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Requisitioned Premises (Com- Pensation)

Volume 387: debated on Thursday 25 March 1943

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Motion made, and Question proposed, "That this House do now adjourn."—[ Sir J. Edmondson.]

The matter which I want to bring to the notice of the House concerns the compensation payable to firms whose premises have been requisitioned. It is a subject which has arisen as a result of a case in my constituency, but as it affects many others firms it is in the general rather than the particular sense that I raise it, and I do not intend to mention any particular names or instances. The basis upon which the question of compensation rests is Section 2 (1, d) of the Compensation Act, 1939. The Act deals with practically every trouble to which a firm is put as a result of the war and the relevant words are:

"The compensation shall be a sum equal to the amount of any expenses reasonably incurred other than on behalf of His Majesty for the purpose of compliance with any directions given on behalf of His Majesty in connection with the taking possession of the land."
There are two broad categories of firms affected in this matter as a consequence of premises being requisitioned. The first, which for simplicity's sake I will call the operating type, the one with which I am particularly concerned to-day, is the firm which when its premises are taken over has still Government contracts on its books and still has a desire and indeed an obligation to fulfil them. As a consequence, it re-erects its plant on another site. The second category I will call the storage type. That is the firm which does not wish to continue operations during the war but is instructed to remove its plant because its premises may be required for some other purpose. The plant is stored until the war ends and the firm may return to the original site.

The interpretation which has been put upon these two types of cases is as follows: that the operating type, wishing to continue to deliver goods to the Government during the war, may have the cost of removal and the re-erection of plant paid for, but if the firm elects to do so, it is precluded from claiming the cost of the re-erection on the original site after the war. In contrast with that position, the storage type may have the cost of the removal of plant to storage, the cost of storage and the cost of re-erection on the original site paid for by the Government. In order to get a proper perspective on this question it is necessary to refer to two other types of firm who have had to leave their premises as a result of conditions arising out of the war. The first of the other types is what I would call the dispersal type, the firm which, either for reasons, of bombing or because it is situated in a coastal belt, is advised that it should move. It goes to some place which it is thought will provide greater security. The cost of removal and erection of plant on the new site is divided between the Government and the firm. The Government are not committed to, nor is the firm precluded from, payment in respect of homecoming.

The fourth case is what I would call the transferred firm—the firm which is situated in a congested area where labour is very difficult and where the Government have decided that it is in the general interest that the firm should be removed, in order to release labour required for expansion in that area and should go to some other part of the country, where the labour supply is easier. The transferring firm, in these circumstances, has to move to the new site and re-erect its plant on the new site and the Government pay the entire cost. Its homecoming rights are the same as those of the dispersed firm. It is neither promised homecoming costs nor precluded from claiming them ultimately. It will be seen that there are four types in respect of homecoming. The stored firm which does not operate during the war is promised homecoming costs. The operating firm is denied homecoming costs. The dispersed firm is uncertain; it has no promises and it loses no rights. The transferred firm, in like manner, has the future completely open. So that, all based on the Act, there appears to be a variety of interpretations in respect of homecoming which, in my submission, calls for review.

It seems that the reason the Government have decided, in the case of what I call the operating firm, to pay for the re-erection of plant on the new site only if the firm promises to make no claim for homecoming afterwards, is as follows: They say, "Look how much better off is the firm which is able to operate during the war than the unfortunate firm whose operations are curtailed while its plant is stored. Surely, it has very little to complain of if it is not able to obtain from the Government the cost of homecoming in comparison with the firm which has been completely idle for two, three, or four years." I submit it is a false analogy to compare the position of the operating firm with that of one which is closed. In my submission, it is very much more reasonable to compare the position of the operating firm, which is, after all, of much more value to the nation operating, than it would be if its plant were stored, with the; dispersed firm which, let us say, has left Brighton or the transferred firm which has left Preston. In both those cases the firms are eligible to claim the cost of homecoming after the war if there are arrangements made hereafter to enable them to make such a claim.

I do not ask that at this stage the Government should attempt in any way to decide to what degree the cost of homecoming of a firm should be paid for at public expense. The conditions as they will be then, are completely unknown. We may wish to impose certain conditions before the cost of homecoming can reasonably be charged to the taxpayer. It is wise, in my judgment, to defer until the time when the conditions are known to us the rights and claims which a firm may have for homecoming. But, having said that, it seems to me all the more reason why the Government should leave every firm completely free to make its claim when the time comes and not debar it in particular circumstances from making the claim after the war. By saying, "We will pay for the first re-erection of your plant provided you will make no claim for the second," it seems to me the Government is adopting an unreasonable attitude. Either the firm under this Clause has a right to have the first re-erection paid for or it has not. If it has the right, there is no justification for the Government seeking to grant it only if the condition they ask for is fulfilled, namely, no claim for the second re-erection. If, however, it has no right for the first re-erection, clearly the Government will be wrong in agreeing to pay for it under the Act. So that it seems to me the Government is tying two things together which ought to be kept totally and distinctly apart. If, therefore, without wanting the Government to tie its hands in respect to after-the-war, it were possible for the Financial Secretary to apply this provision in the Compensation Act without reference to after-the-war at all, and pay the cost of the first re-erection where in the Government's view it is justified, without attaching any conditions to it, that would leave firms so placed as free to claim for subsequent homecoming as are the other firms with whom they ought, properly, to be compared. I hope I am not the only one who believes that there is a good case here for the Government to review, and I hope the Financial Secretary will give it sympathetic consideration.

