House Of Commons
Tuesday, 4th February, 1941.
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 DEPUTY-SPEAKER, pursuant to the Standing Order.
Private Business
Cannock Urban District Council Bill
"to modify the provisions of the Cannock Urban District Council Act, 1919, with regard to the period within which the consent of a Local Authority to the continuance of the running of omnibuses under that Act within their district should be obtained; to provide that a consent given in accordance with the provisions of this Act shall be deemed to have been given in accordance with and for the purposes of the said Act; to make such further provisions as may be incidental to the matters aforesaid; and for other purposes"; presented, and read the First time; and ordered to be read a Second time.
Great Western Railway (Superannuation Fund) Bill
"to provide for a superannuation fund for certain of the salaried staff of the Great Western Railway Company in substitution for the Great Western Railway Superannuation Scheme established under the provisions of the Great Western Railway (Superannuation Scheme) Act, 1908; and for other purposes"; presented, and read the First time; and ordered to be read a Second time.
Great Western Railway (Variation Of Directors Qualification) Bill
"to authorise persons holding offices or places of trust or profit under the Great Western Railway Company to become Directors of the said Company and for other purposes"; presented, and read the First time; and ordered to be read a Second time.
Kent Electric Power Bill
"to amalgamate the undertakings of the South East Kent Electric Power Company Limited and the West Kent Electric Com- pany Limited with the undertaking of the Kent Electric Power Company; to confer further powers on the Kent Electric Power Company; and for other purposes"; presented, and read the First time; and ordered to be read a Second time.
London Midland And Scottish Railway Bill
"to empower the London Midland and Scottish Railway Company to acquire lands; to amend the London Midland and Scottish Railway Superannuation Scheme; to authorise the Midland and Great Northern Railways Joint Committee to acquire lands; and for other purposes"; presented, and read the First time; and ordered to be read a Second time.
Railway Clearing System Superannuation Fund Corporation Bill
"to provide for reorganisation of the affairs of the Railway Clearing System Superannuation Fund; for alteration of the benefits to which contributing members of the Fund are entitled and the contributions payable to the Fund by contributing members and bodies; for admission of women to the Fund; for sectional division of the Fund and for guarantees of solvency; for amendment of the Railway Clearing System Superannuation Fund Acts, 1873 to 1914, and Rules made thereunder; and for other purposes"; presented, and read the First time; and ordered to be read a Second time.
Southern Railway (Superannuation Fund) Bill
"to substitute new rules for certain of the existing rules of the Southern Railway Superannuation Fund established by the Southern Railway (Superannuation Fund) Act, 1927; to amend that Act; and for other purposes"; presented, and read the First time; and ordered to be read a Second time.
Oral Answers To Questions
Trade And Commerce
United States (British Goods)
1.
asked the President of the Board of Trade the special steps which are being taken to stimulate the marketing and sale of British goods in the United States of America, and will he consider the advisability of approaching the Government of the United States of America with a view to obtaining modifications in any existing trade agreement, or concessions in a new one, which would increase the demand for British goods in America, particularly in woollens and worsteds, cottons and linens, leather goods, pottery and glass?
All possible encouragement is being given to the marketing and sale of British goods in the United States of America, both by export groups and through Government facilities such as those provided by the Department of Overseas Trade and Export Credits Guarantee Department. The necessary materials and labour are made available for such exports to the utmost possible extent. The suggestion in the second part of my hon. Friend's Question is not being lost sight of.
Is there a permanent British marketing and selling agency at work in the United States?
No, Sir. We are examining plans for the establishment of such an organisation.
Patents Law
3.
asked the President of the Board of Trade whether he is aware that the manufacture of certain patented articles has ceased, or has been considerably reduced, on account of war conditions; and is he prepared to consider increasing the life of such patents for the same duration as the period of interruption as in the last war?
Section 18 (6) of the Patents and Designs Acts, 1907 to 1939, provides for the extension of patents where the patentee as such can show that he has suffered loss or damage through the war. This is the provision which was made for the extension of patents on account of their interruption by the last war and I do not, as at presnt advised, proposed to introduce further legislation on the point.
Is not the Minister aware that a large number of patents will expire during the war and that congestion is likely to take place? Cannot he see his way clear to issue a general order in order to overcome these difficulties?
Fire And Burglary Insurance (Premiums)
2.
asked the President of the Board of Trade whether he will call the attention of insurance companies to the likelihood of a reduction in the number of claims arising out of both fire and burglary policies as a result of the new system of general fire-watching and prevention; and whether he will consult with them as to the possibility of some reduction in premiums?
No, Sir. In war-time the risk of fires and burglaries is increased in many ways, apart from enemy action. It is too soon to say how far the additional security provided by the fire-watching system will offset this extra risk.
Mr.
Has my right hon. Friend any evidence to support his statement; and if the premium cannot be reduced, can he approach the insurance companies, with a view to getting them to make some contribution towards the cost of maintaining watchers?
The figures for 1939–40 support my statement.
Would it be possible to publish those figures?
Italian Prisoners Of War
7.
asked the Secretary of State for War whether the Government have come to any decision with regard to the disposal of Italian prisoners taken by the British Army in the Libyan campaign?
I would refer my hon. and gallant Friend to the answer I gave to my right hon. Friend the Member for Newcastle-under-Lyme (Mr. Wedgwood) on Tuesday last, of which I am sending him a copy. I can now add that the Government of the Union of South Africa have agreed to take 20,000 of these prisoners of war, and it is hoped to complete the arrangements for this very shortly.
Is the suggestion that a large number of these prisoners should be put to work on the land here, to be carried out?
Yes, Sir; that is being pursued.
British Prisoners Of War
13.
asked the Secretary of State for War, what number of inspectors are employed by the International Red Cross to visit and report on conditions obtaining at the different German prisoners of war camps; what is the total number of such camps; and how frequently are such inspections made?
I am informed that the International Red Cross have four inspectors who visit the prisoner of war camps in Germany, and that such visits are made about once every three months. The number of camps for British prisoners of war is 16. The inspections on behalf of the International Red Cross are independent of those made by the authorities of the United States of America (the protecting Power). We have asked the latter to make monthly inspections.
Does not my right hon. and gallant Friend think that, as there are 16 camps of very considerable extent, four inspectors is a very inadequate number? Would he make representations, through the protecting Power, that this number of international inspectors might be increased?
I will certainly see what can be done.
What is the nationality of these inspectors?
I shall have to have notice of that.
16.
asked the Secretary of State for War whether he can assure the House that British prisoners of war who were captured in the early summer wearing light summer clothing have now received warm battledress and overcoats; and, if not, what is the present position?
Enough greatcoats and suits of battledress have been despatched for distribution to all camps in Germany in which British prisoners of war are detained to provide one of each for every officer and man. It is definitely known that supplies of this clothing have left Geneva, but I regret that I have not yet been able to ascertain what numbers have been received in the camps.
Is my right hon. and gallant Friend aware of the great anxiety of relatives about prisoners of war being in the clothes in which they were taken prisoner in the summer? We know about the despatch; what we are anxious to know is whether the parcels have arrived. Can anything be done, through the protecting Power or otherwise, to ascertain whether the majority of the men have obtained overcoats and new battledress in this terribly cold weather?
What I said is that the parcels have not only been despatched, but that they have left Geneva—they have arrived at Geneva and have left Geneva. I am unable to say whether they have actually reached the camps. I am trying to get further information. As soon as I have it, I will let my hon. Friend know.
Has my right hon. and gallant Friend considered the possibility of these suits of battledress being intercepted by the Germans and used to clothe a possible invading force?
That would seem to be an argument for not sending them at all. We have to balance one consideration against the other. As I have said, a good deal of the despatching has been done.
Would the right hon. and gallant Gentleman consider sending a different kind of clothing, so that it could not be put to the purpose to which the hon. and gallant Member referred?
I will consider that.
Would my right hon. and gallant Friend consider the fact that out of every 20 parcels despatched by the Red Cross from this country, only one has crossed the German frontier?
asked the Secretary of State for War whether any further measures have now been taken to facilitate the transit of food and clothing to our prisoners of war in Germany?
I should like to assure the House that the War Office and the Red Cross Society are ready and anxious at all times to consider—and with the utmost sympathy—suggestions designed to promote the welfare of our prisoners of war, whether these come from Members of this House or the public at large. From my own personal observation I am satisfied that the British Red Cross Society is doing everything possible to further the end which we all have in view. The society has had a very difficult task to perform and has from time to time come in for criticism, in my view often unmerited. The House is well aware of the very real problems, quite outside our control, in connection with the distribution of parcels, which the society has been and is trying to solve. To help them in this task Field-Marshal Sir Phillip Chetwode tells me that he has secured the services of Mr. Stanley Adams as managing-director of the parcels department of the British Red Cross. Mr. Adams, who is chairman of Messrs. Thomas Cook & Son, Limited, has secured the co-operation of other business firms. He is, of course, a most experienced administrator and has an unrivalled knowledge of European transport problems. He is giving his services without remuneration.
If the right hon. Gentleman is satisfied with the work of the Red Cross, is he satisfied with the work that the Government have done?
All the time we are trying to improve the very difficult circumstances.
Is there not delay in the transit of parcels to Lisbon? That is not a matter for the Red Cross but for the Government.
While appreciating to the full the good will shown by the staff of the Red Cross, high and low, is not the burden of the public's complaint that they have been staffed by amateurs who have no knowledge of affairs, and is not this feeling confirmed by the very late appointment of a business man? Will the right hon. and gallant Gentleman take some steps to ensure that the staff of the Red Cross from top to bottom is re-organised to include people who have knowledge of business affairs rather than amateurs?
I think that Sir Philip Chetwode, by making this appointment, has shown that he was conscious of the value of professional as opposed to amateur help and that it would be a great advantage to the society to have help of the kind which Mr. Stanley Adams, with his great experience, can provide.
British Army
Railway Canteens, Wolverhampton
9.
asked the Secretary of State for War when the arrangements for the canteens at the Great Western and London, Midland and Scottish Railway stations at Wolverhampton, which were promised months ago, will be put into operation; whether he is aware that women helpers have been waiting for a considerable period to staff the canteens, and that there is a great demand for these canteens from men in the services passing through the stations; and what is causing the delay?
The delay in establishing these canteens is due to the prior claims on hutting arising from the necessity of providing troops under canvas with other accommodation. A hut, has, however, been erected at the Great Western Railway station, and the canteen is now open and in operation. Another ut has been made available for the London, Midland and Scottish Railway station, and the canteen will be finished and open by the end of this week.
Is the right hon. and gallant Friend aware that nothing whatever has been done yet at the London, Midland and Scottish station to erect a hut? Is he not misinformed?
I hope very much that I have not been misinformed. My information is that this hut has been made available, and that the canteen will be finished and opened by the end of this week.
Will my right hon. and gallant Friend be good enough to look into the matter again? I assure him that there is no sign whatever of any canteen at the station.
I certainly will look into it again.
Officers And Other Ranks
12.
asked the Secretary of State for War whether any recent Army Council order has been issued forbidding officers of His Majesty's Forces to mix with the ranks when off duty; and does any such order apply to members of the auxiliary women's services and the Women's Land Army?
The answer to the first part of the Question is No, Sir. The second part, therefore, does not arise.
Is the Minister satisfied that none of the subordinate authorities in the regions have issued such orders?
Yes, Sir; I am quite satisfied of that.
Home Guard
15.
asked the Secretary of State for War whether he is aware that the colonel at a zone headquarters, Home Guard, of which he has been informed, has drawn the attention of commanders of all group and mobile battalions under him to the letter from Lieut.-Colonel Bingham, published in the "Times," with the suggestion that the problem raised by the letter should be carefully borne in mind in recommending men for commissions; and what action he proposes to take in the matter?
I have called for a report on this matter. When it has been received and considered, I will write to my hon. Friend.
Is the right hon. Gentleman aware that, as we understand from the Press, these commissions are in process of being given now? I am sure the House will want an assurance that the circular sent out by this gentleman, a copy of which I have with me, will not influence the granting of commissions in that area until the right hon. and gallant Gentleman has looked into the matter?
Certainly, Sir. That is why I called for a report straight away.
21.
asked the Secretary of State for War, whether the Home Guard are authorised to fire on all attempts to land troops by parachute?
Yes, Sir.
While thanking my right hon. and gallant Friend for his answer, will he refer to the answer he gave to Question No. 16, and say how the Home Guard is to distinguish between our own air troops who may be baling out and invading forces, since the latter may be similarly attired?
I think that the Home Guard have a fair degree of common sense.
11.
asked the Secretary of State for War whether his attention has been drawn to the case of two men killed by a Home Guard; and whether any provision has been made for their dependants?
I am aware of one such case. The matter is being looked into.
Czech Forces (Pay)
17.
asked the Secretary of State for War whether the Czech soldiers in this country are paid by the Czech or by the British authorities, or both?
The expenditure on the pay and maintenance of the Czech Forces is met in the first instance from funds provided by the British Government, and charged to a credit opened by the Treasury in favour of the Czechoslovak Provisional Government. The actual issue of pay to individual Czech soldiers is made by the Czech authorities, except that men in hospital are, for convenience, paid by the British authorities.
Is it not unfair that English soldiers should receive considerably less pay than Czech soldiers in this country?
I have no evidence that that is so. I am informed that the rates of pay have been fixed by agreement between the Czech authorities and the War Office, and that they approximate to British basic rates.
Pioneer Corps (Foreign Soldiers)
18.
asked the Secretary of State for War whether foreign soldiers stationed in this country are employed in assisting British soldiers to clear up air-raid damage?
Yes, Sir. Three alien companies of the Pioneer Corps are so employed.
Dependant's Allowance
19.
asked the Secretary of State for War whether his attention has been drawn to the plight of Mrs. Knox, Peebles, a widow, whose two sons are in the Royal Scots; and whether the with- drawal of her dependant's allowance as a result of a visit by a means test inspector was on his instructions or with his approval?
Yes, Sir. Mrs. Knox was in receipt of a dependant's allowance at the rate of 20s. 6d. a week from 2nd September, 1939, to 14th July, 1940. On the latter date, when the case came up for review, it was found that a married daughter with a separate income was living with her. My hon. Friend will, of course, be aware that, under the regulations, if a dependant in Mrs. Knox's circumstances was to qualify for allowance, the average income per head of the household, after making certain allowances for rent, etc., must have been less than 15s. a week as the regulations then stood. The per capita income of Mrs. Knox's household, on 15th July, 1940, was, I understand, over 27s. The allowance was, therefore, terminated with effect from 15th July. On 28th December, 1940, there was a change in Mrs. Knox's circumstances as her daughter left the house, and the case would have been reviewed if the change had been brought to notice. It is made clear in the allowance book that the dependant should at once inform the paymaster of any change. The change was not in fact brought to notice until my hon. Friend did so in his telegram of 18th January. On 22nd January a provisional allowance was issued at the rate of 18s. a week with effect from 30th December, that is the Monday following the change, pending investigation of the new circumstances. The principle of an income limit which has governed the treatment of this case was that approved by this House after very full debate. It is implicit in that principle that the Department should take whatever steps are necessary from time to time to review cases with a view to ensuring whether the income limits have so changed as to alter the entitlement to an allowance. No instructions from me were necessary, nor was it necessary for me formally to sanction a course of action which had already received the approval of the House of Commons.
Is my right hon. and gallant Friend aware that the married daughter referred to is the wife of a soldier and is entirely dependent upon a soldier's allowance? Is it not therefore the fact that that allowance was expected not only to maintain the wife of the soldier, but the widowed mother of two other soldiers; is it the further fact that, when the hon. Member for Streatham visited this unfortunate woman, he found her in a state of destitution, undernourished and underfed, with only one shilling in the house; and, finally, does my right hon. and gallant Friend believe that he is carrying out the wishes of this House and the public outside in treating anyone like this?
At the moment the case was brought to the notice of the War Office action was at once taken, and a provisional allowance was issued. The matter is to be further investigated to see whether the compensation or the allowance which is being paid is the right one, and if it is not, an adjustment will be made.
May I remind my right hon. and gallant Friend that this case was brought to the notice of his junior Ministers three and a half months ago and has been continuously before them ever since, and that it takes a Parliamentary Question to have anything done at all?
Is it not the fact that this woman's daughter has practically been driven out of the house by the prevailing system, and is the right hon. and gallant Gentleman aware that this kind of case does not stand alone and that it is time that this system of counting in allotments was stopped?
I have acted under the law as passed by this House, and, as I said in my answer, this matter was very fully debated when the Bill passed through the House.
Is it intended to propose the amendment of these Regulations to bring them into line with the proposals now before the House under the Determination of Needs Bill?
There is an Inter-Departmental Committee sitting to see how the Regulations at present in operation can be dovetailed into the new Bill now before the House.
If it is found that they are less favourable than those contemplated by the new Bill, will the right hon. and gallant Gentleman consider altering them to make them more favourable?
I do not think that I can give a pledge of that sort; I must await the result of my investigations.
Vehicles (Road Accidents)
20.
asked the Secretary of State for War how many military lorries and vehicles in this country have been damaged through road accidents in the last 12 months; and whether, in view of the extra cost this damage entails to the taxpayer, he will impress upon the drivers of these vehicles to take the greatest care?
I regret that figures are not available for the last 12 months, but during the last two months of 1940 accidents in which military vehicles have been damaged occurred at the rate of 300 a day. This is a most unsatisfactory record, and stringent instructions have been recently issued enjoining observance of traffic regulations, road signs and speed restrictions imposed by law, and also laying down maximum speed limits for the various classes of Army vehicles in areas where no speed limit is imposed by law. A driver who breaks the traffic regulations except when, in case of emergency, he is given special written authority by an officer not below the rank of lieutenant-colonel, to drive a heavy vehicle at a speed in excess of that ordinarily prescribed, is liable to prosecution by the police, or to military punishment. Severe disciplinary action is to be taken where the authorised speed limits are exceeded, and in all cases of dangerous driving.
While thanking my right hon. and gallant Friend for the satisfactory steps he has taken, will he bear in mind that it is really speed which is more to blame than the quality of the driving?
There are probably many contributory factors.
Is my right hon. and gallant Friend satisfied that these Army vehicles are being properly kept up and serviced, that the state of the engines and vehicles generally does not leave a great deal to be desired at the present time, and that it costs the taxpayers a great deal of money?
I have no evidence of that, and I do not know; I have driven a car a great deal myself, and I do not think that that question can necessarily be a contributory factor to the number of accidents.
While appreciating the necessity for stiffening up the driving care displayed by soldiers in charge of military vehicles, does the right hon. and gallant Gentleman recognise that, during the period to which he referred when so many accidents occurred, the road conditions were exceedingly difficult, and that I myself have seen half-a-dozen lorries involved in accidents, when no amount of care could have avoided an accident?
I quite agree with that, but I do not think that it explains the whole list.
The Minister referred to prosecution by the police, and I would ask him whether the police are entitled to prosecute?
Yes, Sir.
Is the Minister aware that there is a contributory factor in the fact that many motor drivers are employed for other purposes in the Army, while men who have never been motor drivers have been newly trained and are without a road sense to drive these vehicles?
I am certain that as drivers become more experienced, the accidents should become less.
Small-Holdings, Ayrshire
22.
asked the Secretary of State for Scotland the number of applicants for small-holdings in the county of Ayr at present unsatisfied; why he granted the owners authority to destroy the subjects of the statutory small-holding of Hillend, on the Lanfine estate, Galston, as a separate holding and divide it between large neighbouring farmers; and whether, before granting such authority, he consulted the land court or offered the holding to any of the applicants on his list?
