House of Commons
Tuesday, December 17, 1940
The House being met, the Clerk at the Table informed the House of the unavoidable absence of Mr. SPEAKER from this Day's Sitting, whereupon Sir DENNIS HERBERT, the CHAIRMAN of WAYS and MEANS, proceeded to the Table, and after Prayers took the Chair as the DEPUTY-SPEAKER, pursuant to the Standing Order.
Provisional Order Bills (Nostanding Orders Applicable)
Mr. DEPUTY-SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, no Standing Orders are applicable, namely:—
Ministry of Health Provisional Order (Shipley) Bill.
Bill to be read a Second time upon the next Sitting Day.
Private Bills
The CHAIRMAN of WAYS and MEANS reported, That, in accordance with Standing Order 87, he had conferred with the Chairman of Committees of the House of Lords, for the purpose of determining in which House of Parliament the respective Private Bills should be first considered, and they had determined that the Bills contained in the following List should originate in the House of Lords, namely:—
Camborne Water.
Cardiff Corporation.
Derwent Valley Water.
East Surrey Gas.
Mid Southern Utility.
Portsmouth Water.
Report to lie upon the Table.
Oral Answers to Questions
British Army
Camps, Cove
asked the Secretary of State for War whether he will make available for the information of Members of this House the report rendered to him on the inquiry into the expenditure on the construction of the camps at Cove, on which his predecessor promised to report to this House?
Figures of the cost of the militia camps generally are now toeing examined with a view to reporting to the Select Committee in the form which the Committee desires.
Will the Financial Secretary explain why it is so necessary that this report should be kept secret, as the Select Committee keeps it quiet and nobody knows what is inside it?
There is no particular desire to keep the report secret, but it is a Departmental report, and there does not seem to be much object in publishing it.
After it has been before the Select Committee, will the Financial Secretary see that it is made available to Members of the House?
No, Sir, I cannot give that undertaking.
Vehicles (Lights)
2 and 12.
asked the Secretary of State for War (1) whether and, if so, in what respects his Department issues orders to drivers of military vehicles regarding lights different from the regulations regarding lights on civilian vehicles; and whether he is satisfied that the regulations regarding military vehicles are duly enforced;
(2) in what respects the regulations governing lights on military vehicles differ from those relating to civilian motor cars; and whether there is any reason why the same regulations should not apply to both military and civilian vehicles?
The rules applying to the lighting of civilian vehicles apply generally to the lighting of military vehicles, except that, in cases of extreme urgency, headlights may be used during am air raid, and, during night manoeuvres, the ordinary lights may be switched off. In the latter case, however, the back axles are illuminated. The method of screening the lights is different from that applying to civilian vehicles, but has been agreed to by the Air Ministry, and is considered to be at least equally effective against aerial observation. Instructions have been issued to all commands that these lighting regulations are to be strictly enforced.
Commercial Education (Travelling Expenses)
asked the Secretary of State for War whether he has now decided to allow the cost of transport to the 520 members of His Majesty's Forces desirous of taking classes in technology and advanced commercial subjects provided free by Newcastle-upon-Tyne Education Committee, so that the post-war civilian prospects of these units may not be impaired?
Yes, Sir. Instructions are about to be issued which will allow the use of transport for regular attendance at organised classes free of cost to soldiers, subject to reasonable conditions of length of journey and numbers to be conveyed.
Will the Minister note that the tardiness of arriving at this decision has prevented these hundreds of units from taking the classes which were organised for them and the organisation of which has taken months to arrange?
They will be able to take advantage of it now.
Home Guard
asked, the Secretary of State for War whether he is aware that it has proved impossible for a member of the Home Guard who has had his motor-car damaged or destroyed by enemy action while engaged on Home Guard duties to recover compensation from the War Office even in cases where the use of a motor-car is essential for his livelihood; and whether he will end this hardship without further delay?
Provision is made for payment of compensation from Army funds when a motorcar of a member of the Home Guard is damaged or destroyed by enemy action while it is being used for Home Guard purposes in emergency. Other use for Home Guard purposes cannot be regarded as increasing the risk of damage by enemy action, but compensation for such damage, as in the case of similar damage incurred when the car is not being used for Home Guard purposes, can be claimed under the general scheme for compensation for war damage.
Is my hon. Friend aware that claims for loss or damage to cars in these circumstances have been before his Department for three months without any decision being given, and cannot he expedite a decision in these cases in order to avoid such hardship?
If my hon. Friend will bring to my notice the cases he has in mind, I will certainly have them looked into.
asked the Secretary of State for War what steps have been taken to ensure that members of the Home Guard, wounded or injured by enemy action, secure the assistance of the elaborate air-raid precautions organisation set up to deal with the ordinary citizen?
All casualties, military or civil, resulting from enemy action are dealt with by the medical services, military or civil, which are most readily available, without discrimination. I have seen a statement to the effect that the Home Guard are placed outside the scope of these arrangements because the War Office has been offered, and has accepted, free attendance by members of the medical profession on members of the Home Guard who sustain casualties while on duty. I am glad to have this opportunity of saying that the acceptance of the offer referred to in no way deprives the Home Guard of any facilities which they would otherwise have.
Land Requisitioning (Departmental Go-Ordination)
asked the Secretary of State for War what liaison or co-ordination exists between the War Office and other Service Departments in regard to the requisition of lands or factory space?
Proposals to requisition sites which may be of interest to the other Service Departments are referred to the local representatives of those Departments, or, if there are no such local representatives, are referred by the War Office to the Admiralty or the Air Ministry or both. As regards buildings, coordination is secured by means of the central register maintained lay the Office of Works and Public Buildings.
Is my hon. Friend aware that there are cases of factories which have been requisitioned by one Ser- vice Department and subsequently visited by members of the War Office, and that a second attempt has been made to requisition premises already requisitioned by another Department?
I was not aware of that, but I will have the matter looked into.
Can the Financial Secretary state what compensation will be paid to the person who owns a large factory, only part of which has been taken over by the Department?
I am afraid that I cannot answer that Question without notice.
Inoculation
asked the Secretary of State for War whether he is aware that men in a group of the Royal Artillery were recently inoculated with T.A.B. vaccine; that there was nothing to indicate that the operations were voluntary; that none of the men were given the 48 hours' rest prescribed in Army medical regulations; that two of the men were badly affected by the inoculation, one of them having to enter hospital for infra-red ray treatment, having an arm swollen twice the size; and whether he will remind all Army medical officers that these inoculations are voluntary, and that every man must be given 48 hours off duty after each inoculation?
I am having inquiries made and will write to my hon. Friend as soon as I have the necessary information.
Does not the Minister realise that there is widespread persecution in the Service against objectors, and will he take certain steps to look further into the whole subject, with a view to making this voluntary inoculation a real instead of an imaginary one?
No, Sir, I do not realise that there is widespread persecution, and, what is more, I do not believe it. Officers are perfectly well aware that inoculation is voluntary and that there must be 48 hours' rest after inoculation. As I say, there may be one or two cases where these instructions have been ignored. This may be one of them, but I am having inquiries made into the matter.
What kind of evidence would the Minister require to make him believe anything?
To put the matter into proper perspective, can the Minister give any indication as to the approximate percentage of men who have refused inoculation?
I am afraid that I cannot answer that Question offhand, but it is a very small percentage.
Is not the Minister aware that such a statement would be of no service at all, because men do not object when they want to object, for fear of the consequences?
Conscientious Objectors
asked the Secretary of State for War whether he has considered the report of the special inquiry into the allegations of ill-treatment of conscientious objectors attached to the non-combatant corps; and whether he is able to make a statement on the subject?
The report is still under consideration, and I regret that I am not yet in a position to make a statement.
Will it be possible to have a statement before the Adjournment?
I should very much doubt that in present circumstances. As my hon. Friend is aware, my right hon. Friend has other preoccupations at the moment.
Claims Commission
asked the Secretary of State for War who has been appointed president of the Army Claims Commission; whether lie receives full major-general's pay; whether, just prior to appointment, he was a civil servant; and whether he is entitled to a pension from any source other than Army funds?
As regards the first part of the Question, I would refer my hon. Friend to the answer I gave to my hon. Friend the Member for South Croydon (Sir H. Williams) on 3rd December last, of which I am sending him a copy. The president does not receive the pay and allowances of a major-general but those of a brigadier. In virtue of his Civil Service, from which he retired on 18th October, he receives a pension from Army funds. His total emoluments are less than those of a major-general.
Troops Under Canvas
asked the Secretary of State for War whether he can give an assurance that no soldiers serving in this country are now under canvas, or, if not, what exceptions there are?
There are now about 13,000 troops under canvas in this country, of whom the majority are air defence troops. My hon. Friend will appreciate that the latter are liable to constant moves, often to localities where no buildings are available.
Does the hon. Gentleman appreciate that many searchlight units are under canvas in very unsatisfactory conditions? Cannot something be done to make their position better?
The air defence troops usually are in fact actively engaged in a theatre of war. It is impossible to guarantee them every amenity.
Is it possible to build more huts for them?
Everything possible is already being done.
Will every endeavour be made to avoid keeping some troops under canvas nil the time?
I will look into that point.
Jamieson Committee
asked the Secretary of State for War the names of the members of the Jamieson Committee, together with their qualifications to sit thereon; the purpose for which this committee was set up; and if he will inform the House as to whether its decisions will be made public and, if so, when?
As my right hon. Friend said in answer to a Question by my hon. and gallant Friend the Member for East Lewisham (Sir A. Rownall) on 2nd July last, this committee was set up to advise the Army Council on building questions including the placing of works contracts and the supervision of work in progress. The members of the committee are: These gentlemen have all wide experience of building questions. Mr. Jameson is a director of the Anglo-Iranian Oil Company, and in that capacity has been responsible for works and building operations on a very large scale. Mr. Tudsbery is civil engineer to the British Bread-casting Corporation and was a member of the Home Office Committee on Structural Precautions against Air Raid Attack. Mr. Elcock is senior partner of the firm of Elcock and Sutcliffe, Architects. Mr. Ainsley is senior partner of the firm of Messrs. Ainsley, Quantity Surveyors. The committee has rendered advice on a considerable number of technical questions. It is not proposed to publish its reports.
Civil Defence
Shelters
asked the Secretary of State for Scotland whether he is prepared to approve of the necessary additions to medical and sanitary staffs in Scotland to enable local authorities to carry out the instructions of the Department of Health for the regular inspection of shelters?
I am prepared to approve reasonable proposals by local authorities for the increase of medical and sanitary staff to facilitate regular inspection of shelters in Scotland. Approved expenditure will be reimbursed by the Government.
asked the Home Secretary whether he is aware that many of the basement shelters in London, although ample facilities exist, are not in any way heated; and whether he will call the attention of the different borough councils to this shortcoming?
The whole question of heating in public shelters of the various types was referred to a committee of experts. They have reported against heating in fully occupied shelters as being dangerous to health. The Horder Committee agreed with this view. In view of the special conditions in brick surface shelters and certain trench shelters it has been decided to heat these types, and the work is now in hand.
Is it not a fact that the experts to whom the hon. Lady refers were Departmental experts and that external experts wholly disagree with that recommendation?
I am sorry, but that is not correct. Both Departmental and outside experts were consulted.
Can my hon. Friend say whether an opportunity will be given to the House to discuss the Horder report?
That will have to go through the usual channels.
Can my hon. Friend say whether, with regard to the electrical heating, lighting and ventilating apparatus which she inspected recently, steps will be taken to enable manufacturers to put it into production at once, or whether we must wait until the winter is over?
The question of heating is well in hand. In regard to small shelters, we have come down on the side of the small coal stoves which were brought to my notice by my hon. Friend the Member for West Fulham (Dr. Summerskill). With regard to the various forms of electrical heating, boroughs have been allowed to conduct experiments, and many are installing the kind of heating which they find is best.
asked the President of the Board of Education on what grounds of equity local education authorities, which did their duty in constructing school shelters when first called upon to do so, are to be less favourably treated in respect of Exchequer grant than those which did not place contracts for shelters until after 19th October, 1940?
The application of the decision to increase shelter grant to 100 per cent. in respect of future provision in the case of school shelter follows the line adopted in regard to public shelter, and I would refer my hon. Friend to the answer given to his Question of 12th November by the joint Parliamentary Secretary to the Ministry of Home Security.
Is my right hon. Friend aware that my Question, which referred to grounds of equity, is hardly answered by reference to a Treasury decision which has been criticised in all parts of the House as being grossly inequitable to the efficient authorities?
Precisely the same point was put to my right hon. Friend the Minister of Home Security, and I cannot improve on his answer, which was:
"I fully appreciate the point of my hon. Friend and would not argue as to its merits. This action, however, was taken because of developments in the 'Blitzkrieg' situation, wherein it was necessary to get rapid action."—(OFFICIAL REPORT, 28th November, 1940; col. 330, Vol. 367.)
asked the Minister of Health how many meetings of Lord Horder's Committee have been held during the past five weeks; whether the committee has made any further communications to the Government since 12th November on conditions in air-raid shelters; and, if so, will he publish these communications?
This committee has held six meetings during the past five weeks. It has made a number of additional recommendations, and expressed its views on a number of points submitted for its consideration. These will be published in a supplementary White Paper, which my right hon. Friend the Minister of Home Security and my right hon. Friend propose to issue as soon as possible.
Does the hon. Lady realise that it is not so much the publication of the recommendations as action which is wanted? Is she further aware that the tube shelter, to which I called attention on Thursday of last week, is still in the same condition, and there are still 2,700 people with only two lavatories? Will action be taken immediately in this case?
I think the last time the hon. Member asked me the question we were considering the Horder Report, and the hon. Member's anxiety was for its publication. My right hon. Friend quite agrees that action must be taken, but also hon. Members in this House desire to see a report on the recommendations and the report of this committee.
Evacuation
asked the Minister of Health whether he has yet reached a decision about making Romford and Hornchurch evacuation areas?
asked the Minister of Health whether he is now in a position to make a statement about the claims of the local authorities of Bexley, Crayford, Dartford and Stone, to be classified as complete evacuation areas?
As the answer is long I will, with permission, circulate it in the OFFICIAL REPORT.
Is it not possible for the hon. Lady to assure the House that the classification of the various areas in the national interest is being reviewed from time to time?
Most certainly I can give that assurance. If the hon. Member reads the reply, be will see it is done on a very careful basis.
Can the hon. Lady say whether she is going to allow these particular areas to become evacuable areas in the immediate future?
When the hon. Member reads the reply, he will see the exact scheme upon which my right hon. Friend is working. Certain adjustments are being made, figures will be kept constantly under review, and further adjustments will be made as the situation makes it desirable.
May I give notice that if the reply is unsatisfactory to my constituency, I shall raise the matter on the Adjournment and try to obtain some satisfaction?
Perhaps the hon. Lady will read the answer first. I do not think she has done so as yet.
This is the only opportunity I shall have of giving notice.
Following is the answer:
I have considered the representations which I have received that certain areas in and around London should be declared evacuation areas. In examining them I have had before me very full information as to the actual effect of air raids on those areas, and I have had in mind cer- tain general principles which I will indicate briefly. The question whether a district should be declared an evacuation area cannot be determined by any single factor. It is necessary to take into account and balance several factors. The first is the degree of danger from bombing to which the inhabitants are exposed. This depends upon the density of the population, the liability to air attack, and the intensity of the attacks delivered. Secondly it is necessary to have regard to any danger to health which may arise from shelter conditions in the area, particularly the overcrowding of public shelters. Moreover, the extent to which evacuation can proceed depends upon available space in reception areas. In assessing the demands that can properly be made on that space, consideration must be given, amongst other things, to ( a ) the need for the removal of further children from central London and ( b ) the importance of maintaining a margin of accommodation in reception areas to meet the needs of provincial centres that may suffer intensive raiding.
In deciding, in the light of these considerations, whether further areas around London should be declared evacuation areas, regard must be had to conditions generally in these areas as compared with the reception areas. When considering the outer London suburbs, it is questionable whether the areas to which the people, if evacuated, could be sent, would be as comfortable as their own homes or so much safer from the point of view of bombing and health as to justify further inroads upon the accommodation in reception areas. With these considerations in mind I have come to the conclusion that the first necessity is to reduce the number of children in the more central areas, and I propose to extend facilities for the organised evacuation of mothers and children of school age or under in the case of the boroughs of Leyton, Tottenham, Walthamstow, Hornsey and Willesden. As regards the areas adjacent to the Metropolis I have come to the conclusion that there is not at present a case for adding to the evacuation areas except in two instances. I propose to declare as an evacuation area the urban district of Penge and part of the borough of Beckenham; and to make a slight extension of the existing evacuation area in the urban district of Thurrock. While this represents my present view on a very careful examination of the position, I should like to assure the House that the situation will be kept under constant observation.
asked the Secretary of State for Scotland what is the capacity of the five evacuation camps in Scotland; and how many children are at present using this accommodation?
The camps are capable of providing for the accommodation over a prolonged period of about 1,300 children. The number of children in the camps on 13th December was 892.
Does the right hon. Gentleman appreciate that this is a happy form of evacuation? Could he see that we get a little nearer the 1,300 places filled?
I agree entirely with my hon. Friend. The Under-Secretary in the last three weeks has visited two of these camps, and I have visited one during my recent tour in the Glasgow area. I will do all I can to get them full.
Is there some hitch, then?
You cannot give any single reason for the drift back of some who go to the camps. It is extraordinary in how many cases there are very real domestic reasons.
Sentence, Uxbridge
asked the Home Secretary whether he has now received and considered the special report which he stated he was going to ask for with regard to the case of James Lloyd, who, on 11th November, was charged at Uxbridge with having a bonfire at Ruisrip during an alert, and, when remonstrated with by air-raid wardens, deliberately flashed a torch, and, after being fined a sum of £25 and costs, gave the Nazi salute as he left the court; and what decision has he come to with regard to the question of having Lloyd put under restraint?
Yes, Sir. Lloyd has since been committed to prison for failure to pay the fine. My right hon. Friend has also made an Order for his detention under Defence Regulation 18B which will come into effect on the termination of his imprisonment.
Is my hon. Friend aware of the satisfaction which his answer will give throughout the country?
Demolished Houses (Firewood)
asked the Home Secretary whether he can make arrangements that wood rescued from demolished houses should not be burnt in the streets by the Pioneer Corps engaged in the demolition work, but made available for firewood to the people in the neighbourhood?
I would refer my hon. Friend to the reply which my right hon. Friend gave to the hon. Member for Plaistow (Mr. Thorne) on 12th December.
Can my hon. Friend indicate briefly what that answer was?
Briefly, it was that my right hon. Friend agreed with the suggestion and was prepared to send out the circular. The circular is now in draft, and will be sent out in the next day or two.
Greek Nationals (Assistance)
asked the Secretary of State for the Home Department, whether he has considered the case submitted to him of a Greek national, a waiter by trade, -who served in the great war and 'holds mercantile marine and war medals, and who, after living in Plymouth since 1918, was ordered to leave it, as a protected area, in May, removed to Torquay, was ordered to leave by 28th June because the area had become protected, removed to Barnstaple, was ordered to leave, because all Devon and Cornwall had become protected, on 11th August; and whether, in view of the hardship inflicted on working-class families by these repeated removals, some compensation or contribution towards the cost of removal can be made to them?
