Orders of the Day — Distribution of German Enemy Property Bill

– in the House of Commons at 12:00 am on 15th November 1949.

Alert me about debates like this

Order for Second Reading read.

3.40 p.m.

Photo of Mr William Hall Mr William Hall , Colne Valley

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

The purpose of this Bill is to allow German property, which during the war came into custody through the operation of the Trading with the Enemy Act, 1939, to be used towards meeting the pre-war claims of United Kingdom creditors against German debtors, as far as it will go. The property to be disposed of consists of assets in the United Kingdom which belonged to German nationals on or after 3rd September, 1939, the day when war broke out. As those who look at the interpretation Clause of the Bill will see, "Germany" means Germany as its territory was comprised on 1st March, 1938. The property, therefore, of an Austrian living in Germany either before or after the Anschluss is excluded.

Under the Trading with the Enemy Act, 1939, all this property had to be declared to custodians of enemy property and placed under their control. It was the responsibility of those custodians to preserve such property in contemplation of arrangements to be made at the conclusion of peace. The property, of course, is varied. Much of it—about £10 million sterling—is in liquid form. The rest, comprising houses, bullion, jewellery, stocks and shares, reversions, policies of insurance and the like, has not yet been realised and the value of it is, of course, what it will fetch when it comes to be sold in the open market. In advance of sale it cannot be valued with any accuracy but, including the £10 million in liquid form, the total value of all the property is estimated to be of the order of £15 million. I must emphasise that this figure is only an estimate.

These external assets of Germany, along with other similar assets in allied and other countries, form part of the reparation settlement agreed upon at Potsdam in July and August, 1945. Under part IV of that agreement it was decided that: The reparation claims of the United States, the United Kingdom and other countries entitled to reparations shall be met from the Western Zones and other appropriate German external assets. In the same document, I think Articles 8 and 9, the Soviet Government at the same time renounced all claims for reparations from such assets in the United Kingdom and, of course, in other countries of the Western Allies.

The matter was carried a stage further by the agreement on reparations from Germany which was made in Paris in the early days of January, 1946, the whole text of which agreement can be found in the Treaty Series No. 56 (1947)—Command Paper 7173. Under Article 6A of that agreement it was decided that: Each Signatory Government shall, under such procedures as it may choose, hold or dispose of German enemy assets within its jurisdiction in manners designed to preclude their return to German ownership or control and shall charge against its reparation share such assets (net of accrued taxes, liens, expenses of administration, other in rem charges against specific items, and legitimate contract claims against the German former owners of such assets). I quoted that in full because I noticed, in the "Financial Times" this morning, the suggestion that the whole of Article 6A should, in fact, be included in the Bill. The German enemy property dealt with under this Bill is thus at the disposal of His Majesty's Government, but because of the terms of Section 7 of the Trading with the Enemy Act, 1939, legislation is necessary before it can be disposed of. There are three ways of handling these assets.

Photo of Colonel Alan Gandar-Dower Colonel Alan Gandar-Dower , Penrith and Cockermouth

May I interrupt on a question of elucidation. If an enemy had property, and could make such a claim, could he put that forward as a claim to be dealt with among all other claims?

Photo of Mr William Hall Mr William Hall , Colne Valley

He will only have a claim against his own Government or such authority as is dealing with these matters in Germany, but actual enemy property—the property of a German national in this country—has already passed under the control of the Custodian of Enemy Property and now we are proceeding to dispose of it to those who are creditors, in one form or another, either of the German State or of German nationals.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

I am sorry to interrupt on this point but, in order to get the matter quite clear, is it not a fact that certain persons who have been accepted as genuine refugees from Nazi oppression and who, in fact, possessed property here at a time when they were of German nationality, have been permitted to reclaim that property from the custodians?

Photo of Mr William Hall Mr William Hall , Colne Valley

Where such cases have arisen—and I have no exact information about them—I do not doubt that in a few selected instances, where a pre-war German national has been naturalised, he will already have received such property as was for the time being in the custody of the Custodian of Enemy Property. The fact is that if there are such cases those assets would naturally not come within the assets which are being dealt with under the Bill.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Is my right hon. Friend saying that, as this Bill is drawn, the properties to which he has just referred are not covered by it? Many of us are advised differently and, of course, if what he is saying is correct it might have some bearing on the length of the Debate.

Photo of Mr William Hall Mr William Hall , Colne Valley

I did not refer to the problem; it was raised in a question put to me, and the query was, as I understood it: where a German national—that is, some one who was a German national at 3rd September, 1939—has since become, first, a refugee and then a British national, will any property belonging to him still be included in the assets to be dealt with under this Bill? I asked that question myself of those who are expert in this matter and, although they could not think of anyone to whom it might apply, they indicated that where someone had become a British subject, all the chances were that any property, if he had any, which had previously been under the control of and in the custody of the Custodian of Enemy Property, would have passed to him already and would not come in for distribution under this Bill.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Supposing the property has not already been handed to its original owner and is now in the hands of the Custodian of Enemy Property, will it not then be covered by the Bill?

Photo of Mr William Hall Mr William Hall , Colne Valley

Yes, it will; but there is what I may call an escape Clause in the Bill. My hon. Friend will see that it is subsection (6) of Clause 1—incidentally, another of the provisions of this Bill to which the "Financial Times" called attention this morning as needing clarification. I have no doubt that such clarification will most properly be given when we reach the Committee stage.

Photo of Sir John Foster Sir John Foster , Northwich

I am sorry to interrupt the right hon. Gentleman, and I am very grateful to him for allowing me to do so. I think that he will find, first of all, that a German national on 3rd September, 1939, was not necessarily an enemy.

Photo of Sir John Foster Sir John Foster , Northwich

Secondly, I think he will find also that he is wrong about naturalisation. Naturalisation does not give the right to recover property. There are many instances in which non-English nationals have already recovered property—as my right hon. Friend suggested just now in his question—and also cases where naturalised English people have not recovered property. I think the right hon. Gentleman will find his two answers wrong, if I may say so with great respect.

Photo of Mr William Hall Mr William Hall , Colne Valley

No, I do not admit that for a moment. However I did not go on, as, perhaps, I should have done, to say that it is not essential in every case that persons should have been naturalised. The Board of Trade has had authority and has exercised it—in selected cases—on behalf of refugees from Nazi terror, and has liberated property to them in order, for one thing, to allow them to go on living without being a charge on the authorities.

Photo of Colonel Alan Gandar-Dower Colonel Alan Gandar-Dower , Penrith and Cockermouth

We want to get this right. Would not this also include German nationals who are resident in Germany now, and not only refugees? I can give instances and names of people who are still in Germany but who have had their property in this country returned to them. [Interruption.] Oh, yes. They are not regarded as enemy aliens.

Photo of Mr William Hall Mr William Hall , Colne Valley

That may very well be. I have admitted two things. The first is that property has been returned and now does not form part of the assets to be distributed. In a sense, it is quite immaterial at this juncture of our proceedings under what provision the property was returned, or what is the exact status of the individual to whom it was returned, or even, perhaps, where he happens now to be living. In some cases—there are not many—a man has been naturalised. In others provision has been made, and the property has been returned. I should like to say at this juncture that this is a very technical Measure, and I do not for one moment pretend to know the answers to all the questions that might be put to me. Perhaps, then, I may proceed.

There are three ways of handling these assets. The first is that proposed in this Bill—to apply them, as far as they will go, to meet the claims of United Kingdom pre-war creditors against German debtors in respect of obligations outstanding on 3rd September, 1939. The second is to allow those creditors who can point to the assets here of their particular German debtor to claim against those assets and then for us to take the balance remaining, if any, into the Exchequer. The third would be to pay all these assets into the Exchequer as some small offset to the burden of war costs.

Now the Government are satisfied that there are good reasons for following the first alternative, with modifications which go some way towards meeting the special case of the claims mentioned in the second. Apart from the fact, for what it is worth, that this was the method followed after the 1914–18 war, it was also the method followed in the Peace Treaties with the satellite States, Italy, Roumania, Bulgaria and Hungary, where it is provided that the assets of those countries in Allied territories can be seized and applied to meeting certain claims, which are almost entirely those of pre-war creditors.

In addition, there is also the special position of some of the pre-war creditors to consider. Among those are the holders of the Dawes and Young Loans and what are known as the standstill creditors. The Dawes and Young Loans were issued with the full support of His Majesty's Government and the prospectus of the Young Loan said: This issue is made with the approval of His Majesty's Government under the Hague Agreement of 20th January, 1930. The claims of the standstill creditors arose well before Hitler began to rise to power.

Between the years 1924 and 1930 there was a considerable volume of long-term and short-term investment in Germany. The depression in 1930 and 1931, and its effects on American banks, together with the lack of confidence in Germany's budgetary position and external balance of payments at that particular time, caused a steady withdrawal of capital, mostly short-term, from Germany. Many of us have lively recollections of those days, and of how daily this drain went on. In June, 1931, the financial crisis in Germany reached such a pitch that a moratorium was declared on reparation payments—I refer, of course, to the Hoover Moratorium—and the Seven-Power Conference in London the following month recommended that steps be taken to maintain the volume of credits already extended to Germany.

In support of those recommendations, with which His Majesty's Government of the day were closely associated, the Treasury requested the Governor of the Bank of England to do what was possible to secure the co-operation of the banks and others concerned. This was done, and the result was that an agreement was reached known as the Standstill Agreement, which secured that those German credits, so far as United Kingdom creditors were concerned, were thus maintained when, but for the Government's intervention, they might have been withdrawn. I mention these facts to show that there is an obligation to those creditors.

The great bulk of the claims, therefore, either date back to contractual obligations entered into with Germans or the German State prior to the rise of Hitler to power in Germany—mainly at the time of the Weimar Republic—or relate to normal trading transactions cut short by the outbreak of the war. This being the position, the most equitable course to follow in dealing with those assets was, it seemed to us, for us to use them, so far as they will go, to meet claims of the pre-war creditors, which, incidentally, will include claims in respect of His Majesty's Government's guarantees of certain Austrian Loans—and I have no doubt that that point will arise, but I will not elaborate upon it now—for the reason that we do feel that those loans should come into the picture.

The dividend will be small; but how small cannot yet be indicated because an exact figure is not yet available of the total of the claims. There were voluntary registrations of claims during the war, and in January last there were further registrations of claims against particular assets. On the basis of this and other information in the possession of the Government the present estimate of them is £120 million. It may, of course, be only £100 million or even less. We cannot say. I want to emphasise that even £120 million may not cover the claims that may be put in. However, so far as we can estimate what the claims may amount to, we put it at something between £100 million and £120 million.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

On a point of elucidation. Could the right hon. Gentleman tell us how much of this £120 million represents the claims of the Government, as mentioned in the Financial Memorandum of the Bill, with respect to the guarantees of the loans to which the right hon. Gentleman has referred?

Photo of Mr William Hall Mr William Hall , Colne Valley

I am sorry. I tried to break the figure down, but at the moment it is quite impossible to give any figure upon which the House could rely, and I should hate—and I am sure the House would hate me to do so—to guess at it, because thus a figure might get into circulation that was not accurate. If it is possible to give a close estimate of that figure I shall gladly try to do so in order to meet the wish of the right hon. Gentleman.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

I do not want to embarrass the right hon. Gentleman, but I should have thought the Government would have known the amount of their own claims.

Photo of Mr William Hall Mr William Hall , Colne Valley

I am told it is fairly small, but the exact figure I could not give. I repeat that if I can give an estimate to meet the wishes of the right hon. Gentleman during the Debate, I shall gladly do so. I have been advised to keep off any attempt to break this amount down because, in many directions, our information is somewhat scanty at the moment.

The main proposal in the Bill is that claims by British persons with debts against Germany based on contractual obligations which existed on 3rd September, 1939, covering transactions connected with business carried on in the United Kingdom, may be considered as a basis for sharing in the distribution of Germany enemy property. This would allow any British subject carrying on business in the United Kingdom to claim in respect of that business, but would not allow a claim in respect of a debt arising through a contract with a German made in respect of his business in some other country, for example, in the U.S.A. or Holland.

Claims will lie against the German assets as well as against persons or firms in Germany. Claims will also be admissible from British holders of Austrian Government bonds, payments of which were covered by the Anglo-German Transfer Agreement of July, 1938. It would not be right, in our view, to expect the Austrian Government to be responsible for these loans during the war years, and, therefore, claims based on such loans should be included in any scheme of distribution of German enemy property. The Bill also covers, as I have already indicated, claims of British holders of Dawes and Young Loans for which provision for payment was also made in the Anglo-German Transfer Agreement.

The Bill provides for the appointment of an administrator by the President of the Board of Trade, who will be clothed with the necessary powers by Order in Council to make distribution in manners to be prescribed. The administrator, as has been already announced, will be assisted by an advisory committee which it is proposed to appoint, composed of representatives of the various classes of creditors concerned, who would be asked to advise on such matters as the classes of debt which should rank for payment, what priorities, if any, should be established, and on any other matters upon which their advice can be usefully secured before the Order or Orders in Council are drafted. I hope that when the various creditor interests meet, they themselves will settle whatever differences there may be between them, and provide a scheme which will have their support.

It is proposed that there shall be a general pool of assets against which the claims shall be made. There is, however, provision in the Bill in Clause 1 (4, c) under which any scheme of distribution can allow a choice to be given to those creditors who, but for the war and the operation of the Trading with the Enemy Act, would have been able to claim against assets in the United Kingdom of their own particular debtor.