There are 762 outstanding applications for holdings in Ayrshire, but it is doubtful whether as many as half of these remain effective. The holding in question extended to only 13 acres in grass at 800 feet above sea-level, the grazing of which had been sublet during the whole of the last tenant's occupancy to an adjoining small farm of 136 acres. In these circumstances it was agreed with the landlord that the needs of food production and also of economic farming of the holding would best be served by combining its land with the neighbouring farm and adding the cottages to another farm for the much needed accommodation of a married ploughman. The consent of the land court was not required to this course, and in view of the situation and quality of the holding it was not considered desirable to risk the delay entailed by offering the subjects to applicants on the list.
Does not the Minister consider that it was a wrong action on the part of the Department to ignore the strong opinion of the land court that this was a suitable estate to remain as a smallholding; and is it not wrong also to destroy small-holdings, in view of the large demand for them?
I cannot discuss the general conclusion of the last part of the hon. Gentleman's Question, and, of course, I shall do all I can to extend small-holdings, but the facts in this case do not bear out this general conclusion, because the tenant of the farm with which it was proposed to amalgamate the land had had the grazing as sub-tenant during the whole of the late tenants' occupancy of the holding and had broken up more land because that grazing was available. This arrangement has been approved by the agricultural executive committee. It is my object to get the maximum production in war-time.
Is not the Minister aware that the landlord previously tried to have this small-holding destroyed as a separate holding and that the land court took a definite line against him?
I will look into that matter, but the House will see that cultivation on the top of an exposed hill at 800 feet above sea-level is hazardous; and, as a matter of fact, in 1914 the then tenant did not cultivate the holding but got employment elsewhere.
Coal Wagons
23.
asked the Secretary for Mines whether he can indicate the nature of the reply sent to the Executive Board of the Midland (Amalgamated) District with regard to their note sent to him concerning the loss of coal output consequent upon the shortage of railway wagons?
In co-operation with my right hon. and gallant Friend the Minister of Transport, I am giving constant attention to the problem of ensuring adequate supplies of empty wagons, not only in the Midland district but also in other coalfields. The action already taken includes the clearance of a large number of wagons standing under load at the docks in South Wales and arrangements for the freer movement of other loaded wagons from that area. Strenuous efforts have been and will continue to be made to speed up the clearance of wagons at depots throughout the country and relief has been given to the railways by restoring certain local coal traffic where practicable to the roads. I am advised that the wagons which were held up on the Great Western and Southern systems during the autumn as a result of the special working difficulties then experienced have now been cleared and are again in service.
Can my hon. Friend say whether any reply has been sent to the coalowners and how many of these 24,000 wagons which are surplus to requirements on the Great Western and Southern railways have been transferred to the Midland district, where they are losing at least 250,000 tons of coal a week and some pits are working less than four clays a week?
I quite see the difficulties, but the coal output in the Midland district is nearly up to the level of last summer. There is a shortage of wagons in more than one district, and I am meeting a deputation from the Midland area today to consider whether something can be done to augment the number of wagons used in that area. The problem is associated with the rate at which wagons can be turned round and the movement of traffic.
But my hon. Friend must remember that although the output is nearly up to the level of last summer, it is far below what could be produced if there were more wagons in that area?
I am sure that is quite right. More coal could be produced if there were more rapid movement of traffic on railways, but there are special conditions, to which I have referred in my answer.
Will my hon. Friend make more use of the inland waterways of this country?
We are doing so, but the inland waterways have to have proper boats and people trained to use them. That is being done, and more coal is being moved on canals now than some months ago.
China And Japan
24.
asked the Under-Secretary of State for Dominion Affairs whether he will give an assurance that the broadcast by the Australian War Minister from Singapore, on 12th January, stating that Australia had no quarrel with Japan, implies no change in Imperial policy involving recognition and support for China in her struggle against Japanese aggression?
Yes, Sir.
Civil Defence
Shelters
27.
asked the Secretary of State for the Home Department whether shelter-marshals are instructed, or empowered, to require that persons claiming to occupy regular places in public shelters must bring their gas masks with them?
I have been asked to reply. No, Sir, but it is, of course, highly desirable that persons using shelters should in their own interests carry a respirator, and my right hon. Friend the Minister of Health is considering what further steps can best be taken to impress this upon them.
Is the Ministry of Home Security taking all possible steps to make sure that in concentrating upon the risk of fire people do not forget the risk of gas?
29.
asked the Home Secretary whether he can make a statement concerning the measures adopted by His Majesty's Government to make trench air-raid shelters waterproof?
The problem of damp in trench shelters has received very careful consideration. Some of the difficulties are due to the hasty construction of trenches in unsuitable sites at a time of grave crisis. Where they are hopelessly damp local authorities have power to close them. A circular, giving expert advice on the best way of treating leakage through the roofs of trenches, was sent to local authorities on the 11th December last: briefly, the advice was to remove the earth covering and treat the roof with a waterproof layer of asphaltic or bitumastic material.
Can the hon. Lady say whether these measures are meeting with a fair amount of success?
Where they are being carried out in accordance with expert advice they are meeting with some success. Where local authorities scamp them they are not.
Is it not a fact that in many areas the difficulty arises from the fact that before the collapse of France the areas were considered to be safe, and dormitory trenches not necessary, but that these areas are now vulnerable areas, where dormitory trenches are necessary, and that the whole situation has shifted?
The matter is continually under review.
Does my hon. Friend propose to deal with the local authorities which are lax?
Yes, we are dealing with them continually, but it has to be done through the regional authority.
Is my hon. Friend aware that the worst cases are those in which local authorities have closely followed the Home Office plans, which have been a complete failure, and will she see that in any future proposals made the local authorities—who know their area better than the Home Office inspectors—are allowed to carry out the proposals they want instead of being compelled, as they have been by the Home Office, to put up shelters that are absolutely useless?
I cannot accept such a sweeping statement.
You could if you were on the other side of the House.
30.
asked the Home Secretary whether he can make a statement concerning the plans adopted, or approved, by His Majesty's Government for the provision of strong air-raid shelters by means of tunnelling in areas where the subsoil consists of chalk?
I am sending to my hon. Friend a copy of a circular which was sent to local authorities for their guidance in this matter. I may say that some chalk formations are likely to afford good opportunities for tunnelling and the chalk outcrops in the south-east of London are the subject of special examination by consultants working for the Regional Commissioners.
Do I understand that the hon. Lady and her right hon. Friend have personally examined the possibility of making such shelters on a very large scale within a reasonable distance of the centre of London?
That is hardly a job for myself or my right hon. Friend. We are having experts to do that; they are working under the Regional Commissioners for the London area and are in process of examination of the problem.
Will my hon. Friend bear in mind that experts working on this matter have made many mistakes in the past and that if this question receives the personal attention of herself or her right hon. Friend, the time will be well spent?
Detentions
28.
asked the Home Secretary in how many cases he has not accepted the recommendation of the Advisory Committee appointed to hear appeals from persons detained under Regulation 18B?
This information is contained in the reports submitted to Parliament in pursuance of paragraph (6) of the Regulation, and I would refer my hon. Friend to those reports.
As the Minister has already assured me that in other cases he has ac- cepted the recommendations of the Advisory Committee, will my hon. Friend explain why there is such interminable delay between the receipt of recommendation and the day on which the Home Secretary makes the decision?
No such assurance as the hon. Member has suggested has, in fact, been given. There is a number of cases in which my right hon. Friend has refused to accept the recommendations of the Advisory Committee. Particulars of these cases are contained in the Parliamentary Paper referred to in my answer.
Does my hon. Friend recollect the answer which he gave to a similar Question by me about six weeks ago, when he stated that invariably the recommendations have been accepted?
Air Raids (Destroyed Clothing)
47.
asked the Financial Secretary to the Treasury whether he is aware that people who have had their clothes destroyed in air raids often have to wait many hours at Unemployment Assistance Board offices before they can get a grant; that the grants when made are, in many cases, quite inadequate to buy necessary clothing, and applicants are sometimes not given Form W.D.3 informing them that the first payments may be followed by a subsequent one; and will he investigate these complaints with a view to remedying them?
The Assistance Board do their best to save applicants from waiting, but in the nature of things it is not always possible to foresee and make provision for the attendance of large numbers at particular points. I cannot accept the suggestion that the grants made are inadequate, though on this matter and the further point raised in the Question I will look into any particular cases which the hon. Member cares to bring to my notice.
Is the right hon. and gallant Gentleman aware that applicants sometimes have to spend one day there and are then told to come back the next day, and that in some offices the grants given are quite ridiculously small? If I send the right hon. and gallant Gentleman quite a large number of cases, will he look into them?
Yes, Sir. I rather think I have already looked into some cases which the hon. Member sent to me.
Is the right hon. and gallant Gentleman aware that I have a similar batch concerning the same office, and will he pay particular attention to them?
Internees, Canada
25.
asked the Under-Secretary of State for Dominion Affairs whether he is aware that friendly alien internees sent to Canada suffer in certain respects compared with prisoners of war interned in Canada; and whether he will consider consulting the Canadian Government on any improvements submitted to him by returned internees which have the approval of the Home Secretary?
I have been asked to reply. My right hon. Friend has no information to support the suggestion in the first part of the Question, but he will be glad to consider any information or suggestions teat may be submitted to him regarding the internees sent from this country to Canada.
Peace Aims
34.
asked the Minister without Portfolio the nature of the organisation he is setting up to consider the question of Allied peace aims; and when a statement on the subject may be expected?
I regret that. I am not in a position to make any further statement at present.
Is my right hon. Friend aware that there is a very widespread interest in this subject of peace aims and that the matter cannot be left in its present unsatisfactory position? Can he hold out any hope of a statement being made in the near future?
The Prime Minister, the last time this Question was raised, said that when a good opportunity arose it would be taken.
Has not the Minister an organisation of his own dealing with the matter in his new office?
Is the right hon. Gentleman not aware that there is a more widespread interest in winning the war first?
This is the best way Winning it.
Has my right hon. Friend's attention been called to the evidence given by Mr. Kennedy, late Ambassador of the United States to this country, to the Foreign Affairs Committee of the American Senate, in which he said that he had no idea what this country's peace aims were? He was Ambassador here for a long time, and in view of that statement, is it not desirable that any ambiguity there may be on the subject should be cleared up at the earliest possible moment?
I cannot be responsible for statements made by ex-Ambassadors. Some of these statements certainly have not the approval of numbers of Members of this House.
Does not my right hon. Friend recollect the statements made in this House and elsewhere by the Lord Privy Seal that a statement on peace aims would be made shortly?
Do the Government really know what the war is about?
Is it the policy of the Government to make such a statement?
National Finance
First-Class Railway Travel (Taxation)
35.
asked the Chancellor of the Exchequer whether he will impose a luxury tax upon first-class railway travel in the next Budget?
My hon. Friend will not expect me to anticipate my Budget statement.
Will the Chancellor bear this in mind when he draws up the Budget?
Banks (Wartime Co-Operation)
36.
asked the Chancellor of the Exchequer whether, since the outbreak of war, he has received the full co-operation and support of the principal banks both in London and the provinces; whether he is satisfied by the effort made by the banks to strengthen and maintain wartime credit; and whether the response of the banks to requests and suggestions from the Treasury and public Departments has been satisfactory?
The answer to all parts of the Question is in the affirmative.
37.
asked the Chancellor of the Exchequer what is the total sum lent by the five leading banks to the Government since the beginning of the war, including the increase in balance-sheet totals, sums released by the decline in call money, bills and advances, investments in Government securities and loans on Treasury deposit receipts?
As the answer contains a number of figures, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
Does the Chancellor agree that his Answer indicates the extent to which the banks of this country are co-operating with the Government in raising funds for the war?
Yes, Sir. That is what my answer does.
Following is the answer: The published accounts of the five leading banks do not enable me to state precisely the amounts lent by them direct to the Government since the beginning of the war, but the following figures will give my hon. Friend an indication of the sums involved. In the period between August, 1939, and December, 1940, the deposits of the five leading banks increased by £473,000,000, which together with a decrease in advances of £59,000,000 increased their liquid resources by £532,000,000. Cash balances, money at call, etc., and cheques in course of collection, increased by £130,000,000 and the balance of £402,000,000 was accounted for by an increase of £262,000,000 in bills discounted (consisting almost exclusively of Treasury bills and Treasury deposit receipts), and an increase of £142,000,000 in investments (almost exclusively in Government securities).Business Property (Revaluation)
38.
asked the Chancellor of the Exchequer whether he will consider the re-assessment of all shop properties in evacuation areas to cover the war period and one year after, upon the existing basis of valuation?
I assume that my hon. Friend is referring to reassessment for purposes of Income Tax Schedule A. Present conditions are quite unsuitable for a general revaluation, and a revaluation confined to particular classes of properties in particular areas could not be justified. I may, however, remind my hon. Friend that in the case of business property owned by a trader the net Schedule A Assessment on the property is deducted in arriving at the profits for assessment to Income Tax Schedule D and any reduction in a Schedule A assessment is therefore reflected in a corresponding increase in the Schedule D assessment so that a revaluation would not necessarily be to the advantage of traders.
Is not the existing valuation in many cases out of all proportion to present circumstances?
I have said that it would be quite unsuitable to have a general revaluation at this moment.
Government Securities (Overseas Investors)
39.
asked the Chancellor of the Exchequer whether it is possible for him to state the proportion of the new 2½ per cent. National War Bonds and 3 per cent. Savings Bonds taken up by overseas investors neither domiciled nor ordinarily resident in this country; and what special steps will be taken to attract people in overseas countries to invest money in these securities?
I regret that it is not practicable to identify subscriptions according to the domicile or residence of the subscriber. As regards the second part of the Question, my right hon. Friend the Secretary of State for the Colonies has drawn the attention of all Colonies and Dependencies to various ways in which by making a local issue of securities the proceeds of which would be relent to the United Kingdom Government they can assist the war effort. I am glad to say that one such issue has already been made and plans for issues in other Colonies are well advanced. In various other countries special facilities for the purchase of Savings Certificates by local residents have been made. I should add that arrangements have recently been made whereby persons resident outside the sterling area may purchase British Government and other sterling securities, and may at the time of purchase receive the licence necessary under the Defence (Finance) Regulations for their resale at any time.
War Industrial Plant (Tax Allowances)
40.
asked the Chancellor of the Exchequer whether, in view of the fact that a high percentage of war industrial plant is working at full capacity and that much of it will have to be replaced if the pressure of work is to continue, he will state the special concessions which exist to enable companies to set aside suitable sums to a plant-renewals account; and, further, are any new financial concessions under consideration to enable industry to set aside still larger sums which may be required for this purpose?
As the answer is somewhat long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
Following is the answer: I assume that my hon. Friend refers to allowances made in respect of plant and machinery in computing profits for taxation purposes. Annual allowances are given in respect of the wear and tear of plant and machinery and where owing to war production there is an abnormal wear and tear by reason of working additional shifts the normal annual allowance can be increased. Where plant or machinery has become obsolete and is replaced before the allowances for wear and tear have amounted to its cost less scrap value, a further allowance may be claimed. For Excess Profits Tax purposes an allowance may be claimed in respect of exceptional depreciation due to the war of buildings, plant and machinery provided for the purposes of a business since the beginning of 1937 and, as I stated on 19th December last, in reply to a Question by my hon. Friend the Member for Aylesbury (Sir S. Reed) I have decided to propose in my next Budget a similar allowance for the purposes of Income Tax and National Defence Contribution. The effect will be to allow for taxation purposes any loss incurred by a trader in providing additional buildings plant and machinery for the War effort.Charitable Trust (Investigation)
42, 43 and 44.
asked the Chancellor of the Exchequer (1) whether the investigation in Case T.1193/6/38, Inland Revenue, is still proceeding; whether the persons whose names were supplied as being willing to give oral evidence, and to produce documentary evidence of fraud against the persons concerned in the inquiry have yet been called on to give such evidence; and, if not, when it is proposed to call for this evidence;
(2) why a person appointed or recommended by the Westminster Bank, Limited, has been appointed to conduct the inquiry into Case T.1193/6/38, Inland Revenue; and whether, as the person concerned in the inquiry and against whom charges of fraud on the revenue are made has several accounts totalling large sums of money at this bank, he will reconsider this appointment; (3) whether he will cause an independent inquiry to be made in Case T.1193/6/38, Inland Revenue, at which evidence can be taken on oath, and witnesses subpoenaed; will he see that oral evidence is taken from those willing to give it, and that documentary evidence is examined from those willing to produce it; will he make such evidence available to Members of this House; and will he see that the person against whom the charges of fraud are made is suspended from holding the office of financial adviser to one of the control boards until the inquiry is completed?The issue in this case is whether the income of a certain charitable trust has been wholly expended for charitable purposes. The trustee has appointed a chartered accountant of experience to investigate the trust accounts and this investigation is very near completion. It appears from the accountant's report that certain payments, while in the main of a generally benevolent character, are not in the strict legal sense charitable. It has been accepted in principle that the sums erroneously paid away will be replaced in the hands of the trustee by the donor of the trust income and these sums will be applied by the trustee in accordance with the provisions of the trust deed. The amount to be replaced has not been finally ascertained, but it is expected that agreement on the figure which will receive the approval of the Inland Revenue will be reached shortly. When the adjustment has been made, there will remain no ground for objection on the part of the Inland Revenue, which is, of course, bound to repay to a charitable trustee Income Tax on income wholly expended for charitable purposes. In these circumstances I am satisfied that so far as Revenue interests are affected, they are being fully safeguarded. I see no ground for any further inquiry or for the course suggested in the last part of the hon. Members' third Question.
In view of the fact that statements have been made that this is a persistent fraud over a number of years, and that the sums involved are very considerable, does not the Chancellor consider it strange that the evidence offered has not been accepted, either orally or in writing, and does the right hon. Gentleman propose to ask for the evidence, if it is not asked for by the person who is charged with the inquiry, and who, by the way, is appointed by the bank, which is the trustee and which holds very large accounts for the person against whom the charges are made? Is the Chancellor willing himself to see the evidence that has been offered to the Inland Revenue authorities?
As the hon. Member is aware, this is really a question of the administration of a trust deed for charitable purposes, and, of course, the Inland Revenue are concerned only to the extent mentioned in my answer. I have yet to receive the final report, but I will gladly look into the matter further myself—I have already examined it, in view of the hon. Member's Question—and I should be very glad to consult with him on any point to which he thinks my attention ought specially to be drawn; but except for the interests of the Inland Revenue, it is a matter of interpretation and judgment as to whether a certain trust deed has been duly complied with or not.
Is not the Chancellor aware that loaning money to friends cannot be considered under any circumstances a charity, when those friends repay every penny of the money that was loaned, and then 13s. 9d. is received back from the Treasury because it was loaned out of a charitable trust? Is not that obviously a fraud?
I would hesitate to pronounce on that statement, but in any event a matter of that kind, if there was any ground for investigation, would have to be investigated by the courts. I am concerned in this matter only from the point of view of the Inland Revenue, and the hon. Member can rest assured that I will see that the public interests are fully safeguarded.
Will the right hen. Gentleman see me about this matter?
If there has been a misuse of charitable funds, is it the Chancellor's function or the function of any Minister of the Crown to direct the attention of the Public Prosecutor to the papers concerned?
Certainly, if any case of that kind arose and I thought a fraud had been committed, it would be my duty and the duty of anybody else to bring it to the attention of the appropriate authorities.
Armorial Bearings Duty
48.
asked the Minister of Health what is the present annual yield in Great Britain of the Armorial Bearings Duty; and what is the highest recorded yield in any year?
The yield of the Armorial Bearings Duty in England and Wales for the year ended 31st March, 1940, was £126,403. The highest recorded yield in any year for which figures are available is £32,840 in 1936–1937. As regards Scotland, I would refer my hon. Friend to my right hon. Friend the Secretary of State for Scotland.