My right hon. Friend has considered the case submitted to me by my hon. Friend. This man appealed To the Regional Advisory Committee against the decision of the Chief Constable requiring him to leave the protected area, and the Regional Advisory Committee upheld the decision of the Chief Constable. Much as it is regretted that hardships are caused to individuals who have been ordered to leave their homes because the district has been included in an Aliens Protected Area, these hardships are an inevitable consequence of the policy which is dictated by military necessity in the interests of national security. My right hon. Friend regrets that no compensation can be paid from public funds to individuals affected by these Orders.
Does the hon. Gentleman realise that this inflicts great hardship on many other cases besides this particular one, and cannot he indicate whether there is any source from which such people can get assistance, such as the Assistance Board, because to ruin people by this perpetual chivvying from one place to another causes them very great hardship?
All persons affected by measures of this kind can, of course, apply to the Assistance Board under the Prevention of Distress scheme.
Have such cases actually been granted assistance by the Board? Are there precedents?
Certainly there are precedents.
What is the position of Greek nationals in this country now? Are they considered as Allies or put under any restriction like ordinary aliens?
All aliens are, of course, subjected to restriction, whether they are Allies or not.
Ministries (Co-Ordination)
asked the Prime Minister whether he is satisfied that the jurisdictions of the Ministry of Health and the Ministry of Home Security in the areas severely affected by enemy action are sufficiently defined and co-ordinated to obviate confusion in the discharge of their respective functions?
All these matters are being constantly considered in the light of current experience. The duties of these two Departments are clearly defined and understood by all concerned. The Regional Commissioner is responsible in each Region for co-ordinating the plans and activities of all Departments in connection with Civil Defence.
Does my right hon. Friend agree that while there is a direct line between the Ministry of Home Security and the Regional Commissioner, there is no such direct line between the Ministry of Health and the Regional Commissioner, and that, indeed, the Ministry of Health's representative is often housed in a different building? That it what is making some confusion in different parts of the country. Would my right hon. Friend consider the suggestion that the Ministry of Health's representative in each region should himself be a commissioner and take part in the general discussion around the Regional Commissioner's table?
As I have said, ail these matters are continually being reviewed in the light of what happens from day to day in different parts of the country, but certainly I will consider the suggestion made by my hon. Friend, though I cannot give any undertaking that I am able to adopt it.
Transport
Alternative Motor Fuels
21 and 26.
asked the Secretary for Mines (1) whether, in view of the urgent necessity to conserve our shipping resources, and to make full use of coal mines at home, all possible steps are being taken to encourage the use of alternative motor fuels made from British coal; and whether representations upon this subject, made by local authorities who have carried out exhaustive experiments, are now receiving rapid and sympathetic attention;
(2) whether, in view of the urgent necessity to conserve our shipping resources, and to make full use of coal mines at home, all possible steps are being taken to encourage the use of alternative motor fuels made from British coal; and whether representations upon this subject, made by local authorities who have carried out exhaustive experiments, are receiving rapid and sympathetic attention?
I would refer my hon. Friend to the reply which I gave on 20th November to my hon. Friend the Member for Southampton (Mr. Craven-Ellis). As re- gards the second part of the Question, any representations made by local authorities in this connection will be duly considered. As to the rationing of the use of coal tar oils as motor fuel, on which I understand that certain representations have been received, I would refer the hon. Member to my hon. Friend the Secretary for Petroleum.
In view of that reply, has not the Minister something more tangible to give than that very emaciated reply on this subject? Surely it merits greater detail than has been given.
I have informed my hon. Friend on previous occasions that the committees which made investigation into these matters have reported and that a summarised report will be presented at an early date.
Can we know when it will be presented, as we were promised that long ago?
But my hon. Friend is not asking that question now. We have received no representations from local authorities, and I can give no answer until we receive them.
asked the Secretary for Petroleum whether he is now in a position to make a further statement regarding the steps he is taking to encourage the use of tar oils as motor fuel?
Yes, Sir. A scheme has been drawn up to encourage the use of tar oils as motor fuel in goods and public service vehicles and at the same time to effect economy in the use of imported fuel. The scheme will come into force with effect from 24th January next, and will be subject to review at the end of six months.
Can the Minister say whether he has given equal encouragement to other forms of motor fuel?
This Question relates to this particular form of fuel.
Are we to understand that, after all these patient months of investigation by the hon. Gentleman and his various committees, this is all that has been produced?
No, Sir, the Question I am answering deals with the particular new suggestion that tar and creosote oil should be used in Diesel engines.
asked the Minister of Transport whether he is aware that certain vehicle examiners in the East Midland area informed haulage operators that if they used an indigenous alternative fuel their basic petrol ration would be cut by 50 per cent., and that they would be unable to obtain any supplementary petrol rations; and whether this represents the policy of the Government with regard to alternative fuels?
I am informed that the fuel referred to was being obtained without coupons in breach of the Motor Fuel Rationing (No. 2) Order, 1940. Instructions have been issued to the officers concerned that while supplementary petrol rations might be reduced in these circumstances, a reduction of basic rations is not an appropriate remedy. The second part of the Question does not arise, but as to the policy of the Government in regard to alternative liquid fuels, I would refer my hon. and gallant Friend to the answer given to-day by my hon. Friend the Secretary for Petroleum, to the hon. Member for the Consett Division (Mr. David Adams).
When are we likely to get a decision on these alternative fuels? Is the hon. Gentleman aware that our airmen are extensively engaged in trying to stop the production of synthetic fuel in Germany while the Minister here seems to be trying to stop it in this country?
I would refer the hon. and gallant Gentleman to an answer already given on the subject to-day.
Coal (Railways)
asked the Minister of Transport whether he is aware that the serious coal shortage in the town of Kidderminster and district nearby is attributable to difficulties between the London Midland and (Scottish Railway Company and the Great Western Railway Company; and what steps he is taking to deal with this urgent matter?
I have been advised by my hon. Friend the Secretary for Mines that the stocks of some industrial undertakings in and around, Kidderminster are low and arrangements have been made to run some special trains. The difficulties in regard to the exchange of coal and other freight traffic between the two companies are solely attributable to physical handicaps of a temporary character and these are being overcome as rapidly as possible.
Is it true that the difficulties arise owing to the understanding that there would be complete reciprocity in the exchange of wagons, and if that be so, is it not possible in the special circumstances of today, when there is such a shortage of coal in many parts of the country, that that rule might be waived?
I am not only assured that it is not true, but I can give the hon. Member figures showing that there is no such reciprocity in the exchange that takes place.
Does the Minister think there will be a real improvement in the position in the next few days?
Is my hon. Friend aware that it is estimated that the number of employés in the coalfield of Cannock Chase is very likely to be 3,000 owing to the shortage of wagons?
That question does not arise out of the Question on the Paper.
Is it not connected with the question of the shortage of wagons at the pithead?
Road Vehicles (Production)
asked the Minister of Transport whether he is satisfied that the number of road vehicles under construction is sufficient to replace the vehicles no longer serviceable, and to avoid any breakdown in essential road transport services?
The urgent requirements of the Service Departments for road vehicles have necessarily resulted in a greatly reduced production of new vehicles for civil work including the replacement of existing vehicles. At the same time new demands are being made upon road transport resources. The situation thus created is not without difficulty, but it is receiving urgent attention and steps are being taken which will, I hope, enable road transport to meet all reasonable demands that may be made upon it.
Is it not the case that many people who use motor vehicles are being refused new vehicles which have been ordered and are ready for them to take from the manufacturer, because the Minister of Transport refuses it, and they are still lying there?
Whatever refusal is made will be justified by the circumstances. If my hon. Friend will give me particulars, I will look into any case.
Is there any justification for allowing new motor vehicles to be lying on the manufacturers' hands for months and not used at all?
There would be no justification for that, but I imagine that there would be some explanation in such a case. If my hon. Friend will give me particulars, I will look into it.
Has the hon. Gentleman full authority to requisition spare lorries which are not being used for the war effort?
We have full powers to requisition for any war purposes.
Is the hon. Gentleman aware that 360,000 tons of potential transport have been deliberately made derelict owing to the closing of the Kennet and Avon Canal since the war broke out?
I was not aware of that. If the hon. Gentleman will give me the facts, I shall be very pleased to look into them.
Will my hon. Friend investigate the statement made by experts that much of our road transport is lying unusable owing to lack of mechanics for repair work?
There may be difficulties of that character, obviously. We are doing the best we can to deal with a difficult situation.
Is the hon. Gentleman aware that in the opinion of experts this is one of the biggest faults with regard to the non-utilisation of transport services—that is, the lack of mechanics?
I am sure my right hon. Friend has the services and opinions of all the best experts on the subject.
Coal Industry
Exports to Italy
asked the Secretary for Mines how much coal was shipped to Italy in the 12 months preceding the outbreak of war with Italy; on what terms; and how much still remains unpaid for?
It has not been the practice since the outbreak of war to publish detailed particulars either of exports or the state of clearing accounts with enemy countries, and it is not proposed to depart from that practice. As regards the second part of the Question, coal was sold to Italy on the usual commercial terms, subject, of course, to payment being made through the Anglo-Italian Clearing.
Is it not very fortunate that the Minister has a precedent for not making the statement?
Distribution
asked the Secretary for Mines whether he has had a further opportunity of considering the serious position in the Nottinghamshire coalfield where pits are working short time owing to the difficulty of getting the coal away; and whether he can now state what steps he is proposing to take to deal with this difficulty?
The position improved during the week ended 30th November, but has since deteriorated again. I understand that the difficulties are due to shortage of empty wagons at the collieries and to general transport difficulties.
Will the Minister say what steps he is taking to remove that particular difficulty? Is he considering again whether he might use Army lorries as supplementary to wagons?
The hon. Member knows quite well that it takes an enormous number of lorries to perform the work which one train can do, but we are taking steps, in consultation with the Ministry of Transport, to improve the conditions of transport on the railways and add to the number of trains coming through.
Will the Minister use his influence with the Minister of Transport. It is not consultation we want so much as action.
Yes, Sir, I think we all want the same thing, and there is a committee in consultation to decide how suitable action can be taken.
Supplies
asked the Secretary for Mines whether there is any special reason for a shortage of coal supplies in the Chislehurst, Orpington and Sidcup areas in the Chislehurst Division of Kent; and what steps he is taking to ensure that an adequate supply of coal is provided before the hard weather sets in?
There are various difficulties interfering with the normal flow of coal into these areas. My right hon. Friends the Ministers of Transport and Shipping and I are co-operating in special measures to improve the situation.
If the blame can be laid at anyone's door, will disciplinary action be taken?
I do not think it can be said that the blame lies with anyone. There are difficulties, and people concerned are doing their best to overcome them.
When coal or coke is not available within the period for which the allowance has been fixed, will the person be entitled to get the balance in the next period?
Every effort is being made to get coal to the places where there is the greatest shortage. Within the limits of transport facilities, that policy is carried out.
If a man is entitled to, say, five tons and is able to get only four, can the extra ton be supplied in the next quarter?
The only promise I can make is that the coal will be sent to the consumers who are in the greatest need. The most urgent cases will receive the first attention.
Will the hon. Gentleman also take note of the number of small people who cannot stock four or five tons? Will regard be paid to those who can take only very limited quantities?
There are large numbers who cannot take much in. The object of the Government stocks is to provide those people with direct access to supplies when their turn comes.
Petrol Rationing
asked the Secretary for Petroleum what steps he took to augment petrol rations for private cars in Birmingham and other Midland industrial centres after enemy air raids?
Instructions have been issued to the Divisional Petroleum Officers to make additional petrol available without delay, when necessary, after enemy air attack. These arrangements, carried out in consultation with the other authorities concerned, operated in the Midland cities after recent air raids.
Is my hon. Friend aware that motorists in Birmingham would not entirely agree with him, and in view of the fact that buses were lent to London from that city, could he assure the House either that there is a "Help Your Neighbour" scheme administratively available to be put into force immediately in the event of bad air raids, or, if not, whether he will take that step immediately?
I cannot answer with regard to buses and the general transport position, which is a matter for my right hon. Friend the Minister of Transport.
Will my hon. Friend answer this question? If he has not made it possible for the authorities in Birmingham after a bad raid to put into force a "Help Your Neighbour" scheme for the giving of additional petrol to private motorists, will he please do so at once?
No, Sir. If my right hon. Friend the Minister of Transport wished that, it would be a matter for his Department to raise it with me. I think London is in a special position with regard to the transport problem; in the Provinces the matter is at present dealt with by making additional petrol available for private motorists.
Are we to understand that this question has nothing to do with any arrangement which my hon. Friend himself can make, because that is not the information given elsewhere?
Perhaps my hon. Friend will consult with me afterwards.
War and Peace Aims
asked the Secretary of State for Dominion Affairs whether consultations are now taking place with the Governments of the Dominions with reference to an agreed statement of war and peace aims?
I have at present nothing to add to previous statements of the Government with regard to war aims.
Do I understand that no consultations of any kind are taking place with the Dominions, in spite of the statements to that effect which have been issued?
My hon. Friend must not understand that; we are keeping in the closest touch with the Dominions on all questions with the closest interest.
Limitation of Supplies Order
asked the President of the Board of Trade whether he is considering rationing to ensure a just distribution of supplies, in view of the further cuts in production?
I can assure the hon. Member that the question of securing a fair distribution of any essential goods that may be in short supply is constantly engaging my attention. Action already taken in this matter was explained in a reply to the hon. Member for East Birkenhead (Mr. White) on 26th November. If further action is necessary, it will be taken.
When the right hon. Gentleman says it is right to cut down the size of goods to wholesalers and retailers, will he endeavour to secure just distribution? Is he aware that many of the smaller retailers cannot get their share?
I do not admit that for a moment. The matter is being watched, and, if necessary, we are prepared to take any action to secure that distribution is equitable.
Will my right hon. Friend, apart from watching and, if necessary, taking action, do something which is really useful?
National War Effort
Prisoners (Employment)
asked the Home Secretary whether he will consider the employment of prisoners, at present inactive in gaols or engaged on unnecessary work, on some activities of public service?
With the exception of a small minority of persons who for one reason or another cannot appropriately be put to work, practically the whole of the population of Prisons and Borstal Institutions in England and Wales is employed on Government work, either for the Prison Department, including necessary domestic services, or for other Government Departments. There are no prisoners engaged on "unnecessary" work.
Mobile Labour (Accommodation)
asked the Minister of Labour whether he is aware that the Germans, in using mobile labour, always employ caravans in which the workers live until the job is finished, when they move off somewhere else; whether this policy will be adopted in this country; and whether he will consider investigating the possibilities of such a scheme,
Accommodation in caravans is suitable in certain cases where small numbers of men are employed: this method is sometimes used in this country for men engaged on road construction and repair and might be extended for example to small units engaged on land drainage work in isolated districts. My right hon. Friend is advised however that a general extension of this method is not to be recommended. I may add that the Department is in consultation with the building and civil engineering industries as to the methods of improving the housing accommodation of the workers in these industries, particularly those on remote sites.
Food Supplies
Meat Rationing
asked the Parliamentary Secretary to the Ministry of Food whether it is proposed to have one or two meatless days a week in order to economise on imports?
No, Sir. Any necessary restriction in the consumption of meat can be secured by adjusting the ration and the supplies allowed to catering establishments. As my hon. and gallant Friend is aware, the meat ration was reduced to 1s. 10d. per week from 16th December. A reduction has also been made in the meat allocations of caterers.
Would it not be advisable to compel restaurants and such institutions to have at least one meatless or fishless day a week so as to avoid the necessity of their stocking both these foods on every day of the week in order to give clients an option under the Act?
The whole question of catering establishments is under discussion at the present time.
Will the hon. and gallant Gentleman consider controlling all poultry and game at reasonable prices so that the poorer section of the community can share in the advantages?
At the moment poultry is not considered as a staple diet. All the staple foods are very well looked after.
Although it is not regarded as a staple food, is the Minister aware that some people regard it as a very effective substitute on those days when they cannot get the full meat ration?
The full meat ration is not taken up even now by the population.
What becomes of the meat when there is a good number of vegetarians in any particular district?
asked the Parliamentary Secretary to the Ministry of Food whether, in respect of any rationed food commodity, there is evidence of public disinclination to use the full allocation, and how this affects meat in particular?
With the exception of meat registered customers have, generally speaking, taken up the full amount of the ration. The percentage taken up in the case of meat varies from time to time, but was lower on the 2s. 2d. ration than it was during tile previous period when the ration was 1s. 10d.
Turkeys
(by Private Notice) asked the Parliamentary Secretary to the Ministry of Food whether he has any further statement to make regarding the price of turkeys?
Yes, Sir. My Noble Friend issued recently a statement of the maximum prices to which, in his opinion, turkeys should rise at the peak of the Christmas trade, and stated that if these prices were exceeded he would take action. Information has now reached the Ministry to the effect that the prices to which I have referred are being exceeded, and an Order was accordingly issued yesterday to come into operation to-day giving statutory effect to the prices which had been previously indicated. I will arrange for these prices to be printed in the OFFICIAL REPORT.
What steps is the Minister taking at the same time to prevent the operation of the rule that when prices are controlled the goods disappear from the market in large quantities?
I have expressed the opinion before, and the same applies to turkeys as to onions, that controlling the price will not increase supplies.
Does not it cause them to disappear?
To a certain extent that is true, because it is obvious that if you control the price and the supply is short, the temptation is to deliver the goods to the nearest market at the most profitable price.
Will the Minister control the price of haggis if I put down a Private Notice Question?
What steps is the Parliamentary Secretary taking to control the wholesale as well as the retail price, because I understand that in some cases the wholesale price already exceeds the retail price mentioned by the Minister?
The retail price is the one that most matters as far as we are concerned.
The prices are as follow: Per lb. s. d. Turkeys bred and reared in Norfolk: Not exceeding 18 lbs. in weight 2 10 Exceeding 18 lbs. in weight 2 6 Turkeys bred and reared, in Eire: Not exceeding 18 lbs. in weight 2 4 Exceeding 18 lbs. in weight 2 0 Turkeys bred and reared in Scotland, Wales, Northern Ireland or in English Counties other than Norfolk: Not exceeding 18 lbs. in weight 2 8 Exceeding 18 lbs. in weight 2 4
Victories (Flag Flying)
asked the Prime Minister whether he will arrange for Government buildings to fly flags after any signal victory by sea, land or air; and for the public to be invited on each occasion to do likewise?
Precedents vary, and I find it difficult to lay down rules. I do not recollect that we had any important occasions for rejoicing during the last war, but people seemed quite pleased about the way it ended. I think now we had better see how we get on. The battle of Libya is still in progress.
Detention of a Member
asked the Prime Minister whether he will consider moving to appoint a Select Committee of the House to consider, if necessary in secret, facts in the case of the hon. and gallant Member for Peebles and Southern (Captain Ramsay) arising out of his detention under Regulation 18B of the Emergency Powers (Defence) Act and to report to the House their conclusions and recommendations?
No, Sir. The facts of this case have been fully investigated by the Advisory Committee appointed under the provisions of the Regulation in question, and I do not think any further investigation is called for.
Would the Prime Minister be prepared to consider representations on this subject from his supporters in different parts of the House.