When the treatment of German assets was previously debated in the House on 20th January this year, the question was raised whether those creditors whose debtors possess assets in this country should be allowed to obtain such satisfaction as they could out of the assets of their prospective debtors held by the Custodian. It was argued, in particular, from the other side of the House, that some national advantage might be gained in allowing these creditors to claim against the assets of their debtors, since under the Paris Agreement on Reparation those recoveries of contract claims against the particular assets of the creditor's German debtor do not, in certain circumstances, rank against our share of reparation. We might thus become entitled to more of other forms of reparation. It was, so far as it went, I think, a very real argument. The extent to which this benefit is likely to be realised in practice is, however, a matter of some doubt owing to the intricacy of the accounting arrangements.

Clause 1 (4, c) of the Bill will make it possible for these creditors to exercise a choice between (a) making a preferential claim against their debtor's assets and no more, or (b) waiving such a claim and standing in with the rest of the creditors in claiming against the general pool. The creditor will presumably be in the best position to judge where his best interest lies, and whether he should exercise the option to which I have just referred.

I have seen some articles in the Press which suggest that the information given on this matter up to now is not explicit enough for creditors to form an opinion whether they should pursue their claim against the proceeds of the property formerly owned by their debtor or stand in with other British creditors of the German proceeds of German property in the United Kingdom. The Custodian of Enemy Property will do his best to give such information as he can to persons claiming against the assets of specific debtors in order to help them to choose rightly between any options which an Order in Council may give them. It will be necessary for such creditors to give the custodian adequate information to enable him, in his turn, to identify the assets against which they propose to claim.

Photo of Mr Thomas Scollan Mr Thomas Scollan , Renfrewshire Western

This is a very interesting point. Does that mean that certain creditors in this country who know that the people whom they were dealing with in Germany had very large bank balances to their credit in this country can make a claim direct on the balances that are here; and another creditor who does not know whether the people who owe him his bill have any real assets worth speaking about in this count-try can make an application on the pool? Does that mean that the Bill is setting up a pool for the one and direct payment for the other?

Photo of Mr William Hall Mr William Hall , Colne Valley

It means, as I said, that where a creditor here has a claim against assets which he can trace in this country belonging to a German debtor, he will have the option of pursuing his claim against those particular assets as such, or he can, if he is so minded, take his chance in the pool. It may well be that a creditor in that position may not know whether someone else has an even prior claim against the particular assets which he thought were hypothecated to himself. It will be for him to judge. As I indicated—and what my hon. Friend said just now by way of question underlines it—a creditor here will have that right if he so desires to use it to make his claim against a particular asset and not against the pool as such. I would emphasise, however, that he will not be able to pursue his debtor in this direct manner and then for any balance which may be due to him proceed also against the pool. He has to opt for one or other of these particular courses.

Photo of Sir Walter Fletcher Sir Walter Fletcher , Bury

The right hon. Gentleman used the expression "hypothecated to him." Previously he had been talking about assets lying at a bank or somewhere else. Would he make it clear if the position is the same where it is an asset not hypothecated directly to the man who lent the money but of whose existence he knows somewhere else, because there is a considerable difference?

Photo of Mr William Hall Mr William Hall , Colne Valley

I perhaps used the wrong word when I said "hypothecated." A United Kingdom national might have been doing business with a German national about whom he knew nothing and whom he might have considered as a man of straw, and the undertaking between the two may have been that the German national should deposit here certain securities. Although they were not in the possession of the United Kingdom creditor, nevertheless, by some method—an exchange of letters or even perhaps something more direct—the creditor here was given in certain circumstances the right to take certain of those assets which had been deposited. In a case like that, the creditor here would be able to proceed against the specific assets which he knew were here when war broke out and which had been transferred under the Trading with the Enemy Act, 1939, to the Custodian. I meant no more than that when I talked of certain securities being hypothecated.

Photo of Mr George Drayson Mr George Drayson , Skipton

Will the Board of Trade administrator be empowered to inform a creditor whether there are other creditors of the same German debtor who have a lien on whatever assets might be lodged in this country?

Photo of Mr William Hall Mr William Hall , Colne Valley

That, of course, is a matter of detail. I have already said that the Custodian of Enemy Property will be prepared to help individuals to make up their minds whether to proceed against the assets of a given debtor here or to take their chance in the pool, and I should imagine that information such as that would, if known to the Custodian, be given to anybody before coming to a decision.

I should make it clear that the Bill does not provide for the distribution of German enemy property in colonial or other overseas territories over which His Majesty exercises jurisdiction. This will be a matter for consideration, and if necessary separate legislation, by the territories concerned. Perhaps we can return to that later in Committee.

Recoveries will, as I have said, be small. Some creditors will in the past have been given a bad debts' allowance for taxation purposes, usually on a provisional basis, in respect of the claims upon which a dividend is received under this Bill. Legislation will therefore be necessary to ensure that the sum now to be received is related back for taxation purposes to the period for which the allowance was given, and it is proposed to include a provision to this effect in the next Finance Bill. The proposed legislation will also cover debts from other enemy and enemy-occupied territories.

The fact that German enemy property is distributed in the manner proposed will not, apart from the direct effect upon debtor-creditor relationships—where creditors' claims are met out of the particular assets of their debtors—affect any claim which the former German owner may have under any scheme of compensation which may ultimately be adopted in Germany. That is to say, so far as we are concerned, the German debtor will continue to have his right kept alive against his own Government if any scheme there is adopted which gives compensation for loss of assets in overseas countries. His position will be the same as if his property was taken into the Exchequer—that is, taken over by the Government. Private debtors whose debts have been reduced under the general distribution may well have to make some internal adjustment with the German authorities under any scheme of compensation which the latter may adopt. As only a small part of creditor claims will be met there should be large balances outstanding, the right of settlement to which as between creditor and debtor will remain unimpaired. That is to say, the creditor's contract claim against his German debtor will still subsist, apart of course from anything he has received under any settlement come to as a result of this Bill.

This Bill does not, as I know hon. Members opposite have noticed, lay down a detailed plan for the distribution of assets. It is only, broadly speaking, an enabling Measure to permit machinery to be set up for this purpose, leaving the operative details to be promulgated by Orders in Council. The adoption of this method has, I freely confess, not been followed without considerable discussion and reflection. Its acceptance is based on the knowledge that before any scheme of distribution can be worked out a great deal more information is required than we at present possess.

Further, it will be necessary to have the advice of the Advisory Committee before some of the difficult problems of the scheme can be resolved. Consequently, it is for this reason that the Bill calls for powers to proceed by Orders in Council, which will of course be subject to a negative Resolution of this House. Provision will need to be made, for example, for the manner and time in which claims are to be made, the determination of whether a claim is in fact established, priorities, and the order in which payments shall be made, and the admission of claims against particular assets, to which I have referred.

The Bill is largely an enabling Measure. Its provisions are somewhat technical in character, and no doubt a number of points will arise as a result of this fact. I notice that a series of queries has been brought to our notice in the columns of the "Financial Times" this morning. There are, I would observe in passing, good answers to all of these, some of which will undoubtedly be given by my hon. Friend the Secretary for Overseas Trade when he replies to the Debate tonight. Others will perhaps be left till the Committee stage. Therefore, unless the House so desires it, I do not propose this afternoon to take the Bill, short though it is, Clause by Clause. All I will do in conclusion is to commend the Bill to the House as a Measure which will do as much justice as it is possible to do to those who have claims against German property at this time.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Is it proposed that the Committee stage shall be taken upstairs or on the Floor of the House?

Photo of Mr William Hall Mr William Hall , Colne Valley

That is a question which would be more properly addressed to my right hon. Friend the Leader of the House, but I will find out the answer before the evening is out. My impression is that, from the nature of the Bill, it should be taken on the Floor of the House.

4.17 p.m.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

This is a Bill which I am sure we can discuss on non-party lines. It deals with a highly complex and intricate subject, as anybody who listened to the right hon. Gentleman's opening statement will realise. However, I should like straight away to enter, not in any spirit of enmity towards the right hon. Gentleman, my protest against the hopelessly inadequate time we have been allowed between the presentation of the Bill and the taking of its Second Reading. After all, it is nearly four years since the Paris Agreement upon Reparations was arrived at. That agreement is the parent of this Bill, but while the Agreement was made four years ago we have had scarcely four working days between the presentation of this Bill and its Second Reading.

Moreover, up till now we have had very little of the essential background information made available to us upon which we could form a view about this Measure. It is only in the opening statement which the right hon. Gentleman has now given us that we have been furnished with a great deal more information than we previously possessed, and we should like considerable time to study his statement and that information before we come to the Committee stage.

I echo the appeal of the hon. Member for Nelson and Come (Mr. S. Silverman) that this Bill be taken in Committee of the Whole House. I would also strongly appeal for a reasonable time—at least 10 days in my view—before we come to the Committee stage, to give us time to examine the statement the right hon. Gentleman has made, and also the further information which I hope we shall get from the Secretary for Overseas Trade tonight, to enable us to deal intelligently with the Bill in Committee.

We know today for the first time the approximate extent of the ex-German property now in the hands of the Custodian, which we are told is £15 million, and that the extent of claims is anticipated to total no less than £120 million, which means that if there were an all round pro rata distribution, there would be a dividend Of only 2s. 6d. in the pound. I must echo the surprise I voiced during the right hon. Gentleman's speech, that he cannot tell us what is the extent of the claim, included in this £120 million, put forward on behalf of His Majesty's Government.

Photo of Mr William Hall Mr William Hall , Colne Valley

I apologise once again for not having the figure when I made my speech, but I have now discovered it is between £3 million and £4 million.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

I am much obliged to the right hon. Gentleman. I am not at all sure that, when we come to examine that further, we shall find that it is equitable for the Government to include their claim, in respect of guarantees given for certain Austrian loans, among the claims put forward by ordinary traders and people who invested in the Dawes and Young Loans that were floated at the instance of the Labour Government in 1931.

Photo of Mr William Hall Mr William Hall , Colne Valley

The Dawes Loan was 1924, and the Young Loan was 1930.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

This Bill deals only with a very limited facet of the whole question of reparations, which was the subject of the Paris Agreement. I think it is necessary in discussing this Bill that hon. Members should appreciate what the Paris Agreement laid down. It was an agreement among all members of the United Nations, except the U.S.S.R., that reparations should be divided in agreed percentages. It states that German reparations shall be divided into the following categories:Category A, which shall include all forms of German reparation except those included in Category B;Category B, which shall include industrial and other capital equipment removed from Germany, and merchant ships and inland water transport. A table of percentages is then given, ranging from 0.05 per cent. of Category A in respect of Albania to 28 per cent. to be granted apiece to the United States and the United Kingdom.

When we come to Article 2, we see that the signatory Governments agree among themselves that their respective shares of reparation, as determined by the present Agreement, shall be regarded by each of them as covering all its claims and those of its nationals against the former German Government … arising out of the war. The important Article, from the point of view of this Bill, is Article 6A, which the right hon. Gentleman read to the House. It is important to understand the full significance of this Article, which states: Each signatory Government shall, under such procedures as it may choose, hold or dispose of German enemy assets within its jurisdiction in manners designed to preclude their return to German ownership or control, and shall charge against its reparation share such assets (net of accrued taxes, liens, expenses of administration, other in rem charges against specific items and legitimate contract claims against the German former owners of such assets). It would appear that, broadly speaking, that the amount of enemy property sequestrated by each of the signatory countries shall rank against any amount which that country may subsequently become entitled to under the percentages agreed to in Article 1. It is important however to note the words, that the assets which are to go to diminish our ultimate share of reparations exclude assets net of accrued taxes, liens, expenses of administration, other in rem charges against specific items and legitimate contract claims against the German former owners of such assets. As I understand it, that means that if the Government now permit specific claims to be made by individuals against specific items of German property here, our 28 per cent. of any sum ultimately agreed upon by a peace treaty as reparations due from Western Germany will not be pro tanto diminished by such sum.

It seems to make a very important difference from the point of view of our national interest—that is, how much we shall eventually receive as a nation—whether the Government proceed by means of a general distribution pro rata to everyone, or whether they admit specific claims against specific assets. That seems to be of vital importance from our national point of view, and it also seems, on the face of it, to be a more equitable procedure, for the reason that if one lends or advances money or is owed money, without security, one is not in such a good position as a person who has taken the trouble to find out whether there is security and property available against which distraint or attachment can be exercised. As a matter of equity, it seems to me that where there is a claimant here with claims upon a German national who had property here at the outbreak of war, his claim is better than the claimant without security or property which could have been attached. As a matter of equity, he has a stronger claim.

There is also the point that our national interests will be greatly advantaged if the claims are dealt with in this way.

Photo of Mr Cecil Poole Mr Cecil Poole , Lichfield

If such claims are met out of the assets of German nationals here, will it not reduce our total claim for reparations to that extent?

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

If the hon. Member examines the statement made by the Financial Secretary on 2nd November and also the statement of the Economic Secretary on 20th January, he will clearly see that, from the point of view of our national interest, we are likely to obtain more if specific claims are admitted against specific assets. The right hon. Gentleman also went on to say today that the benefit which would accrue to us was not estimated now to be so great as it was some months ago. I take it that he thinks the prospect of ever obtaining anything for this country under the Paris Agreement as our share of reparations is slighter today than it was estimated to be in the past. I should welcome some statement from the Secretary for Overseas Trade on the general question of whether he thinks we are likely to receive anything at all under the Paris Agreement.