Is my hon. Friend aware that this tax dates back unchanged, from 1869, when a single clause in an Act imposed duty on such varied objects as male servants, carriages, horses, mules, armorial bearings and horse dealers; and, as all the rest at various times have been freed from tax, including the horse dealers, will he ask the Chancellor of the Exchequer to see whether the Armorial Bearings Duty, after 70 years, does not, at least, need some renovating?
External Water Fittings (Repairs)
45.
asked the Chancellor of the Exchequer whether he is aware that owner-occupiers of leasehold houses are served with a peremptory notice by the Metropolitan Water Board when the external water fittings are damaged by bomb explosions; that this is done without regard to the exceptional circumstances in which the damage occurred and the difficulty of procuring the requisite labour to get the repairs done within seven days; whether, in cases of this kind, the expenses of repairs will be recoverable as war damage; and whether he will consider allowing the Metropolitan Water Board, and other water-providing authorities, to use their own staffs for the repair of such external damage, and thus make one comprehensive claim for repayment instead of a multiplicity of small claims by individuals who, in some cases, may not have the money to pay the cost of repairs?
My hon. Friend will appreciate that the first part of his Question is primarily a matter for my right hon. Friend the Minister of Health, but I understand the Board are showing the utmost leniency in the circumstances to which my hon. Friend refers. A payment for making good war damage of this character could under the War Damage Bill be made to the person by whom the cost of executing the necessary works was incurred and I shall be glad to consider providing in the Treasury regulations that comprehensive claims may be made by water authorities carrying out such repairs, in all cases where this is practicable.
Does the right hon. Gentleman appreciate that this will be very expensive to small tradesmen, if they are left to do this work, instead of one large undertaking doing it?
Jamaica (Constitution)
49.
asked the Under-Secretary of State for the Colonies whether he will give an assurance that before any Order in Council is made altering the Constitution of Jamaica opportunity will be given for discussion in this House?
As was stated in reply to a Question by the hon. Member for Dewsbury (Mr. Riley) on 29th January, the question whether the constitution of Jamaica is to be amended is among those questions which are being discussed with the Governor of the Colony who is now in this country; and I should prefer not to make any further statement pending the outcome of those discussions.
Is my hon. Friend aware of the great anxiety felt by residents in the Island on this subject, and will he give an assurance that neither the sale nor the leasing of the whole Island to a foreign Power is contemplated?
That is another question, but I can asure my hon. Friend in regard to the question of constitution that, if changes are agreed upon then, I think, the Government will consider the question of the matter being considered by this House.
Would the hon. Member give an assurance that there will be no leasing or sale of our possessions in the future without first consulting this House?
No, Sir.
Would the Under-Secretary convey to the Prime Minister the desirability of a statement at an early date on the whole subject of leasing and the constitution of these bases?
That can be done. The House will remember that a conference is sitting at the present, and I have no doubt that at its conclusion a statement will be made.
Is the Under-Secretary aware that this House is desirous of knowing exactly what is being done, and what will be done in the future, before a final decision is taken?
Is my hon. Friend aware that the great bulk of Members of this House are very happy with the arrangement with America in regard to this matter?
Are we to understand that the Cabinet feel at liberty to dispose of British possessions without consulting this House?
Food Supplies (Rationing)
32.
asked the Parliamentary Secretary to the Board of Trade, as representing the Ministry of Food, whether he is considering the extension of the personal rationing scheme to meals taken in hotels and restaurants; and whether he will ensure that no hospital, children's home or similar institution shall lack suitable foodstuffs if these are available to hotels and expensive restaurants?
My Noble Friend is not satisfied that the extension of the personal rationing scheme, through the collection of coupons for meals taken in catering establishments, such as hotels, restaurants, works' canteens, community kitchens, etc., is as yet necessary for controlling the consumption of rationed food away from home. As I informed my hon. Friend the Member for Frome (Mrs. Tate) and my hon. and learned Friend the Member for East Leicester (Mr. Lyons) on 11th December, the terms upon which rationed food may be obtained by and consumed in catering establishments are already under close examination, but in view of the extent to which all classes of the community find it essential to take some meals away from home the question is one of considerable complexity. I have no information to suggest that hospitals, children's homes and similar institutions are short of suitable foodstuffs, and if my hon. Friend has a special case in mind, I shall be glad to look into it if he will supply me with details.
33.
asked the Parliamentary Secretary to the Board of Trade, as representing the Ministry of Food, whether he is aware that in many cases housewives are finding considerable difficulty through shopkeepers refusing to serve them with certain non-rationed commodities when the shopkeepers perceive, some weeks in advance, through information in ration books that the housewives intend wholly or partly to change their retailer for rationed foodstuffs; and whether he will make arrangements that in future ration books shall not intimate intended change of retailer or at least for not more than six days before the change becomes operative?
I am not aware that housewives have been experiencing the difficulty to which my hon. Friend refers. Changes of registration with retailers must be effected by means of documents attached to ration books, and in order that the necessary supplies may be made available in the case of retailers whose registrations show an appreciable increase, information of the changes must be known well in advance of the date when they will become operative. I am afraid, therefore, that my hon. Friend's suggestion cannot be adopted.
Abyssinia (Status)
asked the Secretary of State for Foreign Affairs whether he has any statement to make on the subject of the attitude of His Majesty's Government to the future of Abyssinia?
Yes, Sir. His Majesty's Government would welcome the reappearance of an independent Ethiopian State and recognise the claim of the Emperor Haile Selassie to the throne. The Emperor has intimated to His Majesty's Government that he will need outside assistance and guidance. His Majesty's Government agree with this view and consider that any such assistance and guidance in economic and political matters should be the subject of international arrangement at the conclusion of peace. They reaffirm that they have themselves no territorial ambitions in Abyssinia. In the meanwhile the conduct of military operations by Imperial forces in parts of Abyssinia will require temporary measures of military guidance and control. These will be carried out in consultation with the Emperor, and will be brought to an end as soon as the situation permits.
Business Of The House
Can the Lord Privy Seal make a statement about the Business for the third Sitting Day?
On the third Sitting Day my right hon. Friend the Chancellor of the Exchequer will move the Votes of Credit, and, after any financial discussion, matters relating to the Ministry' of Information will be debated.
Will they he debated on the Motion for the Adjournment, or what will the procedure be?
That can be considered. Perhaps the hon. Member will see the on the subject.
Conduct Of A Member (Question Of Privilege)
I have a Question of Privilege to bring to the attention of the House. It arises out of a letter published in the "Times" newspaper on 31st January, signed by Joynson Hicks and Company, a firm of solicitors, on behalf of their client Mr. Weininger, one of the witnesses who gave evidence before the Select Committee on the Conduct of a Member. In view of the very short notice and other Business before the House to-day, it might not be convenient to take it now. I should like to ask you, Sir, whether the Motion will be prejudiced if it is taken to-morrow or later?
The right hon. and gallant Gentleman, of course, is quite right in raising the matter at once, as it has to be raised without any avoidable delay, but in view of the very short notice and also of the importance of the question which he has raised, I should he much obliged if he would raise it definitely tomorrow at the end of Questions. In the meantime there will be some further opportunity to consider it and the matter will not he prejudiced by the delay if it is raised to-morrow.
I will act accordingly.
Ministry Of Health Provisional Order (Shipley) Bill
Reported with Amendments from the Committee on Unopposed Bills; Bill, as amended, to be considered upon the next Sitting Day.
National Expenditure
Ordered, That a Message be sent to the Lords to request that their Lordships will be pleased to give leave to the Lord Beaverbrook to attend to be examined as a witness before the Select Committee on National Expenditure.—[ Sir John Wardlaw-Milne.]
Secret Session
Notice taken, that Strangers were present.
Whereupon Mr. DEPUTY-SPEAKER, pursuant to Standing Order No. 89, put the Question, "That Strangers be ordered to withdraw."
Question agreed to.
Strangers withdrew accordingly.
The following record of the Proceedings in Secret Session appeared in the Votes of Proceedings:
Resolved,
"That the proceedings in connection with the Motion relating to the Sittings and Business of the House, to be moved by the Lord Privy Seal, be held in Secret Session."—[Mr. Attlee.]
The House subsequently resumed in Public Session.
War Damage (Money) (No 2)
Considered in Committee, under Standing Order No. 69.
Resolved,
"That for the purposes of any Act of the present Session to make provision with respect to war damage to immovable property and to goods, it is expedient to authorise the payment out of moneys provided by Parliament—(a) of such sums as may be required to be paid into the Road Fund for the purpose of the payment thereout of grants to local authorities in Great Britain in respect of contributions required by or under the said Act to be made by them towards the expense of making payments in respect of war damage to highways; and (b) of any expenses incurred by the Public Works Loan Commissioners in discharging any liability imposed upon them by virtue of any provisions of the said Act relating to contributions." [King's Recommendation signified.]—[Captain Crook-shank.]
Resolution to be reported upon the next Sitting Day.
Orders Of The Day
War Damage Bill
Considered in Committee [ Progress, 30th January].
[SIR DENNIS HERBERT in the Chair.]
Clause 10—(Persons To Whom Payments Are To Be Made)
I beg to move, in page 9, line 44, to leave out from "thereof," to end of Sub-section (3), and to insert:
"which suffer depreciation in value by reason of the war damage, in shares proportionate to the amount of the depreciation in value which they respectively suffer by reason thereof, that is to say, the amount by which the value of those interests respectively immediately after the occurrence of the damage is less than the value thereof respectively immediately before the occurrence of the damage.
This Amendment alters and improves the principle of Clause 10. When the value payment is made, it is to he divided between the different persons interested. If one takes the ordinary case of a landlord and tenant, the Bill, as originally drafted, made the division according to their respective interests. The Amendment as will be seen—and I do not want to go into unnecessary detail on this complicated subject—does two things. It substitutes the principle that the proportions shall depend on the depreciation which each interest suffers as a result of the war damage. I think the Committee will see that that is plainly right. You are deciding how to divide up the payment with respect to war damage between, say, two parties who are interested, and you want to see, therefore, in what proportion they have suffered by reason of that war damage. That is the principle which is substituted by this Amendment for the principle contained in the Bill as now drafted. The other matter with which the Amendment deals is the case in which, under the Landlord and Tenant (War Damage) Act, a lease has been surrendered. In assessing the pre-damage value and the post-damage value one has to go back notionally to March, 1939, and if the lease has been surrendered by disclaimer under the Landlord and Tenant (War Damage) Act, the Committee will see that two things will have happened. The landlord will have lost his right to the rent but he will have gained the site and what remains of the building upon it. Therefore it is right in considering what depreciation has been suffered by him to take those facts into account. Paragraphs (a) and (b) of the Amendment will enable the principles which have already been described to he applied and make them fit the facts as they arise, where there has been a disclaimer under the Landlord and Tenant (War Damage) Act.(3) For the purposes of the last preceding subsection the value that a proprietary interest in a hereditament had immediately before the occurrence of war damage and the value (if any) that it had immediately thereafter shall be taken respectively to be the amount that the interest might have been expected to realise on a sale thereof in the open market on the thirty-first day of March, nineteen hundred and thirty-nine, if it had been subsisting on that day with the like incidents in all respects (other than its being subject to any charge or lien for securing money or money's worth) as it had, and the hereditament had been on that day in the state in which it was immediately before the occurrence of the damage, or immediately thereafter, as the case may be, so, however, that—(a) in determining the value that the interest had immediately after the occurrence of the damage, regard shall be had to what in fact happens as respects any surrender by virtue of the Landlord and Tenant (War Damage) Act, 1939, of any tenancy in the hereditament or in a part thereof (including that interest if it is a tenancy), and the amount that the interest might have been expected to realise on the assumed sale shall accordingly be determined as if any surrendered tenancy (including that interest if it is a tenancy and is surrendered) had been for a term limited to expire on the date on which the surrender takes effect, and had been held free from any obligation as to repairs to which it was subject; but (b) subject as aforesaid, the amount that the interest might have been expected to realise on the assumed sale shat be determined without regard to the provisions of the said Act."
I do not rise for the purpose of opposing this Amendment but to ask the right hon. and learned Gentleman whether any consideration has been given, in the case of disclaimer by a tenant, of the advantages which may accrue to the landlord in respect of the damaged buildings. In certain cases, under whatever bargain is made, a valuable building structure may be involved and the tenant may have lost all his rights in the matter, whereas the landlord will stand to benefit as the result of what may have been a considerable venture on the part of the tenant. This matter has been brought to my notice in several cases and I should like to know whether attention has been given to It.
That is a rather special case, but I will certainly have it examined. The principle of the Amendment is that it does take account of what the landlord gets as the result of the dis- claimer. There may, of course, be fixtures which had a special value to the tenant because of the use to which he put his premises but which may not have any particular value in the market. That is a fact which the tenant would take into account in deciding whether to disclaim or not. However I will look into the matter.
Will my right hon. and learned Friend consider, in connection with the disclaiming of such leases, the fact that a tenant may have been under pressure and unable to maintain the lease owing to the exhaustion of other resources?
I do not think that point arises on this Amendment.
Amendment agreed to.
The following Amendment stood on the Order Paper in the name of Mr. Graham White: In page 10, line 34, leave out from "therefor," to "except," in line 38, and insert:
"by apportioning the value payment between the mortgagee and the owner in the proportion which the amount of any such mortgage bears to the total value of the property, and failing agreement as to the apportionment the matter shall be determined by the Commission and."
I do not propose to move this Amendment.
The Chancellor of the Exchequer.
On a point of Order. The Amendment in the name of the hon. Member for East Birkenhead (Mr. White) which he does not propose to move seems to be analogous in principle to the Amendment which stands next to it on the Paper, in my name: In page 10, line 40, at the end, to insert:
I take it, Sir Dennis, that if you wish the principle to be discussed, it can be discussed on the Amendment in my name?"In all cases arising under this paragraph the shares of the payment shall be payable to the claimant and the mortgagee, respectively, in the same proportions as governed their respective liabilities for contributions on the last date, prior to the damage, when payment of interest was due."
I do not propose to call the hon. Member's Amendment. If he looks into it carefully, he will see that it is inconsistent with the paragraphs which have already been passed.
I beg to move, in page 10, line 41, to leave out from the beginning to "one," in line 46, and to insert:
The object of this Amendment is to make it plain that it is for the different parties concerned to decide among themselves as to the value of their respective interests and that it is not a matter for the Commission."(5) The value which a proprietary interest in a hereditament is to be taken by virtue of subsection (3) of this section to have had immediately before the occurrence of war damage, or immediately thereafter, shall be such as may be determined by agreement between the owners of proprietary interests in the hereditament, together with any mortgagee of any such interest, or, in default, of agreement, by reference to."
May I ask what would happen if they disagreed?
The Referees would decide.
Amendment agreed to.
I beg to move, in page 11, line 10, to leave out from "right," to the end of the Clause.
I am moving this Amendment, although I recognise that since it was placed upon the Order Paper the Chancellor of the Exchequer has given some further information about the Commissioners and their duties, which previously were not clear. Sub-section (7) of Clause 10 applies restrictions to the transfer of rights to compensation, and this might affect the amount which, for example, a bank might be willing to advance for business purposes. The object, it is clear, is to prevent speculators from buying up rights to compensation, but, on the other hand, there is a danger that unless this power of restriction is wisely used by the Commissioners it may prevent certain people from being able to carry on their business by depriving them of the necessary capital. I should like to know whether it would not be possible to amend this proposal so as to allow an assignment where it is made with the object of continuing the same type of business and in the same locality. If some words on those lines could be inserted in the Clause as an instruction to the Commissioners it seems to me it would meet a difficulty. I may mention that there is another Amendment in my name to Clause 42 which will be disposed of at the same time so far as I am concerned—in page 32, line 40, to leave out sub-section (5). That Amendment raises the same point.I hope that the Chancellor of the Exchequer will give us a good reason for resisting this Amendment, because it seems to have much to commend it. To bring in the word "speculator" is to try to throw discredit on a transaction. I see no reason why a man who has a legitimate claim and who wants ready money should not be free to sell that claim to anybody who is prepared, for a consideration, to advance the money. That seems to be a perfectly legimate transaction, and I do not see why it should be restricted. We ought to be careful that we do not prejudice our minds by frequent references to "speculators," who are merely people who are rendering a decent service to the community.
If it is proposed to restrict these assignments, I fail to see why they should be permitted in the case of a person who has some rights in the property, such as a ground landlord or a mortgagee: If we think it wrong to allow assignments, why permit them in that restricted class of case? The effect of it will be to force people who wish to raise money lo go to the one or two persons upon whom there is no restriction, and in that way we shall give the ground landlord or the mortgagee—
I do not quite follow that.
We impose no restriction in the case of an assignment of a share or part of a share to a person entitled to another share of the same payment. In such a case it is not necessary to get the consent of the Commission to the assignment. The effect of that will be to force persons who wish to raise money to go to that restricted market, and those people will be in a position to take advantage of their privilege and to make a lower advance.
This Subsection (7) gives power to assign the right to receive payments subject to the approval in writing of the Commission, but does not give any indication of what considerations of principle or policy are to guide the Commission in coming to a decision. We have no idea whether their approval will be given only in extreme cases, or whether it will be general and the exceptions will be few. I am thinking of businesses which have been smashed up, where the capital of the concern existed largely in the premises. There may be an opportunity of taking vacant premises near-by and re-starting business if it is possible to get the necessary capital by an assignment of the right to payment under this Measure. There is also the case of elderly people who own a fairly large house and gain their income by letting part of it; or they may own two or three houses as their source of income. The houses may be destroyed, but the owners will want their immediate income to continue, and it is not good enough for us to say to those old folk, who are perhaps in the last years of their life, "We will not allow you to assign your right to payment in return for an advance of money. You must wait for the money until after the war." Those are typical of the considerations which will arise, and we should be given some guidance by the Chancellor of the Exchequer on the line which will be taken, or, if possible, instructions should be incorporated in the Clause to guide the Commission in deciding whether they should give or withhold their approval.
I gladly say a few words on this matter. The general principle of the Clause was clearly indicated on the Second Reading of the Bill, and it was approved in all quarters of the House. I think the object of the Clause is plain. The first reason for inserting it was to ensure that the provisions of the Bill regarding the payment of money should not be circumvented by claimants assigning their claims with the object of getting loans on them. The other reason which appealed to me and my advisers when we framed the Clause was that we were afraid—there is no offensive use of the words "speculator" in this connection—that there was a danger of the exploitation of claimants by persons offering to advance the money at a discount. It might have led to a number of people going round trying to do that sort of thing. Those were the main reasons for inserting the Clause. I would refer my hon. Friend to a part of the Bill which, I think, will meet some of the cases which it was quite right to mention to the Committee, and that is the part which empowers advances to be made by the Commission. I have already undertaken to reconsider the amount, which is at present limited to £500. As a matter of fact, I was looking into the matter again yesterday. I hope that provision will meet the demand that a larger sum should be made available.
Finally, I think we may trust the Commission, in a reasonable case, not vexatiously or too strictly to use this Clause. The Amendment I am proposing to make will meet a number of cases. It is desirable that we should in no way encourage anything which will get round the Clause by way of advance payment. From the national point of view, we have to consider the expenditure of money, and at the same time we do not want exploitation by people who induce claimants to sell.Is it clear that the executors of a person are entitled to the payments on behalf of that person?
We propose to deal with that matter.
Has the right hon. Gentleman considered the point mentioned by one of my hon. Friends, as to whether there is any justification for giving a holder of a mortgage or a ground landlord a special interest in this matter? Obviously they will be provided with a means of using a certain amount of pressure to get more favourable terms, in a case where a man may be, for personal reasons, in desperate need of getting money. Just as happens in the insurance world, some of these claimants will wish to compromise, and may be defrauded out of their legal rights because they will have no other place to which to go except this limited market.