I am always ready to consider representations, but I think this matter has been very carefully weigher1 by the House through its proper tribunal. I share entirely the feeling of abhorance at these exceptional procedures, but they are exercised under the authority and supervision and approval of the House of Commons.
Sir Robert Vansittart (Broadcasts)
asked the Prime Minister whether the recent broadcasts by Sir Robert Vansittart were made with the approval of His Majesty's Government; and whether the declared policy, that this country desires nothing humiliating to the German people, has been changed?
Many interesting points of view are put forward in our country from time to time without His Majesty's Government being committed to them, and this principle of free discussion within the limits of the law has the approval not only of the Government but of Parliament.
Arising out of that reply, is it not true that Tacitus described the Batavi as head of the German tribes, and is it not true that Sir Robert Vansittart is a descendant of the Batavi?
I think that is a very uncalled-for remark about a man who has had the root of the matter in his hands throughout this great controversy.
Arising out of that further answer, are not the Germans, in fact, much more our hereditary friends than anyone else?
Can the right hon. Gentleman say who selects the speakers? Is it the B.B.C. or the Minister of Information?
The general authority must rest with the Minister of Information. Of course, tastes differ in these matters. It is impossible to give transmissions which please everybody or suit every audience by which they may be heard, but I think a difficult task is being discharged with considerable success.
Is it not necessary and desirable that the German people should suffer the humiliation of defeat?
Let us be content if they suffer defeat.
Does not the Prime Minister appreciate the great difference between a private individual making a statement on the B.B.C. and a diplomatic adviser of the Government?
Yes, Sir, there is undoubtedly a difference, but the policy of the Government is declared by responsible Ministers.
Is not the solution to have a greater number of alternative transmissions with wave-length space for a greater number of speakers, thereby a greater number of opinions being expressed, reducing the importance of any particular one?
Will the Prime Minister at least consider allowing one broadcast to be given by a prominent individual who takes just the opposite point of view, so that the public could hear the great advantage to our war effort by announcing the exact opposite of the policy?
I think we are getting far away from the original Question.
National Finance
Old Age Pensions
asked the Chancellor of the Exchequer whether he is aware that a married couple aged 75 years and 74 years, who have found refuge from air raids with friends in the Isle of Man, are unable to draw their old age pensions; and whether he will draft a regulation or introduce legislation to make such payments possible, with retrospective effect?
The Old Age Pensions Act, 1936, provides that a non-contributory old age pension shall not be paid to any person unless that person is in Great Britain, and there is no provision under which a non-contributory pension can be paid to a person in the Isle of Man. Legislation would therefore be necessary, and I am afraid I cannot see my way to introduce this at the present time.
Does the right hon. Gentleman think that septuagenarians, especially female septuagenarians, should be encouraged or discouraged to go to the Isle of Man?
Would not the allowances be payable to them if and when they return?
I think there is an account of that.
asked the Chancellor of the Exchequer what increase would be necessary to bring the value of the old age pension to the equivalent purchasing power of November, 1938 and 1939; and the total cost to the Exchequer of making such an increase?
The cost of living at November, 1940, exceeded that at November, 1938, by about 23 per cent., and that at November, 1939, by about 13½ per cent. Corresponding increases in a pension of 10s. would be about 2s. 4d. and 1s. 4d. respectively. The gross annual cost of increasing by these amounts all old age pensions now in payment would be about £18,750,000 and about £11,000,000 respectively. As the increase would reduce the needs of pensioners in receipt of supplementary pensions and so reduce the cost of supplementary pensions, and as an increase, in the amount of contributory old age pensions would raise the question of an increase in the rate of contribution, no precise answer can be given to the last part of the Question.
Gold Holdings
asked the Chancellor of the Exchequer whether he can give the approximate value of gold, other than bank and Government stocks, platinum and jewels, held in this country by wholesalers, retailers, and private persons?
No, Sir. From the nature of the case, it is not possible to given even an approximate estimate.
Purchase Tax
asked the Chancellor of the Exchequer whether his attention has been called to the fact that on many branded articles sold by chemists the tax has to be paid partly or wholly by the retailer, who is unable to pass it on to the consumer, since they must be sold at stated prices; and, as the retail chemists have not been consulted in the matter, whether he will take steps to remedy this grievance?
I have been asked to reply. No, Sir. I am not aware of any ground for grievance in this respect. If my hon. and gallant Friend refers to regulation under the Prices of Goods Act, there is nothing in that Act to prevent a retailer from raising the price of an article, whether branded or not, by the amount of Purchase Tax which he has actually paid on it.
asked the Financial Secretary to the Treasury why wholesalers are now charging retailers Purchase Tax at 33⅓ per cent. on babies' bonnets, babies' gloves, babies' bibs, boys' ties, scarfs, braces and belts, in view of the fact that consumers were under the impression that all children's garments were exempt from this tax?
The exception in favour of young children's clothing is limited to garments and footwear and does not apply to headgear, gloves and haberdashery, which are chargeable with tax at the full rate. Babies' bibs are regarded as garments and are not chargeable with tax.
Is the right hon. and gallant Gentleman aware that consumers in this country feel that they have been deceived because, when we passed that Act of Parliament in this House, we thought all children's garments would be exempted from the tax?
So garments are.
Does the Minister not think it perfectly ridiculous that, in a child's set for four or five years of age, the pantaloons and jacket are exempted from the tax, while the hat, which belongs to the same set, is taxed? Is he aware that in Scotland this is a very severe handicap for children?
I am sorry to hear that it is a great handicap for anyone, but, of course, Parliament discussed this at great length only a short time ago.
Is the right hon. and gallant Gentleman aware that a promise was received that children's garments would be exempted?
How can the right hon. and gallant Gentleman justify the taxing of boys' braces and leaving the trousers untaxed?
asked the Chancellor of the Exchequer whether he is aware that certain retail houses, who are purchasers of goods chargeable with Purchase Tax, have notified their suppliers that, while they will pay for the goods within the normal period, they will remit the appropriate amount of tax separately, and only at quarterly intervals; and whether, in view of the fact that the suppliers are acting as his agents for the collection of this tax, and that this practice will greatly increase the amount of work in which they are involved at a time when clerical staffs are much depleted, he will issue instructions that the tax must be paid at the same time as payment is made for the chargeable goods?
I have been informed that this is occurring in some cases. It is a matter which must be settled between seller and buyer and I have no power to intervene.
Is not my right hon. Friend aware that manufacturers may be caught very badly while collecting taxes for the Government, and would he not consider the issue of an order such as I have asked for in my Question, because it is obvious that between the time the goods are sold and paid for and the time the tax is collected things may happen by which the manufacturer may be left to pay the tax without any chance of recovering it from a person whose premises have been put out of action, or who has gone out of business?
I have no power to make such an order, but I understand that many traders are taking effective steps to insist that payments are made in full.
What power has the manufacturer to compel payment?
Royal Air Force (Ground Personnel)
asked the Secretary of State for Air whether there are any steps which can be taken to give practical recognition to the outstanding work of the ground organisation staffs of the Royal Air Force; and whether he will consider the advisability of instituting a meritorious award for this class of service for which commissioned and non-commissioned ranks would become eligible as occasion arose?
Ground personnel of the Royal Air Force are already eligible for awards for meritorious service, and 82 such awards were made to them on the occasion of the King's Birthday this year. I think, therefore, that the existing arrangements are adequate to ensure due recognition of the devoted and valuable services of the officers and airmen concerned.
Aluminium (Domestic Hollow-Ware)
asked the Parliamentary Secretary to the Ministry of Aircraft Production whether the restrictions on the sale of domestic hollow-ware made wholly or partly of aluminium may also be taken as indicating an intention to commandeer existing supplies of these articles in the shops?
No, Sir, we do not at present intend to requisition from retailers domestic hollow-ware made of aluminium.
Are we taking advantage of all the light alloys which the Germans bring over and precipitate in our fields?
We are taking considerable advantage of these already. They are being melted down quickly, and we have quite a substantial tonnage of output.
Is the Minister aware that his Department is taking advantage of nearly everyone?
Business of the House
May I ask the Prime Minister whether the Means Test Bill will be available before we reassemble after the Christmas Recess?
I am afraid I cannot say that.
Conduct of a Member
Ordered,
" That the Minutes of the Proceedings of, and the Minutes of the Evidence taken before, the Select Committee on the Conduct of a Member in the last Session of Parliament be laid before this House."—[ Colonel Gretton. ]
Procedure on Public Bills
Ordered,
"That for the remainder of the present Session the following provisions shall have effect as respects public Bills:
Orders of the Day
War Damage Bill
Order for Second Reading read.
I beg to move, "That the Bill be now read a Second time."
I think it can be said that this Measure has been generally welcomed. We shall certainly desire to review it carefully and to avail ourselves fully of the assistance of Parliament in finally framing the exact provisions of this scheme, but I do not think there will be any differences as to either the desirability or the main objects of the Bill itself. Indeed, the formulation of these proposals is one more practical manifestation both of our confidence and capacity to deal with the use to which the enemy is putting the air war weapon—and thus further to defeat his hopes of destroying or shaking our solid and united community. The main object of this Measure is to provide full security provision against war damage to property and goods, the greater part of which by far consists of damage to dwelling houses, churches, chapels, civilian hospitals and similar hereditaments, because as Herr Hitler said the other day, it was impossible for him to bomb accurately by night and, as the world knows, he has failed generally in his attempts by day.
This scheme is not only a considerable measure of benefit and relief to owners of property—both large and small—but is of great value to the State itself. It helps to restore assets of vital importance to our national economy and assets in which practically every section of the community has a considerable stake. It means much not only to the owner of the destroyed or damaged home, business premises or factory but is a necessary support of credit and economic security which concerns the whole Nation. It is in these circumstances that the scheme is based not only on immediate and substantial contributions by owners of property themselves but in certain events on the direct support of the National Exchequer itself.
Out of evil good may come, and this Measure will not only enable us to do justice by securing that the burden shall be shared between those who suffer and those who are fortunate enough to escape damage to their property, but to see to it that our wounded cities, districts and houses are restored again with a wider vision and in more enlightened ways, by the avoidance of those ill-conceived and' haphazard methods which unfortunately were an unhappy feature of much of our pre-war building. We have to rebuild; let us rebuild well. I have just said that so far as individual owners are concerned we desire to see the burden justly borne. It is another principle of this Measure, with which I think the House will also agree, that all must stand together so far as the rate of contributions is concerned; that it would not be fair or right to vary them according either to sectional interests or as to particular parts of the country where property may happen to be situated. I may say, as I shall explain later, that the special rate for agricultural property represents no departure from this principle.
We have given some time to the preparation of this Bill; it concerns vast interests as well as being of moment to almost every one of us. It affects property which, as regards buildings alone, has been variously estimated at the value of between £6,000,000,000 and £8,000,000,000, apart from land which we have decided shall also be the subject of restoration and compensation. There are, indeed, structures of many kinds not limited to dwelling houses, offices and factories; they include such installations as railways and roads and pipes, and wires both above and below ground. All of these have to be considered and provided for. There is also our system of land tenure, perhaps as complex here as in any country in the world. All these are subjects which give rise to considerable complexity in framing a scheme in wartime, and especially one which must be put at once into operation, be of general application and at the same time fit in as far as possible with the immense variety of special cases which must obviously arise. What we have to find in these circumstances is a scheme which in the main affords substantial relief and at the same time provides a means by which contributions are made to ensure, if not precise, substantial justice between individuals and also conforms to the national interest.
We first looked at two proposals which on the face of them would appear to be attractive. The first was based on a logical view that the contributions, like the compensation, should be related directly to the capital value of the property, and should take the form of a percentage of that value, which at one time we thought we might adopt. But we had to reject it for the simple reason that it involved either a valuation during the war of all properties in this country— numbering some 13,000,000—which is obviously impracticable, or the postponement, equally undesirable, of a settlement of the contributions until a long time after the end of the war. It was clear that we could not provide an immediate workable scheme on these lines. Another alternative was to base the scheme on existing fire policies—to pay compensation up to the amount of the fire insurance policy on a property and to require payment of premiums to that amount.
Again, I almost say I regret to say, there are insurmountable objections to such a plan. In the first place some of the properties that we desire to cover under this scheme are not insured against fire, such as land, embankments and other earthworks. Again, the values for fire insurance are fixed by the insured themselves. Some, properties, undoubtedly, are over-insured, whilst others are under-insured, and a compulsory scheme, especially one which also involves the payment in certain events of State money, could not be based upon such uncertain factors. Further, the existing fire insurance premium, as we know, is often paid by someone who is not substantially interested at all in the capital value of the property, but who is required under the terms of a lease or other legal contract to make this particular payment. It was, therefore, plain that such a basis would not be fair or practicable for a compulsory contribution of the character and extent involved in these proposals.
It was in these circumstances plain that in any scheme of compensation which was to come at once into operation compensation and contribution could not be related as they are in ordinary insurance. Certainly, so far as contribution is concerned, the main requirement is a simple, familiar and readily available basis which at any rate will provide a workable scheme. Whilst it is obvious that there is no perfect solution, such a basis is afforded by the net assessment of properties to Schedule A Income Tax or, where such assessments do not exist, net annual value for rating. It may be said that such a contribution is not scientifically related to the capital value or nicely calculated as between one individual and another, but it does, I suggest to my turn. Friends, adopt a known and well-tried system and on this basis provides, by and large, a substantial and adequate contribution from property owners as a whole—that is, in effect, from the section of the community who will receive the payment of compensation.
As appears from the terms of the Bill the amount of contribution has been fixed at 2s. in the £ for each of five years to cover the period from the beginning of the war to 31st August next, when the whole matter will again be reviewed and determined by Parliament. In the case of agricultural properties, the rate is fixed at 6d. in the £ in recognition of the fact that so large a proportion of the annual value is attributable to the land rather than to the buildings. This rate may be taken as, broadly, equivalent to the 2s. paid on other properties. Some may say that these contributions are too heavy, even though payment is to be spread over five years. But, according to the provisions of the Bill, if the damage is less than the estimated produce of the contributions, Parliament will be asked to ensure that any excess of the contributions is used for the benefit of the property-owners—in some such way as by giving credit for them in any future risk period. If these contributions are too small, then the State is to give assistance.
It will be remembered that the Prime Minister foreshadowed in his statement in October last that the Government would, itself, contribute towards the cost of compensation in case of need. Under the Bill the rate of contribution I have mentioned, is a provisional rate. I will ask the House to assume that it yields £200,000,000 and that the total compensation payable exceeds that figure—the Exchequer ~ will then meet the excess up to £200,000,000. If the total compensation were to exceed £400,000,000 the excess would be provided, half by the Government and half by an increase of the contribution. Ordinarily, the contributions will be col- lected from the person who was the landlord on the previous 1st January. If the occupier on 1st January is the freeholder, or a long lessee, he will be the person liable, but the person to pay is not necessarily the person to bear the whole cost for there are often several interests in a property to be considered, and provision is made for joint contributions which we can consider in greater detail when we come to the Committee stage of the Bill.
I would add a word upon that because I have seen some comments on it and received one or two letters in connection with it. Such contributions are in the nature of a capital liability and they will not be allowed as an expense for the purposes of income tax, national defence contributions or excess profits tax. Compensation against war damage is a necessity if the capital asset is to be preserved and the liability to contributions is such that it could not fairly be computed to be paid out of income. Apart from this consideration, if deduction were permitted, it would mean that w should, in fact, have to put up the rates of contribution under the various schemes, in order to secure the necessary net total sum from owners of property.
There is another matter which has been the subject of public interest. Contributions will not be collected in any case while the property is uninhabitable by reason of war damage. If there is a total loss and a value payment is to be made, the amount of the contribution will be deducted from that payment. I would like to say a word about the apportionment. We have provided in the Bill that weekly, quarterly and annual tenants and indeed all tenants for terms of seven years or less will pay nothing. For longer tenancies and for ground leases the contribution will be divided between the tenants and the freeholders according to a table which will be found in the Bill based on the length of the unexpired term of the tenancy and the proportion of the rent payable by the tenant to the total annual value.
I now turn to another important aspect of these proposals and that is the question of contribution by mortgagees. There are the cases, and they are very numerous, where small houses in particular have been purchased by borrowing on mortgage whether from a building society or otherwise. That is one of the features of our national life to-day. I have given consideration to the whole question of contributions by mortgagees and there are undoubtedly, I say at once, a number of conflicting factors in relation to which I have endeavoured to reach a reasonable compromise. I do not propose to deal with all mortgages but only with those granted for the acquisition of a particular dwelling-house or farm, and not any kind of dwelling-house or farm but one with a Schedule A assessment not exceeding £100 and £250 respectively. Generally, it may be said that these mortgages—and this is why I make this distinction—represent a large portion of the value of the property and the relations of mortgagor and mortgagee are, in effect, comparable to those of a long-term tenant and landlord. They are not like other mortgages, for instance, which are a floating charge on a number of other assets. Therefore, I propose that in cases mentioned in the Bill, if the mortgage exceeds one-half the pre-war value of the interest mortgaged but does not exceed three-quarters of that figure—the mortgagee shall hear one-third of the contribution, and if it exceeds three-quarters of the pre-war value of the interest mortgaged, the mortgagee shall bear two-thirds. These figures are arbitrary, but I think, on the whole, this can be regarded as a fair arrangement between the parties, by which those concerned bear a reasonable allocation of the payments.
I am proposing that contributions should not be levied on charities in respect of properties such as places of public worship, hospitals and alms-houses, while charitable institutions for the advancement of education, science or research will be charged at one-third of the normal rate for buildings in their occupation. In these special cases of charities, the right to compensation paid by the State will not be absolute, but we shall confer with the authorities concerned with a view to reaching a reasonable solution of their difficulties and providing a fair settlement. It might be possible, for instance, in the case of religious bodies, to agree to meet their needs by a total sum which need not be applied for replacing exactly what has been destroyed or for rebuilding on the same site—and many cases will occur to my hon. Friends. In fact, I suggest to my hon. Friends who are here this morning that much positive advantage may be obtained if a wise use is made of the opportunity which now offers in all these cases.
I now turn to the important question of the payment of compensation. It will be made in respect of all war damage during the first two years of the war. If one views an area on which bombs have fallen, it is, I think, remarkable how few have been the buildings completely destroyed as compared with the number of the properties which have been partly damaged, and among the damaged properties, those slightly damaged greatly preponderate. The number of cases of comparatively minor damage costing less than £50 to make good on our claims to date is a large proportion of the whole. Therefore, cases requiring repair will preponderate over cases of total loss. In the cases of property which is damaged but not destroyed, it is proposed to make a payment of "costs of works," and the exact time of payment will depend upon the availably of labour and materials. Temporary first aid will continue to be provided for where possible at once, but generally the provision of labour and materials will depend on how urgent, from the national point of view, is the repairing or rebuilding of the damaged property. If the work is of sufficient urgency to justify the allocation of the supplies necessary to carry it out, compensation will be paid as and when the work is executed; otherwise payment will be deferred, and the decision as to payment will rest with a new body— of which I will say something in a minute or two—the War Damage Commission, which, subject to Treasury direction, will control the payment of all compensation.
