make a value payment is made. There may be cases in which the property or an interest in the property has changed hands on the basis that there will be a cost of works payment, and it is important that there should be machinery for seeing that the value payment when it comes to be made should reach the right hands. The scheme of this Amendment is to say that you shall look at the interest at the date when the decision to make the value payment is taken. In normal cases that will produce an equitable result, but there may be cases in which there has been a transfer of the property, whether by contract or under a will, in which case there would be an anomalous result if you applied the governing principle as laid down in the earlier part of the Amendment. It is impossible to foresee all the cases which might arise, but the Amendment provides in paragraph (5) for an application being made to the Commission by persons who say that owing to the form of contract or to what has happened the machinery as laid down by the Amendment will produce an unfair result. The discretion has to be in wide terms, but it is a problem we have thought about in some detail with the assistance of those who are in touch with it, and the general scheme of this new draft is a considerable improvement on the draft in the original Bill.
The object of the Amendment is simple. I will illustrate it by a case in which there is a house occupied by an old lady who has the enjoyment of only part of it because she has to use the rest of it to make a living by taking in boarders. She may be of an advanced age. In the meantime, because of the destruction of the house, she has nothing to live upon. The principle of the Act as is stands is that no payment shall be made to her until some time after the war is over. That might easily mean that not only has she nothing to live upon but she might not live until that time. I am asking that, in cases of that kind, where there is hardship due to age or infirmity and where a person must have a means of livelihood, there should be advance payments. The War Damage Commission should have the power to make advances up to an amount not in excess of the total amount payable to such persons under the Act. I hope that the Chancellor of the Exchequer will see his way to accept this simple Amendment.
I support the Amendment. My hon. Friend has argued the case of special disablement arising from old age, infirmity or personal difficulties of that kind, but the matter is of somewhat wider application. There are many cases in which, although every agreement has been arrived at with the Commission in respect of the amount of compensation due, the persons who wish to proceed cannot do so because no means are available to them. It is a case in which justice cannot be done, and men are ruined because there is no power on the part of the Commission to make any payment to them. It is a very serious hardship, and I hope that the Chancellor of the Exchequer will give consideration to it.
I would make one observation upon the case which my hon. Friend the Member for East Birkenhead (Mr. G. White) has just made. I doubt very much whether it is in the interests of claimants in the particular case he mentioned, where, apparently, a sum of money should be paid in respect of a cost-of-works payment—which cannot, in fact, be performed at the present time, owing, I should guess, to difficulties of labour and materials—to hand over a sum of money to such claimants to expend as they desire. That is not the main principle which runs through this legislation. What the House laid down in connection with these payments is that we should have regard to the interests of the claimant and to the national interest as well, as we all desire to do. Part of the reason why this Act is on the Statute Book is that we desire to see rebuilt in this country—we hope in better fashion than many houses in the past—houses and factories which compose very largely what we call our national assets.
I hope that my hon. Friend will give no encouragement to the suggestion that we are doing our duty under the Act by handing out payments which persons may put in their pockets and expend as they desire. My hon. Friend will recall that cost-of-works payments are made to the persons who have discharged the work. As regards value payments, no doubt he will recall that those payments have to be made when the War Damage Commission has given consideration to the national interest. I should guess that the trouble of the constituent to whom my hon. Friend was referring is really that, owing to the scarcity of labour and materials, it has not been possible for him to put his property into condition at as early a date as possible.
I am afraid I must disclaim any intention of suggesting that we should hand out sums of money to be devoted to purposes other than those for which they are intended. In the actual case I had in mind, the difficulties of labour and materials had all been settled, but no money has been received.
I should very much like to have particulars of that case. If the labour and materials are available, there is no reason why the matter should not be proceeded with. My hon. Friend may take it that there is no withholding of money at all from the Exchequer and the Treasury in that particular connection. I know that the War Damage Commission are most anxious for these cases to proceed.
So far as the Amendment is concerned, I wanted to hear the case put by my hon. Friend the Member for North Battersea (Mr. Douglas) and to consider between now and the Report stage whether I should be justified in asking the Committee to take any steps, and what steps, in this connection. The matter is not without difficulty. I can quite understand my hon. Friend's feeling in the matter that, in cases where it is right and proper, on the ground of age, infirmity or poverty, and where hardship would be caused by deferment—those are the major things that we have in mind—the Commission should have power to advance a sum or sums not exceeding the total amount which is to fall due to such persons.
It is often exceedingly doubtful—I do not want to put it too high, and I would not prejudice my consideration of the matter—whether it is in the true interests of the claimant that such advances should be made. One is tempted to say, "Why not let a particular claimant have £25 or £50 on account of the sum that may be due to him in respect to his damaged property? "We have to remember that such advances may ultimately mean £25 or £50 less money available for the re-erection or the repair of the particular claimant's property. However difficult and hard a case may be, it is doubtful whether in fact it is wise to make available a sum of that character, which might be expended, no doubt, as the claimant would desire, but not perhaps as he might most usefully be advised to spend it. It may very well be in the best interests of the claimant to keep a pretty strict line, because if you once begin to make exceptions as regards payments of this character, you will get into very great difficulties indeed. There is a very great deal to be said for the view that the object of this Measure, which ought to dominate all other considerations, is to see that property is restored and houses made available to live in. I am therefore very doubtful whether it is wise even in cases of old age or infirmity, much as I would sympathise with such cases, to break the rule.
The only other matter I would mention in this connection is that it would be an extremely difficult task to place upon the War Damage Commission. They would have to decide, without very much guidance but in accordance with the facts of each particular case, whether an advance payment should be made. I must have regard to the very considerable duties which now rest upon the War Damage Commission, and consider whether it is right to put a further duty of this kind upon them. Having made these observations, I will add that I will consider the Amendment again, although I am very doubtful whether it is a wise one to adopt.
If the Chancellor examines the claim put by my hon. Friend in the spirit of the words he has just spoken, we shall be satisfied, but I would suggest again that here we are considering a particular class of persons who have lost their homes and who may not even survive the war if it lasts as long as some of us think it may do. We should do all we possibly can to make the rest of their lives as comfortable as possible. Considering the psychological effect on these people who have lost everything, I am sure the Chancellor will not use such arguments to reduce my hon. Friend's Amendment to nullity. I hope that he will not stress the point concerning the work entailed, if such an Amendment as this is carried in some form or another, on the War Damage Commission. I know some of the work of the Commission. It has been very onerous and they have dealt with it, as the Chancellor himself said, very well indeed, with the aid of an efficient and able staff. In view of the duties which they have to undertake at present, I do not think that this very limited class of case would cause them so much extra work. I think my hon. Friend will be the first to acknowledge the Chancellor's willingness to examine the case in a sympathetic manner.
I appreciate the difficulties which the Chancellor of the Exchequer has to face in this matter. It was on that account that I tried to limit the scope of the cases in which such an application could be made, and also to make the power merely discretionary and not obligatory. In view of the promise which the right hon. Gentleman has given to reexamine the matter, I beg to ask leave to withdraw the Amendment.