Photo of Mr Thomas Scollan Mr Thomas Scollan , Renfrewshire Western

I should like to ask the right hon. Gentleman a question.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

This is such a complicated question I would rather the hon. Gentleman did not. I would make a much more sensible speech if he did not interrupt me. He will no doubt have his chance to speak later on.

Photo of Mr Thomas Scollan Mr Thomas Scollan , Renfrewshire Western

I just wanted the right hon. Gentleman to clear up one point.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

I would much rather that the hon. Gentleman put his questions on this subject not to me, but to the Government who have introduced the Bill.

There are a number of points which still need clearing up. We shall study with care the speech made by the right hon. Gentleman this afternoon in the hope of finding some light thrown upon them. I attended closely to what he said, and I am still in a fog—as, indeed, we must all be today—regarding the answers to the very pertinent questions which are to be found in the column of the City Editor of "The Times" on Wednesday of last week. That column put the thing more clearly than I can, and I will quote from it: It is uncertain whether, in a case where the custodian holds assets in this country of a German undertaking which owes money to a British creditor, the latter will be given the choice of taking the sequestrated assets in final settlement or of taking his chance in the general share-out. As I understand the right hon. Gentleman's statement, he proposes to give an option, and moreover, he proposes that the Custodian should furnish information to claimants to enable them to have some idea whether to exercise their option or not. I suppose he means that if the Custodian is prepared to give information to individuals to assist them in their claim, he would equally be prepared to publish this list of assets if necessary, so that the same information may be available to everyone. To me it would hardly seem right that somebody who had a claim, which might be rather a bad claim, should be entitled to receive information which is not available to the public at large.

Photo of Mr William Hall Mr William Hall , Colne Valley

My hon. Friend the Secretary to the Overseas Trade will answer many points when he comes to reply, but this question has been raised many times, and I ought to reply to it now. It would be quite unrealistic to ask either the Advisory Committee or the Custodian of Enemy Property to publish lists of assets. They run into numerous folios and are given item by item. It would be an incredible thing to do. Information given both to the individual and to the Advisory Committee is another thing, but the long lists of German assets in this country are more or less an estimate of what they may or may not be worth, and ought not to be asked for and certainly not published.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

I should like to consider the right hon. Gentleman's reply, and I am much obliged to him for making it. This procedure of published lists has been followed in the United States, and there is, therefore, a precedent for doing it.

The second question which was in the City columns of "The Times" was this: This raises all sorts of questions of the priority of claims according as to whether they are secured or not. Ostensibly it would seem that a secured creditor of a German firm, if he takes the first alternative and finds that he receives only a tiny portion of his claim, is precluded from claiming for the balance of his debt. I should like to know whether it is only secured creditors who can make claims against specific items of property, or is it other creditors, who knew or may be taken to have information that their German debtor was possessed of assets in this country?

The third issue raised in the City column of "The Times" is the question— whether a large firm—a bank, say—having several claims may choose between the two alternatives for each one of its claims, or whether it must choose between one or the other course for all its claims. I hope we shall have an answer to that question when the hon. Gentleman comes to close our Debate tonight on this Bill.

On the Bill itself there are one or two points I should like to put, and the first relates to Clause 1 (4) to which the right hon. Gentleman has already referred. In that subsection an Order in Council may: exclude from the application of the Order such classes of claims as may be prescribed by the Order. Apparently, it is contemplated that the Order in Council itself, which establishes all the machinery for the operation of making claims and of distributing assets, shall itself exclude from the application of the Order such classes of claims as may be prescribed. I should like to know what classes of claims it is contemplated can be altogether excluded. I can well understand that a debt, which was not enforceable at law—a gambling debt or a debt for immoral purposes—might be excluded, but I cannot at this moment conceive of any trading debt or other legitimate debt enforceable in law which ought to be excluded altogether.

Clause 1 (4, b) clearly raises problems of the greatest difficulty. It says: An Order in Council may … differentiate between different classes of claims, as respects the priority in which payments are to be made and the extent of the payments; Questions of the very greatest difficulty are going to arise there. What are the relative merits of the different classes of claim? The right hon. Gentleman was wise to have armed himself in this regard with the Advisory Committee to which he referred in his Written Answer on 2nd November when he said: It is my intention to appoint a representative Advisory Committee before the scheme comes fully into operation to advise the Administrator generally on the classes of debts to rank for payment, the scheme of division, what priorities, if any, should be established, and any other matters of a like kind on which the Administrator considers their advice might be useful."—[OFFICIAL REPORT, 2nd November, 1949; Vol. 469, c. 58.] I should have thought it was very essential that this Advisory Committee should tender advice to the Administrator before the Order in Council is finally settled, because it contemplates that the Order in Council may not only appoint the Administrator, but it may go on to exclude certain classes of claims as well as differentiate between them. I should like an assurance that we shall have this Advisory Committee in being and tendering advice before the Order in Council is made, which makes provision for the matters under Clause 1 (4).

Almost the last point I have to make is in regard to a tribunal. After the Treaty of Versailles, tribunals were established, called Mixed Arbitral Tribunals, and the hon. Member for Nelson and Colne (Mr. S. Silverman) and other hon. Members who are versed in the law are fairly familiar with the fact that before them a contested claim could be challenged. If we look at what the Bill proposes, it is by no means clear whether there is to be a tribunal or not. I attach the very greatest importance to there being a tribunal.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

The right hon. Gentleman may or may not know that the Custodian of Enemy Property now, in the administration of similar matters arising from Hungarian, Roumanian and other claims, proceeds without any tribunal, but lays down his own rules to guide his own discretion. Then he does not always keep to those rules.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

I am very much obliged to the hon. Member. I think I can see that in this matter he is on my side. That is a very rare occurrence, and I must confess that it makes me a little nervous. If we look at Clause 1 (2) we shall see that the Order in Council may make provision for the following matters—and we turn to paragraph (d)— the determination, as respects any such claim, of the question whether the claim is established for the purposes of the order and of the amount of the claim. I should have thought that as a mere matter of ordinary common sense and justice there should be a tribunal before which disputed claims could be taken for settlement. I should like to know, therefore, whether it is proposed that the Order in Council itself will make provision for a tribunal, either to hear claims or to hear appeals against adverse decisions of the Administrator.

Finally, I should like to know in a little more detail than we had from the Financial Secretary the prospects for those creditors, over and above the miserably small amount of their claims which they are likely to receive, on the average, according to the provision of the Bill. The average dividend, it appears, will be 2s. 6d. in the £. That means that many people will receive much less than the 2s. 6d. in the £ upon perfectly genuine and bona fide transactions. What prospects have they of receiving something further, if and when a final reparations settlement is reached? We learned a lot after 1918 of the evil consequences upon the economy of Europe of excessive and indeterminate reparations claims, but I should like to know whether there are prospects of any finality being reached under the Reparation Agreement, and if, when that happens, it is the intention of the Government to give any consideration whatever to the claims these persons will have for the other 17s. 6d. in the £, of which they will be short, after the proceedings contemplated in the Bill have been completed.

Of course, the community as a whole has suffered by German aggression, and it would be quite right that the bulk of any reparations payments should go into the Exchequer. It seems to me that these people have suffered what lawyers call special damage. They have been conducting the perfectly normal operations of trade and finance such as are essential to a community which depends upon international commerce for the lifeblood of its existence. I should like to have some assurance from the Government that they would intend, having distributed, let us say, an average of 2s. 6d. in the £ to people with genuine claims, that the people may have some hope of getting something further when an ultimate reparations settlement is reached.

4.45 p.m.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

In view of one remark made in passing by the right hon. Member for North Leeds (Mr. Peake), it seems that I ought to apologise to him for occasioning him anxiety or discomfort because of my alliance with him in today's Debate. To see how far the alliance may proceed, we must wait until another stage of the Bill. In the meantime, it may be some comfort to him to know that we are not discussing a subject today with which the differences of party politics have much to do. We are discussing how best to deal equitably with a series of difficult and highly complicated questions.

I confess to having some sympathy with the complaint which the right hon. Gentleman made about the long time that is required to discuss these matters. They are highly complicated, and they require fairly detailed knowledge of a complicated international background. It is a little difficult to do justice to them without having a day or two's time to consider them, especially when the Bill in which the Government proposals are embodied is, as it was correctly described by the Financial Secretary to the Treasury, an enabling Bill. The Bill gives very little positive or specific information about how matters will be dealt with in practice. Most of them will be dealt with under Orders in Council which no doubt we shall have the right to see and to challenge. Until we know what is in them, it is difficult to make any final or abiding opinion.

It may be that the Government thought that this was only a small amount. One knows what pressure there has been on the time of the House and how it accelerates and increases. The Government may therefore have thought that this was a matter which the House might be content to leave to them and to their expert advisers at the Board of Trade and the Treasury. I feel sure that that would be the wrong view, and that these matters ought to be determined by the House and that the House ought to have proper time to discuss them.

After all, what is the basis of all this? It is an old custom, and no one would seek to challenge it now, that when war breaks out between two States each State feels itself entitled to confiscate the property of the nationals of the other State, leaving anyone aggrieved by that State confiscation to his remedy against his own Government in his own country. As a matter of broad principle, there is no exception that anyone would wish to take to that procedure. The war which concluded four and a half years ago had many differences from previous wars. It was not simply a conflict between territorial Powers. It was a conflict of ideas even more than a conflict of persons or of States. We had in that conflict allies in the States with which we were at war, and it has never been part of our principle that we should confiscate the property of our allies.

There was a large number of persons who were inevitably not on the side of the enemy country but on the side of this country and our allied countries. Many of those people had, long before the war, and for months after the war, been deprived by the State in question of their citizenship. There were therefore large numbers of people who were born citizens of an enemy Power and who were deprived by the action of that Power of the compensating right to look for relief against their own Government in respect of any property of theirs which was confiscated in this country. I can find only one rather obscure passage in the Bill which has anything to do with making any such exception, and even that is vague, inconclusive and not specifically directed to this issue. It is to be found in Clause 1 (6), which says: Notwithstanding anything in this section, the Board of Trade may give a direction to the administrator requiring him to transfer to or for the benefit of any person specified in the direction any German enemy property or the proceeds of any German enemy property, to which that person would have been entitled but for the operation of the Trading with the Enemy Act, 1939, or any order made thereunder, and the administrator shall comply with any such direction. Under that Clause there is, therefore, power in the Board of Trade to exempt a particular asset. There is nothing in the Bill to show to what kinds of case that applies, whether there are to be any rules about it or whether the discretion of the Board of Trade is to be what is called a judicial discretion as apart from mere caprice, or how the Board of Trade is to reach its opinion, and in that the Bill does much less than justice to the known intentions of the Government. I do not see why the Bill should be so drafted as to make that a purely discretionary or arbitrary caprice when the Government have already bound themselves voluntarily to apply the proper principles by the international arrangement they made in the Paris Agreement.

Under that Agreement, an assembly drafted and accepted a set of rules of accounting to which His Majesty's Government are a party, and under those rules of accounting the proper exceptions are directed to be made, and I cannot believe that the Government do not intend in their activities under the Bill to give full effect to the principles to which they have already made themselves a party in the Agreement and under those rules. I cannot conceive why that should not be put specifically in the Bill so that everybody shall know what his rights are and what things the Government are proposing to do about it.

We are not without all guidance. I should like, first, to draw attention to what is being done in other countries under the same Agreement and what we are doing under that Agreement with regard to assets of the same kind now in our hands. The United States of America make it quite clear. They do it very simply and very fully. They have two statutes on the subject, Public Laws 322 and 671, which are amendments to Section 32 of the American Trading with the Enemy Act. According to their way of looking at it, the assets of victims of Nazi persecution are to be released either if these victims were deprived of their liberty or if they did not enjoy full rights of citizens since the outbreak of the war.

Both those things were derived from the rules of accounting made under the Agreement to which reference has repeatedly been made. It should be noted very particularly that the Americans have done it on principles of broad generosity. They have not sought to whittle it away by all kinds of technical limitations or rather narrow or narrow-minded exceptions. Nor have they made the requirements cumulative; they are alternative requirements. The first is that if one can prove that one was deprived of one's liberty by the Nazis on racial, religious or political grounds, that is enough to exempt one's property from confiscation as enemy property. Why should it not be enough? Then if one cannot prove that but can prove that, without being deprived of one's liberty or without even being deprived in the full sense of one's nationality, one did not enjoy full rights of citizenship on these grounds, that is enough, too.

Again, why should not that be enough? As we have seen, the very ground on which one is entitled to confiscate somebody's property is that he is a full citizen of another country and can rightly and safely look to the Government of that country to redress him or compensate him for the property he has lost. We do not quite do that.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent Stoke

What is my hon. Friend quoting?

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I am quoting some notes which I have prepared and extracted from the agreement.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent Stoke

They are on the other side of the House, too.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

One takes precautions to see that knowledge is widely diffused. There is no harm in that, I hope, in Parliamentary practice. However, the facts must be taken—I am sure my hon. Friend the Member for Stoke (Mr. Ellis Smith) will so take them—on their own merits and not in a prejudiced way according to whoever happens to be reading them at the moment.