In deciding whether compensation shall be paid at once in any particular case, the Commission will act on the advice of the Departments, which, each in its own sphere, already license or authorise the execution of war damage; namely, the Board of Trade, the Ministry of Works and Buildings, the Ministry of Agriculture and the Electricity Commission. The major consideration in this matter must be the necessity for assuring that labour and materials are expended during the war on essential buildings, machinery and plant.
There are, of course, as we know, buildings where the damage is so serious that they are not worth repairing, and they must be regarded as a total loss. In these cases, the owners will be paid the estimated value of the building before the war. Thus, every owner of a damaged or destroyed building will receive, at such time as is in conformity with the national interest, his actual cost of repairs, or in the alternative he will receive its pre-war value in cash. As a general rule, the cost of works payment will be made where it will not exceed the value of the property after the works are executed, but costs of works will also be paid if it is in the national interest that the building should be replaced during the war. In other cases, a value payment will be made.
Now I will call attention to something which I have seen much discussed publicly during the last few days, the differentiation which is made—if one may use the term—in one particular respect with reference to these two matters. The costs of works payment will cover the cost at the prices ruling at the time when the work is executed. The value payment will represent the value of the structure as at 31st March, 1939. That distinction, is, in fact, I suggest, based upon valid considerations. The purpose of the value payment is to provide the former. owner with the value of the destroyed property. The natural thing would have been to give the value calculated at the time of the occurrence of the damage, but that is impracticable because of the absence of stable prices in war-time. Therefore it appears to us that the choice lies between taking post-war value and pre-war value. Of course to wait until settled post-war value could be established would mean such a delay in the settlement of claims as I do not think could be justified. Therefore it appeared to myself and to those who were associated with me in framing the Bill that the pre-war basis was the best and only practicable one that we could take.
In cases of total loss, the payment cannot be made now, when it is necessary to restrict private expenditure as much as possible, but it will be made after the war when that necessity will have disappeared. Meanwhile, interest will accrue at 2½ per cent. It follows, as in the earlier part of the Bill, that the value payments will be divided between various interests in a single property by reference to the capital values of the respective interests, with special provision for special cases, as is set out in the Bill.
There is a very important exception, to which I would now refer, in connection with these general conditions. Apart from first-aid repairs and urgent repairs to essential buildings, we are making in the Bill certain important exceptions to the general rule that compensation payments will normally be made after the war. There will be cases where people clearly entitled to receive compensation under the scheme for damage to their house or business premises, and "who are in need of funds, may desire to make provision for themselves and their families by either buying or renting other premises. Provision will be made for making advances in such cases up to a limit of £500 against the compensation ultimately payable. By this means we shall be making immediate provision for many. It will enable them to obtain a home once again, and in a number of cases also they will be able to continue their business, and by this means and under this particular provision we hope to re-establish themselves and their families.
There is one lacuna in the Bill to which I must refer. Clause 30 refers to public utility undertakings, railway, dock, gas, electricity and water undertakings. In effect, under this Clause provision is made for the application of the scheme to these undertakings at a later date. Provision is made for advances to them in the interim towards the cost of urgent works of reparation. I much regret that it has not been possible to deal fully with these undertakings in the present Bill. I know to many of them, and especially to the railways, it may be a serious inconvenience, but we shall do our utmost, in consultation with those concerned, to expedite the presentation of our proposals to Parliament. We shall, of course, provide in such a scheme that these undertakings will make suitable contributions, as may be determined hereafter by Parliament, and will receive appropriate compensation.
I would like to say a few words about the new body we propose to set up, the War Damage Commission. Much work under the Bill will rest upon other Depart- ments such as the Board of Inland Revenue who will collect the contributions; and in the fixing of values for compensation the services of the Valuation Office will be used. But, of course, it is apparent that to ensure the smooth working of the machine and to manage the whole business and other arrangements which do not fall within the ambit of any Department, a new organisation is required. I have in mind in the first instance a body of four or five persons who will generally command public confidence and be able adequately to deal with the many problems that must arise. I hope to be able to announce the composition of the Commission during the passage of the Bill in this House. The Commission will act under the directions of the Treasury. This, of course, places the Commission under the direction of the Chancellor of the Exchequer, who thereby becomes the Minister responsible to Parliament for its acts. It also ensures that the Commission's decisions shall be in conformity with the National interest and that it acts in close co-operation with other Departments.
Now I turn, and I propose only to refer briefly, to the other parts of the Bill, as my hon. Friend the Parliamentary Secretary of the Board of Trade will speak more fully on these matters in the course of the Debate. The other classes of property which it is intended to bring within the scope of insurance by the State are dealt with in Parts II and III of the Bill, and comprise roughly movable plant and machinery as well as fittings and equipment used for the purposes of a business, which are provided for in what we call the business scheme; the furniture, clothes and other private effects of the private householder which are provided for in the private chattels scheme; and certain limited classes of goods which have, for one reason or another, been excluded from the Commodity Insurance scheme, to which they would otherwise naturally belong. The new schemes will be operated by the Board of Trade, and, as in the case of the Commodity Insurance scheme, policies will be issued by the fire insurance companies and Lloyd's. Of course, it is obvious that elasticity in administration is essential to meet varying difficulties which will inevitably arise. For this reason, following the precedent of other forms of War Risk Insurance, like the Commodity and Cargo schemes, the details and conditions of the schemes will be prescribed from time to time by administrative orders, the more important of which will be laid before Parliament. Under the business scheme, it is proposed to fix the premium at 30s. per cent., for the period up to the end of September, 1941. To ease the burden, payment will be spread over three periods for each of which a policy will be issued at the rate of 10s. per cent. Insurance will be compulsory where the value of the goods falling within the scheme exceeds £1,000: below that, it will be optional. Insurance must be for the full value for the time being of the goods covered. Where the goods destroyed or damaged can and should in the national interest be replaced or repaired, payment will be made immediately following assessment; in other cases, it will be deferred and interest at 2½ per cent, will accrue.
Agriculture has required special treatment. It is of national importance that funds should be available to replace losses to farming implements or stock due to enemy action. Except in the smallest cases the farmer will be required to insure up to a limit of twice the Schedule A value of his farm; above that limit insurance will be voluntary. Because of the lower limit of insurance, he will be given a first-loss policy; that is, he will receive full indemnity for any loss up to the amount for which he has insured without any question of average arising. Agriculture, as we know, presented special difficulties under the Commodity Insurance scheme, and livestock and agricultural products on the farm were excluded from insurance under it. These products will remain uninsurable under that scheme and will be brought within the ambit of the Business scheme. A farmer will thus be enabled to insure not only his movable plant and machinery, but also his livestock, his growing crops and other products on the farm at the rate of 30s. per cent. For private chattels, it is proposed to fix the premium also at 30s. per cent.; annual policies at that rate will be issued, valid for one year from the date of issue. Insurance will be voluntary; there will be a limit for each individual of £1,500, with a further maximum allowance of £500 for motor cars or motor cycles. Payment will be made at once where necessary to avoid undue hardship; in other cases, it will be deferred and interest at 2½ per cent, will accrue.
I may add that we have made this a voluntary scheme because it would be inequitable and quite impracticable to found a compulsory scheme upon existing fire insurance valuations chosen at the instance of the person taking out the insurance. And it would be equally impracticable to check or amend in war time figures of this kind. Again, while a compulsory State-aided scheme may be regarded as appropriate for the purpose of supporting the economic structure and productive capacity of the nation, this consideration would not apply in the case of furniture and personal possessions. It was therefore considered right to make available a scheme whereby those who wished to do so could in fact insure at a reasonable premium.
Of course, the existing scheme of free grants to persons of limited income for essential furniture and clothing will be continued.
There remain the goods which have been declared by order of the Board of Trade to he uninsurable under the Commodity Insurance scheme in its present form. To complete the general picture, it is now proposed to give the Board of Trade power to make insurance under the Commodity scheme in respect of any class of goods voluntary. Mutual insurance schemes will be prohibited from insuring against war risks except in respect of property or loss not covered by the Bill or the War Risks Insurance Act, 1939. Or in respect of goods which, though otherwise falling within the Commodities Insurance scheme, are not compulsorily insurable under that scheme.
I would finally point out that all the provisions for payment of compensation under all these new schemes—Parts I, II and III of the Bill—are retrospective; thus those who have already suffered will obtain the full benefit of its provisions, subject to a deduction of the appropriate payment, as will any who may suffer before this Bill becomes law. I think we are completely covering all those who have unhappily suffered before this scheme came into operation as well as those who may have to suffer in the future. I thank the House for the attention they have given me. I claim for this Bill that it is a security Measure of the first order. Other more scientific and ideal proposals may be can- vassed, but I believe they are either impracticable or make for intolerable delay which could not be suffered to-day. This Bill is not only a necessary Measure, but I hope and believe that with the assistance of the House—I emphasise that—it will prove to be a workable and convenient one.
Certainly I think we can justly say that no country, unless it was confident of victory and particularly of the defeat of the enemy in the air, would proceed with these proposals—which instead of hitherto rather vague assurances now provide definite guarantees and payments by the State to those whose property has suffered or may suffer from enemy air attack. This Bill is certainly an instrument of justice and an act of social solidarity, and it may well prove to be one which will play an important part in securing not only rebuilding but that better reconstruction and replacement on which we are all determined.
My right hon. Friend has pointed out that under Part I of the Bill contributions would not be allowed as an expense in respect of taxation because they were in the nature of a capital liability to preserve a capital asset. May I ask him how he distinguishes these contributions in this respect from ordinary fire-insurance premiums?
I will ask one of my colleagues to deal with any points that may arise.
I feel that I am expressing the opinion of the House as a whole, as well as my own, in offering congratulations to the Chancellor of the Exchequer and to the Government of which he is an ornament for introducing this courageous Bill, whose importance it is difficult to exaggerate. I believe that the Bill, in the main, is on sound lines, and I believe that after careful examination, and possibly Amendment at a later stage in this House, it will make its way to the Statute Book and be of infinite value to this country. But I am bound to say that I am going to start my discussion, not with a criticism of the present Government or of my right hon. Friend, but with a word or two with regard to the lack of prevision on the part of the previous Government. The introduction of this Bill ought not to have been left until to-day; it ought to have been introduced 15 months ago, and it ought to have been prepared and got ready in one of the pigeon-holes of the Treasury two years ago, so that when the war broke out—as almost everyone knew it was going to do—it could have been one of the first Measures put forward. This is not a question of being wise after the event, because one of the things that was almost certainly expected by everyone was that there would be bombing from the air if and when there was a war, and a great many of us were, from the very beginning, most insistent that some measure of this kind ought to have been brought in and carried through the House of Commons. It is quite true that the Weir Committee very shortsightedly turned down the idea, but I cannot omit from censure the Government of the day, which so completely failed to understand what the country would require.
I want to pause a moment to consider what were the reasons which prompted that decision—that very wrong decision, as I hold it to be and as, I believe, the Chancellor of the Exchequer and the present Government, and probably the whole House, also hold it to be. It was said that because the damage that might be inflicted would very likely be very considerable, it must therefore be allowed to rest where it fell. That was, of all reasons, the most preposterous. If the damage had been so small that any person on whom it fell could reasonably bear his particular share of it, that might have been a reason for not thinking it worth the State's while to deal with it, but not because it was so great that somehow or another the community was to be served by allowing the unfortunate individuals on whom injury fell to bear the whole of it themselves. This decision is one which I have felt has very wide ramifications, because in olden days the idea that the community was not responsible in any way for individuals was widely held. It was held with regard to unemployment. It was held with regard to accidents to workpeople. Gradually we have come to see that we are essentially one another's keepers in these matters, and that we cannot allow people who are injured through circumstances over which they individually have not full control to bear the full burden of their individual losses. The community has, therefore, stepped in. It is stepping in to-day in this matter, and it will have to step in more and more under the complicated system of modern society to meet the immediate dangers to which the individual becomes liable.
This is a very complicated Bill. In spite of the full description of it which the Chancellor of the Exchequer has given, I doubt whether anyone in this House understands all its details. Certainly, I do not myself. But, broadly speaking, I believe that the House regards the Measure as sound. With regard to the finding of the money, the proposal of the Bill is that first recourse should be had to those who have an interest in land and buildings. That, I think, is a sound proposition. It is in keeping with the traditions that we have followed up to now, at any rate, that the class of people who have to suffer the damage should between them bear the burden. There is one idea that the House should put on one side. That is that those people who are fortunate enough not to have suffered any damage will, from a pecuniary point of view, benefit from the destruction of the property of their competitors. Take the man who has dwelling-houses. Quite clearly, the destruction of a number of dwelling-houses will—subject to anything that Parliament may do about it—tend to increase the value of those dwelling-houses which are still intact. That applies still more in the case of business premises.
No benefit will accrue to the owners of working-class dwellings which are rent-restricted and which will continue to be rent-restricted.
I quite appreciate that, and I allowed for it by saying, "subject to anything that Parliament may do about it." I have said that, on the whole, the reasons why, in the first instance, recourse is to be had to the owners of property are sound. But the Bill does not confine itself to that. It proposes that if the money which is provided from the premiums of the property-owners is not sufficient, the Government shall step in and put up an equal gross amount; and that if that is still insufficient, the two parties shall go 50–50 in meeting further liabilities. That corresponds, by a somewhat inverted method, to the relationship of the preference shareholder and the ordinary shareholder. The preference shareholder takes a certain amount per cent, to start with, then the ordinary shareholder comes in, and then there are arrangements by which both receive equally any further accrued profits. This is an inversion of that method, because in this case it is not a question of receiving money, but of paying money out. We have to be clear that these amounts of money which are to be got in by this Bill are not based in any sense on an estimate of the damage likely to be incurred.
As I understand the Bill, it applies at the moment only to damage created up to 31st August next year. It deals with the two years from the commencement of the war, at the beginning of September, 1939, up to 31st August, 1941. I am not very clear about what happens if the war goes on after that date and further damage is done. It is perfectly clear that whether the war ends before 31st August, 1941, or not, if the total damage is under £200,000,000—or whatever the figure may be—the whole cost of the compensation comes out of the pockets of the property-owners. On the other hand, if, even prior to 31st August next year, the damage exceeds £200.000,000, the State is called upon for a contribution. But suppose that, up to 31st August next year, the damage falls short of £200,000,000—say, it is £150,000,000—and that after 31st August it continues to rise, until it exceeds £200,000,000, does the State under this Bill pay any money or not? That, no doubt, will be explained later. I understand that if the war continues, then we are to have another Bill. But we are entitled to know whether the State will pay under this Bill for any damage in excess of £200,000,000 assuming that that excess damage does not occur until after 31st August.
It is worth noting, in order to focus our minds on what people are really being asked to pay, that this payment of 2s. per cent, of the annual value is an annual payment continuing for five years, whether the war ends to-morrow or two or three or five or seven years hence. So far as this Bill is concerned, there is to be an annual payment of 2s. on every £100 of annual value for each of the five years. That is a total payment of 10s. in the £ on the annual value. I think most people will be glad to have themselves secured on that basis, although it is a considerable amount to be called upon to pay. The next point that arises is the method of assessment. I think that we all agree with the Chancellor of the Exchequer that this Schedule A basis is not ideal; it is not theoretically sound. I think that the need for adopting that method arises from the persistent objection of proprietors of land over a great number of years to anything in the nature of a valuation of their land and property. Whether that springs from the difficulties of the case or whether they fear that it may tax them if there is such a valuation, I do not pretend to say at this moment. What is certainly the fact is, that we never had this valuation, though many of us have often suggested that it should take place. At one time there was an actual Act of Parliament which imposed it, but it was rescinded before the valuation had actually come into effect. I am interested to see that, failing that valuation, the Schedule A method was the natural method to adopt and that it has been adopted. I may mention in passing in that respect that when I was talking, both before the war and after the war started, about a capital tax, I admitted quite fairly that it would have to be calculated on a Schedule A basis, as far as land was concerned, if it was to be collected during the war without very serious delay.
The next thing is the apportionment between owners, and, broadly speaking, I think that the scheme of the Bill is a sound one, but that is a matter more for Committee than for Second Reading. We then come to compensation. As far as I understand the Measure, there are two separate points. There is the point whether compensation should be paid at once or whether it should be postponed until after the end of the war; and there is the question of whether payment should be made on a cost-of-works basis or whether it should be on a value basis. Those two are to some extent separate criteria. To a large extent, no doubt, where the rebuilding is postponed until after the war it will be the value payment, and where it is done at the time it will tend to be on die cost of the work. But I do not think that the two criteria are actually conterminous. I think they will be to some extent separate.
One of the questions I want to put—and possibly the Law Officers may give me a careful answer later on—is, When the payment is not immediate, does the promise of the Government in any way create a negotiable security? What I imagine is this: A man has his property destroyed. It may be his business or house or a house in which somebody else lives, and at the same time there may be nothing, certainly no cash, and a great many outgoings to pay. The Government may, under this Bill, in certain circumstances, find a certain amount of ready money, but it may not be enough for what he wants, and he may naturally go to his bank and ask for an advance. I want to be clear whether the bank will be able to give him an advance on the strength of the promise in this Bill. They may say that it is not desirable that a lot of cash should be going about, but it is a matter which I have envisaged from the beginning of this scheme, and perhaps I may receive an answer in the course of this Debate. Is the promise of the Government in any sense a negotiable security? If it is not, is it anything upon which a man can raise money, a kind of post obit as it were? My right hon. Friend the Member for Horsham (Earl Winterton) asks whether certificates are to be issued. Is there any document which a, person can have?
There is only one thing more on the question of payment. As I understand the scheme, in certain cases there will be what the Bill or the explanation calls first-aid and the question of immediate replacement if it is in the national interest. I hope that the Commission will come to its decision fairly rapidly on this matter. If there is need for first-aid and replacement, it ought to be decided as soon as possible. I hope that it will not be put off month after month while the Commission is doing something else and that in the end, after perhaps 15 months, it will be decided that the building ought to be replaced at once and that they should then begin to get on with the job. There has been a great deal of that kind of thing hanging about during this war all through the country, and I hope that the-Commission will have adequate machinery to enable it to make that decision promptly and to carry it into early effect.
I would like to say a word about charities and public utilities. Charities as a whole may congratulate themselves that they 'have been very generously treated under the Bill, because in their case it is practically heads they win and tails they do not lose. They do not have to pay any of the contributions which owners of property have "to pay, and they are to get, if not the whole, at any rate a considerable part of, the benefits conferred by this Bill. But I cannot quite understand, if they are to be treated so well, why the National Trust of England and the National Trust of Scotland are excluded. No doubt there will be some explanation of that forthcoming. With regard to public utilities, when the schemes which the Chancellor of the Exchequer adumbrates are brought forward they will have to be very carefully scrutinised at the time to see that they are fair both on the one hand to the public utilities and also on the other to the community as a whole.
I pass to Part II of the Bill, dealing with business goods and furniture. I thought I understood it, but what the Chancellor of the Exchequer said rather made me wonder whether I did. The principles of the payment of insurance under Part II of the Bill are entirely different from what they were under Part I. Part I, as I have already said, is the payment of 10s. in the £ spread over five weeks, which covers the insurance up to 31st December, 1941. Under Part II of the Bill I understand that it is an annual insurance, certainly with regard to furniture, which is 30s. premium per annum, except for the fact that as far as compensation is concerned the insurance period is the same. The Chancellor of the Exchequer, in dealing with business goods, spoke of the 30s. itself being spread over three periods, and that rather confused me. 'Perhaps other Members of the House may have understood the point, but possibly we may have a little more explanation at some point.