It is rather surprising that five hon. Members whose names are appended to this Amendment are not able at present to move it, and I therefore propose to do so. I have not had time to look into all the repercussions of the Amendment, but if I remember aright it is intended to abolish the provision in the principal Act which lays upon the person whose property is damaged the burden of the first £5 worth of the damage. I think it is not asking too much to suggest that the sum of £3 should be substituted for the sum of £5 in such a case. If we consider for a moment the type of damage which will fall between £3 and £5, we shall find that in 90 per cent. of cases it consists of the breaking of the whole of the windows or of part of the roof. In the case of a small property it may clearly inflict considerable hardship on a person whose means are limited and are being stretched to the utmost under war-time conditions if he has to pay the first £5 of damage done.
I will give just one further argument in favour of reducing that amount to £3. It is because of the consequential damage which often arises if the first damage is not immediately repaired. Suppose, for example, that a breach has been made in the roof. Perhaps not more than a dozen tiles have been displaced, but if it is not promptly repaired, damage amounting to £10, £20 or £30 may easily result. There are many cases—certainly I have encountered a few—where people are not able to find the money. When the limit of £5 was questioned when the principal Act was before the House I believe the right hon. Gentleman said that if these very small claims were to be laid before the War Damage Commission at a time when a whole flood of claims was bearing in upon them, their offices would be swamped and they would not be able to administer the scheme properly. The first rush of work has finished, and as we may see from reading these notes, they are completely on top of their job, to use a colloquialism. That is a very sincere compliment to the Commission. If the Chancellor were to ask the Commission whether they now felt themselves in a position to handle this new smaller class of claims, I am certain he would find that they would answer in the affirmative.
Unlike my hon. Friend who has just preceded me, I have given some consideration to this point, though I must congratulate him on the very able manner in which he jumped into the breach and explained the case in the absence of the movers of this Amendment or those who have put their names to it. It seems to me that this principle of excluding any claim that does not reach £5 is based on a well-known principle adopted by insurance companies whereby in the case of fire insurance or other insurance the insurance company throws the liability for the first £5 of the claim on to the insured. That may have been done with the express purpose of excluding frivolous claims which sometimes happened in connection with fire insurance claims. But it cannot be the same principle in war damage claims. There have been many cases where property far away, perhaps, from the immediate incident has sustained some damage such as my hon. Friend instanced, broken glass and so forth, and for which a claim of more than £5 cannot be made up. I may say, in passing, that if they called in an experienced valuer, or a person following the same profession as I used to follow, it is quite easy to make up a claim of over £5, and to carry it to the War Damage Commission, because the War Damage Commission have not the time or experienced men to come down and investigate a claim for £6 5s. 2½d. If it seems reasonable on paper, they pay it, rightly so, I think.
I do not refer, of course, to the type of claim made when no damage has been done. If a person puts in a claim which is entirely false, that person can be proceeded against in the ordinary course of the law. But there are many cases in which poor people—and they are poor people, otherwise they would be able to call in expert advice—have sustained some minor damage and have been unable to get any recompense. I suggest to the Chancellor that this is a case in which he ought to accept the Amendment. As my hon. Friend said—and I think my recollection is the same as his—on the occasion when we were discussing the principal Act, the reason given by the Government for excluding these small claims was because of the work which would be thrown on to the War Damage Commission. I think the Chancellor will agree with me that as things are at the moment—and they have been like it for a year, at any rate—the work thrown on to the War Damage Commission is not so great, thanks to Mr. Hitler, or his lack of aeroplanes, or some reason which we cannot quite understand. I think and hope that the Chancellor will agree that in these circumstances we might now admit these smaller claims. That is the whole case, and I think that was in the minds of the supporters of this Amendment. It does affect quite a number of people in humble circumstances, and on those grounds alone I think that the Chancellor might meet us. It is not a case of high principle; it is a case of administration.
I am sure we all recognise the strenuous efforts which my hon. Friend has made to deal with this Amendment in the absence of those who sponsored it and who are not present at this moment. I will make no comment on the illuminating glimpse which my hon. Friend gave of the life of a surveyor and what he does, which I am afraid rather astonishes me, as I have always had such a high regard for members of that great profession. We will pass that by and say nothing about it, and I will endeavour to deal with the merits of this Amendment. I would recall to the memory of my hon. Friends what happened when we discussed this matter on the last occasion. In fact we devoted some time to the question of what the limits should be, and many of my hon. Friends will remember that we conferred together beforehand as to the attitude I should take, and I received advice from Members in all quarters of the House before I came to the conclusion as to what in fact I should advise the Committee to do. Most of my hon. Friends whom I consulted came to the conclusion, in connection with the suggestions I was about to make, that it was in fact in the interests of the claimants themselves that the provisions we ultimately made in the Bill should prevail. There are two things which have to be taken into account and which led us to the conclusion that £5 was the proper limit. One is that the great measure of what is called first-aid work, which includes these small claims, is done by the local authorities, and in their case there is no limit to the particular amount. The local authorities, as we know, because they have done magnificent work in this respect, have done a great measure of first-aid work, and many people have been restored quickly to their homes. So far as that work is concerned, there is no question of a £3 or £5 limit at all.
The second matter that led us all to come to the conclusion that this was the right thing to do was that I also made a proposal, a suggestion of many of my hon. Friends, that where in fact there were two or three houses or more belonging to any particular person to which minor damage was done we would allow, and the House approved it, the amount of damage to those houses added together, so that where damage of a few pounds was done to one house and to another that should be permitted to be added together and payment made. As a matter of fact, I have had no complaint about the decision we all took in that matter. I have consulted the War Damage Commission, as the House would expect me to do, on this and a number of other Amendments, because they are the people on whom any burden of work would fall. I think myself that if we introduced, at this late stage, a £3 limit into the Bill we would be bound to make it retrospective. I do not think for a moment we could say that only people who sustained damage down to £3 from 2nd June, or whenever we considered the matter, are to be paid and those who suffered before that are not to be paid.
It would be almost impossible for us at this time to put on the War Damage Commission the task of examining all the small claims that may not have been assisted by the local authority, and also of undertaking the payment of small claims of this character now. It would not be in the interest of the claimants, because it would considerably impede the work that the Commission have in hand at this moment. I would not like Members to think that the work of the Commission has slowed up. It is true that they have not had to deal with the large number of immediate claims which they had some time ago, but they have a great mass of work to do. I ask my hon. Friend not to press this Amendment further, but to rely on the arrangement we came to last time. In fact, the bulk of this work is being done by the local authorities, and it would not be in the interest of the claimants themselves to impose the payment of these small amounts. On the whole, most of us thought the arrangement made last time a reasonable one.