There is a clear case in which, I submit, it should be permissible to pay this compensation to another person, and that is where a contract for the sale of a hereditament has been entered into before the war damage was caused. If I agree to buy a property and sign a contract for its purchase, and the property is afterwards damaged, obviously, in law, the property, although not actually conveyed, is my responsibility and belongs to me. Therefore, I respectfully suggest that the right hon. Gentleman might put an Amendment into the Bill somewhat to this effect: "After 'shall,' in line 14, to insert:—
The Law Society has, I believe, raised this point with the right hon. Gentleman. It would appear one which would not infringe any of the principles which the right hon. Gentleman has in mind.'except in a case where a contract for the sale of a hereditament has been enterd into before the war damage has been suffered and in which case payments shall be made to the purchaser'."
I will certainly look into that matter, which seems to be a proper one for consideration. Another reason for putting the Clause in its present form was to assist arrangements which might be desired for the development of the property between landlord and tenant, and to facilitate them. I will have regard to what has been said. On the whole, I think it wise to retain this condition, but I will consider the matter.
In view of the undertaking given by the right hon. Gentleman, I do not wish to press the Amendment, and I therefore beg to ask leave to withdraw it.
Amendment, by leave, withdrawn.
I beg to move, in page 11, line 13, after the first "a," to insert "payment or."
I think it desirable that, as far as possible, the right to receive the payment should run with the assignment of the property. In order to prevent them from going in different directions it seems desirable that the person who is going to receive the property should have the right to receive the payment in respect of it. Those two things become dissociated sometimes but it is desirable to keep them together. I hope the point will be considered whether, after the death of the claimant, the right to receive payment of money should be separated from the right to receive the property.My learned Friend is quite right. We are looking into the point that under a will the right to the compensation should go with the property. On the main point of the Amendment, a provision to give a right of assignment in all cases where the property is transferred might go a long way to defeat the object of the Clause. If there is a bona fide sale by a man requiring money in order, for example, to get alternative accommodation, that is a case in which one anticipates consent would be given by the Commission to the assignment. The purchaser ought to be able to get not only the site but the right to the payment. As at present advised we think that the Amendment would open a door which it is the purpose of the Clause to provide should be opened only by the Commission. We therefore recommend the Committee not to accept the Amendment and I hope that my hon. and learned Friend will not press it.
What the Attorney-General has said is amply sufficient to show that it would be proper for the Commission, in the kind of case I have in mind, almost automatically to give consent. I do not desire to press the Amendment, and I therefore beg to ask leave to withdraw it.
Amendment, by leave, withdrawn.
Amendment made: In page 11, line 14, after "thereof," insert:
"or an assignment which does not affect any beneficial interest in the payment or share or in any part thereof."—[Captain Crookshank.]
I beg to move, in page if, line 15, at the end, to add:
This Amendment would cover the difficulty raised by the previous Clause. There is a case, of course, where the Commission are prepared to make a payment in advance. That means that the Commission make the payment, and that costs the person who receives it 2½ per cent. But there may be cases where the Commission are not prepared to make a payment—cases where they do not think it is justifiable—but where the man who has had his property destroyed may be in desperate need of receiving assistance for other purposes. This Clause would enable the Commission to advance him the money, instead of the man having to go to moneylenders or other people and borrow money at an additional 2½ per cent. This would avoid the complication of one man dealing with the value of the property, another man dealing with the question whether it is worth lending money upon it, and bringing in outsiders to go into the question and make arrangements which would be more complicated, less simple and less immediate in their action."(8) In any case where the Commission are not prepared to make an immediate payment. the Commission may, in their discretion, lend sums up to fifty per cent. of the value destroyed, and charge interest at the rate of two-and-a-half per cent. per annum, provided the Commission are satisfied that there is urgent need for temporary relief of the difficulties of the contributor, arising from the damage concerned."
My hon. Friend mentioned that the person he had in mind would, for various reasons, require to borrow money. He had in mind the case of a man with personal difficulties, who might be owing money, and matters of that kind. That suggestion, of course, is totally opposed to the principle of the Bill, as my hon. Friend appreciates. The State is making a considerable contribution in this matter because it is in the national interest so to do, and the main national interest which the State is seeking to preserve is the restoration of property, because, obviously, in our national economy, property plays such an important part. Therefore, we have in the Bill conditions such as would necessitate the Commission satisfying themselves that payments should be made—I have in mind at the moment value payments—and that they should be devoted to specific objects. Thus, speaking broadly, it would not be in the national interest that money should be obtained and devoted to some personal necessity or desire, and therefore one could not assent to my hon. Friend's proposal. That is why we have incorporated in the Bill the other Clause which enables advances to be made, not for personal necessities of an individual, but to enable him to rent another house, or perhaps even to purchase one again, so far as the national interest allows. That is the main principle of the Bill, and that is why I am unable to accept the Amendment on the Paper.
Amendment negatived.
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
May I draw the attention of the Chancellor to the fact that the first Amendment on the Paper standing in my name was not called? Clause 10 has no provision as to when payment is to be made for cost of works, and there is no part of the Bill which justifies the statement in the Memorandum as to the cost of works payment. In paragraph 4 of the Memorandum it says:
but there is nothing in the Bill to make it obligatory that payment will be made as set out in the Memorandum."'Cost of works' payments will be made as and when the repairs are carried out,"
We discussed the principle of this Amendment when my hon. Friend was not here. I discussed this point with my advisers, and on the Report stage I propose to move an Amendment in the direction indicated.
I would like to ask the Chancellor of the Exchequer whether there is provision for guaranteeing that the owner of a house gets anything at all out of the value payment. I recognise the difficulty which exists in understanding the complications of a Bill of this kind, but I am not quite satisfied, where owners have mortgages of a considerable amount on a house, that, when a value payment is made and the arrangement completed, it will not be possible for the owner of the house to receive nothing for his house and that the money will all go to the mortgagee and the other people who are claimants. There should be some assurance in the case of a person who owns a house, where the mortgage has been contracted at a time when the house had a different value on the market, and the owner finds himself liable for the mortgage, that the whole of the amount will not be claimed.
The problem of the relationship of mortgagee to mortgagor is one of the very gravest problems in this Bill. As a mortgagor who has been "blitzed," I am personally interested. This question raises very grave problems, particularly as the basis of valuation, being the 1939 value, is very likely to be altered after the war, with the result that the value payment received will be an entirely fictitious sum, bearing no real relationship to the loss sustained by the property owner. May I give two instances? The part of the value left in the hands of the property owner is his site, which had a certain value in 1939. The value of that site after the war may be vastly different: it may be very much smaller, although that diminution, caused by the increased number of sites on the market owing to war damage, is not taken into account. There is also the case of the single houses that have been knocked down. We know perfectly well that those sites are never going to be rebuilt on until the whole block of property is dealt with. Nobody will put up a modern house on one of those congested sites in a narrow mid-Victorian street. The owner, therefore, is left after the war with a site which has a value in theory but none in practice.
Again, let us consider, not London, but a provincial town where a big central area has been damaged. The value of that land may theoretically be very high, but an enormous number of sites are thrown on to the market, more than can be absorbed for a very long time, with the result that the owner is left with land which has a merely theoretical value but no practical value. The land is derelict and will remain so for years. On the other hand, the mortgagee is absolutely protected and will take the whole of, and possibly a great deal more than, the value payment. The probable position of the mortgagor under this Bill will be very serious. I admit that it cannot be dealt with under this Bill, and I have kept that admission to the last lest I should be ruled out of order, but I do feel that this Bill will have to be supplemented by some form of protection for the mortgagor, otherwise you will have one set of interests bankrupting another set of private individuals, owing to war damage.Perhaps I ought to say a few words on this matter, which is very important. As my hon. Friend who last spoke has indicated, it is really a matter for consideration, not under this Bill, but under such other proposals as may be put forward by the Government to deal with difficulties arising out of the war generally. So far as this Bill is concerned, I think the matter is quite plain, and I do not think anybody has any quarrel with it. You are bound to take the facts of the position as they are and the legal position as it now is, namely, that if in relation to payments under this Bill a mortgage debt is owing, the mortgagee is entitled to receive that amount. It is not simply a question of the mortgage on the property itself; in a vast number of cases very great value is attached to the personal covenant. You cannot lay down a rule in all these cases to say that the mortgagee shall not be satisfied and that his debt shall not be met. Neither can you say what an unfortunate position the mortgagor is in until you know something about the mortgagor himself, because you may very well have cases where the mortgagor is in a better position in fact to bear the blow than the mortgagee himself. This is a matter of the adjustment of debts, and the question of what shall happen and how the fair thing shall be clone is obviously not a matter for the War Damage Bill, but for more general consideration.
It is not entirely a question of the personal obligation. When the Government were building houses they found it impossible to build houses for all the people of this country, and they encouraged people to build their own. Builders said to people that if they would put down £50, they would build a house, and I know working people who with a great struggle succeeded in putting down £50 and who now theoretically own the house, but most of it is actually subject to a mortgage which they are paying off gradually by means of their savings. There can be no justification for saying that that was ever a personal obligation. Both the Government and this Parliament will be seriously neglecting their duty if they do not protect people who built houses, not only for their own sake but to relieve the Government of the necessity to build homes for the people. I beg the Chancellor not to allow a position to remain in which these people, if the "Blitz" does damage their houses, will be left without a penny after the sacrifices they have made to provide themselves with homes.
I should like to reinforce what my hon. Friend has said, and while I do not ask the Chancellor to give any pledge at this moment, I would ask him to use all his influence with his colleagues in the War Cabinet to get a Bill brought in by the Ministry of Health to deal with this complicated question. My constituency has a strong interest in this matter. I have something like 90,000 constituents, of whom a very large proportion are nominally in the position of owning their houses while in fact they owe a very large amount of money to the insurance companies. I would go even further than my hon. Friend and say that it was the encouragement which the State gave which led to the enormous extension since the last war of this method of financing housing. Unless there is a special Act on the subject we shall get a most appalling position. A great deal of damage has been done in constituencies like mine to that class of property. I should also like to urge very strongly that consideration should also be given to the fact that in some respects this Clause puts the mortgagee in a more favourable position than that in which he would be otherwise, because under the Rent Restriction Act the mortgagee is very strictly curtailed as to the manner in which he can exercise his rights.
I do not think we can accept what was said by the Chancellor. It does not seem to me that the question of the personal covenant of the borrower really affects the matter. It is not a question of what the security was; it is a question of sharing the burden of damage, which has no relation whatever to the question of the security raised in the first instance. All of us, and not least those of us who are lawyers, have, of course, an interest in this matter, which is a very difficult one from every point of view. No one desires to do an injustice either to the mortgagor or to the mortgagee, but unless some provision is made—and I do not see why it should not be made under this Bill, and indeed under this Clause—a very serious injustice will be done to many mortgagors.
Take the case of a man who has mortgaged a house which he has purchased, and which was valued at £1,000. Suppose that it is re-mortgaged at £750—a very common case. It may be that the value on 31st March, 1939, was only £750. That, presumably, will be the sum paid by the War Damage Commission. The whole of that sum would go to the mortgagee, whether an individual, a building society, an insurance company, or anybody else. If that sort of case is multiplied, as it may be, by hundreds or thousands, there will be an outcry. The way to deal with the position seems to me to be very clear. I admit that it is one which may inflict hardship on mort- gagees, but, in the great majority of cases, especially where they are owner-occupiers, they are in a much better position to bear the burden than the mortgagor. Take the case which I have given. Assuming that the value of the house on 31st March, 1939, is £750, the matter might be adjusted by giving the mortgagor and the mortgagee each a part of the £750. The sum paid is three-quarters of the original purchase price of the house. Three-quarters of the sum which, on a logical basis, would be paid to the mortgagee, would be £560; and the balance of the £750 would amount to £190. So the mortgagee would get £560 of the £750 originally advanced, and the mortgagor would get £190 out of the £250 which he originally put in. That would, I think, do substantial justice as between the two parties. I agree with a good deal of what was said by my Noble Friend the Member for Horsham (Earl Winterton), but I would point out that what I have suggested would not require a special Act of Parliament. Clause 10 of this Bill deals with the question of the persons to whom payments may be made, and—as I understand—the apportionment of those payments. Therefore, it would be quite competent for such a scheme as I have outlined to be laid down. That would avoid a difficulty which, if not tackled, will become very serious, and which might take away a great deal of the value of this Bill.There are some general considerations which must necessarily influence one when trying to work out whether one should lean on the side of the mortgagee or the side of the mortgagor. Those general considerations apply equally whether we are considering the question of compensation or that of contributions. I have some observations which I was going to make when we come to the question of the contribution, but I could equally well make them now. So far as compensation is concerned, I do not see any other practical way than that of putting down a particular date. After arguing the question, we have decided on 31st March, 1939, although it may well be that somebody who bought a house through a building society will find that the market value on that date is below the unliquidated amount of the mortgage. That is bad luck, I admit; but I do not see how it can be helped. On the broader question of which way we shall move when it comes to considering the interest of the mortgagee or that of the mortgagor, we have to draw the line somewhere. I suggest, and I think hon. Members opposite are themselves inclined to this view, that we should place the line just above the point where the lender is in some sense the partner of the borrower for the purpose of building the house. We can hope to achieve only a sort of rough justice. If we try to go further we come up against what we are always coming up against in Parliament, a position where the best becomes the enemy of the good. If we go above that line, we get into that field where the borrower may, in borrowing the money, have had other motives than home building.
In the main, in that higher field, the borrower stands to gain all there is to gain, while the lender's interest is, by the very terms of the contract, limited. It is true that an uncovenanted risk has descended on both borrower and lender from above, on account of the war. I do not think that that affects the major question of equity involved. But when we consider the practical issues which arise in the higher field, both on the side of paying out compensation and that of collecting contributions, the difficulties are almost insuperable, for instance in a case where a mortgage constitutes only part of the security for a debenture or a loan, and the trustee or the lender is looking for his security more to other assets, on, which he has a general charge.Some of us would be willing to limit the special arrangement to the owner-occupier.
And so avoid the commercial aspect.
I have not actually considered the implications of that aspect, but I am in sympathy with the view that leads to that suggestion.
How are we to deal with the question of temporary advances or fluctuating credits secured by mortgage or mortgages deposited as collateral by third parties? But there is another major consideration involved. Mortgages are widely regarded as a very safe and well-tried form of in- vestment, and their security is held to be inviolable. Is it wise to pass legislation which might threaten this inviolability and make the class of persons who invest in mortgages—a class which includes insurance companies, banks, trustees and friendly and charitable societies of all kinds—fight shy of this form of investment?The hon. Member has succeeded in demonstrating that this question is not free from difficulties. There are many complications. But this Bill does settle a principle—the principle that where the amount of compensation is limited, all of it, if necessary, is to go to the mortgagee. This is a principle which we ought not to accept at this stage, except with very great reservation. This is, as the hon. Gentleman said, an uncovenanted risk. Neither the mortgagee nor the mortgagor contemplated that property would be destroyed by enemy action, and, therefore, in my view, it would be equitable that the risk should be shared by both. It is inequitable that the whole of the burden should be placed on the mortgagor, with the mortgagee left in the same position as if this were an ordinary transaction. I can realise the position where money was advanced on a commercial basis and not for the purpose of providing the whole, but this Bill goes far beyond that and settles the principle where money is advanced. There is no Amendment on the Paper to deal with the point, and nothing can be done at this stage, except make our position plain. I believe I shall obtain the sympathy of everybody in the Committee when I say that, as the thing stands now, it is inequitable that the mortgagee should recover the whole of his money and the mortgagor nothing at all in cases where the amount provided is not sufficient.
I hope, as the right hon. Gentleman said, that the Chancellor of the Exchequer will give very serious consideration to this matter and not allow it to remain where it is, but will, at the earliest possible moment, introduce legislation to deal with what might become a very serious national grievance throughout the country. The right hon. Gentleman's constituency is not the only one by any means, and all over the country this is a burning question. I might go further and say that perhaps the matter which is receiving the greatest amount of thought on the War Damage Bill is the position of the owner-occupier, together with the question of what is to be the position of the man who is a lessee, whose premises have been destroyed and who is still liable for the reckoning. These two questions are burning questions in everybody's mind, and I hope that serious consideration will be given to them, so as to ensure that equality is provided for both the mortgagee and the mortgagor. The Chancellor of the Exchequer made what he does not usually make, namely, a debating point, when he spoke about the personal covenant, because he knows perfectly well, in view of his profession, as I know, that the personal covenant in 99 out of 100 cases is not worth twopence. People do not grant money on personal covenant but on the actual property itself. Therefore, it cannot be said that there is additional security of the property.I intended to get up to ask a very limited question, but this discussion is ranging rather wider than I thought was likely, and I would like to ask you, Colonel Clifton Brown, whether this is to be taken as a general discussion on the relations between mortgagor and mortgagee, or will it be possible to enter into this argument again on Clause 19?
I cannot anticipate what will be in Order on Clause 19, but I hope that some of this discussion will make it unnecessary to talk at great length on Clause 19. But, of course, it can be considered.
The specific point that I wanted to raise first arises in my mind on something which the Chancellor of the Exchequer said in replying to the last Amendment that was moved. He made the point, which has been made very often in the course of the Debate on the Clauses of this Bill, that public interest is the paramount consideration in relation to the working of this Measure. That of course is right and is very present in all our minds. But the argument, used in answer to the point made by the hon. Gentleman opposite, was that there could be no payment out of substantial balances of money in advance because it is in the public interest that even value payments should be used for restoration. That raises a very important point. Are we to understand that in no circumstances will an early value payment be made in such a way that it can be used for the redemption of a mortgaged debt? There may be very many occasions on which, if the value payment could be settled soon after the damage, the situation could be used for relieving a mortgagee from a very difficult position. Are we to understand that in no circumstances will the value payment ever come into question as something which can be used for settling claims as between mortgagee and mortgagor?
Sub-section (4) of this Clause provides that, if a value payment is made, it goes to the mortgagee, and so much as is necessary to satisfy his debt, and if his debt is larger than the whole, it would depend upon him. It is, among other things, to that position that certain objection has been made, namely, that it goes to the mortgagee.
I understood the Chancellor of the Exchequer to argue that there could be no payment out in advance because the money which the State has to contribute is to be reserved for rebuilding.
On the question of advances. This is rather different.
The principle is the same. The principle on which the Chancellor of the Exchequer was arguing would apply to final payment. But I wanted to raise that question in regard to early settlements and because doubt had been raised in my own mind by what has been said.
Apart from that, I do not want to speak at any great length, and would only like to put a point of view following on the lines of what was said by my hon. Friend behind. I am not speaking at all of the very difficult case of the owner-occupier—I realise that there are some tremendously important issues arising out of that class of case—but on the general relationship between mortgagors and mortgagees, I would ask hon. Gentlemen opposite who press the contrary point of view to realise the nature of the contract that is very often entered into. The man who borrows money chooses to enter into a speculative investment very often with the borrowed money. He stands to gain if his property investment increases in value. I have never yet known of a case of a mortgagor coming to the mortgagee and saying, "The luck has been my way. Some chance—perhaps even the war—has come along and put up the value of real property enormously. In these circumstances, I think I ought to pay you 6 per cent. interest instead of the 3 per cent. we arranged, and I would like to give you a handsome capital premium on your advance when I repay it." That case never happens, although very often a man who has entered into a speculative investment which may have done very well with somebody else's money receives a very substantial profit. The lender, on the other hand, took a limited risk, with a very limited rate of interest, and we must remember, when we are discussing this general issue, that those difficult positions were deliberately chosen by the two individuals who entered into this particular form of contract.The hon. Gentleman does not forget that during the last war the mortgagee did take advantage of the situation and forced up mortgage rates very considerably
I do not think that I need go back to the experiences of the last war. Naturally a mortgage is generally arranged on a six months' notice basis, and if rates of interest go in a certain direction, the position is provided for in the contract. It is a limited period which can be used both ways. But, here again speaking from my own experience, having looked art this matter from the point of view of big insurance companies which invest money in mortgages, I have never come across any case where rates of interest have been deliberately raised.
