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

The Bill is, I hope, non-controversial although somewhat technical. Its only object is to wind up the scheme of compensation for war damage which was introduced during the Second World War. It also transfers most of the remaining administrative responsibilities for this scheme to the Inland Revenue Department in order to effect administrative economies.

In view of the work done by the War Damage Commission, and to set the Bill in its proper place, it is only right for me to say a short word about the original war damage scheme and the Commission's work. The war damage compensation scheme was one of the success stories of the war and the immediate post-war period. In October, 1940, when Britain stood virtually alone and the Battle of Britain was being fought in the air, the then Prime Minister, my right hon. Friend the Member for Woodford (Sir W. Churchill) announced that a comprehensive war damage scheme would be inaugurated at once.

As a result, in December, 1940, the then Chancellor of the exchequer, the late Sir Kingsley Wood, introduced the Bill which became the War Damage Act, 1941. As Sir Kingsley Wood said at the time—as reported in HANSARD, 17th December, 1940; Vol. 367, c. 1125—the Bill was an instrument of justice and an Act of social solidarity spreading the burden of the war damage over the whole community. Incidentally, it reflected confidence in ultimate victory.

The War Damage Commission, under the able and energetic leadership of its first chairman, Sir Malcolm Trustram Eve—now Lord Silsoe set about its formidable task—and it was quite a task—with a will. Arrangements were made to deal with the various notifications of damage which came flowing in. There were about 4 million claims in respect of about 3½ million proper- ties altogether. Sixteen regional offices were set up and technical staff in local offices, supplemented at the peak period by the use of private professional firms, assessed the extent of war damage and classified properties according to whether payment could be made for rebuilding or repair—which was a cost-of-work payment—or whether compensation should be paid for a total loss—which was a value payment. In due course the technical staff dealt with the specifications which were put in for repair work and assessed the proper cost of making good war damage.

We should reflect that under Part I of the Act, dealing with damage to property, the Commission paid over 4 million claims in respect of 3½ million separate properties, and the total so far paid approaches £1,300 million. Against this, £200 million was collected by the Inland Revenue Department for 1941–46 in the form of war damage contributions from property owners.

I should say a word about Part II of the War Damage Act, which dealt with goods and chattels. Part I dealt with properties in two ways, either value payments or cost-of-works payments. Part II of the Act dealt with goods and chattels, which were covered under two insurance schemes administered by the Board of Trade, one for business chattels and one for private chattels. On these alone large sums were paid out. About £117 million has been paid out in claims on private chattels. There are virtually no claims outstanding under this Part of the Act, with the possible exception of one or two arising from the erroneous inclusion of chattels in property.

This will give some measure of the work which has been done by the War Damage Commission and the compensation paid under the war damage scheme. But the House will agree that in 1964 it is high time that this scheme was wound up. The vast Majority of the cases of war damage have already been disposed of, but there is a residue, and the outstanding liability—it is difficult to be precise—is estimated at about £20 million, mainly comprising cases in which a cost-of-works payment will be due if and when the damage is made good.

By and large the delays have been caused by waiting for the convenience of owners through difficulties of site development, and so on. The trouble is that unless action is taken to impose a time limit there is the possibility that such cases will drag on indefinitely, and meanwhile it is becoming harder and harder to distinguish between war damage and the ordinary dilapidation, and the provision of administrative machinery to deal with these cases is becoming increasingly wasteful.

For these reasons, in August, 1961, the then Financial Secretary to the Treasury, now my right hon. Friend the Minister of Education, announced in reply to a Question that the Government intended to wind up the war damage scheme and to transfer the staff and responsibilities of the War Damage Commission to the Inland Revenue. Hon. Members who wish to look this up will find it in HANSARD, Vol. 645, c. 207. The details of the proposal were published in a white paper, Cmnd. 1583, in December, 1961.

I do not want to weary the House with the full details of the scheme in the White Paper, because it is not precisely the scheme put forward in the Bill. Broadly speaking, the scheme outlined in the White Paper provided for the registration within a limited period of outstanding claims in respect of damage to land and buildings. In general, compensation would take the form of a value payment—that is to say, a payment based on the depreciation in value of the property—unless it could be shown that the damage could and would be made good within four years from the commencement of the scheme, subject to a possible extension for a few cases of exceptional magnitude, in which case the damage, when made good, would qualify for a cost-of-works payment.

At that time the outstanding liability for war damage compensation was put at about £40 million, but since then good progress has been made in reducing the volume of outstanding work, largely due to the announcement of the decision to wind up the war damage compensation scheme, which, I think, had something to do with persuading people to get on with the job.