Would my right hon. Friend reconsider this question between now and the Report stage? It really affects the humblest people. I agree that the change must be made retrospective if it is made at all. Let me mention the case of an old age pensioner whose house was damaged. He repaired it himself. He was not allowed to charge for his own time, because he was an old age pensioner; so that if he spent £3 on materials and put in £3 worth of labour, he could get nothing. Surely it is comparatively easy for a qualified man to go and see whether the damage is really war damage or not? There are penal clauses to prevent people trying to jump claims on the Commission.
Could we get an assurance from the Chancellor that he will consult the War Damage Commission before entirely closing his mind? He must see the absurdity of his whole case. If you make your claim £5 os. 1d., you come within the Act, but if it is £5 or less you remain outside. Without any dereliction of duty on the part of an experienced surveyor, is it not possible for him to make a £5 claim into a claim for £5 os. 2d.? If the only objection is the administrative one, the Chancellor should see the War Damage Commission about it.
Is it generally known that there is a limit of £5? As one who was responsible for the repair of the bulk of the war damage in Glasgow, I say that it is a waste of public money to send surveyors to survey £3 worth of damage. If the limit were generally known—I am not inciting anybody to do anything at all—the inclusion of a couple of window cords would perhaps bring the total up to £5. I do not believe that those poor people are as dumb as some Members make out. If the damage is only £3, the people ought to be thankful that that is all the damage that they have suffered.
I leave that speech as it has been made. I have no doubt that the views my hon. Friend has put forward will be duly weighed by the Committee. The argument about a claim for £5 os. 1d. would apply equally, if the Amendment were carried, to a claim for £3 os. 1d. Wherever a figure is fixed, you will always get that difficulty. I have consulted with the War Damage Commission on this matter, but I will call their attention to the Debate to-day, and ask whether they would like to add anything to what they have said on the matter.
The next Amendment covers the first Amendment on page 97, in the name of the hon. Member for South Croydon (Sir H. Williams), the first Amendment on page 98, in the name of the hon. Member for Peckham (Mr. Silkin), and the first Amendment on page 99, in the name of the hon. Member for South Croydon.
I beg to move, in page 11, line 13, at the end, to insert:
10. Reduction of contribution where Schedule A assessment reduced, otherwise than through war damage, by reason of destruction or demolition of buildings.
At the end of Sub-section (2) of Section thirty (which provides that where by reason of alteration in the condition of a unit of land a Schedule A assessment is replaced by another such assessment, the lower of the two assessments is to be disregarded) there shall be inserted the following proviso:
Provided that where the alteration is caused, otherwise than by war damage, by the destruction or demolition of buildings or works, or parts thereof, comprised in the unit of land, then, as respects an instalment of contribution for any year (being a year subsequent to the year nineteen hundred and forty-one) the relevant date in which falls after the new assessment is first in force, the assessment replaced, and not the new assessment, shall be disregarded for the purposes of this Part of this Act notwithstanding that the amount of the new assessment is less than that of the assessment replaced.'
This Amendment, although it may not meet all the points in the various Amendments, is designed to meet the point which was made in the Second Reading Debate and which has cropped up from time to time since the original Act was passed. Under the original Act, if a house which had a particular Schedule A assessment prior to the war was burned to the ground, not through bombing but by an
ordinary fire, or was demolished or structually altered in a manner which reduced its value and its Schedule A assessment, nevertheless the contribution was still based on the pre-war Schedule A value. The justification for that was that in the early part of the war the full value was at risk, and if it had been bombed at that time, before the fire or the demolition, its value at that time would have been paid under the Bill. There was much more reason for that scheme at a time when, prior to this Bill, the contribution was in respect of an initial risk period. Now that it has been possible, at any rate for the moment, to treat the contribution, as covering an indefinite period, it strengthens the argument for adjusting the contribution to the present reduced value of the house in cases where that reduction in value arises in one or other of the ways indicated in the Amendment.
It will be clear to the Committee that, under the terms of the Amendment, you do not get this reduction if your house is destroyed by war damage. If the house is destroyed by war damage, one is going to be a beneficiary, under the Act, out of the fund, to which other property owners and the State will contribute. This provision for reduction applies only where the Schedule A value comes down as the result of some alteration in the structure, and not if that alteration is due to war damage. This concession, if I may so describe it, does not apply to the first instalment of the War Damage Contribution. In many cases that already has been collected and paid, and, in the vast majority of cases covered by this concession, the property in its pre-war form will have been at risk for a substantial period. Both on practical grounds and grounds of principle it seems reasonable that we should leave the first instalment based on the old Schedule A value, but in other cases, where there is a reduction of the Schedule A value due to the causes enumerated in the Amendment, then the later instalments will be based on the reduced figure.
I would like one point cleared up. In my division there is a mansion house property which, together with the adjoining grounds, has been purchased for the purposes of housing development. The mansion house property is so dilapidated and in such a state of disrepair that it has not been occupied since its acquisition and will not be occupied, and were it not for the lease it would have been demolished. The first contribution has already been paid on that property and I take it that, should this Amendment be carried, the local authority concerned will be relieved from any further contributions under the War Damage Act in respect of the property. Will the Amendment free the local authority from paying contributions?
I would like to see the case. If the mansion house has been uninhabitable from the beginning of the war and immediately before the war, I do not understand why there should have been a Schedule A assessment, unless somebody just left it there without bothering to get it out of the way. If my hon. Friend will send particulars, I will have the matter looked into. If the house is uninhabitable, I should have thought that the Schedule A assessment could be reduced to next to nil. It does not seem to be a case to be covered by the Amendment, which is really designed to cover cases where the actual physical configuration of the structure has been altered by fire, demolition or some other cause since the outbreak of war, but, as I have said, if my hon. Friend will send particulars of the case my right hon. Friend will have it looked into.
The Attorney-General points out that an exception is made of the house which is damaged as the result of an air raid and that the contribution is continued on the ground that those concerned will eventually receive their re-compense. I would draw attention to the position of a person whose house is damaged by air raid in so far as he ceases the use of the property perhaps for many years and must still continue paying, although in addition he may be paying for the cost of finding accommodation for himself elsewhere. On the ground of equity it is not fair on the man who loses his property in an air raid that he should have to continue to pay the contribution, which, in the case of an ordinary fire insurance, he would cease to contribute after the first year.
I take it that the Amendment excludes those properties which have been scheduled by local authorities for demolition under Housing Acts if they are in fact demolished? My right hon. and learned Friend will know that it is not always easy to demolish condemned properties even during war time—
I beg your pardon, Colonel Clifton Brown. Then I must reserve my remarks on this point. There is one question I would like to put to the Attorney-General with regard to the retrospective effect of the contribution. He told us that the Government are going to ignore the first contributions already paid. Is that not a little unfair to those who paid up promptly? In some cases, because of arguments between the assessed person and the Inland Revenue, the former has been able to hold up the case for some time, so that by the time the Act comes into force, he may be able to evade the payment of the first contribution.
The Amendment does not affect the liability in respect of the first instalment. It does not matter whether it has been paid already or whether a person has been able to hold it up by producing ingenious arguments, he will not be in any better position because the first instalment is excluded from this Amendment.