I am also connected with very large insurance companies, and although nobody is making any charge against the big tariff companies, there have been cases where small insurance companies have shown very bad treatment to small occupiers, who are the people I seek to protect under this Bill.
I hope my right hon Friend will not think that anything I have said is in defence of instances of that kind, but I am talking about the very important kind of business which is carried on on clearly accepted principles, where a contract is entered into and is perfectly well understood by both sides. Any suggestion that that line of business should be interfered with should be viewed with great caution. There is doubtless a wide range of cases which need special treatment, but that special need should be treated as a separate matter and not made the excuse for altering well-established contractual relations which the parties have entered into with their eyes completely open.
This Clause is one of very great importance, because it is not only necessary that the amount of compensation should be the correct figure but that it should go to the parties who have really suffered damage. The Amendments moved by the Chancellor to-day to Sub-sections (2) and (3) have gone a considerable distance towards remedying one of the most serious defects in the Bill, but there are still some defects in regard to the allocation of the payment. It is the fundamental principle of this Bill that no compensation is payable in respect of loss of income. It is only compensation in respect of loss of capital that is provided for under the Bill. Unfortunately, there is no provision whatsoever by which the rights in respect of income of one party, who is interested in the property as against another, shall cease, and, clearly, if the principle is that no compensation is given for loss of income, then, when the income from the property ceases completely owing to war damage. the right of one party against another, ground landlord against lessee or lessee against sub-lessee, should cease also, in order that the position of everybody might be precisely the same.
This point is of particular difficulty in the case where the payment to be made is a cost-of-works payment, because in that case the person who is entitled to that payment is the person who actually carries out the work. If the lessee is to receive any compensation whatever, it follows that he must retain his position as lessee. He cannot disclaim his lease; he must continue paying rent, and it might conceivably happen that by the time compensation is paid to him he may have paid away to his landlord or superior lessor more money than he will actually receive in compensation. I know of cases where the rent is perhaps half the value of the damage that has been sustained, and, therefore, in the course of two years the whole compensation will ipso facto be taken away from the person entitled to it and handed over to his lessor. I beg the Chancellor and his colleague the Attorney-General to consider this matter and devise means by which it may be remedied.I raised this matter to try and bring the points that have emerged into a more concrete form. A great deal has been said about sympathy for the mortgagee: I think the Committee will feel sorry both for the mortgagee and the mortgagor, and everybody who suffers as the result of war damage, but the essential point to remember is that nobody contemplated this kind of damage in any contract, and if this damage takes place, neither the mortgagee nor the mortgagor will get one penny. Parliament by this Bill is to take them from that position and make payments to compensate them for damage, and I say that our sympathy should be on some ground of equity and not only be extended to the mortgagee. At the moment the Bill gives an enormous advantage to the mortgagee, and there is no guarantee at all to the mortgagor in the case of an owner-occupier.
I quite agree that from the point of view of speculation, where mortgages are for speculative purposes, there might be justification for saying, "That is a risk which these people took, and they must bear it," but there is no justification for saying that with respect to the great field of owner-occupiers where people have taken upon themselves the liability of ownership without the effect of ownership. In other words, they have become agents of insurance companies or others who have arranged with them for the mutual building of the property, and I suggest that the Government must do something to ensure that benefits shall be mutual and not one-sided. I am quite sure that there will be great bitterness in the country if this preference is given to one section instead of treating people on the basis of justice.I have not been in the position to follow this Bill and pay attention to all its details, because of other matters with which I am concerned, but I have heard this discussion with some surprise. I do not mind telling the Committee that I am in the position of being an owner-occupier with a mortgage on my house. This position, I understand, is the same as that of 4,000,000 other people in this country. Is it the intention of the Government that where a workman has paid 25 or 50 per cent. down on the cost of a house, has obtained a mortgage for the rest, has paid his interest for some years and then has his house destroyed, the actual payment is to be made to the mortgagee? If so, the Government will have to take some steps to meet it. If I am right, that is a very great wrong and will need most serious consideration. I do not know whether it is the intention of the Government to make a statement of general policy on this matter or to bring in another Bill to deal with it. This is a very serious matter for the bulk of our people who, in fact, will get very little relief. They have regularly paid their interest, they have not defaulted in any way, but if they lose their house they will get no payment. If this Bill is not for those people, who is it for?
Various matters have been discussed since two of my hon. Friends raised the very important question of the distinction drawn in Clause 19 with regard to contributory mortgagees. I think the distinction we have drawn in the Bill to some extent reflects the view which has been put forward from the benches opposite, namely, that the owner-occupier mortgagor is really in a sense sui genesis. The only point with regard to the mortgagor and the mortgagee which arises on this Clause is with regard to the value payment. I think that perhaps the hon. Member for Chester-le-Street (Mr. Lawson) did not realise that the bulk of the owner-occupier cases, like the bulk of other cases, will be cost-of-works cases. What the man who wants to live in the house will get will be that his house will be repaired at the cost of the State.
When I raised this point with the Chancellor last week, I could not get any assurance from him that it would be the case that the owner-occupier would have his house replaced if there was a total loss.
That is not what I said. I was pointing out that the bulk of the cases would be cost-of-works cases, in view of the principles laid down in the Bill. If anyone goes to a damaged area, he will see that the vast bulk of the damage is not total damage, but damage which can be repaired economically and in the national interest. That is what the owner-occupiers and other people will get out of the Bill in the great majority of cases. Therefore, as far as this Clause and mortgages are concerned, we are dealing only with cases in which the destruction is so great that it is uneconomic to rebuild the house or is contrary to the national interest to do so. In that case, the position under the Bill, and the position in fact, is that the mortgagor has a certain amount of debt outstanding to the mortgagee. What the Bill says is that if it is not a cost-of-works case but a value payment case, the value payment is to be used in the first instance to pay off the debt. If it is not used for that purpose, the debt will remain to the extent that it is not paid off. I think most hon. Members have realised that the sort of matters we have been discussing go beyond matters which could be dealt with in this Bill, as is pretty well evidenced by the fact that there is no Amendment on the Paper dealing with these matters. What is said is that this Bill may require reconsideration concerning the relationship between the mortgagor and the mortgagee in the building society class of cases.
What about the payments of the owner-occupier?
The owner-occupier will have paid a certain amount. If the amount he has paid has brought the mortgage debt to a figure at which it is below the March, 1939, value of the house, then of course the debt is paid off and he gets the difference. What is the position if they are equal? If a house is totally destroyed, if it is presumably uneconomic to rebuild on the site, then if the value payment is included within the mortgage debt, it goes to the mortgagee. The debt is completely wiped out.
The man is left with the bare site.
Yes. I do not want to be controversial, because this matter is really outside the Bill, but I wanted to state the position as it appeared to me and to draw limits within which our consideration can proceed after we have passed from this Bill.
Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to. Clauses 11 to 13 ordered to stand part of the Bill.Clause 14—(Properties Liable To Contribution)
I beg to move, in page 12, line 9, at the end, to insert "being land."
The object of this Amendment is to make sure that, as is presumably the intention, only those properties which, if damaged, rank for compensation under Part I shall be liable to contributions under that Part. At present compensation under Part I is payable for war damage to land, as set out in Clause 2, line 4, but contributions are payable on every property—which is a much wider word—that is either assessed for Schedule A Income Tax or valued for rates, as set out in Clauses 13 and 14. Therefore, if there is anything which is not land, but which is a contributory property, the owner may be liable to pay contributions but not able to claim compensation under this Part. In addition, since "goods" are defined in Clause 68, line 41, as including all corporeal property not falling within the meaning of the expression "land," any such thing would come under the business scheme for chattels in Part II. The owner will thus have to be insured and to pay the premiums under Part II. Thus he will be in a position of paying under Part I and Part II and being able to receive compensation only under Part II. It seems that there may be properties in this position—some of the works of public utility undertakers, such a s transformers, switchgear and meters in the street, or on a consumer's premises. Possibly electric lines and cables are in the same position. The network of wires of a broadcast relay company is possibly a case. The special receiving and amplifying plant is an even clearer instance. This plant certainly, and the network possibly, are plant and machinery in the ordinary sense. They are, therefore, expressly excluded from paragraph (a) of the definition of land as set down in page 30, lines 6 and 7, and since they are certainly not part of the carefully restricted class of plant and machinery expressly mentioned in paragraph (b), lines 8 to 18, they are not brought back into the definition of land in that paragraph. On the other hand, they are, in many cases, "contributory property," under Clause 14, because they are rated. It may well be that the Chancellor of the Exchequer considers this Amendment unnecessary. He may well say that what is assessed under Schedule A is land and, as the basis of rating is occupation of land, any rating in respect of the subjects to which I have just referred must rest on that basis. But I would like to draw his attention to the fact that while it is true that what is assessed under Schedule A is land, and that the basis of rating is occupation of land, land in this Bill has in one respect a special and rather narrow meaning, that is in regard to plant and machinery. The only plant and machinery included is the sort of plant and machinery described in the Valuation for Rating Order, 1927, and in Clause 41, page 30, line 11, there is a reference to that point. That Order, however, only set out the sort of plant and machinery which is taken into account in a rating valuation not made on a profit basis. Public utility undertakings are assessed on a profit basis and in their case the rating valuation will take into account things which are certainly plant and machinery, but not of the sort mentioned in the Valuation for Rating Order, 1927—such examples are receiving and amplifying apparatus, transformers of electricity undertakers fixed in the street, and possibly, but not quite so certainly, switchgear and wireless and cables erected on or over streets or over private property. These things are left out of the definition of land by the use of the words "other than plant and machinery," in lines 6 and 7 on page 30, and the reference to the Valuation for Rating Order, 1927, in lines 8 to 16. Therefore, they are "goods" under Part II, but as they are part of the subject of the Valuation for Rating Order, they are also part of the "contributory properties" under Clause 14. The result is that none of these things will receive compensation under Part I while they will be left to contribute under Part I and also under Part II.I am very sorry, before this Amendment was reached, that my hon. Friend did not inform me—
I did furnish the Chancellor of the Exchequer with the information.
I must apologise; I thought it was a new one. All I can say is that it is a question of interpretation, and I am advised that the Amendment is unnecessary because of the definition in Clause 41 (1), which the hon. Member quoted, and, as it is an established rule not to insert unnecessary words during a Committee stage, I hope the hon. Member will not press his Amendment.
Amendment negatived.
I beg to move, in page 12, to leave out lines 10 to 19, and to insert:
I am sure that the purpose of this Amendment meets with the general approval and approbation of the whole country, even if my right hon. Friend is unable to accept it. The Amendment seeks to alter the principle of the assessment of the contributions from that of Schedule A to the adoption of the principle of the life insurance companies, namely, that the contributions should be based upon the amount at which the property is insured against fire. It must be obvious, if this principle is adopted, that 75 per cent. or 80 per cent. of the difficulties which will inevitably arise under this Bill will disappear. We should have a simple method of assessment, and we should have a simple method of assessing the amount on which the contribution was to be paid, and, if we carry it one step further, we should have a very simple method for effecting settlements. What is it that is really suggested? I suggest there is little or no difference between a contribution to be made under this Bill and a premium which is made for fire insurance purposes. The suggestion is that for the purposes of this Bill contributions should be regarded as a premium. If the amount was assessed on the basis of the amount at which the property was insured for fire, then it would be possible for the insurance companies to collect the Government's contributions also and to hand them either to the Chancellor of the Ex- chequer or to the President of the Board of Trade. I have two or three other Amendments on the Order Paper which cover more or less the same point, and I do not propose therefore at this stage to elaborate my point, save to ask the Chancellor of the Exchequer to give it his consideration between now and the Report stage."the full amount of which is insured against fire risk."
I appreciate the considerations which my hon. Friend has raised and put so forcibly before the Committee. We did, in fact, give a great deal of consideration to this suggestion, as hon. Members know, before we brought this Measure before the House. It is most attractive at first sight, and, if there had been a simple and easy way of adopting this procedure, I should have been one of the first to adopt it. I have seen a number of deputations and a number of my colleagues during the last few weeks, and I think it may be said that to-day, at any rate, it is recognised that, with all its imperfections, the course that we have adopted in Schedule A is the best in all the circumstances. I have never disguised the fact that there may be many objections raised to it, but, on the whole, we think our method is best. We found that there was great difficulty if you attempted to use the fire insurance premium method. Some properties are not covered for insurance and there are numbers of cases where the owners prefer to carry their own risk. Then we found that in a number of cases the fire insurance valuation would be insufficient for the purpose, and in still other cases that the amount that would be covered would be excessive. In other words, it was almost impossible, as the basis for a Bill of this kind, to take the value that had been placed by the people themselves. As far as the collection of premiums is concerned, we were in a greater difficulty still, because in very many cases the person who normally takes out the insurance is not the owner of the proprietary interest. For all these reasons we reluctantly had to abandon that proposal, and I cannot promise my hon. Friend that the matter can be reconsidered at this stage of the Bill. I only wish it had been possible to adopt his suggestion.
My right hon. Friend will be aware that, in the event of loss under a fire insurance policy, the onus of value rests entirely with the insurer, and therefore there will be no difficulty should my principle be accepted. He stated that there are cases where property is not insured. I am sure he appreciates that the percentage of properties which are not insured for fire is very small.
I cannot help thinking that my right hon. Friend in coming to this decision, has been guided by what is the easiest administrative course rather than having regard to fairness and the general public interest. I think, in taking the course that he is taking, he ought to give a more closely reasoned statement for his decision. He has sought to dismiss any suggestions for alternative arrangements rather lightly as just being not very practicable and not so convenient as the course that he has adopted. In a matter of such great importance convenience ought to be a minor consideration. We all recognise that his Department is very hard-worked and naturally tends to adopt the line of least resistance, but if he is going to justify the course that he has taken, he should give us a much more reasoned statement balancing the pros and cons than he has done. It seems to me that our proposal avoids the gravest error of the Schedule A scheme. It avoids levying contributions on the site value. Surely no one can justify, in principle, levying a contribution on the site value, which is not in any way a risk. I think that, if for reasons which I wish he will give us fully, my right hon Friend decides that it must be the Schedule A principle, at least some attempt should be made to apportion the Schedule A valuation between the value of the buildings and the value of the site and to levy a contribution only on the value of the building. If he were to do that, I think he would be able to put forward a very good reply to the Amendment. Unless he is prepared to do something of that kind I really feel that the Amendment stands unanswered.
May I ask one elementary question? Is it clear that, if a property is not liable either to Schedule A or to rating assessment, it pays no contribution? The point arises in connection with schools
I did not want to be discourteous to my hon. Friend, but I made a statement on the matter on the Second Reading of the Bill, and so I think, did the Attorney-General in his reply, and I did not want to trespass on the Committee's time again. In fact, if I had to consult the convenience of the Treasury, it would have been far better to cast this tremendous burden upon the machinery suggested by my hon. Friend. As a matter of fact, having to adopt Schedule A has made us at the Treasury assume a most serious and responsible burden. It was not a question of lightly putting the matter on one side without due consideration. Purely from the point of view of convenience to the Treasury, the suggestion would have relieved us of a tremendous burden.
I listened carefully to my right hon. Friend's speech on the Second Reading and to the Attorney-General's reply and read and re-read them. After doing all that I still feel that the matter has been dismissed very lightly. I have listened with interest to what he has said about convenience, but I still think the Committee has not really been treated to a very seriously balanced argument, pro and con, on the question of the fire insurance and the Schedule A basis, especially on the point of levying contributions on site values, because that seems to me a glaring anomaly.
The Chancellor has pointed out the difficulties, one of which is that property is sometimes over-insured and sometimes underinsured. The same argument might apply with regard to assessments. Another difficulty is that some properties are not insured at all. It would be easy to put a Clause in the Bill to make the owner declare the value of his property and that would have the same effect as the Amendment. I disagree with my hon. Friend who talks about the Government following the line of least resistance, because by adopting Schedule A they are taking on a mass of work which is now done by insurance companies. I would ask the Chancellor to consider whether the machinery set up by the insurance companies should not be made applicable. The general public should not be put to all this trouble and expense of setting up machinery to determine whether property is over- or under-valued.
I would remind my hon. Friend that the onus of proving the value of property is on the owner, and, therefore, my right hon. Friend would have no difficulty in that respect.
Amendment negatived.
I beg to move, in page 12, line 19, at the end, to insert:
When property is condemned under a slum clearance or similar order the income to the owner ceases, and the only value left to him is the site value. That means the value of the property divested of the building, so that the authority condemning the building prevents the owner obtaining rent from it. It is, therefore, inequitable to call upon the owner to contribute something in respect of property from which he enjoys no income owing to the action of the competent authority."Provided that property subject before the third day of September, nineteen hundred and thirty-nine, to the operation of an Order declaring an unhealthy area to be a Clearance Area, shall be excepted from the operation of this Section."
This is a matter of considerable importance in Leeds, as in other industrial areas, where property has been condemned or otherwise dealt with under various public health and housing Acts, and it is desirable that we should have from the Chancellor some statement of the position. I am aware of all the considerations that can be urged against granting any compensation in respect of these properties, but we are here to try and do substantial justice. Not all these properties belong to substantial people; there are quite small people, widows and others, who have an interest in property which is in the various stages of condemnation. Their interests have to be considered. On the other hand, if properties have been condemned the owners, whoever they may be, can only look forward, and in the majority of cases can only properly look forward, to site value. The property is usually old and a substantial income has been earned from it over a long period. At the moment, however, some of these properties may have to be occupied for a few years and some income will, therefore, be derived from them. What will be the position with regard to compensation for these properties? If no compensation is to be payable except for merely site value, it would be hardly equitable to require the owners to pay the premiums when they are not to receive any benefit. I rise to inquire of the position which the Chancellor takes up in this matter rather than to urge any particular course, except that even in these cases, although I and my hon. Friends have strong feelings about the majority of them, we have to see that substantial justice is done to those who own this class of property as to those who own other classes.
I have an Amendment down dealing with this point, but it differs slightly from it in that it removes the date beyond which the exemption from contributions is not to be asked for. There is no reason for exempting a pre-war and not a post-war house that has been brought within an earlier order. I support an Amendment of this kind because I see no reasonable chance of these properties obtaining any compensation. A cost-of-works payment is surely out of the question. That payment is only possible if the repaired building roughly exceeds in value the cost of works. Here the repaired building is declared in advance statutorily to have no value. In that case how can there be a cost-of-works payment? The value payment provision is somewhat odd. The value payment being related to a date in March, 1939, the building would, if the demolition order were prior to that date, have no value. If the order were subsequent to it the building would have had a value since 31st March, 1939. We should, therefore, get the ridiculous position of identical houses in different areas receiving different treatment, some being entitled to value payment and others not, merely because of the date of the order. When the war is over the demolition of these houses by the local authorities will continue. Suppose in a couple of years' time a man's house is demolished, he will be required under the Bill to go on paying his contributions for another three years. I ask the Chancellor to consider the feelings of a man whose house has been taken from him and who has received negligible compensation in respect of it, but who is required to go on paying the contributions. I want to make a practical suggestion. This is a small point, but there is strong feeling about it in certain localities. It is an intricate matter also. I suggest that between now and the Report stage the Chancellor should give it the attention which it really requires to provide a satisfactory solution, and that he should deal with it by taking power in a new Clause to issue Regulations on the subject. I believe he could well work out a scheme.
I should like to point out that the mere making of an order by a local authority declaring an area to be an unhealthy area or a clearance area does not of itself mean that the property is going to be demolished. A great many things can happen after such an order has been made. In the first instance, there has to be an inquiry.
Is the hon. Member talking about my Amendment or the Amendment which has actually been moved?
I was talking upon the Amendment which has been moved.