I think on the whole it is sound that there should be this insurance, and no doubt there will be a good deal of discussion of this part of it in Committee. In the case of this part of the insurance scheme, the State is exactly in the position of an insurance company. It takes the 30s., and it runs the risk. If the total damage is less than these premiums, the State pockets the balance and is pleased about it. If, on the other hand, it should prove that the premiums go only a small way to meeting the compensation required, the State is rather glum faced and has to pay the piper. That is how I understand it; I may be wrong, but it is an entirely different principle from that involved in Part I. Naturally, in these circumstances there will be considerable wonderment in people's minds as to whether the figure of 30s. is the right figure. Possibly, if and when the war is continued after the middle of next year and a new Bill is required relating to Part I, the figure may have to be revised either upwards or downwards according to the experience of the previous year.
I am glad that the Government, in introducing this scheme in regard to furniture, are not going back on their word with reference to the smaller people whose incomes fall within the lower limits and who, I understand, still get free compensation without having to pay premiums as before. You get under this scheme two tiers—first of all, the people who are below a certain amount and who get free compensation, whatever the value of the furniture may be. (An Hon. MEMBER: "Only essential furniture.") Yes. Then you get people of any income who can insure up to £1,500, with a further amount in the case of a motor car. I am not very clear as to what people who have furniture of a value of over £1,500 are entitled to do if they wish. They cannot come to the Government. Are they allowed to insure above that amount? It may be thought that this matter is one which the State, as a whole, need not worry about, but from the point of view of a person with a large holding in a house I think it is worth while considering what he ought to be able to do. If the Government are not allowing him to make private insurance, is there any reason why the Government should not allow insurance at a higher rate? I do not think it is right that if a bomb falls on No. 17 in a road and not on No. 18, the person in No. 17 should suffer all the loss.
I have now practically finished what I have to say, but there is one small point at the end of the Bill. I understand that the Bill applies to England, Scotland and Northern Ireland, with certain modifications, but so far as I can see it does not apply to the Isle of Man. We have not the power to legislate for the Isle of Man—I quite appreciate that—but I would like someone representing the Government to tell us what precisely the position of the Isle of Man is to be. Is it anticipated that the House of Keys will introduce a somewhat similar form of legislation, or will the Isle of Man stand out from any scheme of this kind? The Isle of Man, as I understand the position, is just as much at war with Germany as is any part of these Islands, and if that is so, it may suit the Germans one day to bomb the Isle of Man. The House is, therefore, entitled to know how they stand and what are the prospects of similar legislation coming forward there.
I have occupied longer than I intended, but it is a most important and complicated Measure, of which I think the House will approve in the main, but it will naturally expect a very careful Committee stage. I understood from the Chancellor that in accordance with his admirable habit of listening carefully to what is said on the Committee stage, he is always ready to amend any Measure which he brings forward so as to make it fall into line with the views of the House. I believe that we shall have a fruitful Committee stage so that the Bill, before it becomes an Act, will be worthy of the highest traditions of this country.
I share the opinion of my right ho>n. Friend on what he has said about the date on which this Bill was introduced. I think it is very unfortunate that the occasion was not taken to introduce it before, but I shall refrain from adding anything to what he said, because it is my wish to be brief to-day. I will say at once, however, that on behalf of my right hon. and hon. Friends we welcome this Bill, although we recognise it as a Bill which can only be put into the category of necessary evils. We shall certainly avail ourselves of the invitation from the Chancellor of the Exchequer to make such contribution as we can towards clarifying and making the terms of the Bill, if possible, entirely equitable and as precise as the conditions under which we are working will allow.
Since Lord Weir's Committee took the same fatalistic attitude with ward to this pill nothing much has happened which has made it in any way easier to introduce the Bill now. The conditions of assessment, difficulties of valuation and the like are just as great to-day, and I doubt very much whether the experience of air attack which we have had up to the present will allow us to forecast the future with much greater certainty than at, that time. There is hound to be a great element of uncertainty in the whole thing, and the question before the House is whether this is a perfect Bill. It cannot be that. I take the view that if it is rough, it is certainly ready, and it is, I think, in all the circumstances, probably the best Bill that tan be produced to give the assurance and confidence which are necessary. There is no doubt whatever as to the necessity for the Bill.
This war and the movement of population through evacuation schemes, necessitating the billeting of troops and the like, have made it quite clear that although the Englishman's home may be his castle, whether it be mansion or cottage, it certainly is to be part of the nation's shelter in our hour of need. We are becoming increasingly aware of the fact that the nation's productive resources will have to be directed in accordance with the national need. Therefore, there is no question but that a Bill of this kind, by which, to use a happy phrase of the Prime Minister's, we can all stand in together, is necessary and welcome. It is a necessary evil, because the Bill does lay a heavy burden indeed on the community. One of the figures which we have got and can talk about is the estimate of £200,000,000. My right hon. Friend a moment ago said something about having his attention focused on a certain aspect of the Bill. Well, my attention has been focused on this particular aspect of it through the study of some accounts of a company whose profits amounted to £53,000, after deductions and the usual allowances for depreciation and the like. Owing to deferred collection of the increased taxation last year, the amount to be dealt with is £41,000 for Income Tax and the rest of the surplus is to be divided in trying to meet this new contribution and the contribution under the Fire Watchers Order.
So I say that this is a heavy burden, although the Bill does bring us two very important reinforcements to our war economy. One of them is material, and the other is psychological. The Bill allays the anxiety, which has been growing in the public mind ever since the failure of the Weir Committee to make a recommendation, lest the great economic and financial structure of a most complex character, which has been built up on the assumption that the value of real estate in this country would remain stable, should be impaired by reason of lack of confidence, for the danger which might arise from that might be little less serious in its results on the whole community than would be a much greater extent of physical damage resulting from air bombardment. Consequently, I think the Bill is to be approved on those grounds.
Certainly, the Bill is not free from criticism, and it raises points which I have no doubt will receive criticism. This is the sort of Bill which in normal times one might expect to see go to a Standing Committee with some doubts as to whether it would ever come back to the Floor of the House. In present conditions I do not anticipate that will be the case. Very wisely, as we are dealing with unknown conditions and unknown quantities, powers are retained by the Board of Trade and the Treasury to make Orders in respect of conditions and circumstances as they arise. Any hon. Member speaking from these benches would be expected in ordinary times to make some observation about the number of these Orders and the powers they confer, but I do not intend to do that. With a Bill of this kind, which is largely experimental and speculative in character, it is necessary that the widest powers, subject, of course, to the necessary Parliamentary approval, should be placed in the hands of the Board of Trade and the Chancellor of the Exchequer.
It has been argued outside the House that the premiums are too high. I find it difficult to understand how anybody can make an argument of that sort. I accept, on the Chancellor's explantation, the proposal that the collection of the charge should be based upon the rateable values. That selection is, of course, open to criticism, but on reflection, having full regard to the alternatives, I think it represents the only possibility open to the Government. With regard to the insurance of private chattels, I have not been entirely convinced that the scheme should be voluntary. I fail to see why, if we are all standing together, a man who happens to live in the heart of the Lake District or in Anglesey, for instance, should not come into the scheme. What I fear is happening is that the State is accepting all the worst risks.
I fail also to understand why the limit should be fixed at £1,500. I can understand the argument about why a person should be called upon, in a scheme of this kind, to make a contribution, through the taxes or otherwise, for the benefit of somebody who has superfluous goods over £1,500, plus £500 for a motor car; but looking at the matter from the insurance and business point of view, I have not been persuaded that we are not rejecting possibly the only means in this Bill by which we might over a limited field hope to make something like a profit for the benefit of the scheme as a whole. I should like to have an assurance that, according to the best available expert evidence, that possibility is not being thrown away by limiting the amount. I understand and appreciate the social argument, but there is no reason why, because of a good social argument, we should cut off our noses in order to spite our faces. I hope we may have some further enlightenment on this matter.
I want also to refer to the necessity of placing individuals who may be claimants for deferred payment under the Bill in some certainty as to what will be their position. As has been pointed out, they will have liabilities to meet through various organisations and individuals, and a nebulous promise that at some future date they will receive a certain sum, plus interest at 2½ per cent., is not something which will be sufficient to stave off a very real and pressing difficulty. I think this difficulty might be met if a security of a limited transferable character could be devised to deal with the matter. Clearly, if 2½ per cent. War Bonds repayable in 1950 were issued, this would have all the disadvantages that would accrue from an immediate cash payment. I think that some investigation might well be made as to whether it would be possible to have some sort of security, transferable for certain limited and specified purposes, to be dealt with in the ordinary course of things. This would give greater flexibility to the scheme.
I want to make one or two observations concerning Clause 63 of the Bill, which deals with the various mutual associations that came into being as a result of anxiety on the part of the community to get some compensation, at all events, when they took the view that the Government were declining that responsibility. The anxiety which has prevailed in the minds of the people has displayed itself through the efforts of chambers of commerce and other bodies to produce insurance schemes; but outside that, a considerable number of enterprises of a mutual character came into being. Some of them were promoted for the purpose of mutual assistance, generally related to some specific activity, but there was a number of other associations and organisations the methods of which were less purely altruistic, and the methods of some of which seemed to be not entirely desirable. The Government have, quite properly, I think, dealt with this matter by legislation, and steps have been taken to prescribe the terms Tinder which the various mutual associations should operate. It is now proposed that all these mutual pools should cease to exist, and that with the passage of this Bill they should be required to wind up, unless they propose to carry on some scheme of compensation relating to some property or function that is not covered by the State proposals. I think it is quite clear that it would be impossible to allow any association of this kind to continue to transact business in competition with the State scheme, even if it was able to do so. Therefore, it would appear to me that all these projects could now be wound up. It may be that there may be some limited scope for such activities, but I cannot think that they will be found to be worth while.
I have acquired, over years, a great admiration for Parliamentary draftsmen, and for their ability and ingenuity. I cannot help thinking that in the preparation of this Bill, they have had a task before them which has taxed their ingenuity, their resource and their knowledge to the very uttermost. When I was contemplating this Bill the other evening, there came to my mind the saying of Dr. Johnson, with which the House is familiar, who, in an ungracious moment, asked what his opinion was of a lady speaker, replied, "It reminds me of a dog walking on its hind legs. It is not that it is not well done, but that I am surprised that it is done at all." That was the thing which came to my mind when I thought of the difficulties of the Parliamentary draftsmen and those work- ing on this Bill. It is not that it is not well done because I think it has been well done but that I am surprised it has been achieved at all. It has no doubt been very difficult to produce a rough and ready workable scheme to deal with this almost incalculable problem. In ordinary times of life the citizens of this country are, from morning to night, and even when they are sleeping, protected by insurance of some kind or another which they have taken out, or which someone else has taken out for them. This country is the home of insurance. It has grown up here; and the insurance we do for companies abroad is of great value to the State. This Bill is outside the experience of normal insurance, but I believe, subject to modifications in Committee, for which I think there is room, it provides a practicable scheme. As far as we can improve it, or help in any way, we shall be only too glad to do so.
I am thankful for this opportunity of contributing in a small measure to this Debate. I would like to pay my respectful tribute to the Chancellor of the Exchequer for the way in which he introduced this Bill, and particularly to underline a phrase he used, which, I think, is implicit in the whole situation, namely, that compensation and contributions cannot be related to each other as in ordinary insurance. I think that that circumstance which is true, must necessarily inform the whole spirit of the Bill. Secondly. I would like to join with those who have congratulated the Treasury draftsman who may possibly have laboured under circumstances of particular difficulty. For my part, I should like to congratulate him on producing at least three Clauses which I can understand. I found myself unable to agree with the right hon. Gentleman the Member for Fast Edinburgh (Mr. Pethick-Lawrence) that this Bill should have been introduced a year or 15 months ago; perhaps that is because my whole approach to a problem of this kind differs from his. I belong to that archaic school which still persists in believing that an Englishman should rely, in the first place, not on the Government, but upon himself, and upon his own efforts in meeting disasters.
Should he have his own anti-aircraft gun?
That is not a question of insurance. I should like to support what my hon. Friend the Member for East Birkenhead (Mr. Graham White) has said with regard to the voluntary nature of the chattels scheme. I do not see how compensation can be paid under a voluntary scheme to those who have already suffered damage to their personal belongings, unless, either the Government are shouldering that burden themselves, or the premium is being put up unnecessarily high for those who may subsequently join in the scheme after this Bill has become law. I should like to say a word or two upon what was said by the right hon. Gentleman the Member for East Edinburgh in regard to why this scheme should have been introduced 15 months ago. I am not concerned with defending the last Government in this matter, but the report of the Weir Committee, and the pronouncement of my right hon. Friend the Chancellor of the Exchequer's predecessor, made in January, 1939, did in fact commend themselves to my intellect, and I am concerned to defend my intellectual processes. In the first place, I did not enter total war "insurance minded" in so far as my personal and private property were concerned. I do not think any of us should do so. Just as in the last war, when war was largely a matter for the Combatant Forces, one did not enter the Combatant Forces with any idea of insurance against personal physical risks, so in this war, when war is total, I do not see how, as far as one's personal and private property are concerned, one can expect to have any insurance. In total war, injury to property and business fall into the same category as injury to life and limb in the Combatant Forces. There are, of course, important qualifications in cases where a man's property is possibly the subject of mortgage or borrowing and other people's interests are concerned. The effects might be very widespread in the case of a considerable amount of property where other people might be depending on the solvency of the individual. In these circumstances it is important to try to prevent acts of disaster from being too widespread in their effects. Another qualification in total war is that one cannot enter upon it with a "business as usual" mind.
In the very nature of things total war requires restriction on one's personal activities, and one cannot hope to the same extent to rebuild one's circumstances out of one's own efforts. From the point of view of the Government, the moment it is suggested that they should take part in an insurance scheme or compensation scheme of this kind for property, they acquire an interest in what kind of property is erected and where it is erected. I have never taken much stock in the argument that unless there was an insurance scheme the building industry could never be carried on. It seemed to me that the moment we entered into total war the Government had an interest in the buildings erected and where they are put up. From the very beginning I have always felt that this was in no sense an insurable risk.
There was no actuarial basis on which premiums for ordinary insurance could possibly be calculated. It is not possible to insure against the deluge. Compensation has to come out of the fabric that is left, and if the whole structure is threatened, there is no proper basis for insurance. That is a state of affairs which calls not so much for insurance as for an injunction, of a kind which can only be carried out by our Armed Forces.
I think it was a mistake in the early stages, when this subject was being discussed, to talk of it as insurance at all. This is properly a subject for compensation, and this, as was well said in a letter to the "Times" yesterday and emphasised by a leading article to-day, is not an Insurance but a Compensation Bill. The contribution must be regarded not so much in the nature of a premium as of a special tax, quite properly falling upon that group of people who are to benefit from what the Government propose to do, but it is a special tax which tends, to the extent to which it is effective, to relieve the burden on the general taxpayer. The special taxpayer in this instance is so widely spread as almost to coincide in many instances with the general taxpayer whom it is sought to relieve. They are indeed almost as alike as Tweedledee and Tweedledum. I daresay that when the Chancellor in the guise of Alice approaches Tweedledee, the special taxpayer, and considers how Tweedledee is going to pay the tax, Tweedledee will probably reply "No how," according to the book. When he turns to Tweedledum, Tweedledum will also reply, according to the book, "Contrary-wise."
There have, however, since these matters were discussed two years ago, been substantial changes in the situation which have made the introduction of a Measure of this kind more appropriate than it was a year or 15 months ago. We have learnt that it is no longer a question of the deluge. It is clear, in the first place, unless something untoward happens, that the possibility of making restitution to those who have suffered loss is going to be within our means. Secondly, quite apart from this, there has come into force the licensing of all building operations, a measure made absolutely necessary by considerations of shortages of labour and material. Finally, there has come the increasing need of raising more money annually out of Revenue for the purposes of the State, and these three changes which have come about have all combined to make this Measure far more appropriate than it was at the earlier date.
With these thoughts in mind, I turn to the Bill itself. In the first place, the size of the contribution or tax seems to me about fair. It commends itself very (roughly to my sense of proportion as to what roughly the scale of the damage may be in the course of the first two years. It is impossible to discuss that in detail without going into matters which might more properly be discussed in a Secret Session, but it seems that the figure suggested is something of the right order. Ten shillings in the £ on the rateable value, that is, half the annual value, suggests, if four per cent, is the annual return on this kind of capital, a contribution of 2 per cent, on capital value. With the Government proposal to find, if necessary, a further 2 per cent., it suggests 4 per cent, of the capital value as the measure of what we might conceivably suffer during two years. Secondly, the question of compensation, except in urgent cases, is necessarily deferred. It could not be otherwise.
One thing that we ought to bear in mind in connection with the payment of compensation is what I would call the Keynes point as distinct from the Keynes plan. I mean the necessity of restricting to the utmost the present spending power of the individual. It is necessary that this new spending power should not be put into the hands of individuals during the war. It must be left till after the war, when we can see how more properly it may be fitted into the resources at our disposal both of men and of material. So what was in the statement of the former Chancellor of the Exchequer in January, 1939, as a mere wraith is now perhaps taking on the outlines of a skeleton, but it is still the case, necessarily, that the time and the amount of compensation for total loss should remain in somewhat spectral form. Broadly speaking and without going into detail, it seems that the Bill makes the best attempt that could be made in the circumstances at holding the balance between the various interests involved, between the equity owner and the mortgagee and as between leaseholder and freeholder. But we cannot hope to get anything which is absolutely and ideally fair. If we were to attempt to do so in any part of the Bill, we should run counter to the very true principle that the best is often the enemy of the good.
There are one or two points of detail to which I should like to refer. Interest on the value payment is to run at 2½ per cent., as I understand it, from the date at which the damage occurs. There will be very many cases where the owner of a building who is going to receive compensation has a mortgage running at a much higher rate of interest than 2½ per cent. It is not desirable to put that additional burden on to the owner of the building. It may well be that, to the extent of the mortgage, the mortgage holder could be paid off by some non-negotiable instrument, and to that extent liquidate the position and reduce the amount which will finally have to be paid to the owner of the building. There is the very important point also, in Clause 35, of making this a capital charge. I think that is only a form of words. This is something that will have to be liquidated in 99 cases out of 100 out of income, and in the hundredth case it will be liquidated out of something which would have been somebody else's income. There is no way of paying the tax, and no way of the State enjoying the tax, except out of someone's income. I appreciate that it may be desirable to prevent this tax from interfering with the yield of other taxes, but it does not help the situation to say this is a capital charge, because calling a sheep a hog does not make it one. This has to be liquidated out of income in almost every case. The value of treating it in this way is that by this means this new tax upon a special taxpayer will not interfere with the yield of other taxes. Do not let us call it a capital charge because, in fact, it can never be one.
I am very glad to see in the Bill provision for restricting the use of money received in compensation in order that we may be certain that the use of it would fit in with the general national interest, particularly in regard to town planning. I regard that as one of the most important provisions in the Bill. In connection with it I would like to appeal to my right hon. Friend the Chancellor, and through him to the Government, that any such plans as they may have in mind and are maturing for fitting the problems of reconstruction into the whole fabric of government they should hurry, hurry, hurry. For at any moment peace may break out and we shall have these problems upon us. There are already signs of trouble in the thieves' kitchen, and we know that when thieves fall out honest men come into their own.