Schedule A does not apply in Scotland; it is the valuation roll. One of the properties I have in mind appears in that valuation roll as being valued at 1s. I do not expect that the other will appear in the valuation roll at all. Nevertheless, contributions have to be paid in the first period and I want to know on behalf of one of the local authorities concerned whether, if this amending Bill goes through, the contributions will cease to be paid for such property?
I beg to move, in page 11, line 13, at the end, to insert:
11. Suspension or remission of instalments in respect of properties affected by clearance or compulsory purchase, or demolition, orders.
This Amendment also goes some way, though perhaps not the whole of the way, to meet a point which was raised on Second Reading and also when we were discussing the original Measure. It relates to those cases in which the property is subject to a clearance order or a demolition order or a similar order of that kind. The question is, What is the right course to take in these circumstances? Some people would say, and I think some
of the Amendments suggest, that irrespective of whether that property is occupied or not, it should pay no contribution. I cannot exactly commend that view to the Committee. Here is property on which in the course of time, the guillotine will descend. It will be demolished, but at the moment it is occupied and producing rent for whoever owns it. If it is damaged the local authority will come round and do the first-aid repairs and enable the occupier to continue and the landlord to get the rent or whatever it is that he is getting. I do not think that that view is right. When the matter was discussed my right hon. Friend said that under the Bill all property owners should stand in together.
the Commissioners of Inland Revenue shall take no steps to recover any instalment of contribution falling due in respect of the property for that year unless and until they are satisfied that the condition specified in head (b) of this sub-paragraph has ceased to be fulfilled or that the order has been quashed.
It was impossible to get a completely logical scheme which enabled each contribution to be exactly related to the value of the building and its life, as distinct from the various elements which go to make up Schedule A. What my right hon. Friend proposes in this Amendment is this. If property is subject to one of these orders which are set out in paragraph (a) and the house or building is unoccupied during the year then there is to be no collection of the contribution. That is because it has this axe hanging over it and is not producing income for the owner and it seems reasonable in those circumstances that he should be excused contributions. If, however, in the course of the year it becomes occupied, contributions are payable. I hope the Committee will feel that this is a reasonable proposal for dealing with this point.
I beg to move, in page 11, line 13, at the end, to insert:
10. Reduction of contributions.
Section twenty-two of the principal Act shall be amended by adding the following Subsections:—
The point of this Amendment is that it aims not so much at reducing payments as at spreading them over a longer period and lessening the burden on property owners at a time when they are least able to bear it. I do not think I need point out to the Committee that the War Damage Act has departed very considerably from the original principles laid down by the Prime Minister, when he suggested that damage caused by enemy action should be borne by the community as a whole. What has happened, and what is likely to happen unless air raids continue on a very much greater scale than has been the case up to the present, is that this damage will be borne by one section of the community, namely, the property owners. I do not want to argue that point but what I am suggesting is that the Treasury at the present moment are collecting about £40,000,000 a year and cannot possibly spend anything like that amount because of the grave shortage of labour and materials, which is likely to grow worse as the war goes on. The Government have, quite rightly, insisted on first-aid repairs only being done now and have put a limit on what should be done. The Chancellor gave us to understand to-day that he would reveal the extent of the damage which had been done. My point is not so much on the question of what damage has been done as on what amount of damage can be
repaired while the war continues. That is why it is suggested that the contributions should be limited to what is likely to be spent.
I could give many examples of the hardship of the present arrangements, as I am sure could other Members of the Committee, but I will give only one from my own personal knowledge. I know of two old maiden ladies who live in a part of London which has been heavily bombed and who own five houses on which they are dependent for their income. One of these houses has been destroyed, two are empty because people do not want to live in that part of London and two are let at reduced rents. The result is that these ladies are practically without any income. When the war is over, those empty houses will be letable and those now let at reduced rents will fetch their pre-war values and the owners will then be much better able to meet the charges than they are now. As a matter of principle it is not right that the Government should collect more than they can spend. The position now savours of what happened to the Road Fund when money which was collected for one purpose was not used for that purpose at all. It may be argued that there is the possibility of an increase in bombing, against which provision has to be made. Well, that may come, but, as I have said, it is not so much a question of what damage has been done as of replacements which can be effected during the war. I do not want to press the exact phraseology of my Amendment. Perhaps the word "estimate" is better than the word "statement," but if the Chancellor appreciates the underlying principle he may be able to do something to help the tens of thousands of small property owners who, at the present time, are suffering great hardship on this account.
There are two observations I would like to make by way of correction of what my hon. and gallant Friend said. I do not think he correctly cited the Prime Minister's statement about the principles of the War Damage Act, and, secondly, I did not undertake—although I intend to make an observation on this matter—to reveal what amount of damage has been done in this country. No one in the Committee would ask me to do such a thing. My hon. and gallant Friend has put a remarkable proposal before the Committee and one which I do not think anyone, with due regard to financial operations and the prudent administration of this Measure, could support. Apparently what he wants to do is to restrict current contributions by owners of property, under this Measure, to the amount of the immediate outgoings on temporary repairs and such costs-of-works payments as may be made.
As regards reconstruction and value payments, he said we should leave them until after the war and see how we get on then. I do not think that would appeal to the Committee. It does not appeal to me as a businesslike arrangement and I do not think it is in the interests of the contributors themselves. It is not in the interests of people concerned with damaged property and contributions under this Bill to leave over an uncertain and major part of what would have to be paid to meet losses caused by the war, until after the war, when, apparently, some fresh arrangement would be made for payment. It is not a case of the Treasury endeavouring to draw in a considerable sum of money and use it for other purposes. Having regard to the statements that have been made, I do not think it will do any harm to say—because it will dispel a certain measure of suspicion.—that at any rate last year's outgoings in fact exceeded the receipts. Therefore, nine-tenths of the case upon which my hon. and gallant Friend has based his Amendment disappears. We need not pay too much attention to this particular matter, because things vary a good deal, and we shall be receiving some further contributions a most immediately, so that the position may then be reversed. Consequently, although I attach no particular significance to this matter, it shows the folly of trying to base the scheme upon the exact expenditure made and the exact receipts that have come in.
No, not a large number. I could get the exact proportion, and I may refer to this in the Third Reading Debate, but it is only fair to say that the majority of people who have had to make contributions have, in fact, done so, and of the large sums that have to be collected, only a very small proportion have not been received. But do not let there be any misapprehension that we are making a current profit. I do not base my opposition to the Amendment on that particular ground, because the position differs from time to time. I am opposed to the proposal because I consider it to be thoroughly unbusinesslike and not in the interests of the people who have to make contributions. I ask the Committee firmly to maintain the financial structure of the Measure, to which we all agree, and from which I see no reason for departing.