I have given the American practice. We have acknowledged ourselves to be bound by the same rules, and we have had the advantage of knowing how the Custodian of Enemy Property in this country has interpreted the same obligations which the Americans have interpreted so widely. I am quoting a letter from the Administration of Enemy Property Department (Trading with the Enemy Department) which is apparently a joint Department of the Treasury and the Board of Trade. It says: As regards claimants in the first category … the Board of Trade will require to be satisfied—. "The first category" means people who have been deprived of their liberty on racial or religious grounds. The first thing which disappears from our interpretation is the ground of political persecution. That is very wrong. A great many people who were, of themselves, in no danger on racial or religious grounds incurred very great peril by assisting others who were in danger on racial or religious grounds, and there is no reason why they should be deprived of protection which other countries feel themselves bound to give. However: As regards claimants in the first category … the Board of Trade will require to be satisfied that the applicant (i) was deprived of liberty pursuant to any law, decree or regulation which discriminated against any religious or racial groups or organisations, and (ii) did not enjoy full rights of citizenship of the enemy country of his residence at any time between 1st September, 1939, and the abrogation of such law, decree or regulations, and (iii) has left that country, or intends to leave there within a reasonable time … and (iv) was not disloyal to the Allied cause during the war, and (v) has a case which merits favourable consideration. I should have thought that if he managed to prove conditions (i), (ii), (iii), and (iv), he might be exempted from (v) and have a case which merited favourable consideration. Notice the difference that has crept in here between our practice and the American practice. Whereas the American practice required proof of one or other of two serious matters in the alternative, we require cumulatively five conditions to be satisfied even in the case of those claimants. Even that does not tell anything like the whole story—

Photo of Sir John Foster Sir John Foster , Northwich

I have not Section 32 of the American Act here, but I seem to remember that in that Section the claimant also has to prove loyalty. I do not think the hon. Gentleman means that if somebody did not enjoy free rights of citizenship but was loyal to the Allied cause, he could not recover his property. The hon. Gentleman will notice that the law is an amendment of Section 32, and not a substitution for it.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I have not the whole Section either, but I am prepared to accept what the hon. Gentleman says. After all, the basis was that it was a Trading With the Enemy Act both in the United States of America and in this country, and the first thing one has to do is to prove that one is not an enemy, and that one has not been acting at any relevant period in a hostile sense. If the hon. Gentleman says that is specifically part of the American law, I do not doubt it.

Photo of Sir John Foster Sir John Foster , Northwich

But it is a little unfair to the Custodian to say that he requires five conditions and the Americans only one alternatively, because one of the five conditions required by the Custodian is that the person should not be disloyal to the Allied cause, and that is one of the conditions required by Section 32 of the American Act.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I am prepared to amend what I have said and to say that instead of the Americans requiring one and we five, they require two and we four, one of them being a matter which would be common ground. I would not complain that the Governments concerned should either take it for granted or make it a specific part of the law. Obviously it must be an essential element in any claim of this kind that the claimant was on our side during the war. If he cannot prove that, he cannot take himself out of the ambit of trading with the enemy operations.

I was saying that even that is not the whole of the story because, having in this way laid down the rules on which he would exercise his discretion in these matters, I am afraid that in some cases which have been drawn to my notice the most narrow and unsympathetic interpretations of those rules have been allowed to operate to such a degree that one wonders what was the object of interpreting them in such a fashion.

I feel sure that there is not a large amount of money involved. My right hon. Friend has said that the total assets with which this Bill may ultimately have to deal will be about £15 million, and that our own claims amount to perhaps £4 million or £5 million. I do not think any exact estimate has been made, but the best one I have been able to make of the amount which is affected by the kind of claims I have in mind is that it might be about half a million pounds. So it cannot be the amount of money that is worrying the Custodian in making these questionable interpretations of his own rules.

I should like to give examples of one or two. The Custodian begins by saying that one must be deprived of one's liberty pursuant to any law, decree or regulation. In one case a man was deprived of his liberty by the Iron Guards in Roumania—it will be remembered that for the purposes of this Bill all enemy-occupied territory is affected by its scope. This was at a time when the Iron Guards were being used as a secondary police force by that Government. The Custodian of Enemy Property made his own inquiries. We do not know from whom, we do not know what information he obtained, we do not know what evidence he had, we do not know on what basis he reached his conclusion. But the somewhat surprising conclusion that he reached was that this person had not been deprived of his liberty pursuant to any law, decree or regulation which discriminated against Jews or racial groups because the Iron Guards were then in a state of revolt against the Government of the country. If it has any relevance at all, that is a point of fact which can be determined, but there is no tribunal, there is no hearing, there is no disclosure of information, and there is no opportunity to prove to the satisfaction of the Custodian that, so far from being in revolt, they were the willing and enthusiastic instruments of that Government in pursuing a discriminatory policy.

That was one thing. Then the Custodian came to another conclusion. He said of the notorious camp in Transdnistria in Roumania that it was a labour camp, not a concentration camp. Of course, everybody knows there was hardly anybody there except Jews. Of course, everybody knows that hardly anybody ever came out of it alive except such as, in the later stages, were transferred to Auschwitz from which they certainly never came out alive. We know all that, but the Custodian holds that it was not a concentration camp, it was only a labour camp, and that he cannot find any decree which says that only Jews shall go there. The survivor of these horrors, with a pitiful remnant of property got out in some manner under the most difficult and dangerous circumstances, and now in this country, is deprived of the use of it because Transdnistria and Auschwitz were regarded by the Custodian of Enemy Property as labour camps and the inmates were not deprived of their liberty. That is a surprising conclusion.

Then there was the case of a man and woman in Hamburg. The man was taken to a concentration camp and was never heard of again. His wife had a notice of deportation served upon her for transport to Eastern Europe.

Photo of Mr Cecil Poole Mr Cecil Poole , Lichfield

Of what year is the hon. Member talking?

Photo of Mr Cecil Poole Mr Cecil Poole , Lichfield

These, then, were events which occurred during the war?

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

On a point of Order, Mr. Deputy-Speaker. I am genuinely puzzled about where we are getting to. My hon. Friend is talking about unfortunate occurrences in 1941 to some particular lady who was transported somewhere. The Bill appears to be dealing with the distribution of German enemy property and merely to involve the setting up of certain machinery for that purpose.

Photo of Mr Francis Bowles Mr Francis Bowles , Nuneaton

I think I have understood the argument of the hon. Member for Nelson and Colne (Mr. S. Silverman). He is saying that the Bill does not contain the discrimination amongst the people who are to be paid out which he thinks it should contain. He mentioned also the case of the American legislation. I think this is quite relevant to the argument.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I am much obliged to you, Mr. Deputy-Speaker and, if I might be allowed to say so to my hon. and learned Friend the Member for Kettering (Mr. Mitchison), I have tried to follow a careful argument, although I do not think it would be right to inflict repetition of the argument upon the House merely to satisfy my hon. and learned Friend that my point is relevant.

Let me return to the point. That lady, being served with a notice of deportation and knowing to what that might lead, committed suicide. The claim of her relatives in this country to the little property that is here has been disallowed by the Custodian because she was not deprived of her liberty. I think that is a strange conclusion. In another case—this really applies to a category of cases—it seems that there was a habit in Berlin of taking to gaol people against whom this kind of discrimination was practised and telling them that they could get out if they signed away their property, but that, if they did not do so within eight days, on the eighth day they would be shot.

I know of one case in which a man remained in prison under that threat for three days, heard other people shot in pursuance of a similar threat to that made against him and therefore signed away his property. His relatives have had their claim disallowed by the Custodian of Enemy Property on the ground that he cannot regard only three days' imprisonment as really a deprivation of liberty. In this country we have our own ways of defining "deprivation of liberty." We know what a false arrest and what malicious prosecution are. We define them for our own purposes, and quite rightly, in the broadest terms. Why does not the Custodian regard himself as not merely being bound by the rules he himself has laid down, but bound to interpret their words according to their natural and ordinary meaning?

I shall have a good deal more to say on specific points when we come to the Committee stage but I think I have said enough to show that it is surely in every way better that somewhere or other we should put into the Bill a precise definition of what kind of assets—which might prima facie be regarded as enemy assets—we are going to exempt from treatment as enemy property.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent Stoke

What was the nationality of the last man to whom my hon. Friend has referred?

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

German by birth, but of course he was a person to whom the Nuremberg laws related, so that his German nationality had been withdrawn and he was most certainly a person who did not enjoy the full rights of citizenship in his country. That is all that was required by the agreement to which we made ourselves a party in Paris.

I am quite certain that everybody in the House, and certainly the Government, do not desire to see petty injustices inflicted on this handful of people, the flotsam and jetsam of one of the biggest catastrophes in all human history. I feel quite certain that the Custodian does not want to see that either; and that he feels himself, in spite of his own desire to interpret things more generously—and, one would have thought, more justly—in some way inhibited by the directions given to him or by the narrow terms of the orders under which he operates. Therefore, I say to my right hon. Friend: Remove those inhibitions from him. Let us define exactly what we mean by an enemy asset, and what we do not regard as an enemy asset in such terms that they may be clearly understood by the people and obviously and justly interpreted by everybody whose business it is to administer them.

Finally, I should like to say a word in support of what the right hon. Member for North Leeds said. There really is not any reason in the world why the Government, the President of the Board of Trade, the Chancellor of the Exchequer, the Custodian of Enemy Property or anybody else in this country should be sole judge in his own case. There is no reason why there should not be some sort of third-party judgment to administer these matters, just as there was third-party judgment administering cognate matters after the end of the 1914–18 war. A Mixed Arbitral Tribunal was a third-party judgment, was it not? I should have thought so. In any case, I would be content with that. It is a little better than having no rules and no third-party judgment of any kind.

Photo of Mr William Hall Mr William Hall , Colne Valley

Surely my hon. Friend is in error when he says that there is to be no third-party judgment under the Bill. We are to have the Board of Trade, who are answerable to this House. If the suggestion which my hon. Friend now makes were carried out, it would mean that there would be no Ministerial responsibility to this House at all. After all, Orders in Council have to be passed here, and we shall get the judgment of which my hon. Friend speaks. There is the Advisory Committee, the Administrator, the President of the Board of Trade, and this House. I do not know what more my hon. Friend wants.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I have heard this kind of argument so often in so many connections that I am surprised to hear it again from my right hon. Friend. I know that he is actuated by the best of motives in what he says. I repeat—I do not want any misunderstanding about it—that I do not suspect anybody wants to be harsh, unjust, or guilty of double dealing about this. If I suggest a third-party judgment, it is as much for the protection of the officials as of anybody else.

I distrust the argument that because the Minister is ultimately responsible to the House, that can take the place of third-party judgment. It does not. I have the greatest possible respect and admiration for my right hon. Friend. He has done a magnificent job in his post throughout these four and a half difficult years. He might some day have to defend to this House a decision of the Custodian with which I disagree. What would he want me to do?

If he says that that is to be the only kind of third-panty judgment that I am to be allowed, am I to put down a motion of censure against him? Am I to make it a question of confidence in him, and so make it a question of confidence in the Government? I have every confidence in the Government. That confidence would not be in the least disturbed because in some individual case the Custodian of Enemy Property had come to a decision with which I did not agree. I would not in the least want to imperil the position of my right hon. Friend, or the Government, or this party, in this House or in the country on some individual, isolated instance of a mistake of that kind. But my right hon. Friend says that that is all he would like to leave to me and that he thinks that that is sufficient. I am sure he does not.

Why should these things not be determined in a non-political atmosphere according to agreed rules? Certainly, in the agreement of the rules, this House must take its part. We, or at any rate the majority of us, must consent to the form of the Orders in Council or to the form of the Bill. What we ought to do in this matter is what we do with any other Bill. Having decided what the law is to be, we do not insist on administering it ourselves in the House of Commons. We set up courts of law and courts of appeal to do that. Nobody says that if a criminal is wrongly convicted, his proper remedy is to complain to the Home Secretary or to the House of Commons. All I am asking is for the same rule, and I am sure that it is a wise one.

Without wishing to press my right hon. Friend further at this juncture, I commend these considerations to him. I hope that between now and the Committee stage he will see whether we cannot, in Committee, put into the Bill a number of matters which I am sure all of us would like to see in operation, whether they are in the Bill or not.

5.20 p.m.

Photo of Mr David Eccles Mr David Eccles , Chippenham

The submission which the hon. Member for Nelson and Colne (Mr. S. Silverman) has made on behalf of those who stood out against the Nazis will, I think, find ready acceptance in all parts of the House, and we should like to see what he has suggested put into the Bill more clearly than it is at present. I would also add that now we are engaged in a great war of ideas probably for the rest of our lifetime it is particularly important that we should stand up for those who care for freedom and make their attempt behind the Iron Curtain to support democratic ideals. If we let down those who have done that in the past, it is no encouragement to those who are trying to do so now.

I want to join in what my right hon. Friend said about the intolerable delay in bringing forward this Bill. The agreement between the 18 Powers was negotiated in December, 1945, and signed a month afterwards, yet we have had to wait four years for this machinery Bill. It does not yet tell us how the assets will be distributed; it merely sets up the machinery and indicates the persons who will make the distribution. Why have we delayed so long? Why is it that the United Kingdom is behind the other Allied countries who, long ago, introduced legislation to deal with this matter?