I have come into contact with a considerable number of these cases which are giving very great concern to manufacturers. It is all very well to say they will be able to put it right out of E.P.T. when they get it refunded, but there are smaller manufacturers who are not making any excess profits. The most urgent problem we shall have at the end of the war will be to get our people back to work. These transfers were made during a period of great stress. I can give a case in which a firm was ordered to leave a certain district. The plant was put on the lorry and sent away for fear the factory might be hit that night. It was parked in the country and the firm looked round for premises next day. When that sort of thing was happening ideal premises were not obtained. In some cases people were moved out of their factories in order to make room for others. You will not be able to leave the cuckoos in these nests, because those who were moved out have been promised their premises back after the war. We shall want to find work for both. It would be of very great assistance to those working the factories if the Financial Secretary would make some pronouncement which would ease their minds.

I have seen the effects of some of this requisitioning. It was said of the Minister who started it that he was ready to requisition the bed from under his dying grandmother. The next Minister was even worse and it was popularly said about him that he would not only requisition the bed from under his dying grandmother, but would kick her when she was down. There has been a great deal of injustice done to some of these people and the waste of money is tremendous. It will, eventually, have to be settled up by the taxpayer. I know of one instance in which a weaving shed was requisitioned early in the war and its looms were sent to a place in the country which had not been used for 10 years. After a year that place was required for the making of explosives and the looms had to be moved a second time. The owner said that if they were moved another time they would be fit for nothing. Eventually, a fair solution was come to as between a willing buyer and a willing seller. The Government bought the looms because they would have been of no use again, and the owner was satisfied. There are many cases all over the country of works that have been requisitioned and the smaller men do not know whether they will have the money with which to start again. I have done my best to save some of these little men, because not only is the man himself thrown out of business, but his old employees who have been in the business all their lives have their employment finished forever.

Reference so far has been made only to the owner of the business, and I agree with what has been said, for such cases have come to my notice. I want, however, to bring to the attention of the Minister others who are affected. These are the workers whose home is in a particular area. They naturally desire to return. Anything that is done to make it difficult for a business to return to its old home town will react upon the workers.

I am much indebted to the hon. Member for Northampton (Mr. Summers) for the lucid way in which he has raised this matter. I am also obliged to the hon. Member for Edgbaston (Sir P. Bennett), who is very familiar with this problem. I have taken careful note of the points made by the hon. and gallant Member for Blackburn (Sir W. Smiles) and the hon. Member for Stone (Sir J. Lamb), though some of them went a little wider than the issue with which I am called upon to deal to-day. When a factory is requisitioned and the owner is directed to move his machinery, compensation is paid to him under Section 2 (1, d) of the Compensation (Defence) Act, 1939. If the machinery is stored the Government pay for the cost of dismantling and storing it and of re-erecting it when it is once more possible to do so in the original premises. If the machinery is erected on an alternative site, the Government pay the cost of dismantling and of erecting it in the new premises. In either of these cases the expenses are regarded as having been necessarily incurred by the owner in complying with the directions given to him when his premises were requisitioned. The owner who has erected his machinery on an alternative site may, of course, wish at some time to re-erect the machinery on yet another site, or, if he can get possession on his original premises, to bring the machinery back there. In such a case the costs of dismantling and re-erection are not regarded as having been incurred in order to comply with the direction, and are not, therefore, the subject of compensation under this section of the Compensation Act, 1939.

In spite of what my hon. Friend the Member for Northampton said, it does appear, to me that a firm which re-erects its machinery on an alternative site and continues to manufacture in those premises and can carry on its business is in a somewhat more fortunate position than firms which for many reasons are put out of business altogether and have been obliged to close down. A firm which stores its machinery when the premises are requisitioned cannot carry on its business any longer, and it can be argued that there might be grounds for giving more consideration to such a case. But the point to which objection has really been raised by my hon. Friend the Member for Northampton is that no compensation is payable for the re-erection on the original site of machinery which has been erected on an alternative site in compliance with an Order. That is a case in which, of course, the hardship cannot have been suffered as yet, but I understand that it is the practice of requisitioning authorities when they agree to a claim for expenses under this Section of the Act of 1939 to ask the claimant to agree then and there that the payment is in full and final settlement of all his claims, and that is a point which my hon. Friend has made.

I agree that it would be not unreasonable for a claimant to say at that point that he accepted it as a settlement of the expenses which had been incurred up to date, but that he reserved the right to submit claims for future expenses. The Requisitioning Department would no doubt say that they noted the claim that had been reserved, but of course they would not be accepted as admitting then and there that any claim would lie. This arrangement would, I think, meet the main difficulty which my hon. Friend the Member for Northampton has raised, and I will see that Requisitioning Departments are informed of this discussion and of the way in which they should act in circumstances of that kind.

I beg to ask leave to withdraw the Motion.

Motion, "That this House do now adjourn," by leave, withdrawn.

The remaining Orders were read, and postponed.