I would like to support the Bill as being timely and an attempt to be at once fair and practical in apportioning the burden of compensation. I believe we should call the Bill and regard it not as an insurance Bill, but as a compensation Bill. I support it more particularly as an effective tax-gathering Measure which will assist the State to meet the obligations which it has most properly assumed.
I should like to follow the last speaker in commending this Bill as a compensation Bill rather than as an insurance Bill. In 1939 many of us on both sides of the House urged upon the Government that an insurance scheme should be started. That scheme was turned down. The Minister of Transport in his unregenerate days in a memorable joke described Ministers as inverted Micawbers who were people waiting for something to turn down. We know that insurance schemes are rather formidable and difficult, and I was not in the least surprised that an inverted Micawber should turn down schemes that were put forward even by trained insurance folk. If Ministers were wrong then, they are right now. It was a real relief to find that the Government had stuck to their decision this Autumn in turning down an insurance scheme. I noticed with satisfaction in the King's Speech that some previous utterances that had been made implying a belated introduction of an insurance scheme had been reversed; because an insurance scheme after the event, after so much damage had been done, was really impracticable. If the Government had taken our advice in 1939 there would have been great advantages. We should have had an organisation dealing with the whole problem.
Having missed that opportunity, however, the Government have wisely fallen back on this scheme for compensation and have coupled with it an interesting scheme of taxation which can be regarded wholly separately. Indeed, this Bill will not be properly appreciated unless it is thought of as two Bills. I observe something that is new to me. The Bill is founded on two Financial Kesolutions—one the ordinary Financial Resolution to which we are accustomed, and the other a Resolution in Committee of Ways and Means. It is an ordinary expenditure Bill providing as it does for compensation; it is also a vast taxing machine which is raising by this one method more than the entire Budgets of our youth. We must regard that part of it, as we do any other financial Bill, on its own merits. I will not refer to any other part than Part I because time is short. I divide that part into two. On the compensation side there are two matters I want to raise. First, there is the basis of value. The Chancellor gave his reasons for maintaining the existing scheme and basing value payments on pre-war figures. Whether that is reasonable all depends on how great an inflation there will be. No one would object if the payment is a little less than the cost of replacing by some more or less similar building, but if inflation proceeds to the extent that it did in the last war, when buildings were at least twice as expensive after the war as they were before, then payment on the pre-war basis will be very hard. The Chancellor rather gave away his own case on this point When he said that payments would not be made until after the war. That being so, it really seems a little unreasonable to suggest that valuation on post-war figures is impracticable. I think it is probable that we shall have to accept the Bill as it is, but that when the end of the war comes there will be a strong case for reexamining the system of pre-war valuation in the light of the value of money as it may then be.
I wish to refer also to the admirable feature of the Bill, Clause 8, which pro- vides the magnificent possibility of re-planning our damaged and derelict areas on a really worthy scale. Why, however, does the Chancellor put the power to do that in the hands of the Treasury? From old associations with Treasury activities in other Departments, as well as from having seen on the Public Accounts Committee what they do, I have the highest respect for them, but the Treasury's function is not to create or to operate some novel social experiment. It is the very last body that ought to be given that function. It is neither good for the Treasury nor for the policy that they should operate things of that sort. I shall certainly put down Amendments that will hand over that function to the body that obviously ought to deal with it, the Ministry of Works and Buildings. I feel sure my right hon. Friend will meet that with sympathy.
Then there is the other part of the Bill, the taxing part. Here we have to face the fact that this is a trial trip of the capital levy. The whole idea is precisely what has been advocated for a long time from many quarters of the House—that where you have to provide large capital expenditure you may have to go to capital sources to find the money. It is true that for purposes of assessment the Bill takes the annual value basis, but that does not in the least conceal that it is really taking a portion of the capital rather than a portion of the income. How big that portion is I should very much like to know. We are told this scheme will produce £200,000,000, and the total capital value from which that £200,000,000 is to be drawn was given as something between £6,000,000,030 and £8,000,000,000. If one takes £7,000,000,000 as the total capital value, £200,000,000 is in the nature of 3 per cent., and regarded as a premium 3 per cent, would appear rather a high contribution for the risk that is covered. The only figure which we have had in the course of all these discussions was the figure for London given by the Prime Minister. On that, though perhaps the annual premium for London alone might have been regarded as 7 per cent., taking the country as a whole I thought the figure was far more like 30s. to 40s. But here we are given a figure of apparently 3 per cent., and that is extremely interesting. I do not know whether the Treasury can give us at any stage some more accurate percentage, but in any case this is a useful figure as exploding for ever that fantastic nonsense which was so common a month or two ago suggesting a premium of 2s. 6d. per cent, or something of that kind.
On the capital value.
Well, this is 3 per cent, on the capital value.
Buildings occupied by those engaged in education, science and research are to contribute to this capital levy. Is that really sound? After all education means very largely the public elementary school, and that will mean a burden on the local authorities who, of course, obtain their funds from precisely those people who are to be taxed here, that is, the ratepayers. Is it really fair that education authorities, and other bodies like university authorities, should be asked to contribute to what is essentially a national responsibility which we should all support by other means? As for science and research, it is well known that those two activities are starved by the meagreness of the help coming from national resources, and to ask them to pay this levy does seem a little harsh.
Finally, may I say one thing about cases of hardship? There are bound to be cases of serious hardship, even though the amount of this tax is not very large. We all know of professional, industrial and. commercial people whose incomes have largely gone but whose charges remain and who are in real financial difficulties. I do not say that this charge will be the last straw, but any artificial addition to the hardships of those people, who are already suffering from war, ought to be avoided if possible. I am sure the spirit of our people is strong and will sustain any hardship that is necessary, but, on the other hand, it is our business here to avoid, imposing any hardship so far as we can, and I do ask the Chancellor to keep that point in mind when we come to Committee.
There is one small question I wish to ask because it will interest Leeds, as my hon. and gallant Friend opposite will know. What precisely is the position of property in the slum clearance areas? There are considerable areas which are scheduled as having no capital value so far as their houses are concerned. Are those houses, already scheduled as having no capital value, for which compensation is to be paid on only a very small site value, to be charged with the full amount of the levy, which appears to be the case as the Bill stands? I feel the Chancellor will realise that that would be an obvious anomaly. I end by congratulating the Chancellor and his draftsman upon a brilliant Bill,
I do not propose to follow my hon. Friend the Member for Central Leeds (Mr. Denman) except to say that we in Leeds will be glad to have an answer to the question which he has put and which I should have put had he not done so. I was very much interested in his support—if that is not too strong a term to apply—of what he believes to be a trial trip of the capital levy. I think my right hon. Friend the Chancellor of the Exchequer would disclaim any such intention, and find a great many reasons for proving that it was not the case. I feel that the truth was expressed unwittingly by the hon. Member for Hastings (Mr. Hely-Hutchinson). He complained, or suggested, that my right hon. Friend who spoke from the Opposition Front Bench was insurance-minded. Well, I hope this Bill has been brought in because the Government, the House and the country are insurance-minded. Surely we are in this war because we are insurance-minded. Had we been more insurance-minded before the war we might have avoided war altogether. It seems to me that this is a very proper Bill to be brought in at this juncture, and I think great credit is due to my right hon. Friend the Chancellor and to the Government for introducing it. I think the "Times" expressed the position very accurately when it said in a leading article the other day that this Bill was "a superbly self-confident piece of legislation." I entirely agree with my right hon. Friend the Chancellor that no Government or no nation could bring in such a Measure unless they were confident of victory.
My right hon. Friend who spoke from the Opposition Front Bench was a little in error, I think, if he will forgive me saying so, in comparing the proposals of this Bill with those which were made by the previous Government in January, 1939. It is worth while, to consider for a moment the principle of those proposals. As I understood it, the then Chancellor of the Exchequer said that in his belief and in the view of the Government the general principle should be that loss or injury to property should be regarded as failing upon the community as a whole and not merely upon those who directly suffered the damage. Now my right hon. Friend, perhaps in error, rather suggested that that proposal was that the damage should lie where it fell. In point of fact, it was precisely the opposite. The House will remember that the promise was made that the highest scale of compensation permitted by the financial condition of the country would be paid by the Government out of State funds, but the present proposals, if one looks at them having that fact in mind, appear to depart very consderably from that principle. In fact, they are more disadvantageous to the property-owner than the principle to which I have referred.
If the damage is less than £200,000,000, then, according to the Bill, the whole of it will be paid and compensated for by the property-owners and those interested in property who contribute. It is only when the damage exceeds at first £200,000,000 that the State comes in at all, and then makes contribution to an equivalent amount. I use the figure £200,000,000 on the same assumption that the Chancellor of the Exchequer made, namely, that it will probably be the gross amount realised from the premiums. The essential point is that, in the first instance, the loss is borne by those interested and not by the community as a whole. In that respect, those interested are prima facie in a worse position than they were under the previous scheme. Nevertheless, under the previous scheme—although it was not intended to be so, but we all felt that it was so—the compensation was, if not doubtful, at any rate not certain, and certainly not in amount. Under the present scheme, it is as certain as anything could be that, in the event of this country coming out of the war master of its own destiny, which none of us doubts, compensation will be paid, and to the full extent.
That element of certainty is the most valuable feature of the Bill. Coupled with the fact that those interested in property form a minority, although a considerable and increasing minority, of the population, the proposals of the Bill can be fully justified by the Government. All property owners and all those interested in property, even the man who owns only the smallest cottage, can be reassured to pay the premium with the practical certainty of compensation in the event of loss. The matter is not left largely in the air, as was the case with the previous proposals. My right hon. Friend who spoke from the Front Bench very properly said that those proposals showed a regrettable lack of prevision and a good deal of timidity in the circumstances which existed at that time.
There are a few points of the Bill on which I should like to comment. The proposals as to premiums and to their being based on Schedule A seem reasonable. Schedule A is clearly the simplest basis. I gather that whether by reason of the damage being less than expected or the war ending sooner, provision can be made for premiums to be paid for a shorter period, or some other similar adjustment can be made, just as premiums can be increased or extended when August, 1941, comes. Obviously, there is no point in obtaining more in premiums than is actually required. In regard to premiums, the Government have done the right thing, having regard to the various proprietary interests in the properties insured or in respect of the compensation to be paid. It is difficult to find a fair formula for the apportioning of the premiums, but building societies, which will obviously have to pay a very large proportion of the premiums, will have to carry a fairly substantial burden. It will probably work out at 50 per cent, of their properties on the one-third basis and 50 per cent, on the two-thirds basis I believe they will shoulder that burden willingly as their contribution to the general good of those to whom they have largely owed their remarkable progress and their present strong financial position. I am sure that that willingness will not impair but will strengthen the good will of those people, who will now have a much greater sense of security.
I hope that one result of the Bill will be that building societies will be able to recommence lending, in appropriate and reputable cases, so that they, in common with the rest of the community, may carry on their primary functions. There are very hard cases to-day of people who have left their own parts of the country and can get a house only by buying; or it may be that they desire to raise money on their houses. Building societies could, in such circumstances, recommence lending, and should do a very useful piece of work.
Although my right hon. Friend did not say anything on the point, I take it that landlords will not be permitted to pass on the cost of the premiums or any part thereof to their short-term tenants. Now, I understand, nothing is to be paid by tenants of seven years' tenure or less and that weekly tenants in particular will not have any of these premiums to pay either directly or indirectly. I gather that the Solicitor-General agrees that that is the case. It would obviously be unreasonable if they had to do so, whereas it is reasonable that those who have a longer or a greater interest in the property should be in a different category.
Some of my hon. Friends are not happy about the basis of valuation of totally-destroyed property. The basis of valuation is to be fixed as at March, 1939, five months before the outbreak of wax. I would remind the Chancellor of the Exchequer that the appropriate Board of Trade figures for materials and for the cost of living, then stood at a value of 102.2 per cent. A few days ago that figure had risen, in a period of something over a year and a half, to 128.4 in respect of materials alone. We know that the cost of labour has also gone up. It may be that the cost of building to-day, if the war were to end, would result, to those who received compensation on the March, 1939, basis, in their being the loser by anything up to 30 per cent. The loss might be even more. The cost is rising week by week, and will probably continue to rise, not perhaps to the height to which it rose in the last war, but to a very considerable degree. It seems to me that the right hon. Gentleman will have to make provision for such cases. It does not seem in the least fair that, on grounds of national interest or because the damage is small, property is to be repaired to-day on a cost-of-works basis and that compensation is therefore to be paid in full in that case, while those whose dwelling- houses have been totally demolished have not only to wait months, or it may be years, for their compensation, but are to be involved, when they receive that compensation, in a loss of anything from 30 to 60 per cent.
The right hon. Gentleman seemed to think that there are only two courses open, either to fix the date, March, 1939, or some other date, just prior to the war or just after the war. But surely that is not so. We have had to-day figures indicating that if the right hon. Gentleman thought fit, he could fix 1st January, 1941, as the date. When payment is deferred, clearly the correct date on which the works are to be done and payment made can be the appropriate date, and that would seem to me to be the fairer date. It is not in the least fair to select a particular type of property owner and say that he must lose to such a large extent as would happen in that case. There is a good deal that one might say about the provisions in the first Part of the Bill, but I will conclude by expressing the hope that in some way this Bill and its provisions, particularly with regard to rebuilding, will be related to the work which we understand the Ministry of Works and Buildings are undertaking, namely, the replanning of our country in a better fashion. It would be fatal if money were handed out to property owners to put up houses and build them however they liked, and if no better control were exercised than has been exercised in the past.
With regard to the second Part of the Bill, the proposals seem to be wisely conceived, but I am concerned as to why those proposals should be voluntary. I see no valid reason why the insurance of movable properties, chattels and so forth, should be voluntary. If we are to bear one another's burdens, we should bear them equally in regard to furniture and movable assets as we do in respect of property. Premiumat 30s. per cent, seems heavy, hut it is an annual premium, and I Brink it will be well worth paying. However, I hope that the right hon. Gentlemen mil arrange with Lloyd's or the fire insurance companies so that those who are not able to pay 30s. in one payment may be allowed to do so in three or more instalments.
That is allowed in the earlier scheme.
I gather that in an earlier scheme there is some such provision. Take the case of a man who has been earning £500 a year and, therefore, is outside the provision with regard to essential furniture and so forth. He has been living at the rate of £500 a year, and then he goes into the Army, as many do, as a private and with very small means. He may have considerable difficulty in paying a premium of 30s. per cent, on the furniture and other movable assets that he has accumulated while in receipt of a salary of £500 a year. That is a case which I hope the right hon. Gentleman will consider, because at the moment it does not seem to me to come obviously under this Bill or under the provisions of other legislation which provide for those with smaller incomes.
There is one other point I should like to raise and that is with regard to the great necessity for the prompt assessment of claims. In almost every Department of the Government to-day there are thousands of claims which are not assessed and in regard to which the machinery is becoming more clogged every day. The Service Ministries, for example, have taken over property and lands here and there. It is most essential that proper assessment should be made. I would suggest that a close approximation might be fair and sufficient in those cases. There may be many cases in which it is not essential precisely to ascertain the exact valuation, and a rough approximation might be quite sufficient for those purposes. We are a year and a half behindhand with this matter, and the most urgent and pressing attention should be paid to the question of the early assessment of damage which has been done and which may be done in the future.
Many other matters will, no doubt, have to be discussed in Committee, but I will close by saying that the present Bill, providing as it does for compensation and grants in respect of clothing and personal allowances, embodies the principle of the collective sharing of individual burdens, or, as we on this side of the House say, each according to his means, which is not only of the utmost practical importance but is capable of very great and beneficial extension. Above all, in my view and, I feel sure, in the view of most of us, it it the best augury for the new order which we hope must come about when the present conflict has been settled.
This Bill opens up a very attractive range of fields in which I feel tempted to wander, but on consideration I think such wanderings would be more appropriate in Committee than on Second Reading, and to-day I shall limit the few remarks which I want to inflict upon the House strictly to one point. I want to congratulate and thank the Government in general, and my right hon. Friend the Chancellor of the Exchequer in particular, on the way in which they have included within the scheme of compensation places of worship and other buildings essential to the maintenance of religion, without including them also, as far as places of worship at ail events are concerned, within the scheme of contribution. The Ecclesiastical Commissioners of England have authorised me to express their appreciation and gratitude, and I have not the slightest doubt that those responsible for every religious organisation of whatever kind in this country and those who are charged with the maintenance of places of worship and other religious buildings, would feel just the same.
There will, of course, be many points for discussion in Committee, when negotiations with these right hon. Gentlemen of the Treasury and with the War Damage Committee are set in motion—decisions of definition of what buildings come within this schedule or that schedule, as to the extent to which demolished churches are to be restored, whether on their old sites and in their old form or not. But on the main point there can be no doubt and no differences of opinion—and it is a feeling of general satisfaction—that the Government are asking this free Parliament to take upon itself the task of imposing upon the country the responsibility of restoring the essential places of worship for every denomination with a complete impartiality. We all believe that this war which we are waging is a war against the forces of evil, and if those forces of evil prevail, every form of organised religion as we know it will be destroyed. In those circumstances, it is a fine thing that the world should know that provision is being made, even at this early stage in the war, for ensuring that our country shall continue to have the places of worship and the maintenance of those forms of organised religion which our enemies are assailing.
The Chancellor of the Exchequer has met with an almost unbroken chorus of approval and congratulations on this Bill, but I do not think he will be surprised that I cannot share in it. I think in strict logic there is only one really equitable basis for a Compensation Bill of this kind, and that is a recognition of the fact that war damage ought to be a national liability. As a matter of fact, the Chancellor has already recognised that to the extent of 50 per cent, in certain possible circumstances. The practical need, however, for building up a reserve has, I think the whole House will agree, necessitated some form of imposition being put upon property owners. That, of course, is a practical and not an equitable consideration.
In looking at this Bill, I am not at all certain, if we judge it either from the point of view of equity or from the point of view of expediency, that it can be seriously defended. Let us look at what exactly the proposal is. First of all, the contributions are entirely unrelated to risk. Property held in London, Birmingham, Coventry or any of the other large towns is a very bad risk. On the other hand, property in the Lake District, in Anglesey or in large stretches of Scotland runs a very remote risk of being damaged by bombing. Nevertheless, there is a flat rate of contribution, and that contribution is compulsory. The Lake District owner, the Anglesey owner, the Scottish owner, has to share the burden with the owner of property in Birmingham, Coventry, etc.
Quite right.