The reason seems to us to be connected with the letter signed by the Governor of the Bank of England, and sent round under Treasury instructions in December of last year, which stated that after consideration His Majesty's Government had decided not to avail themselves of the option under Article 6A of the Paris Agreement. It was only at the last moment that we were able, by the intervention of my noble Friend Lord Woolton, in another place, and myself, in this House, to get that decision reversed. It was quite clear from the speech of the Economic Secretary to the Treasury, on 20th January, that the Government had not made up their mind what to do about German assets in this country because they could not come to a decision on the principle by which distribution should be made between different classes of creditors.

The Bill, at any rate has cleared up something. We are glad to know that there is to be an option to those creditors who come within the ambit of Article 6A, and the first question I want to ask is: when has the Government to tell the Inter-Allied Reparation Agency whether we shall avail ourselves of the option under Article 6A? Reading the agreement it looks as though 24th January last was the day on which we had to declare our policy, but it now appears that all we had to do by then was to submit a list of our claims so that at a future date we could decide whether or not we would take up the option. We want to know what the closing date is in this important matter.

I am not sure whether the House is fully seized of exactly what is the difficulty under Article 6A. In so far as British nationals were secured creditors of German debtors they have, of course, taken their security and sold it long ago. We are not dealing with secured creditors at all, but there are some creditors of whom banks, under the standstill agreement, are the chief, who have lent money to German firms or nationals who happen to have had assets outside Germany which have been seized by various custodians of enemy property, but which were not secured to the creditor. Article 6A says that each country may, if it so chooses, set off those assets which happen to belong to creditors of the same persons against these debts and not put them into the international pool. If these assets are put into the international pool, the United Kingdom receives back only 28 per cent. Therefore, it is to the advantage of Great Britain as a whole that none of these assets which we can use wholly to satisfy one of our claims should be put into the international pool, since that will mean that they will be diminished when it comes to a share-out for British creditors.

Photo of Mr Cecil Poole Mr Cecil Poole , Lichfield

I must be duller than I thought, but does not Article 6A provide that the total amount which a country may realise shall stand against its 28 per cent. of the total reparations assets? To me, Article 6A is very clear.

Photo of Mr David Eccles Mr David Eccles , Chippenham

Under Article 6A a country is entitled to withhold from the pool those assets which are found to have been owned by people who had claims upon the same German persons or firms.

It must, first of all, be a principle that we do not lose any foreign exchange for this country. We must, therefore, adopt a procedure which means that the smallest total of assets seized in this country is put into the pool. The second reason for implementing this section of the Paris Agreement is that those creditors who will be able to benefit by this machinery have special claims. Here I want to refer to the speech made by the Economic Secretary on 20th January. He said that creditors who did not have a debtor possessing any assets which have been seized by the Custodian of Enemy Property here would say that it was unfair to them that a person could claim against a particular piece of property here and so get more of his claim than the one who had not got such a piece of property to claim against. The hon. Gentleman also said: They"— that is, the general run of creditors— would say that it was a pure accident of history that certain assets of pre-war German owners in this country happened to be owned by the same German individuals who were the debtors to the corresponding creditors here. It could be argued that that was a matter of chance and, therefore, if we followed that course of action it would be unfair to those creditors."—[OFFICIAL REPORT, 20th January, 1949; Vol. 460, c. 422.] That is not correct; it is not a matter of chance that there were in this country, when the war broke out, assets belonging to those debtors. The reason is that when the standstill agreement was renewed—and His Majesty's Government at the time pressed urgently that it should be renewed—one of the conditions which the Germans had to comply with to get the renewal of those Credits was to present to the British banks a list of customers. These were looked over by the British banks and a certain number of them were selected, who became co-debtors with the German banks. That is to say, if the German banks failed, the British bank had recourse to the firms it had selected as co-debtors to the bank to which it had made the loan.

When selecting these firms as co-debtors, the British banks and insurance companies took care to select firms in the exporting trade because they wanted co-debtors who might have property abroad if the worst happened. In many instances they did not agree to the list of debtors as submitted to them by the German bank. They said "You have some other customers who trade abroad, and we would like to have them tied up." That is how it comes about that there are substantial assets in this country which belong to the co-debtors who came forward as part of the renewal of the standstill agreement, but the assets of these co-debtors were not specifically secured to the British banks. That is why the Economic Secretary to the Treasury was wrong in saying that it is an accident that the Article 6A creditors—if I might call them that—are not in a special position.

The hon. Gentleman must also be wrong for the reason that the 18 nations which met in Paris in 1945 recognised the special position of this category of creditor by including the option in Article 6. As far as I know, all the other countries concerned have availed themselves of Article 6A and in none of them have the creditors who were not able to attach particular pieces of property complained of unfair treatment. Therefore, one must ask whether the scheme proposed as an alternative by the Financial Secretary to the Treasury is a fair one, or not.

The Government's proposal is that these creditors should choose whether to satisfy their claim out of some particular piece of property which it is found that their debtors had in this country. If they do that, that finishes it and they cannot proceed to try to get the balance of their claims settled out of the pool. On the other hand, they may abandon a particular piece of property and make their claim against the general pool. This looks like the worst of both worlds. In the first place, the Custodian must provide full information of the assets which are here or no one can make up his mind which option to take. Let us assume he provides full information. If the bank finds that, having a credit of say £100,000, his debtor has only £1,000 worth of assets, of course he will not take up the option, because one per cent. would be less than the dividend he would expect to get out of the pool. But what happens? That £1,000 goes into the international pool and our share is diminished by 72 per cent. and we lose exchange for this country, which is surely wrong.

Photo of Mr David Eccles Mr David Eccles , Chippenham

That is the opinion of the banks concerned. Supposing he does the reverse and finds that the asset looks as if it will yield more than he would get out of the pool. Of course he would take up the option. I suggest that this is not good sense. What we want to ensure is that none of these assets goes into the pool and is diminished in this way. I do not see why the Government need make an arrangement of this kind. The proper thing to do would be to allow the creditor whose debtor happened to have some property in this country to get hold of the property first and then put the balance of his claim against the pool and the Advisory Committee can decide whether they ought to put a lower priority on claims already satisfied to some extent out of property which has been sold and used to pay for part of it in this country. That is the clear and sensible thing to do. We have the Advisory Committee there precisely for that sort of job.

Supposing the Government cannot do that for some reason—they do not like the banks—when a bank finds there is only perhaps 6d. in the £ it can get if it attaches a specific piece of property, let it do this and then out of the general pool the dividend it receives could be diminished by the 6d. This could be done by another rule made by this Advisory Committee procedure. In that way they would not get an extra cut, but the country would be sure that the small assets not sufficient to pay the average dividend to the creditor would not slip through our fingers and foreign exchange be lost.

The importance of giving full information stands out clearly. We cannot work the option unless people know what are the assets and can find out whether they can or cannot attach a particular piece of property to their debt. I hope the Government will spare no pains to give the fullest possible list of assets to the debtors so that they can make the right choice. I am not clear about subsection (6) of Clause 1, to which the hon. Member for Nelson and Colne and my right hon. Friend referred. We should have a very full explanation of that obscure subsection in order that we may be in a position to consider amending it if it does not turn out to be satisfactory.

I suspect that the different classes of creditors here will constitute a fairly formidable problem for the Advisory Committee and I hope that those who represent the long-term loans, medium-term loans and commercial credits will not take too long to make up their minds as to the relative importance of their different categories of claims. We have waited a very long time to start this business. Other countries have got ahead of us, especially the United States and Belgium, and, after all, it is not a very large sum of money. What is important is that we should get on with the settlement of claims of people who have them.

There are a number of refugees in this country who have claims which could not be brought within the scope of the Bill unless we moved a new Clause. They have claims in Germany which have nothing to do with assets outside Germany. I hear that matters are moving faster in the American zone than in our part of Germany. The Americans are enabling refugees to get back their property which was confiscated by the Nazi Government with greater ease and rapidity than is the case in our zone. We ought to look into that point.

I am sure that all hon. Members have in the last four years had one or two letters from Germans living here who have no claim against the assets seized outside Germany but who have a claim inside Germany which is a very real one. There are also British subjects who left Germany just before the war began and whose property in Germany was seized. Many of them are in sore straits and deserve to be helped more by His Majesty's Government to recover their property in Germany. It is now time, four and a half years after the war, that, in the case of a British subject who left Germany in August, 1939, leaving all his property in Germany, the whole of which was seized and confiscated by the Nazis, we got something back for that man. He may have stayed there to the very end to do some work which was of national importance. I hope that the Parliamentary Secretary will say a word about what His Majesty's Government are doing for that class of person.

5.42 p.m.

Photo of Mr Cecil Poole Mr Cecil Poole , Lichfield

I confess to a good deal of trepidation in trying to say anything on this Bill because of its complex character and because it is fairly obvious that in all parts of the House Members are experiencing considerable difficulty in arriving at what are the Government's intentions under the Bill. The point which I wish to bring before the House is a small one, but it is, I think, of some importance. I wonder why the Government have brought in a Bill dealing only with Germany enemy property, and why they have not embraced the whole of ex-enemy property in one Bill? There are in this country considerable assets of enemy citizens other than Germans.

I ask this question because, if my information is correct, other enemy assets in this country—I shall not mention the country because that would indicate the property—have recently been realised for a large sum of money. I have reason to believe that the amounts which have been realised by the sale of that particular industrial undertaking are finding their way back to the enemy subjects to whom the undertaking originally belonged. If that be true, it is defeating the whole purpose of reparations. I should like to ask why we are leaving the other enemy assets in this country untouched at present? The asset to which I am referring has been in the hands of the Custodian all through the war. It would be a shocking injustice if the Custodian has today taken the step of selling those assets and has allowed the proceeds to find their way back to the enemy State.

In moving the Second Reading of the Bill the Financial Secretary said that the Government would apply the assets as far as they will go. We have heard that they will go to the extent of meeting 12 per cent. of the claims, that there will be £15 million available against £120 million claimed. They will not go as far as they might go because under the Paris Agreement the share which accrues to this country is only 28 per cent. of total reparations. I do not wish to go too deeply into the subject, but I confess to a great feeling of disappointment at finding that the United States of America is, along with ourselves, taking 28 per cent. out of the funds available for reparations.

It would have been a magnificent gesture on the part of our Allies had they foregone their 28 per cent. in the interests of countries such as the Netherlands, for example, whose drawing will be only 3 per cent. Had they done so as a thank offering that their country had been spared the horrors which were inflicted upon our own and other countries in Europe—28 per cent. means nothing to the United States—it would have been a gesture which would have been appreciated throughout the world.

The provisions of the Bill are so vague and are capable of so many interpretations that it is difficult for us to know exactly in what position we may find ourselves under the Orders in Council. But when my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) was speaking we were all brought back to some of the harsh, stern horrors which were perpetrated against many millions of people throughout Europe during the war. I am sure that we were all moved by the one or two accounts which he gave us of cases which had come to his notice. Because of that, I am glad that there will be power under the Orders in Council to differentiate between the different types of claims.

There is no hon. Member in this House who will say that the claim of those people who were mentioned by my hon. Friend should not take precedence over the claim of those who lost money in the Austrian Loan. Those who were creditors in respect of the Austrian Loan must of necessity come much lower down the scale of payments than people who suffered in the way my hon. Friend described. They must come lower down the scale; in fact, I am sorry that they will be admitted into the claim at all. After all, they loaned their money at an exorbitantly high rate of interest because of the great risks which they took, and if the risks unfortunately materialised, I do not think they can rightly or properly have any share in these reparation payments.

Let us always remember that much of that money helped to bolster up Nazism in Europe in its early days. It seems a little incongruous that people whose money helped to bolster up Nazism in Europe should be able to make a claim upon reparations following a war to destroy Nazism. Therefore I hope that a definite and positive differentiation will be made, and that those people who merely have a claim by virtue of money which they loaned to the State of Austria in pre-Nazi days will find their proper place in the scale.

It is and must be to all of us in this House a matter of great regret that those who have suffered so much during the war—I am speaking of those who lost homes and businesses apart from the loss of their loved ones—will be offered a return which is so small. But that is one of the things which always follow war. We cannot compensate them for the great harm which has been done to them, but this Bill does at least enable us to set up the machinery by which some small measure of compensation will be payable to them.

5.50 p.m.

Photo of Colonel Alan Gandar-Dower Colonel Alan Gandar-Dower , Penrith and Cockermouth

I wish to make one real point which has not yet been made in these discussions. But before I come to it I should like to ask the right hon. Gentleman one or two questions. I know that he will not think that I am criticising if I say that this Bill in certain of its relevant details is one about which hon. Members on both sides of the House have not a very clear understanding. I understood the right hon. Gentleman to say that £15 million was all that was available, or likely to be available, for distribution, and that under this Bill it will not be possible to collect any more than the £15 million already stated. It really is a very small sum.

Will the Government itself take priority or only share equally with private individuals? If an individual who establishes a claim receives only half a crown of the debt which is owing, will the Government only receive half a crown as well? I would like a clear understanding on that, because it is rather important. If, as I understood the right hon. Gentleman to say, the Government claim will be about £3 million, that means there will be only £12 million to satisfy claims worth about £120 million; which would reduce it to 10 per cent., only two shillings and not even half a crown in the pound.

The other question is, can something be done for the wretched people who establish these claims of which only one-tenth is to be met? We are told that they will have a claim which they can bring individually and independently against their particular debtor to the extent of nine-tenths. Whether they will see any of that money is extremely doubtful. Only recently I returned from the Colonies of East Africa. I appreciate that it does not come under this Bill, but the right hon. Gentleman was perfectly right when he said there will be a considerable amount of legislation and action to be taken there. I hope that the right hon. Gentleman will speak to his right hon. Friend the Secretary of State for the Colonies—who after all, has discussions with the Colonies—as to what legislation is necessary. I hope that some of the really incredible muddles now going on in the East African Colonies will be dealt with. This Bill is very slow indeed in being brought forward, and I hope that there will be no greater delay with the Colonial problem.