That refers only to an order that "has been" made.
I was saying that a great many things can happen after an order has been made by a local authority. It does not in the least follow that when an order has been made in respect of any particular property that that property is really condemned.
Once the local authority has made the order it is condemned as far as the owner is concerned, and he loses all rents, so that he gets site value only, though the local authorities still continue to collect rents.
The hon. Member is quite mistaken, and I can well understand his bringing forward this Amendment if he was under such an impression. The making of an order by a local authority merely means that it is regarded prima facie as an insanitary property, but that order has to be confirmed by the Ministry of Health, and as a general rule it is confirmed only after a public inquiry, at which the owner of the property has a right to make his case that it should not be condemned. Therefore, the mere making of an order by a local authority has no effect at all. The owner goes on collecting his rents.
No.
Yes, it is so. Having been chairman of a housing committee for seven years, and occupied in doing this work daily, I can assure the hon. Member that that is the case. Therefore, it would be absurd to regard the mere making of an order by a local authority as determining whether a contribution should be made by the owner in respect of the property. It may turn out that the local authority did wrong in making it. I do not want to put forward other objections, and there are more serious objections than that, but on the case on which the Amendment has been moved it clearly cannot be accepted.
The effect of the Amendment is to exempt from contribution property subject to the operations of a slum clearance order. We all have the greatest desire to see cleared away areas which are in a disgraceful condition, but them are considerations which have to be taken into account in connection with a Bill of this kind in time of war, when the ordinary provisions of the Housing Acts either cannot or are not being put into operation in all cases. There is no doubt that behind this Amendment lies the fear that small property will be required to pay contributions despite the fact that in view of its being scheduled for clearance it is not likely to attract any compensation in the event of being damaged. It is to be noted that no countervailing Amendment was moved to Clause 2 to ensure that compensation shall not be payable in respect of such property. Therefore, the net result achieved by this Amendment would be that such property would pay no contribution but would have a full right to compensation, and I could not possibly accept that position.
Looking at the Amendment from the point of view of the merits of the case and the policy which lies behind the Clause, and looking at it from the point of view of the war and the provisions we are making in this connection, the first thing we have to notice is that slum property which is in existence and is occupied at the present time is just as much likely to suffer war damage as any other property. As I have said, we should like to see slum clearance expedited, but in view of housing conditions in war we have to put up with a good many things which we should not tolerate in times of peace, and the fact remains that in many areas these slum properties are still occupied and have to serve such purposes as they can. Therefore, there will undoubtedly be many cases in which a property described as a slum will suffer damage which will have to be repaired, unfortunate as it is, for the purpose of providing accommodation for the people who unhappily have to live there, because there is nothing else which can be done in the circumstances. Therefore it is untrue to say that there is no value to be received by slum property in respect of this Measure, because in the circumstances which I have described there will be a number of cases in which cost - of - works payments will arise. Although we may not like to have to do it, having regard to all the circumstances the property will have to be repaired in the interests of the people who want to go on living there. If we then take into account the other principle of the Bill, which is that all property owners must stand-in together, I think the Committee will agree that the slum landlord must not be allowed to contract out of his obligations merely because he thinks he is unlikely to receive much compensation. So far as he is concerned, this is the other side of the picture: undoubtedly the contributions he will have to pay in respect of the property will be small. My own view is that we have to consider this matter on the practical basis from the point of view of war damage. Therefore the landlord of this property must come in and pay for any expense, which will be limited. On the other hand, he will be entitled, in certain circumstances where it is necessary, to receive a cost-of-works payment, in order to maintain the property. That is the main consideration which I have in mind in connection with these proposals of the Bill.The Chancellor of the Exchequer has not really answered the argument. I was pointing out that the property owner will be without any income, but the Chancellor of the Exchequer is saying to this unfortunate owner, who is in receipt of nothing at all, "You shall contribute." You cannot order a man to contribute when he has no income at all.
My name is attached to this Amendment. I thought I should not be here when it was reached, so I asked my hon. Friend the Member for Holborn (Sir R. Tasker) to move it on my behalf. I am not convinced by what the Chancellor of the Exchequer has told us, and I ask him to look at this matter again. I am not the owner of slum property but I imagine that some of my constituents may be, so let us consider the matter for a moment. A man who owns property of this kind ought to go down on his bended knees every night and pray, "Please, Mr. Hitler, bomb my house," because the moment it is bombed his contribution ceases. Although there may be a certain amount for him in the shape of a cost of works payment, it is primarily not in the interest of the landlord but of the tenant. You are asking a man who has no financial interest, except in complete destruction, and who cannot get a thing if the House is damaged, to make a contribution. If I were the owner of slum property I would get all my tenants out and I would blow it up. It would pay me to destroy it in any kind of way. The Chancellor is asking a man to pay something in respect of property from which he gets no advantage whatever.
It is no use using the analogy about those who are in what are called safer areas. The only declaration of interest I can make in this matter is that I have a bill of £11 12s. against the Chancellor of the Exchequer or the War Damage Department, in respect of the tiles and windows of a small house which I had on the coast, and to which we evacuated an enormous number of children in the old days. In London, where I suffered damage both in my office and in my flat, somebody else has to make it good. A person who cannot get any compensation should not be called upon, whatever the circumstances, to make a contribution.There are two or three points which stand out very clearly in this matter. One is that the cost of works payments will be very much higher in the case of slum property than in the case of well-built property. The amount of damage done to old slum property will be enormous. It will be damage like roofs being ripped off, and not merely windows broken, but window frames blown in. The cost of repair will be very high. The average cost of works payment will be very much higher than the contribution paid by the slum owner. I do not think there is any very grave danger that the owner will pay after his property has been pulled down by the corporation because, after the war is over and at least for five years, we shall not be in a position to pull down houses. Our main job will be to provide new houses to replace those which have been destroyed. There will be very little actual demolition. Taking it by and large, the case for making a contributory payment in respect of clearance order cases, will be overwhelming.
Amendment negatived.
I beg to move, in page 12, line 31, at the end, to insert:
This is a small matter which I have put down in order to get it some consideration. The Schedule A assessment is fair, on the whole, but I do not think it quite represents the value of the property in the case to which I am referring. There is a certain amount of voluntary tithe redemption, paid under the Tithe Act, and it seems to us that it should be deducted from the Schedule A assessment, which does not usually allow for it. It may be done privately, but where the payment is made under an Act of this House the charge should be deducted from the Schedule A assessment, so as to make that assessment not too much. I wish to bring this matter to the notice of the Chancellor of the Exchequer, and I hope that he will look into it."Provided that in the case of either of such properties the contributory value shall be reduced by an amount equal to so much of any annuity in respect of the redemption of tithe rent-charge payable in respect of the property under Section four of the Tithe Act, 1918, as consists of interest."
The Schedule A assessment is arrived at after the deduction of the interest portion of the tithe redemption annuity. When I first saw this Amendment, I thought that my hon. and gallant Friend had probably overlooked that fact, but from what I understood him to say just now he may not have had in mind the ordinary annuity. He referred to payments which are a voluntary charge, outside the Act. The point is quite clearly raised by the Amendment. If my hon. and gallant Friend will give us the details, we shall certainly look into the matter. It may be difficult, in practice, to make provision in this scheme for voluntary arrangements of that kind, but if he will give us particulars of the class of case he has in mind, I undertake, without giving any pledge, to look into the matter.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 12, line 39, at the end, to insert:
In some parts of the country, and particularly in Scotland, where property is brought into the Schedule for the first time in the middle of a year, the assessment is written down proportionately. The Amendment, therefore, is necessary, because contribution will be levied on the full contributory value, however short the time during the risk period when the full value was in force."() Where, apart from the provisions of this Sub-section, the contributory value of any contributory property would, under either paragraph (a) or paragraph (b) of the last preceding Sub-section, be computed by reference to an amount corresponding to the value of the property for any period less than a full year, it shall be computed as if the said amount were increased so as to bear to the actual amount thereof the same proportion as a full year bears to the said period."
Amendment agreed to.
Further Amendment made: In page 13, line 1. leave out "structures," and insert "works."—[ Sir K. Wood.]
I beg to move, in page 13, line 8, at the end, to insert:
I have put down this Amendment following a conversation which I had with an old friend of mine who was one of my leading supporters when I was Member of Parliament for Reading. He was a large billposter. This is a curious situation. A hoarding is put up facing a busy street. The owner of the hoarding will pay to the owner of the land an annual rental, and the owner of the land will pay Schedule A tax on a piece of land on which the hoarding is erected. Then the hoarding itself creates a new form of property, which arises, not on its cost, but on the fact that a lot of people walk past, so that the real object which is being taxed under Schedule A is not the hoarding, but the people who are walking past and who may ultimately buy somebody's toothpaste. I am told that in some cases a hoarding the capital value of which is £20 may have an annual value under schedule A of £100, in which case the owners would be subject to a premium of £10 a year in respect of something the capital value of which was £20. If a bomb fell, the chances are that damage would amount to less than £5, so that they would get nothing, and yet they are being called upon to pay a premium which is totally out of proportion to any kind of benefit which they can get. I cannot think of any comparable situation. [An HON. MEMBER: "What about a kiosk?"] A kiosk is the same sort of thing. The main income of a kiosk is derived from what is advertised on the outside and not from what is sold inside. A kiosk would probably come under this Amendment. I think this should be treated not as property at all, but as the machinery of business. Therefore, my Amendment proposes to transfer it from Part I to Part II, in which case it would be dealt with on an equitable basis. I have gathered from a number of conversations which I have had with hon. and right hon. Members that the billposting community have been busy and have communicated with a large number of hon. Members, explaining that the situation in which they are placed has been made more serious, because I imagine that as a result of the shortage of paper every billposter in this country is running at a loss. At a time when they are running at a loss, to impose a charge which in relation to their turnover would be a heavy charge indeed would be greatly unfair, and, as we shall have an election after the war, we shall want our pictures put on the hoardings."(4) A property which consists of a structure or work used exclusively as an advertising station for poster advertising shall not be Seemed to be a contributory property for the purposes of this Part of this Act but shall be deemed to be goods to be included in a business scheme under Part II of this Act."
I support this Amendment, and I will put briefly one point which the Mover did not make in his observations. A bill-posting business consists of a central office with warehouse or store attached, and it is assessed under Schedule A just as any other business premises, but bill-posting premises consist of very much more than that. In the case of large undertakings in the big cities the stations may run into many hundreds. Each and every one of those, as has already been pointed out, is assessed under Schedule A, with the result that the aggregate of those assessments plus the assessment on the central office—the ordinary business assessment— amounts to a very heavy charge indeed. To-day there is very little bl-posting, and it consists solely of old stock. Paper is neither procurable, nor would it be permitted, and the situation is that these businesses, which in normal times when they are prosperous bear an extremely heavy charge in respect of rates, to-day for the purposes of this Bill will have to bear charges in the form of contributions which are altogether out of relation to any damage which the hoardings may suffer from enemy action; I do not speak of central premises. I think that the Chancellor, if he cannot accept the Amendment in this form, should give very serious consideration to see that the principle of justice and equity which he has so often underlined should be observed in relation to this business.
I think this Amendment is perfectly reasonable, for this reason, that under this Bill the Chancellor intends to tax hoardings doubly. There is the landlord on whose property the hoardings are erected, and he will have to pay his contribution under his Schedule A assessment of the hoardings. Then apparently the bill-poster, who is also assessed under Schedule A, will for the same hoarding pay another but greatly enhanced contribution. As a matter of fact, although the bill-poster, who is the tenant of the site, pays under Schedule A, really his payment ought to be a Schedule D payment. His business of bill-poster is a trade or profession. Although for technical purposes—heaven knows why—he is assessed under Schedule A, the real tax is an Income Tax on a trade or profession, which does not come under this Bill. For those reasons, first of all, because there will be a double taxation, and also because the bill-poster's Schedule A assessment is purely technical, I support this Amendment.
I think my hon. Friends have made out a case for consideration of this proposal. I do not commit myself to the actual form which has been proposed by my hon. Friends, but obviously this is a unique case, and I will look into the matter between now and the Report stage, and I will confer with any of my hon. Friends who are interested in the matter to see whether we can find a satisfactory solution.
In view of the satisfactory assurance of the Chancellor, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 13, line 13, at the end, to add:
These Amendments are designed to meet the case of new buildings, in regard to which it is possible that assessments might not be made until after 1st July, at the end of the contributory period, but which would at the same time relate back to 1st January when the buildings were completed. It is, therefore, proposed to insert these words in the Bill to make it clear that both the assessment and the valuation shall be treated as having been in force during the period for which they have effect."and for the purposes of this Part of this Act—(a) an assessment under Schedule A shall be treated as having been in force during the period as respects which it has effect; and (b) a valuation shown in a valuation list shall be treated as having been shown in the list during the period as respects which the valuation has effect."
Amendment agreed to.
Motion made, and Question proposed. "That the Clause, as amended, stand part of the Bill."
What is the position of a property which is under construction and is incomplete. It is not assessed under Schedule A and is not included in any valuation and it therefore pays no contribution. Is such a property to rank for payment, because, if so, it seems unfair that it should not be subject to a contribution?
I should like to ask whether the deduction of tithes in England will be a deduction from the gross rental? In Scotland the tithe is not, as it stands, a deduction. Will the method of arriving at the next Schedule A assessment be the same for both countries?
My hon. Friend the Member for Peckham (Mr. Silkin) is quite right. It is an anomaly; uncompleted buildings will rank for compensation, but there will be no contribution. The reason, of course, is a practical one. To introduce special machinery for getting contributions from buildings in the course of erection would be to complicate the task of the administration which will already have quite enough problems to face.
Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.Clause 15—(Contribution To Be Payable By Instalments)
I beg to move, in page 13, line 15, to leave out "five," and insert "ten."
This Amendment, and the consequential Amendments, raise a very important issue. The Bill, as it stands, is obviously incomplete, because it is designed, up to a point, to compensate all who have suffered damage, but it does not provide all the money, since obviously it may well be that five years of contributions, together with the 50 per cent. paid by the Treasury, will not produce enough. Later, therefore, there will in all probability be another Bill to change five years into a greater number of years. I am not suggesting that my Amendment really represents the length to which I would desire to go. At this stage, I propose merely to double the period and halve the contributions. Actually, if you halve the contribution, the number of years ought to be more than doubled, because interest is a thing which exists whether in a capitalist system or Socialist system, because it is a payment for a deferment. Frankly, I do not much like the finance of this Bill. I should have preferred a Measure which would have laid down that all property should be liable for an indefinite number of years to a contribution more moderate than the 2s. which is proposed, and which would have gone on until the whole cost had been discharged, incidentally authorising the War Damage Commission to borrow in those years in which their income was less than their expenditure. It would then be possible to be more generous in regard to compensation than is proposed at present in certain directions. I want to turn this into an insurance Bill, and since we have no actuarial basis for contributions in advance we are building up our actuarial basis by having contributions after the event. I would like to see contributions going on until the War Damage Commission was able to report to the Chancellor of the Exchequer of the day that everybody had been compensated and that no more contributions were required. That goes a bit beyond my Amendment but I am satisfied that it is a better scheme financially than that which is before us. The Chancellor is resisting Amendments which, in his heart of hearts he likes, on the ground that he has not got the money. My proposal would give him the money, because it would attach to all property a liability to contribute until such time as the whole cost had been met. That might mean contributions over a period of 10, 15 or even 25 years. I do not mind that, because what people want is the knowledge that having incurred these losses, they will be compensated, and compensated at the proper time, which will vary much according to a variety of circumstances. I realise that my Amendment is rather challenging in principle. I realise that there is to be another Bill before many months are out; I have not the slightest doubt that the Chancellor will ask the Committee to reject my Amendment today, but it does not necessarily follow that he will reject in perpetuity the principle underlying my Amendment. Ultimately, I believe that circumstances will force him, or whoever may be responsible in the future, to go back to the principle I have been enunciating, namely that all property which is safeguarded by this Bill should have attached to it for an indefinite period the liability to provide, together with such contribution as the Treasury may think fit—and personally I would reduce the Treasury's contributions—a sum which people could afford to pay for a long period of time rather than the more oppressive charge of 2s. in the £ which many people cannot afford to pay. Later on the Order Paper appears an Amendment in the name of my hon. Friend the Member for Balham and Tooting (Mr. Doland) to the same effect. There are a great many empty properties at this moment. The owner of such a property gets no income yet has to pay 2s. in the £ on Schedule A. There are some people who will be quite unable to meet the charges under this Bill. If, on the other hand, it is reduced to 1s. in the £ payable over a period of 10 years—although in reality I would not propose 10 years, but X years, X being as long as may be necessary—I think it will he much more workable and will impose less hardship on great numbers of people. I hope that the Chancellor will ask his advisers to examine the project I have now put before him and the Committee. I cannot expect him to accept it under this Bill. We have to get this Bill into law at the earliest possible moment. But we know that before August we are to have another Bill, and there will still be time to recast the finances. I beg and beseech the Chancellor to consider this proposal then. As he knows, I was for three years before the war one of a group of Members who were urging upon the Government the vital necessity of an Air Raid Insurance Bill. He may remember one occasion on which he honoured me with a speech in my constituency. He was less restricted then than he is at the moment by the associates among whom he sits, and he made a very powerful plea in the interests of Conservatism in South Croydon. I appealed to him then to go back and persuade his colleagues in the Cabinet to introduce an Air Raid Insurance Bill. I think it is a tragedy that he did not do it then. I said to his predecessor—now Lord Simon—"As soon as there is serious air raiding, the policy of the Government will collapse." It has collapsed. They said that they would pay no compensation until the war was over. This Bill is evidence of the complete failure of the Government on this question up to now. If the Bill had been introduced when I suggested it, there would have been a lot of money in the kitty now. I only hope that the Chancellor will show that he is not closing the door.It will save time if I say a word on this and on the general considerations that arise in connection with payments of contributions, as laid down in the Bill. I have given most anxious consideration to these proposals. They involve heavy payments by property-owners. It is interesting, in the light of criticisms of my last Budget, to note the many representations which are being made to me to-day, not only in connection with these proposals, about the many burdens now resting on property-owners. If heavy burdens are imposed upon property-owners by this Bill, many substantial benefits are conferred upon them. Our policy is, as far as possible, to protect property, and, within reasonable limits, to secure compensation for war damage, as set out in the Bill. The State is under an obligation to make considerable payments in addition. That is being done, not in the interests of a section of the community, the property-owners, but in the national interest. Property and the home are of the greatest value to the individual. To large numbers of people they mean almost everything. Another consideration is that property forms an important part of our national economy. I must, as a prudent man, ensure payments in respect of property under this Bill. I must ensure that these payments are made in a reasonable time. I do this really in the interests of the property-owners themselves. As my hon. Friend has said, this Measure only ensures protection until August. No one can say what the amount of damage may be between now and August, or after August, but obviously, in the times in which we live, that matter has to be taken into account. I therefore have to have regard to the financial position that may arise both in respect of contributions from property and from the State after August. If I adopted my hon. Friend's proposals and extended the period, I might then ve well find myself after August in the position of having to inflict a much harder blow upon property-owners than I desired to do, although it would be in the national interest that it should be done. It might very well be the best course to adopt, if further contributions have to be made, that those contributions should be over a further extended period after the first five year period. If, however, I were to extend the first period now I should be making it very difficult indeed for me to adopt that proposal, because I might very well be extending the time for payment so long ahead, that it would be impossible to regard it as a practical proposition.