I am unable to agree with my right hon. Friend the Chancellor that the proposal of my hon. and gallant Friend the Member for Hornsey (Captain Gammans) is as absurd as he has suggested. Obviously, it would apply only in years in which the contributions were in excess of the payments. I cannot understand why the Chancellor should consider it so essential to collect more than is enough to make the payments, because surely, if there were a grave increase in the amount of destruction due to enemy action, the general liability to make adequate contributions according to the principal Act is, in effect, well secured, or could be made well secured, upon the property. But it will be a long time after the war before the great bulk of cost-of-works payments will be payable owing to the necessary postponement of the great bulk of re-building. The Chancellor said that he has no wish to make a profit out of this scheme. The fact remains that he gets this money free of interest. It is not earmarked for any particular fund. It is used for the general finance of the war, and in effect may be described as a forced loan in so far as it is not required for making payments.
I listened carefully to what my right hon. Friend said. If I misunderstood him, I apologise, but it seems clear that he does obtain, even if he does not wish to do so, these contributions, which are to him a useful form of finance—
It is not a matter to be emphasised particularly, because improper inferences may be drawn from it, but I have stated that in fact more has been paid out than has been received.
I am aware of that, and I made it clear that the proposal in the Amendment would apply only in years in which the contributions were in excess of the payments. Therefore, I think that, in principle, what I said is right, and that in so far as the Chancellor may in the course of this year collect more in contributions than he has to disburse, he does in fact obtain a loan for nothing.
I did not intend to speak on this matter, but as my right hon. Friend the Chancellor of the Exchequer has stated that the proposal in the Amendment is unbusinesslike, I feel that I ought to say something. I do not understand on what grounds he states that it is unbusinesslike. The proposition seems to me to be a very simple one. At the present time we are to pay over a period of five years, and it is true that a great deal of the property for which compensation will have to be paid will not be put right for many years after the war. Therefore, the Government are holding money upon which they are making no contributions—
The Chancellor does not agree, but obviously he and I are looking at the matter through different spectacles. I want to support this proposition because it is equitable. There is a great deal of talk about equality of sacrifice, but there is no justice or equal sacrifice in this Bill from start to finish. A section of the community has an imposition put upon it which it ought not to have to bear. Why should it be unbusinesslike to provide that this payment should be made over a period of 15 years? Should the war be over in 12 months or two years' time and should there be the labour to undertake the repairs and reconstruction, the Government could impose the statutory obligation for an annual payment for 15 years for the purpose of creating a loan to provide all the money necessary to undertake this work. I cannot understand why the Chancellor should say this is an unbusinesslike proposition. If that is the only reason which my right hon. Friend has for not accepting this Amendment, I am not surprised that this Bill does a deli-berate injustice to a certain section of the community.
I do not always see eye to eye with the Chancellor of the Exchequer, but I think that in this case he is perfectly right. Surely the property owner should know that over the first five years his annual contributions are to be the same. Already the first period has gone, and the facts disclosed by the Chancellor indicate that there is no reason for a refund. The second year is entirely hypothetical. Surely it is desirable that the Treasury should not be paying out more than they receive? If it is right in the first year that the Chancellor should pay more than he receives, it is equitable that in the second year he should receive more than he pays. Under those circumstances I think that the Chancellor is right in not accepting this Amendment.
I beg to move, in page 11, line 13, at the end, to insert:
10. Land used for aerodromes, etc., to be liable to lower rate of contribution.
The normal instalment under Part I of the principal Act is at the rate of 2s. in the £, but in certain cases the instalment is reduced to 6d. Those cases include agricultural land and buildings and land used mainly for the purposes of open-air games, racing, recreation and so on, as set out in Section 20 of the principal Act. Most aerodromes include a considerable area of land upon which no works or buildings are provided, which is really included in the aerodrome merely for the purposes of greater convenience, greater safety and so on. The association of Municipal Corporations and a number of other bodies, including the Aerodrome Owners Association, consider that land of that description, which technically cannot be termed agricultural land, should be entitled to the reduced rate of contribution, namely, at 6d. in the £ I may say that if the Amendment is not quite in the proper form, we should be happy to alter it. I think, however, that this is a case which my right hon. Friend might very properly meet.
As I understand that my right hon. Friend contemplates accepting this Amendment, would he say on what principle he does so, and whether the element of increased risk due to proximity to objectives of military importance enters into it, because, if so, I think he will find himself in some difficulty.
I do not propose to put myself in that difficulty. I propose to advise the Committee to accept this Amendment for the reasons I will give. The Committee will remember that Section 20 (3) and Section 19 (4) of the original Act, taken together, provide that properties used mainly or exclusively for the purposes of open-air games, open-air racing or recreation should pay contributions at the agricultural rate of 6d. in the £, and 2s. in the £ on buildings if the cost of the latter is not less than £5,000. We have received representations from the Aerodrome Owners Association putting forward the case which my hon. and gallant Friend the Member for South-East Leeds (Major Milner) has briefly outlined to the Committee. They have asked for an analogous concession in the following circumstances. As the Committee will appreciate, most of these aerodromes are municipally owned. Practically all of them have been requisitioned for war purposes, and those which have not been used for civil flying are now being used for agricultural purposes. Therefore, their case is, in fact, analogous to the exceptions we have already made, and that brings them within the rule which we laid down in the principal Act. It is for that reason that I think it is right that my hon. and gallant Friend's Amendment should be accepted.
Sir J. Mellon:
I beg to move, in page 12, line 28, at the end, to insert:
14. Deferment of payment of contributions in certain cases.
This Amendment is quite simple and clear in intention and in form. It provides that where the income from property has been so reduced as a result of any war that it is insufficient to meet the outgoings in relation to the property, the collection of the instalments shall be deferred. In paragraph (2) there is a provision limiting the extent to which it can be deferred. I think that the words upon the Order Paper are sufficiently clear and that I need not attempt to summarise the matter further. As I understand it, the "result of any war" would include not only the results of enemy action. Enemy action can result, for instance, in a disclaimer by a tenant so that the income is not only reduced
but disappears. But there can also be, as a result of war, a requisition by the Government which may involve a reduction of income to the owner, either because his tenant in certain circumstances has a right to disclaim, or otherwise. Then there are the cases in which the property is situated in an evacuation area, defence area or protected area. In all those cases the owner may be seriously embarrassed as a result of loss of income from the property, and, if the Chancellor can see his way to make some concession, it would be very helpful.
There is only one line of logical objection to the Amendment, which I think would be very academic. If the income from the property is reduced to such an extent that, after meeting outgoings, there is nothing left to provide for the contributions, then the owner can provide them only by resort to other income or by resort to other forms of capital. The Chancellor of the Exchequer might make an academic objection to the Amendment on the ground that the contribution is designed as a capital charge to secure a capital asset and therefore the income of the property is neither here nor there. If he should take that line I think it would be a very cruel one. Indeed I do not think he ought to stand too much on logic, because the Bill from start to finish is illogical and anomalous. Therefore, I hope he will see his way to accept the practical advantages of the Amendment, in whatever form he may prefer to have it and make some concession.