I come now to the principal point I wish to make. I am not such a great admirer of some of the actions of the Custodian of Enemy Property. Into his hands has been put properties of all kinds including real estate and houses. Cases have been drawn to my attention where the Custodian neglected to give notice of bomb damage, where first-aid repairs were never carried out as they should have been, and where the President of the War Damage Commission wrote off something between 33 per cent. and 50 per cent. of the cost of works payment as work which had been caused by the bad management and deterioration of the property which had been in the hands of the Custodian. I am not saying that this is general. The Custodian may in many cases have carried out his duties beyond criticism. But there are such cases as I have mentioned, and I should like the right hon. Gentleman to tell me what the position is. This is property held by Germans before the war, and presumably some sort of action would be brought or would lie against the Custodian for mismanagement or depreciation of the estates which have been under his control.

So far as I can see, the people who will lose by any bad management on the part of the Custodian will be those unfortunate people who are to get something out of this Bill. It seems to me extraordinary, because it has always been the law of this land that an action can be brought against a Ministry or against a person, however great or however small or however powerful; but that this gentleman will be put into an entirely different position from any other person. I wish to know if there have been cases of bad management of enemy property whilst it was in the control of the Custodian; what steps if any have been taken, and by whom. The right hon. Gentleman may not believe it, but I am sure he has the support of hon. Members in all parts of the House for this Bill. No doubt there will be a lot of minor points which will be ironed out in Committee, but I should like an answer to the special questions which I have asked.

5.56 p.m.

Photo of Mr Francis Noel-Baker Mr Francis Noel-Baker , Brentford and Chiswick

This Second Reading Debate seems to me to be a suitable opportunity for seeking information which I have been wanting to obtain for some time and which is of particular interest to the neighbourhood of my own Division. Perhaps I may put my point by arguing from the particular case to the general.

I am interested in the circumstances surrounding the sale of a factory which before the war belonged to a German firm and which during the war was appropriated by the Board of Trade. A few weeks ago it was sold by the Government to a new private owner—an event which in this case has resulted in all sorts of complications. The factory is engaged in the production of mining equipment, and therefore is of considerable national importance at the present time. The question I wish to ask is quite simple.

What is the policy of the Government as regards the realisation of German assets in this country? Is it the policy, with regard to industrial undertakings for example, that they should be sold to the highest bidder without any other consideration being taken into account? Because it does seem to me that in this specific case it might have been expected that the National Coal Board would have been consulted about the sale. It might have been found more advantageous in the national interest for this factory to be kept under public ownership instead of being sold to a new private owner.

As the moneys realised from these assets will apparently only be enough to meet something between 10 and 12 per cent. of the total claims, it seems to me that other considerations, apart from the question of the high price paid, ought to have been borne in mind when this sale took place. I should be grateful, therefore, if my hon. Friend would tell the House what is the policy regarding the realisation of assets of this sort, and perhaps either during his remarks or on a later occasion he would give me specific information about the case I have drawn to his attention.

5.58 p.m.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester West

This Bill is an extremely important step in the direction of the ultimate decisions which will be taken on signing the Peace Treaty. It is essential when we are dealing with a Measure of this sort that we should reach so far as is possible, decisions and determinations consistent with our intentions which will be expressed when that Peace Treaty is to be put into effect.

It is a highly technical Bill. Yet sometimes when considering technical Bills one finds incidents arising in one's mind—historical events, tragedies of war and many tragedies of peace—in spite of the fact that the terms of the Bill itself apparently deal with a purely mundane matter. I should like to ask the Government to incorporate in this Bill some Clauses which will clearly indicate that we have not forgotten that there was a very marked difference between the enemy alien and the person who though apparently a national of one of those countries concerned, was either fighting underground in order to establish democracy or was himself the victim—the persecuted victim—thrown into the conflict before the war to preserve democracy started.

Several matters have been referred to by various hon. Members. I am not quite sure that the question raised by the hon. Member for Chippenham (Mr. Eccles) falls within the terms of this Bill. He referred to the fact that today there are a number of people who suffered, owing to the attacks of the Nazis upon them in consequence of their racial, religious or political grouping, by having their effects wrested from them in Germany. The hon. Member said that there was a dilatory procedure in regard to giving them back those assets which were, and are, their own in accordance with all human and all real legal principles. There is no doubt that that procedure ought to be expedited.

This Bill however refers to the Trading with the Enemy Act, 1939, and the Agreement on Reparation from Germany of 14th January, 1946. The Custodian of Enemy Property has for years been continuing, under regulations of the Board of Trade, to sort out property, in his possession. Some of this has already been restored to claimants who might have been regarded technically as enemy aliens but who were recognised by the Government as deserving, in their position as victims of persecution or discrimination, of special and proper considerate treatment.

Those of us who have had anything at all to do with these matters know very well that hitherto the Board of Trade has had a defined policy on this, Documents on this have been referred to, and many of us have had practical experience of them. I am of the opinion that some of the provisions required to establish that a person was a real victim of the inhumanity which prevailed in Germany, are ridiculous. I ask that at this stage for example we rectify the position by making it perfectly clear in the Bill that a distinction will be drawn, between the enemy alien and his victim and that a person—whether that person was actually incarcerated or fleeing from incarceration—who was a victim of persecution should be categorically and definitely recognised as entitled to reclaim properties which can be established as having been his in this country or in any of the other allied countries.

The matter does not finish there. I think that one is justified in making this claim in referring to the whole history of the arrangements which were being made, or which are intended to be made, in order to deal with claims of this nature. It will be remembered that in the Agreement on Reparation from Germany on the Establishment of an Inter-Allied Reparation Agency it was definitely stated that provision was to be made to deal with certain cases: In recognition of the fact that large numbers of persons have suffered heavily at the hands of the Nazis and now stand in dire need of aid to promote their rehabilitation but will be unable to claim the assistance of any Government receiving reparation from Germany. … I do not want to read the whole of the Article, but I wish to refer to subsequent Treaties and arrangements which have been made and which are in accordance with the intention that was in the minds of those who were parties to that Agreement. In Article 25 of the Treaties of Peace with Roumania, there was a special provision which said: All property, rights and interests in Roumania of persons, organisations or communities which, individually or as members of groups, were the objects of racial, religious or other Fascist measures of persecution, and remaining heirless or unclaimed for six months after the coming into force of the present Treaty, shall be transferred by the Roumanian Government to organisations in Roumania representative of such persons, organisations, or communities. There was a similiar provision in the Treaty of Peace with Hungary. Recently in the law which has been passed in respect of restitution of property in Germany to victims of Nazi oppression—Law No. 59 of the Military Government of Germany—there were the words: … trust corporations … shall be formed for the purpose of claiming unclaimed and heirless property. I refer to these because I think that we should take the lead indicating that we are determined to see that human rights are properly respected and that when a nation has committed an affront against the principles of human rights those of their nationals who were affected by that transgression should not, when we come to a question of dealing with their assets, be regarded as part of the brutal group who brought the affliction upon them.

That leads me to these questions. First, I should like to know definitely whether it is intended to continue the policy which the Board of Trade outlined for the Custodian in respect of claims made by persons who were the victims of persecution. Is it intended, as I think it should be, that we should go further and that those claims should be sustainable even if the requirements contained in the document issued by the Board of Trade are not strictly fulfilled to the letter? One appreciates the fact that the individuals claiming would have had to be loyal to the Allied cause. One appreciates that they would have to establish a claim, but I am saying that this is the time when we should regard the question in a more generous spirit and should remove some of the heavy restrictions against claimants or make certain that these shall not be interpreted in the way in which they have been interpreted hitherto.

There is an additional question, which concerns assets that have come into our possession and which cannot be claimed at all by any living people or by any of their personal successors according to law. Many families were completely wiped out, and we know that it was a question not of hundreds of thousands, but of six million people being brutally exterminated. Naturally, when six million people are destroyed, one can readily understand that whole families suffered that fate. The result is that there are certain assets which belonged to the victims of the terrible torture and persecution but which are not claimable by definite individuals and which cannot be restored to anyone who is in either direct or indirect line of descent from the victim to whom the property belonged.

It has been recognised by the very law to which I referred a moment ago, that in cases of that description, provision should be made whereby a trust corporation should be established, and that it should be entitled to receive the assets of these victims so that the property may be used in order to settle, rehabilitate or otherwise help those people of similar groups who are the remnants left by the persecutions which took place. I suggest to the Government that, when we are dealing with this Bill, we should give a lead by indicating that, in the interests of justice and in the cause of reasonable and humane treatment of victims who today are unable to help themselves, we shall not take the funds or assets which fellow-victims of similar persecutions have left in our hands except to help those survivors. I say this in the hope that it will apply not only to victims of racial or religious persecution, but also to victims of political persecution, and in the hope that all these points will be considered before the Committee stage. There should be some provision made to establish a trust corporation to which should be handed over such funds for the purpose of distribution in the manner I have indicated.

There is one other point. I should like to ask a question concerning Clause 8 (1) of the Bill. What exactly is meant by the words "British protected person"? I do not know of any legal definition that covers this phrase, and perhaps some Member who does can explain it. Will it include the type of case, referred to here today, of the individual who had come to this country, who was not naturalised but who had suffered in the manner I have indicated? Would it enable him to recover assets which had come, or which might come in future, into the hands of the Administrator, whoever he may be? I should like to have an answer to this question. I hope the Minister will make clear in the Bill, before it reaches the final stage, all these matters, in order that there shall be no ambiguity about them.

It is very difficult to know, from the Bill and the statement which we have had today, exactly what is intended to be concerned in the order. Frankly, I do not think we should leave the question in this uncertain condition. We should, during the Committee stage and subsequently, improve the Bill by introducing such Amendments as will make it possible for a definite policy to be laid down, instead of leaving the matter in the air.

6.17 p.m.

Photo of Sir John Foster Sir John Foster , Northwich

The Bill under consideration today has been attacked on the ground of delay, because, as was pointed out by several speakers, the time which the Government have taken in deciding what they should do with German assets in this country has been inordinate. They were granted the right in the Reparation Agreement to acquire all German assets in this country, but they wasted a good many years before deciding to do so, and, what is more serious, at one moment they decided that they would not avail themselves of the option given to them under Article 6A of the Reparation Agreement.

That was a very serious mistake, and, though one never expects a Government to admit that it has made a mistake, I should like to ask the Secretary for Overseas Trade, without any hope of getting any answer, whether (a) the Government at one time decided not to avail themselves of the option under Article 6A; (b) whether they sent a letter to financial institutions in the City of London saying that they were not going to avail themselves of this option under Article 6A; and (c) whether they reversed that decision, and whether this Bill is the effect of that reversed decision? I have no hope of an answer, because I am afraid the hon. Gentleman would have to admit that the Government had made an error.

The other obvious disadvantage of this Bill is the unreasonable amount of time which was given for its consideration between First and Second Readings. That is a great disadvantage in this case, because, as every speaker has stressed, it is full of technicalities. The points which have been made can be divided into two classes. First, there is the point with respect to the impact of this Bill on the Reparation Agreement, and, secondly, the observations made by the hon. Member for Nelson and Colne (Mr. S. Silverman) and some of the remarks of my hon. Friend the Member for Chippenham (Mr. Eccles) with regard to the insertion in this Bill of certain provisions to safeguard the claims of refugees and people who have been the victims of Nazi oppression. I propose to make a few remarks in the same way.

With regard to the question of the Reparation Agreement, it is first of all necessary to understand the position about German reparations. The Reparation Agreement decided that there were to be two categories of reparation—Category A and Category B. Category B is the physical reparation extracted in the form of capital goods or assets from Germany and is represented to the layman largely by the issue of dismantling, with which we are not concerned here. Category A is a different kind of German reparation of which we in the United Kingdom are entitled to 28 per cent.

There is a very important point here which was mentioned by my hon. Friend the Member for Chippenham. I gathered from the fact that the Financial Secretary and the Secretary for Overseas Trade were shaking their heads that they did not agree with him. I should like to put the point again, if only to convince them that the point about foreign exchange is correct. It is important because I am sure that the Chancellor of the Exchequer would not want his right hon. Friend the Financial Secretary to part with any unnecessary foreign exchange.

Photo of Mr William Hall Mr William Hall , Colne Valley

I would point out to the hon. Gentleman that my hon. Friend and I were not shaking our heads at that part of what the hon. Member for Chippenham (Mr. Eccles) was saying.

Photo of Sir John Foster Sir John Foster , Northwich

May I then make sure that the right hon. Gentleman appreciates that by this Bill they are sacrificing a certain amount of foreign exchange? He will probably shake his head at that, but let me try to convince him. Under Article 6A of the Reparation Agreement, the German assets in every individual country can be collected, and, in so far as they are collected and paid out, they have got to be set against our 28 per cent. of general German reparations, subject to the very important qualification that every contract debt which is paid out of German assets to a British creditor shall not be deducted from the 28 per cent. Without doubt, the right hon. Gentleman knows the Article, and he will find that it shall be set against the reparation amount less various other kinds of expenses, and, finally, contract debts.