I am not grumbling at that. I am merely pointing out what the Bill says. But why has that basis been chosen? Why is it that the Lake District owner, who is practically safe, is compelled to share the burden of the Coventry owner? There is only one reason, and that is that he holds a similar type of property. There is no identity of interest. [An Hon. MEMBER: "We are all in the war."] The only association between the two is an identity of type of property held, not identity of interest or identity of risk. To base compulsory contributions merely on the holding of property of similar type is illogical and, I think, inequitable. Let me give an example of what I mean. Let us take a property in Birmingham, which is a bad risk. That property may be subject to what is known in the North as a chief rent—that is, a perpetual annual ground rent, say of £100. It may also be subject to a mortgage, the interest on which is £100 a year. In order to enable the burden of risk to be borne, the Lake District owner has to pay a very high rate of premium, although he has an entirely different risk and has no identity of interest with the Birmingham owner. But the chief rent owner of the Birmingham property, and the mortgagee of the Birmingham property, who have a very definite identity of interest, are entirely excluded under this Bill from any contributions. Why should the chief rent owner of a property in Birmingham be entirely excluded from contribution towards the cost of insuring the property, whereas some small property owner in the wilds, who runs no risk at all, is compelled to share the burden of the Birmingham owner? If you say that we are going to take not merely identity of form but identity of interest, and spread the burden on all forms of property, then there is an unanswerable case for spreading the burden. But my point is that the burden has been spread merely according to the form of property and not according to identity of interest. Why should the chief rent owner of the Birmingham property not bear his part of the burden?
Let us take another example. Take a works in London, again a bad risk. Why should the preference shareholders and the debenture holders of a firm having factories in London be entirely excluded from carrying any part of the burden? Why should the London works be insured partly at the expense of some property-owner in the North of England and not at the expense of the debenture and preference shareholders of the particular works? As a matter of fact, I do not think you can draw the line anywhere as to who should bear the burden, if you exclude any form of unearned income. It seems to me that if this Bill is to be made equitable, the charge should fall not merely on the owners of a particular form of property, namely, land and buildings, but on the owners of any form of property, whether the hereditament be corporeal or incorporeal, or whether it be merely a fixed charge. Why, as I say, should the Lakeland owner be compelled to bear a very heavy share of the burden whereas the chief rent owner, the mortgagee, the preference share and debenture holders are all excluded from contributions?
Does it not necessarily follow that neither a debenture holder nor a preference shareholder would receive any dividend or interest at all if it were not for the fact that the property was insured? Therefore, they take equal risks.
That is my whole point. The preference shareholder and the debenture holder are dependent for their interest on the existence of the property, but they pay no part of the premium whatsoever. On the other hand, the Lakeland owner, who is not concerned in any shape or form with the London property, has to bear a part of the burden. That is my whole point.
There is one other point I want to make with regard to mortgages. In certain cases mortgagors are compelled to bear a certain proportion of the premium, but the two exceptions to the general exclusion of mortgages seem to me entirely indefensible. They are mortgages on domestic property and mortgages on farms. Why a mortgagee of a farm should be penalised whereas the mortgagee of a large commercial property in London should escape, again seems to have no basis in logic. I know the explanation given by the Chancellor, but frankly I do not accept it, and I do not think anybody in the House does. I think the real reason is that it is another sop to the farmer. The farmer never pays any Income Tax; he pays no rates, and now, if there is an opportunity of shuffling his contribution on to somebody else, that opportunity is taken.
The most glaring injustice of the Bill is in connection with the inclusion of mortgages upon domestic property. Small mortgages of £1500 or £1,000, as the case may be, generally come from persons who have no great savings. Often it comes from a small trust estate; as I know from experience, having done hundreds of valuations of 6mall domestic property for that purpose. Another source is the building society. The building society is little more than a co-operative society for investments. The vast funds in the possession of the building societies come from a very large number of small investments. In the North it is customary to use building societies as a form of savings bank. The number of mortgages effected by the building societies must run into millions; but the number of depositors, who provide the money for the societies to lend, is far in excess of the number of borrowers. The Halifax Building Society, for instance, has tens of thousands of depositors, who are lending small sums in this way. These two forms of mortgagee are compelled to share the burden; but the large trust estates, which do not want small mortgages of £500 or £600, but prefer to lend sums of £50,000 or £60,000 on commercial property, are carefully excluded from making any contribution. Why should the small man, who has put £50 or £100 into a building society, be compelled to bear some share of the burden, while the great insurance societies and banks are not? I hope that in Committee we shall deal with this glaring anomaly. I have not the slightest hope that we shall recast the Bill on a wider scale, and make the levy general on all property—a general levy on all unearned income—but we can remove the glaring anomaly that the only mortgagee who is compelled to bear a share of the burden Ts the small man, while the big man escapes.
We have just listened to a unique speech. My hon. Friend endeavoured to make the point that the debenture holder or preference shareholder does not pay his quota of the premium which is payable under the Government's scheme. Surely, the reply is that, were it not for the Government's scheme, if a property were destroyed, neither the debenture holder nor the preference shareholder would receive any interest. He, along with others, -would lose the whole of his cover. I think that summarises my hon. Friend's remarks.
I want to pay a tribute to the Chancellor of the Exchequer for the introduction of this Bill. That introduction was somewhat belated; but better late than never. The Bill makes it possible for industry to carry on and arrange its commitments with greater security than would otherwise be possible. In regard to the premium, I do not think anyone will have any quarrel with the Government. I regard it as being very equitable. I would like the Government to explain exactly what they mean when they say that compensation will be paid, not during, but after the war. One can imagine many difficulties arising. It is not uncommon for a property-owner to borrow money on temporary accommodation from his banker on the security of his property. If the Government could give an assurance that some document would be issued to the owner of a destroyed property, we should then know that he would have some tangible security upon which he would be able to borrow in order to conduct his business.
I find it difficult to advance any argument why the insurance of industrial moveable property is to be made compulsory, while insurance of personal chattels is to be voluntary. The latter should also be compulsory. Otherwise, people living in remote places remain outside the scheme, whereas the whole people of the country should equally contribute to a national effort. It also means that prudent householders in vulnerable areas who feel obliged to cover themselves will have to pay a larger premium than would be the case if the risk were spread over the whole country. The premiums on household effects will be a very heavy burden to many people of moderate means and this will be increasingly so unless the risk is spread throughout the country thus reducing the amount of fine premium. Clause 5, Part I, of the Bill states that compensation for payment shall be ascertained by reference to prices current on 31st March, 1939. That method will result in a loss to the insurer. The replacement price will be higher and may involve some property-owners with a serious loss, which they cannot afford—and, in consequence may hamper rebuilding after the war. Would it not be possible to consider providing compensation based upon replacement value and thus follow the principles laid down by insurance companies so that there is a common basis for fire and war risk insurance? Clause 14 provides that the contribution of premium payable shall be based upon the assessment under Schedule A in force at any time during the risk period. I feel that it would be better if the assessment could be based upon the value of the amount that the property is insured against fire risk.
There is one other point. Clause 26 provides that the instalment of contribution under this part of the Act should be assessed and collected by the Commissioners of Inland Revenue or the Board of Trade. It would considerably simplify the whole procedure if contributions were collected by insurance companies along with the fire insurance premiums and the contributions handed over to the Commissioners of Inland Revenue or to another Government Department. It would simplify the general machinery and prevent that which I foresee is possible—another important and extensive Government Department coming into being in order to collect the premiums and to effect the settlements which will obviously be very numerous. Clause 47, Sub-section (2) provides that £1,500 should be the maximum amount of indemnity provided under the private chattels scheme, save, for a motor car which should be insurable up to the sum of £500. I heard what my right hon. Friend the Chancellor of the Exchequer had to say on this point, but I really fail to see why the amount should be limited. What is he going to do in the case where property varies, as it does in countless thousands of cases, between £1,500 and £10,000 or even £50,000? Is it not possible that these should be insured? On what basis is it argued that the maximum of £1,500 should be inserted? This part of the insurance is to be famed through either by insurance companies or by Lloyds. If I may say so, I cannot see why the Government should give to the insurance companies or Lloyds just that part of the business which, there is every reason to assume, will show a profit. I will go further and say this: Unless this business was going to show a profit no Government would be able to bring pressure to bear upon the great insurance companies or Lloyds to take a risk which was not a fair risk.
Therefore, I suggest that the Government should consider two points. First, the Government should assume this risk, should receive premiums and derive the benefits of any profit which may accrue therefrom, and, secondly, the Government should see to it that the limit of £1,500 is removed. I regard that as vital If they can do no other, I would suggest that the Government should consider means whereby it would be possible to insure property of £1,500, even though it meant an increased premium or separate insurance through insurance companies or Lloyds. My last, point is this. I cannot see how any argument can be advanced why the premiums to be paid should not be allowed as a business expenditure. Surely, this premium ranks parallel with an insurance or any other kind of provision and is, in fact, a very real business expenditure and should be allowed. No one would argue that fire insurance premiums or workmen's compensation insurance premiums should not be charged as a business expenditure. Of course they are. Surely if one is a business expenditure so, too, is the other and I really would urge that the Government should seriously consider this point and allow the premium as a business expense.
I received only this morning a number of letters on this point, one of which I thought was particularly potent and to which I will draw the attention of the House. It refers to a married man who has the first £170 of his income exempt from tax and who feels that if this new insurance is going to cost him a premium of £15 to £20 per year it will be a very serious matter in many cases. I ask my right hon. Friend the Chancellor of the Exchequer, even if he can go no further—and I hope he will be able to go further—at any rate to allow the premiums to be offset against the income before arriving at the tax upon an income of over £170 a year. I hope the remarks I have made will be regarded as constructive; certainly they are not intended to be destructive. As I said at the beginning of my speech, I give this Bill my wholehearted support, but I do not think there is any one of us who does not appreciate that, when the Bill goes to the Committee stage, there is room for, and that it will be necessary to make, very considerable, and in some cases important, Amendments.
I wish to put forward a point which I think is one of principle and which seems to me to be a serious omission from the Bill. At first sight it may seem to be a small omission, but I think that on reflection the House will agree that, to the people concerned, it is a very large omission. I have in mind in particular the small owner-occupier whose house is very often bought through a building society. It very often represents the life savings of the couple concerned, who may see that home disappear in one dreadful moment into a cloud of debris. This Bill meets certain financial matters in regard to replacement and so on, but I submit that people of the kind I am speaking about do not have large reserves of capital or ready cash. Very often they are working people earning a weekly wage, and in connection with any bombing that may take place and which will qualify them under this Bill, they may he liable to serious out-of-pocket expenses. It seems to me that the object of the Bill is to give financial aid quickly, and I trust generously and sympathetically. The morale of our people in the bombed areas is astonishingly high and has commanded the admiration of the world. I submit that nothing will help to maintain, that morale more than the knowledge that if disaster comes upon them, the House has seen to it that they shall be generously treated and that all their problems have been considered.
When a house is bombed, there are certain financial outgoings which arise at once. A workman may have to spend several days away from work, with consequent loss of pay, while rushing round to see officials, to make arrangements for his family, and so on. He may desire to have his own assessors or to consult his lawyer, and so on—all of these things being reasonable out-of-pocket expenses in connection with the disaster that has come upon him. I submit to the Chancellor that it would be a thing which would be universally approved if, within the premium as laid down, it were possible to make some small immediate cash payment in connection with bombing such as I have indicated for out-of-pocket expenses. K this could not be covered by the existing premium, then I suggest that under the voluntary chattels scheme or another appropriate section of the Bill the Chancellor should allow people to make voluntary contributions for insurance against a small sum, say, £50, or whatever figure might be fixed. Thus, when the calamity came they would be able to make an immediate claim and not have to draw on savings—if there were any—and in any case would not have to borrow.
I feel that this is a practical point, and that it is a serious omission from the Bill. I trust that when we come to the Committee stage the matter will command sufficient sympathy from the House to enable an Amendment to be put down, if my right hon. Friend the Chancellor cannot see his way to bring it forward himself. As far as the Bill as a whole is concerned, it is admirable in its general principles. I am not going to argue the details of this Bill, on which I think, the lawyers will have a field-day. The Bill is already an act—an act of defiance and an act of faith. It is a defiance to the enemy that he cannot bomb us beyond our power to rebuild, and an act of faith that we shall rebuild for a free and triumphant Britain.
I, also, wish to welcome this Bill, especially as it is, I think, the first time that a really big scheme of insurance has been introduced by the State. The former Insurance Acts, such as the National Health and Unemployment Insurance Acts, were not really insurance schemes at all, because they applied only to the bad lives and the healthy lives were left out. A great number of people in the community, not normally subject to unemployment or subject to a breakdown in health because of bad conditions, were not asked to contribute to those schemes, and so those schemes were made lopsided and top-heavy. On the other hand, this scheme extends contributions over practically the whole of the population. The risk in this case is not on an equal scale for the whole population, because some districts may be badly bombed and others may escape, but the very essence of insurance is that that those who are safe should make a contribution to those who are exposed to risk. But this principle is violated again when we come to the third part of the Bill, the property and chattels insurance. Only some people are to be insured under the private chattels scheme, and that vitiates the whole principle of the Bill.
Obviously the only people who will insure under this part of the Bill will be those who feel that they may be subject to a special risk, and therefore the funds which will be available from that part of the scheme, will be quite inadequate to meet the damage done. Like other speakers, I would urge upon the Government not to vitiate their scheme by making this part of it voluntary, but to bring it under the compulsory Clauses of the Bill, and find ways and means of overcoming the difficulties of collecting premiums. The Chancellor of the Exchequer did not convince me, by putting forward the difficulty of fire insurance premiums. After all, in war we must get over difficulties, and I am not at all sure that it is beyond the skill of the Chancellor of the Exchequer and his Department to overcome this difficulty. If we are to adopt the rule of thumb method in other parts of the scheme, there seems to me to be no reason why we should not say to these people: "Assess the value upon which you wish to pay, and pay the premium, and then we will examine whether you have over-insured or under-insured and pay accordingly." I wish now to refer to a danger arising from this Scheme which has not been properly provided for in the Bill. Already house-owners are making threats in the Press that they will raise rents to make tenants pay for the insurance of their property.
In making a statement like that, it is only fair that the hon. Member should say who the people are so that they can be dealt with. He has said that house-owners have already threatened to raise rents, which I think will be impossible.
If the hon. Member is interested I will give him the cuttings. The fact of the matter is that this is not like an ordinary tax which may be passed on to the purchaser. This is a benefit to the house-owner because in the event of property being destroyed, the community undertakes to safeguard him. However, I give that as a word of warning, because the possibility is being considered by some people. A very prominent member of a property-owners association told me that the charge was most unfair in its present incidence unless it could be passed on.
I see nothing in the Bill to deal with the question of fair wages in connection with the reconstruction of the property. I think the Chancellor of the Exchequer might take into account that, if money is to be paid out by a State Department for the rebuilding of property, the ques- tion of fair wages must be covered somewhere in the proceedings, otherwise trouble will develop at a later stage. I trust that the Fair Wages Clause will be a condition of the payment of any money to anyone who rebuilds. Clause 55 seems to deal with hire purchase, but I am not sure that it deals with hired goods not meant to be purchased—gas cookers and electric cookers and other things hired to householders and factories. I think that point will have to be dealt with.
I am in agreement with the Chancellor that these allowances should not be permitted to rank as business expenditure. Of course, it is an expenditure out of income but, if it is allowed as a deduction for Income Tax purposes, it simply means that the premium will become unfair in its incidence. It will bear more hardly on people with smaller incomes who do not get so much relief as those who get bigger relief by paying bigger Income Tax. It is important that the incidence should be maintained in a fair way, and the Chancellor has met that, by not making it a chargeable expenditure against Income Tax. It is obvious that, if that were allowed, the premium would have to be raised—and it will be payable by people whose premium is high enough already—instead of being reduced. In regard to mortgages, while I approve of the idea of distributing the cost of the scheme over those who are to benefit by it, I think a more simple method might have been adopted by allocating the respective insurances between the owner and the mortgagee. It could be done as a proportion of the interest which the mortgage pays to the mortgagee. He already deducts Income Tax when he pays interest, and it would be a very simple matter if, in addition to deducting Income Tax, he also deducted the proportion which would be the insurance contribution of the mortgagee towards his share of the insurance. There is one point regarding the valuation rolls which is going to raise a little difficulty. In different cities the method of valuation varies greatly and if the incidence of the tax is carried out in accordance with the valuation roll, that will mean differences of incidence and some injustice.
To return to the larger aspects of the Bill, I welcome Clause 8, which gives power to the Treasury to control any future development in the interest of national planning. In Clause 29 the Commission seems to be given power to control what shall take the place of the old building. Nothing is of more importance than these powers, and the question arises immediately, in regard to certain classes of buildings, whether the property-owner is to be paid the value of reinstating his property regardless of whether it is in the public interest or not that it should be reinstated. No one wants to reinstate some of the very ordinary buildings of 100 years ago as they are to-day and it may be that, both for the benefit of the State and for the benefit of the property-owner, a much more modern building could be erected at far less cost. Provision, therefore, should be made that it should not necessarily mean the reinstatement of things as they are, but the reinstatement of something which gives equal amenities and equal utility. [ Interruption ]. Obviously the Bill is not meant to reinstate carving and ornaments.
There is no provision in the Bill for bringing in the Ministry of Public Works and Buildings as a necessary adjunct in directing of what should take the place of old properties. The Ministry have been given large powers and the whole future of our country defends upon rebuilding being properly co-ordinated in one Government Department. I suggest, therefore, that in addition to the Board of Trade, the Treasury, and the Commission having the power to control what should take the place of the old, the Ministry of Public Works and Buildings should be brought in as a co-operating, if not as a directing, factor. The country may be much disintegrated; people have been uprooted from their habitual lives; and buildings may be destroyed, some of which have been built 100 years ago, and will not be regretted. But others, new buildings, will be more regretted, and it is essential that there should be a great scheme of national planning. I welcome that aspect of the Bill and I hope that the Chancellor will bring in the Ministry of Public Works and Buildings as a co-operating factor.
The right hon. Gentleman who opened the Debate from the opposite benches spent a considerable time in criticising the action of previous Governments in the long delay in bringing forward this Measure, which has received such wadespread and general welcome from all quarters of the House. I would ask the House to remember the conditions with which we were faced at the outbreak of war. We had been warned to expect some tremendous visits of the German Luftwaffe and no one was sure what its extent would be. Even with a State so financially and politically grounded as our own, it would have been injudicious to have committed ourselves without having some basis on which to work. When the war broke out we were all surprised that the Blitzkrieg did not occur. At that time it was proper to suppose that the feared extensive damage to property and life would be much less than was anticipated. The situation completely changed when the real Blitzkrieg broke upon us, and we were faced with the possibility that the liabilities with which the State or its citizens would be faced would be something beyond even the possibilities of our own financial strength to face. I cannot help feeling that it was wise at that time for the Government to take the attitude, "We cannot possibly know what the extent of the damage will be. It is impossible to give even any guarantee of insurance. All we can say is that when the war is over and we know what the damage is, what we do will be dependent on the financial strength of the State." That was the position—somewhat in the air—in which we were left.
As time has gone by the Government have appreciated that we have something to go on, vague as it may be, because who knows whether a much greater Blitzkrieg, with thousands instead of hundreds of aeroplanes, will come and entirely change the situation? Even today, when we are congratulating the Government on at last having brought forward an insurance scheme, I would remind hon. Members that this is not an insurance scheme, but a sort of contributory compensation scheme. We start on a sort of basis of insurance, but in the background and, indeed, in some of he provisions of the Bill, in the foreground, the State comes in, not with an unlimited liability, but with a widely extended liability. At the same time, we have to bear in mind that quite possibly a situation will arise in which it will be impossible, from the resources of either individuals or of the State, to replace 100 per cent, of the damage we may receive. Therefore, the Government have brought forward a hybrid Measure.