Therefore, the first thing that I say to the Committee is that I must ask them to support the financial proposals generally in the Bill. They have been very carefully thought out and on the whole—and I have received many deputations—while naturally people would like to have the burden lessened, they have been regarded as fair and reasonable both between the property owner and the State itself. I must ask the Committee to support my proposals. As my hon. Friend has said, I shall have to bring further proposals before the Committee, which I hope will be nothing like the extent and character of this Bill, which one sees only once in a generation or once in a great war. But I shall obviously have to consider the whole financial aspect of the matter afresh in the light of the experience which will then be available, and then I shall have to have regard to all that has been said. I want to say in conclusion, because the many deputations who have seen me have invited me to make this statement publicly as I do now, that it is obvious that in the times in which we live, contributions will press very heavily indeed upon certain individuals and sections of the community. You cannot get blood out of a stone and, as far as the Inland Revenue are concerned, I can assure the Committee that they will behave with consideration and fairness towards people who find themselves in difficulty in connection with these contributions. I have noted both in my Ministerial capacity and in private life the helpfulness of the authorities in cases of this kind and, finally, I can say that, in connection with this Bill, consideration and fairness will be applied to those who find the burden too heavy or impossible. Having said that, I must ask the Committee to support me in these present financial proposals, believing, as I do, that they are fair and that they are the utmost I can do today. In the times in which we are living things are very uncertain and we must he guided by future events, but I will have regard in any amending legislation to the important financial aspect of this matter. I have no wish to impose unnecessary burdens upon any section of the community, because so many are having to bear still heavier burdens, but at the same time we must ensure that in this legislation we must work on reasonable and fair lines as far as we can. It was with these matter in view that we carefully framed this Clause and I hope my hon. Friends who have other Amendments which are seeking to amend the proposals will accept my advice to-day and support the proposals I am now making.I do not wish to prolong the discussion, but I hope the Treasury will examine the points I outlined because I want to change the financial basis, although I know it cannot be done in this Bill. With regard to the question of hardship, I listened to what the Chancellor said, but however kind and generous his officials may be, they have to enforce the law, and I do not see in what way we can solve the problem to which reference is made in the Amendment of my hon. Friend the Member for Balham and Tooting (Mr. Doland) which comes later. As I have said, the Treasury officials are reasonably kind up to a point, but there comes a time when they must say, "Please pay up," and unless the Amendment of my hon. Friend the Member for Balham and Tooting is accepted some people will find themselves in a situation of the utmost gravity. However, I beg to ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 13, line 24, at the end, to insert:
I move this Amendment in the absence of my hon. Friend the Member for Balham and Tooting (Mr. Doland). It is an Amendment which makes specific and definite provision for those cases in which in the opinion of the Commissioners of Inland Revenue payment of contribution at the rate set out in the Bill will obviously involve hardship. I should be the last to under-estimate what my right hon. Friend the Chancellor has said about the kindness and consideration with which officers of his Department deal with persons who find difficulty in meeting their obligations but, as my hon. Friend the Member for South Croydon (Sir H. Williams) has said, they have a responsibilty. They have to carry out the law, and the consideration which they can show must always be limited by that fact. I suggest also that it is hardly reasonable that such a great responsibility should be placed upon the officials of the Inland Revenue. There are bound to be many cases where great hardship will arise, and where it will indeed be against the public interest and against public policy that extreme pressure should be brought to bear upon a contributor whose business activities and whose efforts in other directions may be very seriously hampered if he has to meet such a large charge. It is with the intention of trying to some extent to soften the blow to people in that position, and to provide some definite line of amelioration, that I move this Amendment, to which I hope the Chancellor will give consideration."In any case where it is shown to the satisfaction of the Commissioners of Inland Revenue that the payment of the contribution by the five annual instalments would involve hardship, he Commissioners shall have power to spread the amount by instalments over a longer period not exceeding ten years."
I think that when the Committee consider this Amendment, they will agree that it could not possibly be accepted. It would introduce an entirely novel conception into the Income Tax law, and it would mean that the Inland Revenue would have placed upon them, not only the very large burdens which this Bill will impose on them, but would have to have a very large staff to conduct inquiries of rather a means test character in order to investigate cases of hardship that were put forward. It is true that, although it does not arise only under this Bill and under this contribution, war conditions bring unexpected and unanticipated financial losses to some people. Under the ordinary Income Tax, a man may find himself suddenly deprived of the source from which he had hoped to pay his Income Tax, owing to some circumstance due to the war. As my right hon. Friend said in dealing with an earlier Amendment, the administration of this contribution will be carried out with the same care with which I think it is generally recognised the administration of Income Tax collection is carried out. When people have fallen on hard days, undue pressure is not exerted. In war circumstances the number of cases where hardship might arise if undue pressure were exercised will obviously be larger than in peace time, but I do not think that one could possibly introduce into the Bill a principle of the kind suggested in the Amendment. The matter must be left to be dealt with by administrative measures.
If contributions were allowed to accumulate, could not interest be charged at the rate of 2½ per cent.?
If Income Tax is not paid over a period of time, I suppose ultimately it becomes a charge against all of a person's assets. If a person goes on long enough not paying his debts somebody will probably make him bankrupt. Nobody proposes to make people bankrupt if they are unable to pay this contribution because of war circumstances, but if it went on mounting up, I think it would be rather useful to make it a definite charge.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 13, line 32, to leave out "or."
The purpose of this Amendment and the Amendment which follows it on the Order Paper is to include in the lower rates of contributions, housing institutes built by housing associations on housing estates. For a long time, housing associations have been encouraged by local authorities to provide these institutes for the benefit of their tenants. They are used for games and recreations. They are not, of course, used for open-air games, although in some cases they are surrounded by open spaces which can be used for recreation, in which case, I agree, they will come within Sub-section (3, b). However, there are housing institutes which may not be surrounded by open spaces but which, nevertheless, are used for recreation. These associations are philanthropic associations, and I feel there is as good a case for treating such properties preferentially as land used exclusively for the purpose of open-air games. It may be that this point is already covered, but if not I hope the Chancellor will see his way to accept this Amendment to include housing institutes.As I understand it, this Amendment deals with institutes for social and recreational facilities, with the difference that the games are played under cover and therefore do not come within the proviso (b) which refers to land mainly used for outdoor recreation. These institutes are built by housing associations, and I agree with the hon. Member they serve a very useful purpose. Some of them, however, may conceivably come within the charity relief classes under Clause 29. If they do not come within that provision, then I find it very hard to see—and so does my right hon. Friend—that they are different in any way from ordinary buildings. The reason why I do not think they can be assimilated in land used for open-air recreation, is because of the difference between land and buildings. No one would say they would fall within the definition of land. It would really mean that we were trying to get in another class—it may be a very minute one—graded at sixpence instead of 2s. I am told that even if one could accept this Amendment, it could not be limited to this particular class of institute. There are many other institutes which fulfil a similar deserving purpose, but do not happen to have been built by housing associations. I am sure anyone would be able to think of similar cases and it would be a little difficult to make a special class just to distinguish between a boys' club built by a housing association and a boys' club built by someone else. On the whole, while agreeing with my hon. Friend as to the useful contribution to our public life which these institutes make, the problems which their case raises are too complicated to introduce them into this Clause.
Do ordinary village institutes come under the 2s. or the sixpenny provision? They are often used for purely social purposes and cover a considerable amount of work which is most useful in the public social welfare.
They are on the higher scale. The institutes that I know of are buildings. They are not land used for games.
I quite realise that but—
This point obviously does not arise on the Amendment.
I hope the right hon. Gentleman will not finally close his mind to this pica, because, in the ordinary way, these housing associations would be exempt under Clause 29. By the accidental fact however that they have to let their dwellings at a rent, they do not fall within it and are not regarded as charities, although in every other sense of the word they are charities. I ask leave to withdraw the Amendment but I hope the right hon. Gentleman will look at the position again.
Amendment, by leave, withdrawn.
I beg to move, in page 13, line 32, at the end, to insert:
'or
The object of this Amendment is to secure that the rate of premium payable under Part 1 of the Bill in respect of shootings or fishings shall be 6d. in the £ the same rate as that prescribed for agricultural properties and for properties devoted to open-air games, open-air racing or open-air recreation, instead of 2s. In the case of shootings and fishings, as in the case of agricultural properties, I think it will be conceded that a large part of the annual value of the subject is really attributable to the land and not to any buildings that may be on it. Again, fishing and shooting are, of course, closely analogous to those purposes indicated in paragraph (b), that is, they are used for recreations of various sorts. I do not know what reason prompted my right hon. Friend to include those things under the lower rate. I suspect that it is a "hangover" using the word in the best sense from the days when he filled the office of Minister of Health with such distinction and efficiency, and that he desired to do nothing to discourage people in any way from getting as much exercise as possible in the open air. I suspect he was also fortified in his decision by realising that he was underwriting what was probably a relatively good risk. One cannot conceive of very great damage being done to these subjects, and least of all perhaps in the case of shootings and fishings, which are very widely spread. One can visualise a bomb falling into a salmon pool or destroying a covey of partridges, but the damage done would not be of the kind that a man would be called upon to repair. Nature would do what was necessary. I am sure that my right hon. Friend does not wish to discriminate between those who use different kinds of woods for recreation. There are those who wield the ash and those who wield the willow. Others use the green-heart and others the steel rod at the end of a piece of walnut. They are all engaged in exercise in the open air and should come under the same heading. My right hon. Friend might think that my point would be met by substituting the word "sports" for "open-air recreations," but that would not cover it because I have another point which I wish to stress. I have used the words "shootings and fishings" because I wish my right hon. Friend to consider the necessities of a humble class of people scattered all around the coast engaged in a hard-working and exposed life and making a meagre living. Those are the men engaged in salmon-fishing. It would be very hard on these not very well-off men, if they had to pay the higher rate while adjoining them was a farmer, well-to-do and perhaps wealthy—if I may be forgiven for suggesting that a wealthy or well-to-do farmer exists—paying on the other scale. Let us suppose, for the sake of argument, that there is such a farmer. He would pay only the 6d. rate and the man on the foreshore, living in an indifferent house and earning a meagre living, whose all-in-all is tied up in his salmon-nets and cobles, would pay the higher rate. His circumstances are such that he should be put on the same basis as those engaged in agriculture.(c) shootings or fishings."
I do not want to go into the controversy of the rich farmer and the poor fisherman, but I do not expect my hon. and gallant Friend will be surprised when I tell him that my right hon. Friend does not feel inclined to accept the Amendment. If the Schedule A assessment includes sporting rights, then, where the land is agricultural land, as defined in Clause 68, it would pay at the 6d. rate. Where it is not within that definition it would pay the 2s. rate. On the other hand, if the Schedule A assessment does not include sporting rights and there is a separate rate, which I think applies largely to commercial fishing, it would fall to pay the 2s. rate as laid down in the earlier Clause. I do not think it would be profitable at this time of day, when we have so much to do, to discuss the interrelationship of open-air sports, games and fishing. My right hon. Friend has considered all the implications, but does not think that, in the nature of things, fishing should be given the preferential rate.
I should like to be clear about what the Financial Secretary has said. Special provision is made by the law in England that sporting rights shall be separately valued for rating purposes where there is a let separate from the occupation of the land. Did he say that where those rights are with the occupation of the land, and the land is agricultural, the rate is 6d.; and that it was only where there was a let, on a separate lease, that the 2s. rate would be paid? I understood him to mean mat. Where sporting rights are not severed from the ordinary agricultural rights on the land there is no reason why those sporting rights should be charged at the rate of 2s. instead of 6d. To talk about sporting rights sounds very capitalistic, but are they really a capitalistic matter, and are they likely to suffer any damage at all? One may get a bomb in a pond where people go to fish in the summer, or it may be dropped in a river for which sporting rights have been paid. What would be fair, I think, is that the rate should be 6d. where the shooting rights are enjoyed by the agriculturist working the land, and as. where the sporting rights are let separately.
I wish to ask my right hon. and gallant Friend the Financial Secretary whether in his argument against this Amendment he really contends that the sporting values are in any way risked?
I suggest that in the public interest it is not advisable to encourage anybody to keep for sport land which might be turned to agricultural use, and if there is such land used for sporting purposes, as is the case throughout Scotland, the rate on such land should be retained at 2s. in order to induce people to put that land to its proper use, the production of food. On the general question, I do not think that people should contribute only in proportion to the benefits they are likely to get. It is a question of raising money from the whole population on as fair a basis as possible, in order to make payments to those who suffer damage. The argument that certain properties should be exempted from payment stands on the same footing as the old suggestion that blind people should not be asked to pay towards the lighting of the streets because they get no benefit from it.
I had not intended to speak, although I should oppose this Amendment, because I do not think one wants preferential rates for sporting rights, but I have been brought to my feet in some alarm by the explanation given by my right hon. and gallant Friend the Financial Secretary. In a great many cases it is not a question of sporting rights being alternative to agricul- tural uses, because they run concurrently. Most of the agricultural land in the country has a certain amount of sporting rights value. If the person to whom land is let for farming purposes also enjoys the sporting rights over it there is no separate assessment for the sporting rights; there is a separate assessment only when the sporting rights are in different hands. I will take the case of my own little estate in Sussex as an example. About half of the land is in my own occupation. I farm it and I retain the sporting rights and there is no separate assessment for the sporting rights. The other half is let to farm tenants but the sporting rights are reserved, and in that case there is a separate assessment of the sporting rights. What will happen on most agricultural estates is that there will be a certain number of farms where the sporting rights will be charged at the 2s. rate, and others, lying among them, charged on the 6d. basis, and that is likely to lead to a good deal of confusion and difficulty in the assessment committees. All I ask is that the Financial Secretary should look a little closely into the matter.
Surely, if confusion will be caused, that is the last thing that anybody wants.
Will my right hon. Friend look into that particular point? How can you separate the sporting rights when there are no sporting rights?
We will look into the point.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Amendment made: In page 13, line 37, leave out "structures," and insert "works."—[ Sir K. Wood.]
Clause, as amended, ordered to stand part of the Bill.
Clause 16—(Alteration Of Contributions)
I beg to move, in page 13, line 40, to leave out from "may," to "whether," and to insert "each year."
This is a small point, which I raise for the sake of getting a statement from the Chancellor of the Exchequer. The question at issue is whether this matter should be looked at at undetermined intervals or at definite, regular intervals. It may be that the Chancellor of the Exchequer has already come to a conclusion administratively, but a declaration may bind not only him, but his successor. I more or less formally move this Amendment in order to have a statement from him.I will have regard to what my hon. Friend has said. Of course, the other aspect of the matter is that it might very well be in the national interest, at this time particularly, that I should have discretion as to when these estimates are published. It may be undesirable for me to be bound to publish information at definite intervals when it might be of some use to the enemy. There is also something to be said for leaving the power to increase contributions permissive. I should not like to be bound at a particular time to increase charges irrespective of the circumstances which might then obtain. Those are the reasons which led the Government to take their present view of the matter. I hope that my hon. Friend will be satisfied with my reply.
I am perfectly satisfied. I only wanted a declaration of intention. That was my purpose in moving the Amendment, and I now beg to ask leave to withdraw it.
Amendment, by leave, withdrawn.
Clause ordered to stand part of the Bill.
Clause 17 ordered to stand part of the Bill.
Clause 18—(Rights Over Against Land- Lords And Tenants)
The following Amendment stood upon the Order Paper in the name of Mr. WOODBURN: In page 15, line 13, at the end, to add:
"(2) In Scotland, any tenant, not being the actual proprietor, who fails to be entered in the valuation roll as proprietor, shall be allowed to deduct from any rent he pays to the actual landlord such proportion of the contribution as the rent which he pays to such landlord bears to the total contributory value of the property."
This Amendment deals with a subject which should be raised at a later stage.
On a point of Order. I take it that the passing of this Clause does not deprive hon. Members of the right of raising the matter at a later stage on the Fifth Schedule as it affects Scotland?
I do not see how a question which affects the application to Scotland can be prejudiced by passing this Clause. The hon. Member should raise that on the Scottish application Clause which is the proper time for dealing with Scottish questions.
Clause ordered to stand part of the Bill.Clause 19—(Rights Over Against Mort- Gagees In Certain Cases)
I beg to move, in page 15, line 16, to leave out from "mortgage," to the end of line 25, and to insert:
I do not think that the object of this Amendment requires much explanation. It raises the whole question of the proportion of the contributions which should be made by the mortgagee and the mortgagor. It seems to me that the provisions already laid down in the Bill are not equitable. As has been pointed out earlier in the Debate, in many cases the mortgagee is likely to be favourably affected and the mortgagor is likely to be very unfavourably affected. It seems only just and reasonable that where the mortgagee is likely to receive the whole of the benefit the contribution ought to be paid by the mortgagee."he shall be entitled to be indemnified by the mortgagee against the same proportion of his nett liability as the amount of the mortgage bears to the value of that interest."
I think this Amendment bears almost the same point, although it relates to contributions as distinct from payments for war damage, as we discussed on a previous Clause.
I do not wish to interrupt the hon. Member, but I would remind the Committee that anything raised in a previous discussion cannot be repeated on this Clause.
It is only the same point in this connection, that it was argued that the payment of war damage should be apportioned as between mortgagor and mortgagee. I understand that the hon. Member who moved the Amendment desires that the contributions should be apportioned as between the mortgagor and mortgagee in the same way. That appears to me a much more satisfactory method, and a much more logical one, than the method proposed in the Bill. According to the Bill, if the amount secured by the mortgage at the relevant date is less than half the value of the property, the mortgagee will pay no proportion whatever of the premium. It seems to me to be very inequitable, if I have a property valued at £1,000 mortgaged on the relevant date to the extent of only £490, that I should hear the whole of the premium in respect of the insurance of that property. I do not know why this provision should have been inserted unless it is to approximate to some rough rule of justice without the necessity for a calculation in each case. But is that end really secured? I doubt it very much. In each case one has to have the figures in order to decide whether the amount secured by the mortgage exceeds one-half or three-quarters of the value of the interest, and it seems to me it would be simpler to decide what proportion one bears to the other at the relevant date and then make a decision once and for all. It would be just as easy to decide in that way as in the way provided under the Bill.
I hope therefore that the Chancellor will see his way to accept this Amendment. We must all recognise that we try to do rough or substantial justice throughout this Bill, but where we can adopt some logical rule and method, surely that should be done. That applies to the question we have already discussed to-day as to the proportions of the payments received from the War Damage Commission, and should equally apply in this case where the contributions are in question. Let us do rough justice where we can find no consistent principle, but when we can find a principle, and clearly there is one to be found here, let us see that contributions are apportioned according to it.The Clause as it stands says that the amount of the contribution is to be decided according to the value of the interest. I am informed by those who may have to deal with this Bill that there is no practicable way of deciding what the value of the interest is and that the Clause as it stands is therefore quite unworkable in practice. I should be glad to hear from the Chancellor, first of all, whether the Clause is workable, and how it is to be decided, what the value or half the value of an interest is, without finding out what the value of the property is, which if it were done would provide a better basis for the allocation of premiums. I myself tried, by a suggestion to levy one shilling on every £10 of value, to be deducted at the same time as Income Tax, to find a way out of this problem of securing equity as between the mortgagor and the mortgagee. I was told that in the case of a £1,000 house with a £9,000 mortgage the mortgagor, according to that proposal, would have recovered £4 10s., whereas if the house was assessed at £36, he would have to pay £3 12s. At first sight that looks as if the mortgagor was going to make a profit, but since the Bill says that he is only going to be indemnified, he cannot recover more than he has paid out.
In practice, the mortgagee would have paid all the contributions—but, as the mortgagee in these cases is to get the whole payment, I do not see any injustice in that. I support the Amendment on the ground that it will spread the payment on a fairer basis. I see the possibility that in the case of a house where 499 per cent. of the value is covered by a mortgage, when the value payment is made it will all be required to wipe out the mortgage, so that the owner of the house will receive nothing. Yet not only will he have paid contributions, but he is entitled to go on paying contributions after the value payment has been made. Some solution must be found under which the contribution will cover all those who are going to gain from the payment. But for the Bill, neither the mortgagee nor the mortgagor would get a look in at all. We are legislating to give them some compensation, and their contributions should be proportionate to the compensation they will receive. If the mortgagor is to get no compensation, he should not be asked to pay any contribution.This Amendment appears to raise the general question of whether the mortgagee should contribute anything only in the limited class of cases specified in Clause 19, or whether mortgagees in general should be called upon to contribute.