What does that mean? We have £15 million in this country, and we will assume that our eventual share of reparations will be £20 million. On that assumption, and if there were no contract debts in this country, we would collect £15 million here, and, instead of getting £20 million out of general reparations, we would get only £5 million. But supposing there were £10 million of debts in this country owing on contracts from German to British subjects, that would not be deducted from our reparation share, and, therefore, we would get £10 million more out of our 28 per cent., because, instead of deducting £10 million out of the £20 million, we would deduct only £5 million.

What does that mean in practical terms? It means that it is very important that where there is a contract debt the Bill should encourage, and, in fact, almost force, the contract creditor to proceed on his contract by the machinery of the Bill against the German assets in this country because every pound of that will not be deducted from the 28 per cent. due to us. It follows in reverse, therefore, that where we discourage or prevent a British creditor who is entitled on a contract to a claim of so many pounds against a German, our share of the reparations will be diminished by that amount, because, instead of claiming on his contract, he has to claim apart from it, and any such claim will be set off against our share in the reparations.

I am not asking whether the Financial Secretary or the Secretary for Overseas Trade agrees, but I am asking whether he understands what I am saying because if he does not, then I think I ought to try to put it a little more clearly. It is very important that he should understand this because, obviously, if I am correct, the machinery of this Bill is going to lose us foreign exchange. I say that because the only way so far as I can see—and I shall be glad to be corrected if I am wrong—in which these contract creditors are taken care of—and who, from the national point of view, come first, because they are saving us foreign exchange—is under Clause 1 (4, c).

As I understand it, an Order in Council is going to be made enabling the proceeds of German enemy property belonging to particular persons to be distributed to the persons who make a claim. In introducing this Bill, the right hon. Gentleman explained that an option was going to be given. But has he realised how unfair that option is, because he said that if a person made a claim against specific assets he was going to be excluded from the general pool. How is a person who is given the option to exercise it? He has not all the information, nor can he get all the information necessary from the Custodian of Enemy Property.

Let us assume that somebody comes to the right hon. Gentleman and says, "I have a claim for £10,000 against a specific German firm. Shall I exercise my option or not?" The information required before he can make a decision is, first of all, what are the assets of that German firm in this country, and that information can be given by the Custodian of Enemy Property. The second bit of information he requires to know is what are the other claims, which of them is going to be enforced, and in how many cases is the option going to be exercised. How can anybody know that? Supposing there are 100 claims how can one know that all the claimants are going to exercise their option?

But it does not stop there, because it depends on the dividend to be paid whether one exercises the option or not. If the dividend is going to be 20 per cent., then one can assume that it will be exercised, but if it is only 4 per cent. then very different considerations arise. Therefore, from the first point of view, the option is impossible to work in practice. The second point is that it is unfair. It is like saying to a secured creditor, "If you enforce your security, you cannot claim for the balance." The only way is, as my hon. Friend the Member for Chippenham suggested, to work out some scheme by which if a secured creditor gets a certain amount, his claim for the balance should be postponed until other people get abreast of him. It would be very unfair if a creditor claimed against specific assets and recovered less than if he claimed against the general pool.

I should be glad if the Secretary for Overseas Trade would tell us how he can defend the giving of this option on the terms I have outlined. How can he defend giving the option to a man who does not know how to exercise it owing to the fact that there are a lot of factors over which he has no control, and about which he has no knowledge and is not in the position to obtain that knowledge? I should like to know if he considers it fair that if a man who has a claim against specific assets exercises an option against those assets and recovers less than if he had not exercised the option, he should be precluded from getting the balance.

Passing to the second class of general observations on this Bill, I think the arguments made by the hon. Members for Nelson and Colne (Mr. S. Silverman) and West Leicester (Mr. Janner) were entirely correct. I am not sure that they pointed out what was really the great defect in this Bill, that it left so much to be done by Order in Council. Under subsection (6) of Clause 1 it is possible for His Majesty's Government to make Orders in Council which will at least safeguard the position as it is now with regard to the victims of Nazi oppression. A letter has been read out from the Department of the Custodian of Enemy Property giving the properties on which he acted. It was pointed out that the principles on which he acted were less generous than those embodied in the agreement about reparations. Instances were given where the Custodian on the one hand said that he would give back property to victims of Nazi oppression who had been deprived of liberty, but on the other hand decided very arbitrarily and unjustly that people who had been in labour camps or who had only been in prison for three days were not deprived of liberty.

There are literally hundreds of these cases. I should like to refer to a case in Shanghai, in the Japanese-created ghetto in which Jews were compelled to live under appalling conditions for two years from 1943 until the liberation in 1945. The camp was under the command of two Japanese officers who acted in co-operation with and under the instructions of the Gestapo. This, according to the Custodian of Enemy Property, was not deprivation of liberty. What we ask is that the rules which the Custodian applies should be such that at least not less favourable conditions would be given in such a case. Then we ask that a humane and just interpretation of those rules should be put in the Bill.

There are one or two isolated points on which I should like to ask the Secretary for Overseas Trade to give us some information. Does he think it right that no provision is made in the Bill for the appointment of a tribunal or judicial proceedings? I know that he will probably reply that it can be done by Order in Council, but the disadvantage of this Bill is that we do not know what the functions of the Government are as regards an Order in Council, and we do not know on what principle they propose to have matters determined judicially. The statement of the Financial Secretary that the Minister was responsible and that, therefore, it was sufficient safeguard for a person to have difficult questions determined, was quite rightly assailed by the hon. Member for Nelson and Colne.

Orders in Council are going to be subject only to negative Resolution of both Houses. I suggest that at the very least they should be the subject of affirmative Resolution. That is the very least that should be done in view of the importance of this subject and in view of the remarks which were made by the right hon. Gentleman in introducing the Bill when he said that this was an enabling Bill. If any Bill needs an affirmative Resolution it is an enabling Bill. The Government say that it will be sufficient for Orders in Council which are not laid upon the Table to be prayed against in the prescribed time.

Another thing I should like to ask is how the question of what are German enemy debts or German enemy property will be decided. I appreciate that the Government have in mind some kind of judicial procedure; I give them credit for that, and I think that appears to be the case from the right hon. Gentleman's remarks. But how will it be decided whether any particular piece of property is or is not rightly included in the pool? There will be a lot of difficult questions, and there will be much injustice if the Executive is to be given the power of merely deciding whether a property is German enemy property. I should like to know what machinery the Government have in mind for deciding what constitutes the pool. This is a very important matter which should be made clear by the Bill.

The Bill makes no mention of German shareholders—in other words, shareholders of British nationality in German companies. They seem to have no claim at all. Does the Secretary for Overseas Trade think it is fair that shareholders in German companies should have no claim? I deduce that shareholders in German companies are not included, but if I am wrong I should like to be corrected. In Clause 8 "German enemy debt" does not apparently include a share in a German company or in a German partnership, and I think that also should be considered.

There is one important matter of principle which the hon. Gentleman should consider from the point of view of whether injustice is being done. No German enemy debt exists except to a British subject, as I read the Bill. If that is right it seems extraordinary. Does that mean that somebody who has lived 40, 60 or 80 years in this country, who has not got British nationality but who has a perfectly bona fide claim against a German debtor cannot recover? I say that it apparently does not cover him because, as I understand it, "protected person" is a technical term which means persons in certain territories under His Majesty's protection, like former Indian States.

In Clause 8 the only debts which are protected by this Bill are those owed to British subjects. It seems hard enough on the refugees who have been here 10 or 12 years but who have not managed to acquire British nationality; it seems even harder on those foreigners who have made their homes here and have lived here many years but who apparently, as I understand the Bill, cannot claim because they are not British subjects. This has never been a country which has discriminated against people in our midst who owe allegiance to the King—and foreigners living in this country do owe allegiance to his Majesty—and it is wrong in principle that a Bill like this should single out only those people who have British nationality for protection in their claims against the Germans.

Another point which I think should be noticed is that according to Clause 8 (1, c), what is put in the pool is anything which was subject to the Trading with the Enemy Act. Those orders were made arbitrarily and without appeal. They were necessarily made in the heat of war and very often with incomplete information, yet every piece of property to which these orders applied will be in the pool. If hon. Members will turn to the top of page 7 of the Bill, they will see that every person whose property became subject to these Trading with the Enemy Orders or who was included as an enemy of the country, called specified enemies—and there I think less error crept in—is affected, and that in both these classes their property will automatically be in the pool.

There should be some provision in the Bill so that both these classes now have a right of appeal. Now is the last time any error can be corrected. There may well be cases where two people of the same name have been confused and orders made against them, and unless they have a right of recourse either to a specially constituted tribunal or to the courts, they will find that their property is included in this pool, from which, of course, they can get no compensation, apart from some rather loosely defined compensation against the German Government; and if they are no longer German nationals they may well find difficutly even in obtaining that nominal compensation.

The last point I have to raise is less important, but I think it may cause injustice to British subjects. There are many companies—quite a few German companies—which are controlled by British subjects. Under the wording of the Bill these companies are treated as German and any assets over here are lost to the British subjects who control them. They are put into the pool and made available for general distribution. Surely that must be wrong, and it is all the more wrong as the principle of control is used the other way. In sub-paragraph (e) of Clause 8 hon. Members will find that the definition of a German company includes any company abroad which was controlled by Germans. The principle of control is brought into the Bill in order to define a German company but it is not brought into the Bill in order to define a non-German company; and that works injustice on people in this country.

Instances of this injustice have been given to me. For instance, there is the case of a German company which was a wholly-owned subsidiary of a British company. This company had £13,000 assets before the war and this £13,000 was quite properly paid to the Custodian, but the British parent company, if this Bill remains in its present form, will be unable to obtain the £13,000 which obviously belongs to it—although the £13,000 was the holding of a nominal German company—and that sum will be put into the general pool. I ask the Parliamentary Secretary to deal with that instance specifically. Does he think it is right that the German wholly-owned subsidiary should lose its assets in this country and that the parent company or parent person should not be entitled to obtain those assets? Surely that cannot be right.

In conclusion, I ask the Parliamentary Secretary to be so kind as to answer the questions I have asked. There is nothing more frustrating at the end of a debate, especially on a matter which does not raise any party division at all—for speeches on both sides have shown that hon. Members are anxious that the Bill should do what is just and what is best for this country—than when, after having been asked a series of questions, the person who is winding up for the Government says he is not willing to answer them because there is no time. Tonight the hon. Gentleman has all the time in the world in which to answer questions and he has had the opportunity of finding out the answers. I ask him to answer the questions put by my right hon. and hon. Friends and myself.

6.45 p.m.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

Right hon. and hon. Members on both sides of the House have said that this is a very technical subject and I agree wholeheartedly with them. I am quite sure it will be readily understood if I cannot deal with the subject in the same expert fashion as that displayed by those hon. Members who have made a special study of it. Indeed, my first temptation is to resist the political implications introduced by the hon. Member for Northwich (Mr. J. Foster). I refrain from continuing in that strain because I think that the right hon. Member for North Leeds (Mr. Peake) set the right tone to the Debate and it is in that spirit that I will endeavour to reply.

I think it is worth repeating that the German enemy property dealt with under this Bill is placed at the disposal of His Majesty's Government by international agreement. By the operation of the Trading with the Enemy Act, 1939, there is a statutory restriction on its disposal and it is for that reason that this Bill is introduced. It gives authority for the Government to carry out the disposal of this property. There are three ways in which we could dispose of the assets, but it is thought that the right thing to do is to collect all the claims of the United Kingdom pre-war creditors against German debtors in respect of all the obligations outstanding before 3rd September, 1939, and to allow all the accumulated assets to be distributed against them. There is provision also to be made whereby a creditor who can point to a German debtor can have an opportunity of claiming against specific assets. He will be able to do so now, although up till now he has been prevented from doing so by the intervention of the Trading with the Enemy Act.

I am in general agreement with the analysis made by the right hon. Member for North Leeds. I think that the meaning of Article 6A of the Paris Agreement, taken in conjunction with the provision of Article 1, is substantially as he outlined it. The position is that the signatory Governments agreed to a certain percentage of reparations going to each country which was a signatory to that agreement.

As to the Category A assets, these are derived from the German property within our special jurisdiction and it is, of course, that kind of property with which we are dealing today. It has been said, and I think correctly, that in certain circumstances every debt of the kind referred to in Article 6A, which is paid out of the appropriate German asset, may mean that the United Kingdom Government will have a larger share of whatever residual assets there may be when the time comes for the final accounting. So far as we can see, our expectation of sharing in any surplus is slender in the extreme. Nevertheless, I am sure that hon. Members have noticed that provision has been made in this Bill—Clause 1 (4 c)—whereby an opportunity can be taken of this when the Order in Council is drafted.

I also noted that the argument was used that certain types of creditors were more entitled to share in the distribution than were other classes. It is because of contentions of this kind and the necessity for seeing that creditors generally accept them that we have decided on the establishment of an Advisory Committee. My right hon. Friend the Financial Secretary has explained that this Advisory Committee will report before there is an effective Order in Council. I think also I should answer questions put to me about priority claims, and the way in which persons having more than one claim against German assets should be expected to make their claims. These are, I think, from what we have been able to consider, matters upon which the Advisory Committee could give us assistance of great importance, and we should be bound to take note of it.