Really, the Government are taking a tremendous liability with regard to compensation, and instead of paying it all out of the revenues of the country are putting upon us some additional taxation to pay part of it. At bottom that is really what this Bill does. Let no one imagine that any light burden is being placed upon us. I agree that this is a wise Measure to have brought forward, and I have no criticism to make, except in some details, of the proposed rates of premium, but let us bear in mind that it will place a grievous burden on the whole community. An ingenious friend of mine who likes to dig and delve into these things took it upon himself last week to try to figure out what it cost a man with a gross income of £30,000 to pay for a bottle of whisky. He figured it out—do not cross-examine me on how he arrived at the figure—that it cost him between £18 and £19 a bottle. That is merely an indication of the tremendous weight of taxation which the country is bearing at the moment. The taxation in this Bill—because it is taxation and not premium—will be spread very widely over much smaller people, to use a common expression, than the heavy taxation falling upon the man with £30,000 a year, but, just the same, it will be an additional heavy burden upon the taxpayer and it makes merely a partial contribution to the compensation scheme.
The right hon. Gentleman opposite spent a little time in criticising the decision to take the Schedule A net figure as the basis of valuation, and while indulging in the usual criticism about possible past political or financial considerations having led to the refusal to take a property valuation, he did not in my opinion sufficiently emphasise the fact that to take Schedule A net value, rough and ready as the method is, unsatisfactory as it may he in certain directions, is the only practical method upon which we can proceed, because any other presupposes a valuation taken now, and, of course, we cannot do it. Therefore, whatever the misdeeds of past Governments, the fact remains that we had to take some rough and ready method which was to hand.
I shall have some other criticisms in Committee, but there is one point I should like to mention now, because it has been touched upon by other speakers. I refer to the voluntary insurance of goods and chattels and to the limitation of the amount. The Bill is a compulsory Bill. It is of the type of the legislation which we pass, after short consideration, day after day in this House. Then, surprisingly, we find that quite an appreciable portion of the insurable goods of the country which may suffer war damage are to be put into the realm of voluntary instead of compulsory insurance. I fail to see, first, why that exception should be made, and secondly, why there is a limitation of the amount. Just as the person who is unfortunate enough to have an income of £30,000 has to pay £18 for a bottle of whisky, so the persons who is fortunate enough to have £2,000 worth of pictures or Chippendale furniture is not allowed to insure it. He cannot protect himself, because the insurance companies will not take a war risk and the Government have fixed a limit of £1,500. That does not seem fair from the point of view of the unfortunate owner, or in accord with the general principle—to the exposition of which the hon. Member for Clackmannan and Stirling Easter (Mr. Wood-burn) made a valuable contribution—that we should all join in bearing each other's burdens in this matter.
The Chancellor of the Exchequer is also refusing to accept premiums.
I am only trying not to spoil the magnificent effect of the speech of my hon. Friend. There seems to be one curious omission in the Bill. I have not read every word of the Bill, but I have read a good deal of it. I would like my right hon. Friend to consider why, among his definitions, there is no definition of war damage. Perhaps he will look into this matter, because the omission opens the way to a good deal of trouble from solicitors and other people. It might not be unwise to include a definition of war damage. [ Interruption. ] I have not read the whole of the Bill but I did get as far as Clause 47.
The Bill is a great illustration of the advantages of having a National Government at a time like this. It has been welcomed in every quarter of the House. My right hon. Friend, in the great trouble which he has taken over the Bill, has consulted all kinds of quarters who might be interested, and there has not been a single criticism saying that he is under the thumb of vested interests. My right hon. Friend prepared the ground well before bringing the Bill forward. It is because we are, in our usual commonsense way, trying to make this National Government work in the way it was intended to work, namely, with the least possible friction and the greatest amount of determination to do the best for the country as a whole, that we welcome what my right hon. Friend has been able to achieve.
The Government and the Chancellor of the Exchequer most certainly have no reason to complain of the scope and the tendency of the Debate to-day; in fact, very much to the contrary. We have received from all sides of the House valuable suggestions in regard to what is an extraordinarily difficult Ball. In recent years, and in years Tang past, I have been concerned in a good many Bills of difficulty, but I have never had anything to do with a Bill approaching this in its complexity and scope. The right hon. Gentleman sitting opposite said that he did not believe anybody in the House understood the details of the Bill, and I respectfully agree with him. I do not believe there is anyone, and I have no doubt that, when we come to the Committee stage, the ignorance of some of us on some of the details of the Bill will be laid bare. I always except, of course, my right hon. Friend the Chancellor of the Exchequer, who, during many days in his room at the Treasury, has sat patiently and heard the greatest experts on these topics express their opinions. The opinions were not always easily reconcilable, and were not always easy to be understood by those of us who thought more slowly than some of those great experts.
The right hon. Gentleman opposite said, in effect, that it was a great pity that the Bill had not been introduced a long time ago. Well, better late than never; he will agree with that.
Better never late.
I agree with my hon. Friend. It is hardly for me to explain away the omissions of previous Governments. In that respect, at any rate, the sins of the fathers cannot be visited upon the children, and it would be unwise and indeed unnecessary to discuss whether or not the Bill should have been introduced at an earlier stage. I think it is true to say—and fundamental—that the Bill, or at any rate Part I of it, is not, in any proper sense of the word, a strict insurance scheme. Rather is it a compensation scheme, the fund out of which the compensation is to come being provided from two sources. It comes partly from the special tax and partly from the general body of taxpayers. That is to say, if the special tax—a figure of £200,000,000 has been estimated—is not sufficient, then it is the general body of taxpayers who must make up the difference.
The right hon. and learned Gentleman has used the phrase "a special tax." I should be glad to know whether this premium which the property holders have to pay is in fact a tax. I was given to understand that it was not strictly a tax, but I may have been misinformed.
Before I answer that question I should like to know what the right hon. Gentleman means by "a tax." It is a compulsory payment, and in that sense it is a tax. Of course, it is not right to say that it is a tax on things. You cannot tax things. You can tax only people, of course. In so far as it is a tax, it is a tax levied, or a compulsory payment imposed, on a particular class of persons, namely, owners of property, and, for my part, I think it is quite right that there should be imposed upon the owners of property a compulsory levy, which in certain events will have to be supplemented out of the general body of taxpayers.
Does the right hon. and learned Gentleman quite see the force of the question put to him by my right hon. Friend? Will this tax, if such it be, be recoverable in the same manner as a Schedule A tax, which, as the right hon. and learned Gentleman himself knows, is on the property and not on the person and is recoverable from the occupier of the property?
There is a complete code about recovery upon the landlord. I see the point which the hon. Member has in mind, but I do not want, if I may be excused, to get fogged up at the moment in a question as to whether this is a tax or not. I think it is largely a matter of words. It is a compulsory levy.
I may say at once that the history of our discussion of this Bill proceeded in this way. We originally wanted to have a Bill which would have delighted the heart of the hon. Member for Chesterfield (Mr. Benson). He is a very logical man, and sometimes he sacrifices too much to logic. We contemplated having a valuation made, and we were going to value all properties in this country divorced from the land on which they stand; that is to say, the value of structures. We were going to value every structure and arrive at a figure, and a proportion of that—3 per cent., I think, was the idea—should be paid by way of levy. That was a very nice scheme. It could not have been started until after this war. There are not now the valuers to make any such valuation, and after the war we should have had to make a valuation of I do not know how many millions of properties. Some of us who remember the old land valuation controversy have some sort of idea of how long this would have taken, and it became quite obvious to us that if we had continued on those logical lines, it would have taken seven to eight years to get the new "Domesday Book," everybody would have had to await the Greek Kalends in order to get any compensation, and compensation would have been paid to the children or the grandchildren of those who have suffered to-day.
Therefore, we gave up that highly logical scheme and adopted instead an arbitrary scheme. Several hon. Members have asked questions as to whether or not it is not unfair that the persons making these contributions should not be allowed to deduct from their ordinary Income Tax returns, for instance, the amount of that levy or contribution which they are called upon to make. Logically, perhaps there is a good deal to be said for that suggestion, but those hon. Members should bear in mind that this, though perhaps not strictly capital, payment none the less stands in the place of. and takes the place of the original levy of three per cent, on the value which was in the nature of a capital payment, and they should realise, moreover, that at the present time it is contemplated that the general taxpayer will or may have to put his hand in his pocket and supplement the fund provided by the property owners. What is wanted by the Chancellor for that purpose is new money, and if you allow the property owners to deduct from their Income Tax returns the amount of the levy which they have to pay, then the Chancellor will really be finding the new money twice over. He will suffer, in the first place, in that he will have to bear the consequent loss by reason of this deduction," and if he then has to support the fund again out of the body of the general taxes, it simply means that the burden is lifted from a particular class of people—the property owner—on to the general taxpayer.
On balance, it may not be strictly logical—very little of this Bill is—but we believe it will work well and work fairly, and that the scheme we have suggested of not allowing these contributions, which are at any rate in the nature of a capital payment, is on the whole a fair one. It is not quite like an insurance premium, and I think it is a pity to press the analogy of insurance too far. I have already said this is more nearly a compensation scheme, a fund out of which compensation is to be paid being provided by two sources, than a simple, straight insurance scheme.
I think my right hon. and learned Friend would agree that that argument could not be advanced in regard to Part II of the Bill, which is purely an insurance scheme, as the premium will be payable to an insurance company and compensation will be paid by an insurance company?
I agree that the second Part of the Bill partakes very much more closely of the nature of an insurance scheme than does the first.
It might meet the convenience of the House if I were to discuss some of the points which have been raised. The Chancellor has made it quite plain that this is a case in which he presents the Bill to the House—we were anxious to have the Second Reading before the Recess in order that Members might have time to study it—and invites the co-operation of the House. He does not think that the last word has been spoken or that this Bill represents distilled wisdom. On the other hand, the Bill has been subjected to a good deal of thought, and although we invite the co-operation and expect the criticism of the House, and hope that as a result the Bill will emerge better than it is to-day, at the same time we do not want the House to think that we have not had strong reasons for the lines we have taken. The right hon. Gentleman sitting opposite asked what would happen if, in the period to August, 1941, the damage occasioned amounts to, let us say, £150,000,000, whereas the levy in respect of the same period amounts, say, to £200,000,000. If that position arises—and we all devoutly hope that it will happen that the damage will not amount to as much as the levies—the Chancellor will then come to the House and announce that we have £50,000,000 in hand. We shall have to consider carrying on the scheme for the next period, if the war has not come to an end. One obvious way will be to utilise this sum which is hanging over from the earlier period as a balancing amount for the second period, so as to have a lower rate of premium for the second period. But my right hon. Friend will come to the House, with a perfectly open mind, and discuss the best thing to do in regard to the second period. This is rather empirical. We expect to learn a great deal from the working of this Bill. It is no good thinking we can have a cut-and-dried plan now for the second period.
The statement that my right hon. and learned Friend has just made is very important, as, of course, he realises. When he says that the Chancellor of the Exchequer will come to the House, presumably he means that before there is any question of legislation there will be a Debate on the Adjournment, or in some other way, from which the views of the House will be ascertained.
I cannot commit the Chancellor of the Exchequer without his express approval, but I am certain that, on the working of this Bill, there will be ample opportunities for coming to a decision. I do not think we shall be able to see the weaknesses of this Bill until we come to work it. We shall find out where the shoe pinches when we have worn the shoe. I am sure that the Chancellor of the Exchequer in this matter desires very much to carry the House with him, and to have the benefit of the guidance of the House; and I am certain, from what he said to me, that he would be anxious to have the opportunity of consulting the House in the way the Noble Lord suggested; but I cannot, of course, commit him.
An hon. Member asked whether banks would be able to make advances on the strength of the promises of payment—would there be something in the nature of a negotiable security, he asked, on the strength of which advances could be made? The answer is, no. It is not considered desirable that the right to receive compensation should be assignable, save, in certain circumstances, with leave. Otherwise, you might have people trading in these securities, buying up the right to receive payments; and you might then have other people selling the right to receive payments, receiving a discounted sum, it is true, but a lump sum clown, which they might then be able to spend more or less as they liked. It would be very difficult to keep any control over them. This is, of course, one of the matters to be considered in Committee; but, on balance, it seemed to us undesirable that there should be this kind of trading, or that there should be large sums of spending power put into the hands of people without any real check on the way they spent it. Therefore there is a provision which enables people to get the consent of the Commission to assign; but, otherwise, the right to receive a payment cannot be assigned.
I think my right hon. and learned Friend will realise that the question arises of businesses being destroyed. Unless the owners can negotiate the promises of payment with the banks, how can they continue to function in business?
That is one of the cases in which they might apply to the Commission for power to assign.
This would be a matter of very great urgency to the business concerned. They might have to secure property the next day. In the case of a food organisation, there is the responsibility for supplying rationed food to the community. How are they going to get on while they are awaiting the decision of the Commission?
That is a matter which certainly will have to be considered, and I am grateful to my hon. Friend for raising it. [ Interruption. ] I am anxious to give everybody a chance to interrupt, but I want to finish in a few minutes. The right hon. Gentleman said with regard to first aid particularly, that he is very anxious for a speedy decision. Indeed, throughout the Bill he is anxious for a speedy decision; he is anxious to cut out a lot of red tape. I cordially agree, but let us face realities. After a bad raid, we may have 2,000 or 3,000 claims put forward. These claims must be subject to some investigation and checking. All I will say is that the Chancellor of the Exchequer is very keenly alive to the necessity of speedy and prompt decision, realising that justice delayed is injustice. On the other hand, I cannot say more than that he will do the very utmost he can to see that prompt and speedy decisions are given.
The next question about which I was asked was that of charities, and in particular, why the National Trust were excluded. They were excluded because, after talking this matter over with the National Trust, they expressed the view that that was the best thing for them. Some of the properties of the National Trust are properties which produce income; many of them are priceless historic possessions which cannot be restored by money at all. On the whole, after discussing the matter, they came to the conclusion that the best way out of the difficulty was to leave them out altogether, so that they neither pay contributions nor do they receive compensation in the event of their sustaining damage.
With regard to Part II, he asked about the 30s., and, lest there is any misapprehension in the mind of anybody—I hesitate to suggest that there is in his because he is so clear thinking—the 30s. is the payment in respect of the two years down to the end of September, 1941, but it is a payment which, as a matter of concession, it was felt right should be allowed to be made in three instalments of 10s. but thereafter what is contemplated is annual payments.
Will the property-owner definitely not be allowed to pass it on to the tenant? For instance, will the coalowner not be allowed to put it into ascertainments, because the coal-miner finds 85 per cent, of them? If they put it into ascertainments, then the miners will have to find it and not the coalowners?
Our intention is, and we will see that it is carried out throughout the Bill, that the burden of paying the levy shall rest upon the property-owners. If persons interested in property are jointly interested in land or buildings it shall be equitably divided among them, but we do not intend to allow, as far as we can prevent it, any passing of this burden, which should rest upon the property-owners, on to anybody else at all.
What about the ascertainments?
We will certainly bear that point in mind. Various other Members have asked questions about private schemes for insurance. Some have asked why is not this compulsory. Let me deal with that, because that loomed rather largely in the discussion. This is a very difficult problem. It is probably the fact that the taxpayer will have to pay considerable sums of money, and it is quite right that he should, if what he is paying for is something which is essential to the stability of the nation and its interests. Supposing a man has invested his money, instead of in the funds, in an exceedingly valuable set of Chippendale chairs, why should the taxpayer, out of his taxpayers' fund, pay in a sum of money. If it were a strict insurance scheme and there was a chance of it working out, and even of a profit being earned, I would agree that it would be very reasonable, but, after all the best advice we can get, it is pretty plain that this scheme means a heavy burden on the taxpayers. We have to consider that aspect of it.
Not many working men buy these chairs.
That was an exceptional case, but may I finish this point, as it is important? If you are to have a compulsory scheme, you are, I presume, to have some limit. You are not going to make everybody insure. Some, in fact, will not be able to afford it, and if you are to say that people below a certain level of income or capital need not insure, that at once becomes a very invidious thing. To my mind, it seems to be introducing some kind of means test. (Hon. MEMBERS: "It is in the Bill.") No, I am talking about the purely voluntary scheme.
There might be a very good argument for not replacing Chippendale furniture, but not for saying that people who can afford such furniture should not make a contribution to the fund out of which this insurance will be paid.
That, too, is a very difficult thing. You would have to legislate so that everybody insured up to the fair value of their furniture. The Lake District has been mentioned. Human nature being what it is, the tendency would be for a man who owns Chippendale chairs in the Lake District to make out that they were worth very little because he thought to himself that there was a very slight risk in that area, and to say, "The lower I put the value of my chairs, the less my contribution will have to be." But if a man had these same chairs in Coventry, he would no doubt be inclined to place a very high value on them, and, therefore, you are contemplating the Chancellor of the Exchequer going into business on an immense scale, and valuing furniture up and down the country.
Believe me, when we come to the Committee stage and this point can be more adequately discussed in the greater amount of time at our disposal, hon. Members will see that the making of this scheme compulsory has been considered, but that when you come down to brass tacks and work the thing out they will realise that there are very many difficulties indeed. There is this added difficulty: If you take upon yourself that vast scheme, you are in danger of making the whole thing top-heavy. It is a pretty difficult thing to run an insurance business, even with a highly trained staff, and may I say to the hon. Member for Ealing (Sir F. Sanderson) that Lloyd's and the insurance companies are not themselves going to write these risks? They are merely acting as Government agents for the purpose of collecting premiums. It is quite a misapprehension to think that they are coming into this class of business.
They will get commission.
Yes, they will get commission, but it is cheaper for us to do it that way than for us to set up a new organisation. That is why we did it; to set up a new organisation would be a very difficult task. I ask hon. Members to bear in mind, in considering whether we cannot have a great compulsory scheme up and down the country, the fact that it would place a burden on the scheme which is too great and would cause a breakdown. All these reasons are reasons which must be borne in mind in considering the desirability, of making this scheme compulsory.
I cannot conclude without just saying that the chorus of approval which we have had today has been rather broken by the hon. Member for Chesterfield. He did not like what he described as the lack of logic in our scheme. I am not sure that he quite liked the man in the Lake District standing in with the man in Coventry, but so far as I am concerned that is the best feature in the Bill. If I dare say so—and I am sure my right hon. Friend the Chancellor of the Exchequer will not mind—I think that that is a perfectly good piece of Socialism in our time. I would point out to the hon. Member that if he wanted to get a more logical scheme, he would have to wait for many years to get his valuation and levy, and that it is better to have something done now, even though the scheme is not completely logical, than wait years for a scheme out of which the only people who will really profit will be the lawyers. It is better to have some cut and dried rules in this way.
It being the hour appointed for the interruption of Business, the Debate stood adjourned.
Debate to be resumed upon the next Sitting Day.
Electricity (Supply) Acts, 1882 to 1936
Resolved,
"That the Special Order made by the Electricity Commissioners under the Elec- tricity (Supply) Acts, 1882 to 1936, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, in respect of parts of the rural districts of Basingstoke and Kingsclere and Whitchurch in the County of Southampton, a copy of which was presented to this House on 26th November, be approved."—[ Mr. Montague. ]
The remaining Orders were read, and postponed.
Adjournment
Resolved, "That this House do now adjourn."—[ Mr Boulton. ]