The estimated outstanding liability is now down to about £20 It is possible to break this figure down in very rough terms. I would not like the House to think that I am giving a precise estimate, because these things are not easy to quantify exactly. In round figures this amount comprises about £1 million for dwelling houses, about £2 million for churches, about £5½ million for local authority and public buildings—libraries, public baths, and so on, of which £1½ million represents the claims in respect of County Hall and the Guildhall—and about £9 million for commercial property—such as public houses, hotels, offices and shops. In addition to this £17½ million, an estimate of £2½ million is made for contingencies and for the remaining few claims that might come forward on the Board of Trade side, the Part II claims on chattels, bringing the total probable liability to about £20 million.

During the last two years the outstanding liabilities for war compensation have been about halved. It is because of this reduction that we are putting forward in the Bill a simplified version of the scheme originally set out in the White Paper. The Bill proposes to dispense with the requirement of registration of claims. It simply provides that claims for payment must be presented within specified time limits.

The most important time limit is that contained in Clause 1. This provides that a claimant must make good war damage and claim a cost of works payment, or, alternatively, apply for a value payment for damage not made good, within a period of four years from the commencement of the Measure, when enacted, on 1st October, 1964. Clause 1(5) and Clauses 4 and 6 ensure that the time limit also applies to claims for other forms of war damage compensation payments, including the payments for the cost of clearing war damaged sites and the payments under the special arrangement for churches.

All claims in respect of the cost of temporary repairs to war damage should have been made a long time ago, and Clause 3 puls an end to any dormant claims of that sort as from the commencement of the Bill when enacted on 1st October, 1964. So the time limits in the Bill, basically four years from the proposed commencement of the Measure, when enacted, on 1st October, 1964, are continued in Clause 1; and Clauses 4 and 6 extend them to the rather smaller compensation payments.

In Clause 7 a final time limit is laid down, which is ten years after the commencement of the Measure when enacted. Thus a time limit is laid down for the completion of all cases. Claims which have not been brought to a conclusion by then will be extinguished unless—the hon. Member for Sowerby (Mr. Houghton) will realise that this is most improbable—the Inland Revenue has itself been responsible for the delay.

The concentration of most of the remaining war damage work into the next four or five years as a result of the Bill will itself produce administrative economies and so will the rationalisation of the distribution of the remaining work between the Government Departments which the Bill brings about.

Under Clause 2 the functions of the War Damage Commission are transferred to the Board of Inland Revenue. The Revenue has been associated with this work in the past through its Valuation Office, and progress has already been made towards the integration of the Inland Revenue and the War Damage Commission, both of which are under the chairmanship of Sir Alexander Johnston. The Revenue will take over the staff, as well as the functions, of the War Damage Commission, so there will be continuity of knowledge and experience. It will thus be seen that the transfer proposed in Clause 2 will go through with the utmost smoothness.

Clause 2 also transfers to the Inland Revenue the remaining functions of the Board of Trade in relation to the payment of compensation for war damage to business and private chattels. This work has virtually come to an end, except for a few cases which the War Damage Commission already handles as agent for the Board of Trade where a new claim in relation to chattels has arisen because the claimant has mistakenly regarded the chattels as being part of the land or buildings for the purposes of war damage compensation.

There is one small section of war damage work which will not be taken over by the Inland Revenue. That is the compensation payable under the special arrangements for highways. This is covered in Clause 5, which provides that the work shall be carried out by the Minister of Transport in England and Wales and by the Secretary of State in Scotland. They are already closely associated with these arrangements.

Clause 8 extinguishes rights to payment of moneys out of the War Damage (Mutual Insurance Fund Unclaimed Balances) Account, which consists of moneys which have remained unclaimed since 1941.

I do not think that the other provisions of the Bill call for special comment now. They are consequential upon those main provisions and can more suitably be dealt with at a later stage.

A word is necessary about damage from any new incidents arising out of the past war which may occur in the future. Damage to land and property still occurs from time to time from the disposal of unexploded bombs and washed-up mines surviving from the last war. This damage has been very small in recent years. At present, it is dealt with under the War Damage Act, 1943, but the power to make payments under that Act is limited by the Bill to damage occurring before 1st October, 1964—that is, the vesting date of the Bill when enacted.

Any claims arising from damage which occurs after that will be dealt with by the War Office on the same basis as it deals with claims for damage to property arising from its training activities. Most of these payments are based on the cost of making good the damage. It is only exceptionally, where there is a great deal of damage and repair is uneconomic, that payment is limited to the depreciation in value.

I hope that the House will come to the conclusion that this is a useful Bill. It will bring to an end the existence of a body which has done useful and great work in the past. The proportion of work outstanding, as the figures I have quoted show, is remarkably small. I hope that the administrative economies and changes which the Bill introduces and the time limits it places on the payment of compensation will be considered reasonable. As the outstanding claims have been halved in the last two years, I think that the House will agree that a period of four years is reasonable and adequate in which to settle the final claims.

I hope that the House will give the Bill a Second Reading.