I am sorry to have to give an academic reply. My hon. Friend was not far wrong in his forecast. Someone must have seen my notes on the Bill because this is the second time that intelligent anticipation has been directed to my answer. We have held, ever since we first started on this scheme in the principal Act, that the contributions were in the nature of capital contributions and not income.
Was not the real reason for that, one which had nothing to do with the question of property at all, but with the question of Income Tax, because my right hon. Friend did not wish that the contributions should be treated as an expense for the purpose of assessment to Income Tax?
That is another story. Generally, we have taken the view that these contributions are outgoings of a capital nature. That has been our principle right through. My hon. Friend's case is that, supposing the net income from the property has been so reduced as the result of the war that there is not enough to pay the contributions, there should be deferment. But we have never held that the contributions should necessarily be found out of the income of the property. I think this is the first time that that thesis has been put forward. The contributions are, in fact, to safeguard the capital interest and if, from the income of the property, there is not enough at the moment to find the contributions, one naturally would expect that it would be found from any other resource that might be available.
My hon. Friend may say there are no other resources. There may or may not be, but if there are real cases of hardship the Inland Revenue is always prepared to consider any proposals in an individual case, and that is as far as one can go in the matter of deferment. If for some reason or other the owner simply cannot pay his contribution, let him make that case to the Inland Revenue and he will not find them unsympathetic, but that is quite different from the sweeping statement that in any case where there is no income from the property the contribution should be deferred. The owner may have a large income from somewhere else from which he can easily pay his contribution. That is where the Movers of the Amendment have gone wrong. It may quite well be that the owner is embarrassed by the loss of the income of the property, but it does not necessarily follow that he is in a position of such hardship that he cannot pay at all, because he may have other resources. If, however, he can plead hardship and can convince the Inland Revenue, he will be treated kindly. I can give that assurance because I have been in correspondence with Members in specific cases and that has in fact been done. That being so, I could not suggest acceptance of the Amendment.
I beg to move, in page 12, line 32, at the end, to insert:
15. Application of principal Act to elementary schools transferred to local education authority.
This is to enable certain arrangements to be made, if the various parties concerned are anxious to make them, affecting the share of the contribution to fall on the local education authority and the trustees of certain non-provided schools. There are cases in which, under one Statute or another, a non-provided school has been transferred to the local education authority in circumstances in which it is contemplated that the local education authority in fact pays outgoings and keeps up the building. The legal position very often does not represent the realities of the situation. In some cases the local education authority are in possession merely under a licence, and therefore, in law, the trustees can turn them out to-morrow, though in fact it is contemplated that they should remain as they are, as long as the building remains and is used as a school. In other cases there is a lease of perhaps 21 years. In many, I daresay in all these cases the local education authority agrees that the contributions ought to fall on them rather than on the trustees, who are as it were the mere holders of the freehold, or in some cases merely leaseholders.
The trouble is that, under the Bill as it stands, an undertaking by the occupying tenant to pay outgoings does not apply to War Damage contribution and that is not to be treated as an outgoing for the purpose of a covenant with regard to outgoings in the lease. There are also provisions which impede the arrangement as to the sharing of contributions otherwise than in accordance with the Act. Therefore, all that this rather long Amendment does is to say that, notwithstanding those provisions of the Bill and the Act, if the local education authority is agreeable that it should pay the whole of the contributions or come to some arrangement with the trustees acceptable to both, they are able to do so subject to approval by the Board of Education, and the contribution will, in fact, then be paid according to the realities of the situation not hampered, as it is at present, by the actual form which these transactions have taken.
I beg to move, page 12, line 32, at the end, to insert:
15. Land belonging to National Trusts.
I do not pretend to know very much about the technicalities of this long Amendment, and I am not very familiar with the jargon which is employed, but I have been asked to bring it to the notice of the Committee in the light of what has been happening recently in respect to certain of the National Trust properties. Bath Assembly Rooms and Eastbury Manor House, which are let to Bath Corporation and Barking Corporation respectively, have suffered damage recently. The National Trust were exempted by Section 43 of the War Damage Act from making contributions or receiving payments in respect of their inalienable properties. The proposal in the Amendment is that the Act should be made applicable to any tenancies of a property of the Trust longer than seven years. This, broadly speaking, is the way Crown property was treated under Section 37 of the Act. Where there is a tenant with a proprietary interest in a part of a contributory property the Commission are to apportion the contributions. The Amendment will correct a flaw in the Act and be retrospective with regard to both contribution and compensation, and it is a fair way of saying how these properties should be treated. I believe that there has been some discussion with the Treasury about this matter, and I hope that in spite of my inadequate knowledge of it the Chancellor will favourably receive the Amendment to make good what I believe was intended when the Act was originally drafted.
Any person who is aggrieved by an apportionment made by the Commissioners of Inland Revenue under this sub-paragraph' may appeal to the Special Commissioners; and subsection (3) of section thirty-six (which relates to the procedure on an appeal to the Special Commissioners) shall apply as if the reference therein to such an appeal included a reference to an appeal under this sub-paragraph.
I should like to support the Amendment. The National Trust had a special Clause in the main Act whereby it was contracted out of both contributions and benefit. That, no doubt, was a reasonable enough provision where property was widely spread, but it was not reasonable in the case of persons who had taken long leases from the National Trust and owned long leasehold interests in isolated properties. It is to remedy that defect that this Amendment is moved. There will be three classes of case. There will be the property in possession of the National Trust, which will remain without contribution and benefit; there will be the property partly contributory and partly non-contributory if let on long leases, and in those cases the division between the two categories will be made by the Commissioners of Inland Revenue; and the third class will be the long leaseholder who may very well have spent considerable capital sums on the development of the property and who will be covered in the ordinary way, that is to say, he will both contribute and receive benefit. The Amendment is moved in order to bring about that change in the existing position.
Many of us who take a considerable interest in the work of the National Trust feel that anything should be done to help forward the movement. If the Trust has to find sums of any amount to pay war damage contributions, it will limit the amount which it will have for further development, As there are no Scottish Members taking part in this Debate, I feel that I should make a special appeal on behalf of many places in Scotland which might well come under the National Trust. If this Amendment is carried, it is likely to give an impetus to that movement which might be helpful to many people who have interests in Scotland.
For reasons given by my two hon. Friends, I shall be happy on behalf of the Government to advise the Committee to accept the Amendment. It is a fact that since we dealt with the matter last time it has been ascertained that a minority of the tenants hold on long leases from the National Trust, and they have a substantial interest in the financial matters at stake. This Amendment has been moved to meet those cases.
I beg to move, in page 12, line 32, at the end, to insert:
15. Exclusion from Section 40 of hereditaments privately owned.
At the end of subsection (6) of section forty the following subsection shall be inserted,—
' (7) The provisions of this section shall not apply to a hereditament not owned by an undertaking to which this section, applies.'