The right hon. Member for North Leeds asked what it was intended to exclude. The answer, with reference to the Clauses that he named, Clause 1 (4, a) and Clause 1 (4, b), is that this is a drafting matter, and that we are taking enabling power wherever we can—I do not want him to think there is anything sinister in it—which may or may not be required in drafting an Order in Council. The Financial Secretary has already said that the Advisory Committee, to which the right hon. Gentleman referred, will be appointed before questions of differentiation can be put into the Order.

I ought to make this quite clear. In quoting earlier—I will not repeat it—Article 6A of Pant I of the Paris Reparation Agreement, the right hon. Gentleman seemed to infer that although the Article relates to the method of accounting by signatory Governments for the reparation received in this particular way by them, it would confer rights on individuals. In fact, it confers no rights on individuals. It is money which is given over to the Government that is the reparation authority, and it is for the Government to determine how these funds shall be used.

Another question was asked—I am not sure whether it was by the right hon. Gentleman or not: I think it was by the hon. Member for Northwich and the hon. Member for Chippenham (Mr. Eccles)—about what is to happen if the claims against German assets are less than His Majesty's Government will have to account for in their share of reparations. The answer is that that question would arise if there were a likelihood that the Government would be receiving a sum in excess of the percentage laid down in Article 1 of Part I of the Paris Agreement as being their full share of reparation. In fact, it does not appear likely that we shall get the percentage allocated to us, which is 28 per cent., and it is as certain as certain can be, that there will not be a surplus; so I would suggest to the hon. Gentlemen that their argument is to some extent academic.

Photo of Mr George Drayson Mr George Drayson , Skipton

Can the hon. Gentleman say whether he means that this 28 per cent. may be reduced to 25 per cent. or 24 per cent., or that the actual money from the 28 per cent. which will be accounted, will be less than the amount required to cover debts here?

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

Our share is 28 per cent. We want to get it, but we cannot be certain that we shall get it. It depends on what there is in this country, and the aggregate of what is in the area covered by the Agreement, whether we shall get it.

Photo of Mr George Drayson Mr George Drayson , Skipton

We cannot get less than the 28 per cent. allocated to us. The question is whether the amount the percentage will realise is the amount we require.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

If the hon. Gentleman had been in earlier, he would have heard that we are allocated 28 per cent. It is precisely because I said we might not get it that I suggested that that argument that there might be a surplus was academic.

Photo of Mr George Drayson Mr George Drayson , Skipton

Make it 25 per cent. or 24 per cent.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

Now I come to deal with some other points. I hope to cover all that were put to me. I made notes of them as fully as I could, and I am quite sure that hon. Gentlemen will make sure that I do not sit down without answering the points they wish me to deal with.

The right hon. Gentleman and other hon. Gentlemen asked why the Advisory Committee cannot be made into a tribunal and given statutory duties. I think it would be quite impossible in administration for the tribunal to sit on claim after claim; and the reason why it has been decided to deal with this by Order in Council is, quite shortly, that inclusion of statutory provisions in the Bill would make it virtually impossible to rectify mistakes in drafting which will only emerge as experience is gained of the claims received. Of course, I must again emphasise that decisions on policy are the responsibility of the Government.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Will my hon. Friend allow me to interrupt? I can quite see that the Government may come to the conclusion that it would be better not to have a tribunal than to have one. It is a matter of argument on which opinions may vary. However, I do not quite see why my hon. Friend says it is impracticable when it was done precisely by such a body dealing with cognate questions and hearing them at the end of the First World War.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

I am sure my hon. Friend will appreciate the difference between the circumstances prevailing today and those prevailing at the end of the 1914–18 war. At the end of the 1914–1918 war there was actually a peace treaty concluded and a German Government, and the assets in this country were more than enough to meet the reparations. The present position is that the assets in this country are not enough to meet the reparations. There is, in fact, no united German Government with which we can deal, and, above all, there is no peace treaty at present with the enemy. For those reasons, I think my hon. Friend must agree that the circumstances are entirely different.

The hon. Member for Chippenham appeared to feel that, because it had been decided that a creditor should exercise his option to claim assets of a single debtor, and might not claim for a balance against the pool, that in some way lessened our share of reparations. That is not so, for the reason I have already indicated; it is doubtful whether we shall reach the full 28 per cent. to which we are entitled under the Reparation Agreement.

Photo of Sir John Foster Sir John Foster , Northwich

There really is a misunderstanding between the two sides of the House on this. Can the hon. Gentleman clear it up? It is impossible to get less than 28 per cent. from the Agreement. If there is £1 million we get 28 per cent. If there is only a shilling we get 28 per cent. The only instance where we get less than 28 per cent. is when the reparations are nothing, and then we get 28 per cent. of nothing. The hon. Gentleman keeps on saying that it will not reach the full 28 per cent. We are bound to reach the full 28 per cent. in any circumstances except where the reparations equal nothing. That is the point. It cannot be right arithmetically.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

I agree that our share is 28 per cent. Now, at the present moment we feel we can get from the assets in this country a percentage of the total which may be less than that.

The hon. Member for Chippenham, and also, I think, the hon. Member for Northwich, made the suggestion that we were going to lose foreign exchange because of the measures that have been adopted. The answer is that it might have been so if, in fact, we could get some share from the other countries concerned. That is not thought to be likely.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

I mean, that is the impression for the moment, and it does not in those circumstances look as though the question that has been put is one that will cause us as much concern as is felt by the hon. Gentleman. There was also a suggestion that enemy property against which there is a British claim, presumably whether established or not, should not be subjected to the realisation procedure. This is impracticable, and indeed might be unjust. We should not normally realise property if there were a claim established against it without first advising the claimant of the full facts. I think the right hon. Gentleman will agree with me that we ought not to accept a positive written power to realise against the debtor if the British creditor has a good case against the debtor and could establish his claim in the courts against the debtor's property. These courts are, of course, still open to him to pursue his claim.

Photo of Colonel Alan Gandar-Dower Colonel Alan Gandar-Dower , Penrith and Cockermouth

I should like an answer with regard to my question about bad management by the Custodian of the property.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

I will come to that generally, but I was about to answer another question put to me. I was asked whether the amount of £3 million to £4 million which the Government would have under this settlement was in fact subjected to the same arrangement as that relating to the ordinary creditors. The answer is in the affirmative.

I think that I may now reasonably come to something which is not in the context of this Bill. The hon. Member for West Leicester (Mr. Janner) and the hon. Member for Nelson and Colne (Mr. S. Silverman) both dealt at length with the question of refugees, their properties and releases. The suggestion has been made that His Majesty's Government have been harsh in the way in which these matters have been handled. I would say that His Majesty's Government, as a member of the Inter-Allied Reparation Agency, have conformed to the rules of that body. I will quote from the rules: Assets of any individual of German nationality: (i) who was deprived of liberty pursuant to any German law, decree or regulation discriminating against religious or racial groups or other organisation, and (ii) who did not enjoy full rights of German citizenship at any time between 1st September, 1939, and the abrogation of such law, decree or regulation, and (iii) who has left Germany (or if he has not left Germany at the final accounting under the Paris Agreement, it is proved that he intends to leave Germany within a reasonable time thereafter) to establish his permanent residence outside Germany; (iv) who it is proved did not act against the Allied cause during the war, and (v) whose case merits favourable consideration. Provided a refugee complies with these rules, then the assets to which he has made claim can be released. So far as His Majesty's Government are concerned, I think that it will be within the memory of hon. Members that I answered a Parliamentary Question dealing particularly with the method of handling these matters, and several hon. Members have in this House, and certainly outside, expressed gratitude for the generous way in which the Government were accepting and trying to work these particular Articles. I can only repeat that there are undoubtedly cases—some have been stressed this afternoon—where there are perhaps real difficulties.

I have told deputations of Members of Parliament and of representatives of outside organisations that His Majesty's Government are prepared to do everything possible to meet these cases. Indeed, I have been promised details of them, which I am still awaiting. I can only give this assurance: if these cases are presented to me with all the facts necessary to enable His Majesty's Government to give them the most generous consideration, that will be done, remembering that we are acting within the framework of this international agreement arrived at by these signatory Governments of which we are partners.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I am very grateful to my hon. Friend for the spirit of the assurance which he has just given, and which, I am sure, will be accepted by everybody as being offered in complete good faith. I think that he was not in the House when I spoke, and that if he had been, he might have dealt a little more fully with the principal point which I made. Complaint was made about the rather narrow and artificial interpretation put upon these rules in a number of cases which had been decided, and, in the suggestion which I made to the House, decided wrongly because of that misinterpretation—that deprivation of liberty did not include enforced suicide, three days' imprisonment was not enough, and that kind of thing, which has resulted in unjust decisions which I am sure were not intended.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

If any such cases can be presented to me, I repeat the assurance that I have already given that they will be carefully examined. I can only say that as yet none of these cases has been forthcoming in spite of my requests to the representative bodies which have made approaches to me. It is true that for a short time this afternoon when my right hon. Friend was speaking I was absent from the House, and I will take the opportunity of reading HANSARD and learning more about what my hon. Friend had to say.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I was not complaining. My right hon. Friend the Financial Secretary was present the whole time, and I think paid me the compliment of taking a full note of what I said. I only intervene again to assure him that all the cases which I quoted in the course of my speech are actual cases decided by the Custodian in the sense of which I complain. They are not imaginary cases; they are cases which have happened and which have been decided in that way on those grounds.

Photo of Sir John Foster Sir John Foster , Northwich

The Shanghai ghetto is an actual case, and it has been decided that two years in a Shanghai ghetto is not a deprivation of liberty. That seems to me to be nonsense.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

I speak from memory, but I think that case was settled. I will look at it again and deal with it in precisely the way I have indicated to the hon. Member for Nelson and Colne. We are prepared to look at these matters whenever a reasonable case is presented which is worthy of our taking a decision in the general spirit I have indicated.

I am sure that there are many other technical points which could be raised. I think, however, that most of them would be more appropriate in the Committee stage. I ask the House to bear with me in trying to answer many of these points in simple terms, as compared with the legal thought which has been applied to them by many hon. Members this afternoon, and I hope that hon. Members will be content to give the Bill a Second Reading.

Photo of Commander Sir Douglas Marshall Commander Sir Douglas Marshall , Bodmin

I want to raise one point which has already been raised and not replied to and about which I feel that the hon. Gentleman could quite easily clear the minds of hon. Members. It is the case in which the wholly-owned German subsidiary of a British company had a payment made in this country which was collected by the agent of that company and paid to the Board of Trade. The Board of Trade then ordered that the payment should be made to the Custodian of Enemy Property, and therefore there arises a specific sum of money owing to the British company which wholly owns the subsidiary company in Germany. Where exactly does that come in under this Bill and how will His Majesty's Government propose to deal with it?

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

It is precisely because questions of that kind cannot be answered in the way which the hon. Member for Northwich obviously wants them to be answered that we hope we can discuss them in the Committee stage.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester West

Perhaps the hon. Gentleman will be good enough to give an answer to the point raised on Clause 8 (1) as to the meaning of the words "British protected person." It is rather a material point because it deals with a number of claims which are being met at present and which might be excluded by this Bill if that term were used.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

I have not lost sight of that. It is a matter we shall consider. It is a legal term of art with which we cannot deal this afternoon.

Photo of Mr Francis Noel-Baker Mr Francis Noel-Baker , Brentford and Chiswick

I would remind my hon. Friend that I raised a specific point. Could he at least give me an assurance that he will give me the information on another occasion?

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester Chatham

I can give the answer immediately. This firm was put up for tender; the highest bidder got the order, and it was in that way that it was sold.

7.11 p.m.

Photo of Mr George Drayson Mr George Drayson , Skipton

I am still not satisfied with the reply the Minister has given on the question of control. I admit that it is a matter which could be considered by the Advisory Committee to which the Financial Secretary referred in opening the Debate; but surely this is something which could quite clearly be put in the Bill and should not depend upon any decision that may be arrived at by the Advisory Committee. If the question of control has been decided one way, the converse should also hold good. Therefore, where a wholly-owned subsidiary company of a parent company domiciled in this country had assets or balances in England on 3rd September, 1939, surely it can be decided that those assets could be taken over by the parent company responsible for the control of its wholly-owned subsidiary. I should like the Financial Secretary to examine this to see whether, before the Committee stage, he cannot find some way of putting it into the Bill, rather than leaving this important point of principle to be decided by the Advisory Committee.

Another aspect of the speech of the Secretary for Overseas Trade which was distinctly disturbing was the way in which he dismissed the foreign exchange question. I can only assume from the answers he gave that he does not expect to get any substantial contribution from enemy assets outside this country to the general pool, but that in fact, after the various claims against definite assets have been established, we in this country will be making a greater contribution to the general pool than will be made by other countries who are parties to the agreement. I hope that by now the point regarding the 28 per cent. is clear in the mind of the Secretary for Overseas Trade. It will be within the recollection of the House that he said that we might get less than 28 per cent. I think we now appreciate that what he meant was that 28 per cent. of the amount available might be less than the amount required to satisfy all the claims we might put in against the general pool.

Those are the only two points I wish to raise now. There were a number of others with which the Secretary for Overseas Trade was unable to deal, but no doubt we shall have a further opportunity of discussing them in Committee.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

The hon. Gentleman has already spoken.

Photo of Commander Sir Douglas Marshall Commander Sir Douglas Marshall , Bodmin

I have not spoken. I only asked a question.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

It was not a simple question. I thought it was quite a long question.

Question put, and agreed to.

Bill read a Second time, and committed to a Committee of the Whole House for Tomorrow.