This Amendment will put right what is a manifest injustice. Anyone who is unfortunate enough to have as tenant a public utility undertaking is, under Section 40, deprived of all compensation. In my constituency and in many parts of the country there are persons who own warehouses
and other properties occupied by public utility undertakings. In my constituency there were four such warehouses, of which three have been destroyed and one badly damaged. The public utility undertaking which is the tenant has disclaimed the leases, as it is entitled to do. The property, therefore, falls back on the landlord, who is a private owner and who has no means of getting any compensation or even any consideration for his claim. I understand that a Bill has been proposed to deal with public utility undertakings. It was proposed many months ago, it has been long deferred, and there does not appear to be any real intention of proceeding with it. I hope that this is an opportunity which the Chancellor will think it right to take to put in order a grave injustice to private owners who are so unfortunate as to have public utility undertakings as tenants.
My hon. and gallant Friend is right in reminding the Committee that it is the Government's intention in due course to introduce legislation with regard to the war damage aspect of public utility undertakings. My right hon. Friend referred to that in his Second Reading speech by saying that this Bill and the amendments which it makes to the principal Act did not deal with Section 40 of that Act. That remains to be dealt with under the fresh legislation. My hon. and gallant Friend expresses the fear that we have no real intention of proceeding with that legislation, but I can assure him that he is wrong. We have every intention to proceed. In fact, it is very necessary, because until that legislation is through, public utility undertakings cannot know where they stand in this matter. It is a very complex question. My right hon. Friend has from time to time given answers in the House on the subject. There has to be and there will be legislation dealing with it. It follows, therefore, that any legislation of that kind will have to clear up a lot of points which are left in the air by Section 40 of the principal Act. The definition and scope of any new arrangement of payments to or contributions from people who have interest in public utility property will fall to be discussed and settled then. It would not help matters if we accepted the Amendment and dealt with one little corner of the problem without seeing the whole picture. My hon. and gallant Friend can take it from me that there will be legislation dealing with public utilities.
My right hon. and gallant Friend says that we cannot deal with this point until we see the whole picture, but the right hon. Gentleman who is going to paint the picture is sitting on the Government Front Bench. The public utilities have not been holding him up. I have some connection with the electric supply industry, and I am certain that that industry has not held him up. Indeed, we submitted a scheme before the principal Act was introduced. There is no doubt some branch of public utilities which is holding up the rest, and it will help us to know who is causing the delay. It has been all but two years since urgent representations were made by, I think, the gas industry, and I know by the electric industry, that something should be done, but we are still going on in this continued state of uncertainty. Nobody knows where they are or what their obligations are. I think the Chancellor ought to give us some closer indication of when something is to be done.
As my right hon. and gallant Friend the Financial Secretary has said, this matter is not without its difficulties and complexities. For some time now representatives of the Treasury have been conferring with representatives of the public utility undertakings concerned. I would not myself subscribe to the suggestion that any of them are holding up this business, because I think they are as anxious as the Treasury is, and as this Committee is, to have the matter settled, but, as I say, it is full of difficulties. I am glad to say that I think general conclusions have now been reached upon the major matters which will be dealt with in the Bill. I have not come to any conclusion in the matter, but I am considering whether, having regard to the complexities of a Bill of that character, it would not be as well to make it available to Members of the House and those concerned before I. formally present it to the House for Second Reading, in order to see whether they desire to make any suggestions to me about it. That is often a convenient course to take when dealing with matters of this kind, and it may very well facilitate the passage of the Bill. But I am glad to say that considerable progress has been made, that I think all have done their best to make a contribution to the solution of the problem, and that I am not unhopeful that we shall be able soon to bring the Bill before the House.
May we understand that if and when the Bill is introduced any defects to which attention has been called in this Amendment will not only be remedied but will be retrospectively remedied, so that the delay which there has been in dealing with them will not inure to the hardship of the persons concerned?
I beg to move, in page 12, line 34; at the end, to insert:
16. Share of value payment to be attributed to buildings or works belonging to person not having a proprietary interest.
Where a value payment is to be made in respect of war damage to a hereditament and at the date by reference to which the disposal of the payment is to be regulated there is on the hereditament a building or work, not being an article to which the provisions of Subsection (4) of Section forty-six apply, which a person had a right to remove so as to be entitled on removing it to it or to the materials of it, or which a person not having a proprietary interest in the hereditament had' placed thereon and could have been required to remove, and either—
Sub-section (4) of Section 46 of the original Act provided for a case in which there was on damaged property before the damage occurred a fixture which, say, A.B. would have had the right to remove if it had not been blown up but which, owing to the legal position, was vested in C.D. and where, but for the provisions in this Sub-section, the value payment would have gone to C.D. and A.B. would not have got the quota appropriate to his original right to take away the fixture. What this Amendment does is to extend that principle to certain buildings as distinct from fixtures, because it has come to light that there are a number of small buildings or works which do not come within the words used in Sub-section (4) of Section 46 of the original Act but which are in a similar position in that the person who put them up—it may be the licensee or short tenant—would have had the right to remove them at a certain time if the bomb had not blown them up. It is right, therefore, that there should be provision for the appropriate proportion
of the value payment to be paid to him in respect of that right.
the provisions of the said Sub-section (4) shall have effect in relation to the building or work with the substitution of references thereto and to this Sub-section for references to the article and to that Sub-section, and as if references to, a right to remove included references to an obligation, to remove.
I beg to move, in page 12, line 34, at the end, to insert:
16. Provision as to extent of indemnity under the private chattels scheme.
In paragraph (a) of Sub-section (2) of Section fifty-nine there shall be added the words:
' Provided that any policy of insurance under the private chattels scheme shall provide for the determination of the extent of the indemnity by reference not only to the value of the goods but also to the cost of replacement.'
In this Amendment, which relates to the private chattels scheme, the words have been chosen with great care. They do not lay down in precise terms the standards by which the indemnity shall be valued, but they give an indication. The Amendment deals with a very human problem, which I will put in rather simple words. There may be an old couple who have a small house and certain simple furniture bought, perhaps, 15 or 20 years ago. Let us say that they paid £5 for some particular piece of furniture or utensil in the house. That was 15 or 20 years ago, and there has been a depreciation in its value since then, and some figure like £3 would probably represent its current value. Meanwhile, however, owing to all sorts of causes, the price of a similar article has gone up, and they could not effectively replace it for the £3, and not even for the £5, because very likely the modern price would be £8 or £10, and to that has to be added Purchase Tax. Therefore, if they bought a new article of the same kind to serve their purpose as well as the old article—which may have been knocked about a bit but was still perfectly good—they might have to pay £12 or £13. It is true that when these damages are being evaluated the Purchase Tax is added, and that therefore they get a little more than the £5 which was the depreciated value of the article, but that does not go any way towards paying for its replacement. Large numbers of people are in this position, that when the contents of their houses are destroyed they are provided with a sum of money which will not go anything like all the way to provide them with a home such as they had before. Though the State is generously undertaking in theory to replace chattels, large numbers of householders
find that they cannot replace the contents of their houses with the money which is given to them in compensation.
As I pointed out, we do not say in the Amendment that they are to have exactly the replacement value of their stuff but that the replacement value shall be taken into account, and some sort of happy compromise arrived at which will give them some chance of establishing their house again, if not to the full extent at any rate to some partial extent, and that they should not be left without means of living. The Amendment has been put down to obtain a sympathetic attitude towards that class of person.
The right hon. Gentleman referred to this as a very human problem, and indeed it is, but it is not quite as simple of solution as he led the Committee to suppose. There seem to be three bases on which one can assess compensation or payment in an insurance scheme. The first is on the cost of the article when new, a cost that is known; the second is on the replacement value at the date of the loss, also a cost that is known; the third is the actual value at the date of the loss, which would be the replacement value minus something for wear and tear. Each of those is fairly simple to decide. The right hon. Gentleman suggests that we should find means now of assessing a sum of money which will buy, at some future, and as yet undetermined, date, articles comparable to those destroyed. We do not know, of course, how long the war will last, and we cannot say precisely how soon after the end of the war it will be possible to make all those payments. It will be very difficult to lay down any hard-and-fast rule, and that is a difficulty which the right hon. Gentleman no doubt appreciates.
If he agrees that it is impossible so to fix the matter, he may be satisfied if I say that the Government have in mind the possibility of hardships arising to persons of modest resources, if the price level at the date of the payment differs materially from that on which compensation was based. While it would not be right, in the Government's view, to call on the general taxpayer to find money to pay additional compensation for the replacement of articles which are not necessary for a reasonable standard of life, the Government will be prepared to consider, should the post-war price level and other circumstances require it, the adequacy of the compensation in the case of the small man. I hope that that general assurance will satisfy the right hon. Gentleman. As I say, the case he has put is hypothetical. We are aware in the Board of Trade of this increase of prices and are doing our best to stop it. We have recently produced a Furniture Prices Order, and it may well be—in fact, there are reasonable grounds for hoping—that within a very short period after the war, possibly of weeks or months, furniture may be materially cheaper than it is to-day. Bearing that possibility in mind, and in view of the general assurance that I have been able to give to my right hon. Friend, I hope he will feel able to refrain from pressing his Amendment.
This is a matter which has caused very great anxiety to a large number of people who have lost their homes and all their furniture. I have received many complaints about it. They have been met by officers of the Board of Trade shortly after sustaining the damage, and while they were living with friends or elsewhere, and have been offered a lump sum of £50 or £60. That has appeared at first sight to be quite a large sum of money, and they have accepted it. Then, when they find accommodation in which to set up a house once more, they discover that the money which they have agreed to accept is totally inadequate to supply them with the bare minimum essential for a home. I should like to know upon what principles the officers of the Board of Trade have hitherto settled these claims. Is it upon the basis of original cost; of a depreciated value, or of replacement? I think we ought to know, because so far as I can discover there has been no settled principle at all in dealing with these claims, and in a very great many cases, at any rate, the price appears to have been based on a depreciated value. That is all very well in abstract theory. If people were dealing in furniture and were concerned in buying and selling, then certainly they should have nothing more than what they could reasonably expect to get upon the market. But the circumstances of the average working-class household are very different from that. A family in the course of many years will gradually acquire sufficient furniture to meet their requirements, and it is perfectly true that if it were thrown upon the market, it might be worth very little because of its dilapidated or second-hand condition, but in order to replace it a very large sum of money may be required. Really the matter ought to be considered on the basis of trying to save these people from suffering unfairly and unduly in comparison with other people from the hardships of the war, and of re-instating them in a position in which they can lead their lives as before.
I would like to add a plea to the remarks made by my right hon. Friend and by my hon. Friend the Member for North Battersea (Mr. Douglas). The answer given by my hon. and gallant Friend the Parliamentary Secretary to the Board of Trade is not, I think, quite satisfactory. He is deferring consideration of this matter to the end of the war. But that may be a long distance ahead, and there have been so many people who have lost all their goods and chattels that I do not think it comes to a question of money. We have raised the issue in regard to the homes of the people, and we cannot neglect the goods and chattels which go to make up any happy home, and I would suggest to my hon. and gallant Friend that, even if it is a question of money, when we are spending as liberally as we are to-day on destruction we can well afford to spare something for reconstruction, and so avoid the morale of these people being depressed or at any rate ensure that their morale is improved, and also the war effort. I hope he will not defer it too far into the distant future, but that he will give it much more immediate consideration.
I should like to add a plea for more generous treatment for these people. The House of Commons is deeply concerned in this matter; if I remember rightly, when this Measure was originally introduced, the Prime Minister made a particular point of the fact that we should do our utmost to see that loss and suffering were as equally shared as possible in the terrible conditions in which we are now forced to live. I believe that that was universally applauded in the House. There was the strongest possible support for the most generous possible treatment for those who suffered in air raids, particularly those with small means. I do not quite understand how far the pledge of the Parliamentary Secretary went. It sounded very vague to me, and I think it would be to the honour of the House of Commons to get a rather more precise undertaking from him as to what is going to be done.
I wish strongly to support what has been said by the last speakers, having come from a city which has been very badly blitzed. I know the position of these people. What they want is to be able to buy some furniture immediately. They want money immediately. If I may say so with all deference to the hon. and gallant Gentleman, the Board of Trade do not come to a settlement. These people want money and furniture particularly, so that they can restore some sort of home. It is very difficult when you go to these people who have lost everything if they cannot reestablish themselves in some sort of home. They want payment immediately, and they want to be able to replace the goods they have lost. I would urge something more definite from the Board of Trade so that these people may know their position. Delays which are taking place in any sort of settlement are rather upsetting the morale of the people. They stand up to the blitz, but it is their position afterwards which is concerning them.
Before the hon. and gallant Gentleman gets up, may I say that we want something a little more definite than has been stated? He spoke as if it was to be left over until after the war. It is here and now that we want something.
I am sorry if I did not make myself clear. Here and now the replacement value is the value adopted. There is no question of what a thing has cost. The value taken by the assessors is the value at which a similar article can be purchased in the shops at the time of the loss. Our assessors have very definite instructions. They have to assure themselves that they are allotting sufficient money for these purposes. There is no question at all of any instruction to cut payments, and if any Member can give me any cases in which payments have been so cut, I will most gladly look into them. I can assure the Committee that from our general experience our assessors give satisfaction by and large. Many cases are dealt with, and, generally speaking, I believe that the country is satisfied that these cases are dealt with on a fair and reasonable basis. The hon. Member for Exeter (Mr. Reed) said that in his constituency prompt payment was wanted. There again provision is made for prompt payment through the Assistance Board, and in many cases the assistance they give exceeds the amount of the damage. That is not the point raised in the Amendment. The hon. Member was grumbling, as I understood it, not about the payments made to-day, but was looking forward to some future period after the war to a rather different basis of valuation, when the assessments made to-day might prove to be inadequate. It was on that I endeavoured to give an assurance which had to be vague, but was nevertheless a categorical assurance of what we intended to do if the case arose.