We discussed that this morning. I do not think my hon. Friend was here.
I was under the impression that there was to be a general discussion on whether mortgagees in general should be called upon to contribute.
That discussion has already taken place.
The whole point that arises on this Amendment seems to be, what is the best way of assessing the mortgagee's contribution? Although I am not entirely in agreement with the Amendment, I should be glad of an opportunity to support a manuscript Amendment, which, if it is called, is to be moved by my hon. Friend the Member for Chesterfield (Mr. Benson), and which would bring us nearer to the point that we are trying to reach. I think the Chancellor realises that some proportion of this direct contribution of 2s. in the £ on Schedule A Tax should be borne by one of the chief beneficiaries under the Bill, namely, the mortgagee. The question is how much should he pay. I suggest that the Clause does not really place upon the mortgagee the right proportion. As my hon. Friend the Member for East Stirling (Mr. Woodburn) has said, it is very difficult to assess the value of the interest. To save time, I will limit myself to these remarks on the Amendment. Possibly the Amendment of my hon. Friend the Member for Chesterfield, which I hope will be called, will make clearer to the Committee the assessment which ought to be placed on the mortgage. At present the amount is very indefinite. If we can get some clearer definition of what relation the mortgagee's interest bears to the value of the property—that is the main point—we may be able to arrive at a fair contribution to be paid by the mortgagee. I therefore would like to reserve my remarks to the time when I hope you will call the manuscript Amendment which is being put in by my hon. Friend the Member for Chesterfield (Mr. Benson).
We had considerable discussion on the general considerations a short time ago, and I ventured to offer some observations to the Committee; I propose now to direct myself to the proposals which are on the Paper respecting the Amendment which has been moved. I have not seen the manuscript Amendment which my hon. Friend opposite has in mind, and, therefore, I am not aware of what he is proposing. In considering this matter you have to have regard to what can be done from a practical point of view and what can be done quickly. These are the considerations that we have had in mind in Clause 19 (1). It is true, as my hon. Friend has said, that you can take cases on the border line, as he has done, and as I have often done in criticising the Government of the day when I used to sit where he is sitting now. That is usually easy to do, and that is why I used to do it, but when you have the responsibility for a Measure you are rather on a different footing. What we are endeavouring to do here is something which, though perhaps it cannot be completely defended on absolutely logical grounds, gives on the whole rough and ready justice; and it will work.
The reason why we have to adopt this method is because it is impossible to measure precisely the relative interests of mortgagor and mortgagee in the property. The interest of the mortgagor in the property may be greater than the mere difference between its value and the total debt. He is liable to the mortgagee on his personal covenant. My hon. Friend rather disposed of the matter as far as the mortgagor was concerned by saying what he would get out of it in the case he mentioned. The answer is that he will be released to the extent of the payment he has to make in respect of the personal covenant and the undertaking into which he has entered. If he has other assets, as, of course, is frequently the case, the compensation scheme not only protects the capital which is invested in the property but also protects the other assets which he would have to realise to fulfil his personal covenant, if the security of the property were destroyed.Surely, if the amount which comes from the War Damage Commission is insufficient to pay the mortgagee, the mortgagor will be released?
He is released to that extent, and in a good many cases it is a very substantial release indeed. If you say that we should waive the value of the personal covenant on one side altogether, it is something of course we cannot do. What is the objection in practice to the proposals which my hon. Friends have made? It is most desirable, if this scheme is to work at all, to avoid as far as possible the necessity for valuations of mortgaged properties. I am advised, in connection with the setting up of the Commission, that we shall be in considerable difficulty, having regard to the scarcity of valuers at the present time. We shall have some difficulty in obtaining the necessary number that we require, and the formula in the Bill does obviate the necessity for such valuations in a large number of cases, where it appears that the proportion between the mortgage debt and the value of the property is less than a half, or is between a half and three quarters, or exceeds three quarters, and it is only in doubtful cases, near the dividing line of the formula, that valuations may be necessary. The Amendment—and this is why I am not able to accept it—would require the value to be fixed in every case, because in every case the share of the contribution to be borne by the mortgagee would be a precise proportion between the debt and the value.
What is the definition of the value?
The same as in the other Part of the Bill. I have discussed this matter with a number of deputations and individuals, and I put it to them that this is a workable scheme, and that while there are several criticisms that we can make of it, it should be put into operation. I think it achieves substantial justice. On the other hand, the Amendment is quite unworkable, because we cannot contemplate having to fix the value in every case. It is for those reasons—and I am not putting it any higher than I have done—that I must ask the Committee to retain the proposition I have made. In reply to the hon. Member for Bassetlaw (Mr. Bellenger), I would point out that the definition of value can be found on page 16 of the Bill, Subsection (4).
This is a most important point. Could the Chancellor tell us what it is?
It can be found on page 16, Sub-section (4), commencing:
"In this section the expression 'value' means …"
When I heard my hon. Friend the Member for Gravesend (Sir I. Albery) propose his Amendment, I quite realised that it would mean a great deal of work and the employment of a great many valuers, but I have listened to the Chancellor and it seems to me that the Bill as it stands must also employ a great many valuers—
Not so many.
I quite agree, but a great number. I have read the definition of value and have found out that it must be in many cases all the value. The value itself has to be ascertained first, and I feel that my right hon. Friend was rather optimistic in saying that as the Bill now stands it would not mean much work for valuers.
I did not say so.
I suggest that if we want to avoid work and delay, the simplest thing would be a percentage payment on all mortgages. I feel it is rather unjust that where a mortgage is 50 per cent. of the value it should contribute nothing to this contribution.
I should like to refer to one point in connection with values. My right hon. Friend the Chancellor of the Exchequer said that the scheme suggested in the Amendment would perhaps involve some more work, but I cannot see how under the system in the Bill one will get away with so few valuations as he makes out. There is another point which seems to me to be most important. What is this valuation which is to be made? The Clause in question says it is the value which the property would have had in the open market at the end of March, 1939. Does not that in fact mean that the value of the property is to be a bankrupt value? I cannot see any other meaning. If a man has defaulted, and the mortgagor steps in, forecloses on the property and puts it in the market for sale, that is the value of the property in the open market. I do not feel convinced that the present arrangement is an equitable one, and although I agree that the Chancellor has enormous difficulties and that the machinery is very difficult, nevertheless I feel that one can go too far in avoiding difficulties if it is to be at the expense of justice.
Question, "That the words proposed to be left out to 'value', in line 20, stand part of the Clause," put, and agreed to.I should like to move the Amendment in the name of the hon. Member for South Croydon (Sir H Williams)—in page 15, line 16, to leave out from "mortgage," to the end of line 25, and to insert:
"he shall be entitled to be indemnified by the mortgagee by an amount which bears to his net liability the same proportion as I he amount of interest payable under the mortgage bears to the contributory value of the interest.
This Amendment relates to the contributory value of the interest. The Chancellor must find out what is the value of the interest before he can find out what half the value of the interest is. The right hon. Gentleman has not told us how he intends to do that, but assuming that he has some method of discovering the value of the interest, this should go some way to meet the difficulty which has been raised and solve the problem of relating the contribution fairly between the mortgagor and the mortgagee. I shall be glad to know from the Chancellor how he intends to decide the value of the interest, and, if he has a method of doing that, what objection can there be to the Amendment in the name of the hon. Member for South Croydon, which would make the mortgagee bear his contribution according to the relative share of the contributory value of the interest.Provided that in no case shall the indemnity exceed the contribution paid in respect of any contributory property."
Does the hon. Member wish to move the Amendment? The next Amendment which I shall call will be a manuscript Amendment to be moved by the hon. Member for Chesterfield (Mr. Benson), in page 15, line 20, to leave out the word "value" and to insert "price of acquisition." The Amendment in the name of the hon. Member for South Croydon (Sir H. Williams; might come under that.
In that case I do not wish to move the Amendment.
I beg to move, in page 15, line 20, to leave out "value," and to insert "price of the acquisition."
The reason I move this Amendment is that the whole of the machinery of this Clause depends upon the relationship of two figures, the amount of the mortgage and, as the Bill is drafted, the value of the security. The Chancellor has already said that he wants to reduce valuations to a minimum. My Amendment is directed to that end. If the Chancellor considers the type of property which will be mainly affected by this Clause, he will see that it is the small house owned by the owner-occupier, built since 1919 and mortgaged to a building society. There are millions of this class of property, and it is this type of house mainly—I do not say exclusively—which will come under the operations of this Clause. Of the two sums to be considered, one, the amount of the mortgage, is fixed, but the other, the value of the interest, is debateable. A small fluctuation in the value can bring a large number of mortgagors in or outside the three-quarter level. If the Clause is left as it stands, with the one variable figure—the value of the security—this will throw a very great strain upon the machinery of administration. In a vast number of cases we can ascertain concrete figures by substituting the price of the acquisition for value. Under Sub-section (6) the mortgage dealt with under this Clause is already married to the acquisition of property, so I am not introducing a new principle by substituting the price of acquisition for value. I am quite aware that certain properties have no price of acquisition. But in this Bill we are trying to find a workable scheme and not a Bill to deal with every possible or probable case. I am not suggesting that the wording of my Amendment is correct, but I am merely adumbrating a principle, namely, using the price of acquisition instead of a fluctuating figure based on the value at March, Two. By this means we shall reduce enormously the possibility of appeal by people who have real or fancied rights under this Clause. It may be said that to put in Price of acquisition is inequitable or may be inequitable. But the whole Bill is a mass of injustices. We are only trying to find something which will work, and I think that the rule-of-thumb method that I have suggested is far more likely to be productive of good than harm.The point at issue is, I think, quite simple. The Chancellor admits, in principle, that where a contribution has to be paid it should be paid by those who are to benefit under this Bill when compensation is made. Every hon. Member in this Committee knows that the mortgagee stands, as far as compensation is concerned, a far better chance of getting compensation than almost any other proprietary interest, except the freeholder. The question is, as the contribution in the first instance is to be paid by the direct contributor, that is to say the person in immediate possession of the property, how far shall these people who have other interests in the property, other than the immediate physical possession of property, pay some of the contributions. The Chancellor has put in some words which seem to me very intangible. Hon. Members have asked how he is to arrive at the value of the interest. I have a good deal of experience of how mortgages are arranged. It makes no difference whether they are building society or bank or insurance mortgages. They generally bear some direct relation to the purchase price of the property. If we say to the mortgagor, "You have an interest in this property, a fiduciary interest, if you like, therefore you must pay a certain proportion of the premiums." What we have to try to arrive at is how much the mortgagee should pay compared with the compensation which he will receive either on a cost-of-works basis or a value basis. In almost every case where a mortgagor lends money, the valuer or surveyor who assesses the value wants to know what price the mortgagor paid for it. If he is bound to disclose the purchase price, the purpose is to enable the building society to decide the value of the property at the time they are asked to lend the money, and building societies have a well-defined rule of lending only a certain proportion of the purchase price.
It is true that certain properties have an addition made to the purchase price when conversions or works of that nature are carried out. The Amendment may not be quite watertight, but, under the Clause, it is the best method of finding what the relation is between the mortgagee and the mortgagor as it affects the amount of insurance contribution to be paid. Even if the Chancellor will not accept the Amendment, will he keep an open mind on the subject, so that if, on Report, we can lay down a better method of assessing the proportion which the mortgagee should pay, it can be inserted? The Clause, as now drawn, will create innumerable complications and the Amendment gets nearer to the ideal method of assessing the value of the property on which the mortgagee has lent money and on which he should be prepared to pay his proper share of the contribution.I think the Debate has shown the same position as was revealed Clause 4, namely, that none of us likes the Clause as it stands, and I think none of us likes very much the Amendments which have been put forward. What we are all trying to get at is a simple way of calculating the contribution at the mortgagee should make. The Clause involves a valuation which is extremely difficult, and a valuation made from time to time, because it refers to reevant dates, and the definition of reevant dates is 1st January each year.
All you have to on the successive relevant dates is to see how much the debt is. The value is aways as at 31st March, 1939.
The fact is that it is an uncertain and complicated way of arriving at the contribution of the mortgagee. All e Amendments have been directed to avoiding that complication. A second difficulty about the Clause is that many of us feel that the mortgagee should contribute according to his interest in the property, but as the Clause stands he is largely let out in particular circumstances. He is let out entirely if his interest is less than a half. Amendments have been devised, therefore, for the purpose of having contributions from the mortgagee and putting them on a sliding scale. The Amendment of my hon. Friend the Member for South Croydon (Sir H. Williams) was devised with that object, and it gets rid of the two objections to the Clause. It xes the contribution of the mortgagee in relation to two fixed factors. These are the contributory value of the property and the interest which is received by the mortgagee. The contributions of the mortgagee would bear relationship with the interest and the contributory value. That Amendment also provides that if his interest is small, he will pay a small contribution, and if it is large, he will pay a large contribution.
The Clause makes too many jumps. It is all very well for the right hon. Gentleman to say that he is used to dealing with border-line cases, but under the Clause there will be three border-line cases. The Clause is based on an uncertain facto, namely, value. There is too big a jump between the mortgagee who has a three-quarter interest and less than a three-quarter interest and the mortgagee who has more than a three-quarter interest. In one case he pays one-third of the contribution and in the other two-thirds. Those jumps are too high. The Amendment of my hon. Friend the Member for South Croydon provides a sliding-scale contribution which bears an exact relationship with the interest which the mortgagee is receiving and the contributory value of the property. If the right hon. Gentleman cannot accept any of the Amendments, I hope that he will look at the matter again, because the Clause is certainly unsatisfactory.I think that the Chancellor is in a great difficulty, as we all are on this Clause. The only logical thing for him to do is to leave out Clause 19 because that is a policy wihch can be sustained. I will put his case before I reply to it. The mortgagee has not any interest in the property at all. He is merely the owner of a debt for which the property is a guarantee in reinforcement of a personal guarantee. Suppose I own a house and cannot pay my Income Tax, and I go to somebody and say, "The Chancellor wants £200 out of me. I have not got it, but I have a house. Will you lend me £200 if I give you a piece of paper?" I get the money and pay it to the Chancellor, but that does not make the gentleman who lent it to me part-owner of my house. That is the basis on which the Chancellor ought to have started. He realises, however, that, in practice as distinct from theory, the mortgagees are, in fact, partners in the ownership.
I am buying and, as the lady said to her husband, "When we have paid the last contribution to the doctor, the baby will be really ours." That will be my position next September. I had no money to buy my house outright, and I took out a life policy, and if all goes well in September the house will be entirely mine. There is a case where the insurance company and I are effective partners in ownership. In many cases, however, money was not loaned for the purpose of helping to buy the house, but for some entirely different transaction. A man may borrow the money on a house in order to buy a grand piano. In the long run the Chancellor has got himself—and really I do not blame him—into a position which is illogical. But there is the problem and we have to deal with it. I suggest that there is one simple solution, and that it is to be found in the terms of my Amendment. I could make my Amendment much better if I were sitting on the Treasury Bench, because then I could move a Financial Resolution which would turn the contribution into a tax. If we made the 2s. in the £ into a supplementary Schedule A Property Tax, the mortgagee would have to pay. All we should say was that Income Tax was 8s. 6d. in the £ and Property Tax 10s. 6d. We are really doing that in practice now, but we are calling the extra 2s. a contribution under this Bill. It is all very difficult and complicated, because in one sense this is a tax. If the State makes you pay something, it is a tax. The man who sticks so many stamps on his insurance card has been subjected to tax, although we do not call it a tax, because we have hypothecated the money for a particular purpose. I am satisfied that whether my own Amendment or any of the others on the subject—they are really alternatives, seeking the same purpose—is accepted the public will be profoundly dissatisfied with Clause 19. So are we, and so is the Chancellor. I suggest that between now and Report stage he and his advisers will have to apply their minds to the problem of solving something which is not easily capable of solution, but which, if the Bill passes into law in its present form, will create the profoundest discontent among great masses of the people irrespective of their political affiliations.A remark made by the hon. Member for Peckham (Mr. Silkin) is interesting. He said in effect that he did not think the Committee liked the Clause and he did not think they liked the Amendment. At earlier stages I played a humble part in considering the various proposals which were passed under review in setting this measure. Many Amendments which I have since seen on the Order Paper were rejected by us at an earlier stage because we felt there were greater objections to them than to the principles embodied in the Bill. This is, no doubt one of the Clauses—and there are several—which deal with problems which are incapable of a perfect solution. My hon. Friend the Member for South Croydon (Sir H. Williams) went rather wide of the Amendment and I hope he will think it is no discourtesy to him if I restrict my remarks to the Amendment. One could talk at large about mortgages and what might happen to them. This Amendment accepts the 75 per cent. step, and we are not discussing that now. What it seeks to do is to put in the price of acquisition. The hon. Member who supported the Amendment says that at any rate is definite. It certainly has the advantage of definiteness, but how unjust it is. The house may have been bought 15 years ago, and the 15 year-old value has probably depreciated perhaps by 50 per cent.
You would let the mortgagee out, although in fact, although not in all cases, the mortgage debt may be 75 per cent. or 90 per cent. of the value of the house. You let him out because his debt by that time would be less than half the original purchase price of the house. One can say that the price of acquisition would be very unfair to the mortgagor if the house were purchased a very considerable time ago. If the purchase was at or about March, 1939, a reasonable mortgagor and mortgagee would clearly accept that value for the purpose of the Bill and therefore you would not have great disputes about valuation in such cases. If there is no price of acquisition at all or if that acquisition were substantially before March, 1939, in justice to the mortgagor you have to face the necessity of valuation. I do not think that there will be much dispute in the majority of cases. If one is to do the fair thing by the mortgagor you will not be able, I think, to find a solution which does not contain the possibility of dispute, in the border line cases. The Amendment which has been moved would, of course, be unworkable in cases where there is no price of acquisition. It would be very unfair to the mortgagor in the case where the house had been bought a considerable time before March, 1939. My right hon. Friend the Chancellor of the Exchequer and myself have an open mind on this matter and we shall certainly consider any suggestions. We have thought a great deal about this problem, and we realise the imperfections of the suggestion which we have put forward, but I believe that the rough machinery suggested in the Bill is as likely to provide a fair solution as any other solution so far suggested.The Attorney-General's reply is based on the old principle of citing the hard case, but in the vast majority of cases which will come under the Clause there will be the small owner-occupiers whose houses were bought less than 15 years ago and have not depreciated by so much as 50 per cent. The houses will be practically identical in price with what they were in 1939. I do not propose to press the Amendment, and I was not in any way concerned with the basic principles or with the equity of the proposals. I was concerned only with the simplification of the machinery.
I am very disturbed to hear the example given by the Attorney-General. As I understand it, he is trying to arrive at the same conclusion as we are. The only question is, What is the best machinery to put in this Clause? When the Attorney-General talked about values 15 years ago, I wonder whether he realised that the majority of the mortgage business that has been done in this country, in so far as building societies and insurance companies are concerned, has been mainly in the period since the last war—in other words, in the period when building activity has been at its greatest. Therefore, we always come back to this point, that a mortgage is based on the definite value of the property. The question is, What is the value of the property, not on the basis of words as placed in this Bill, but the value paid by the persons acquiring that property? It makes no difference whether it was 15 years ago or in 1939. I would go so far as to say that the majority of mortgages in this country are based on the purchase price. If a person acquired property r5 years ago and borrowed money in 1939, I rather think that the building society, the insurance company or the bank would still want to know, "What was the price you paid for that property when you did acquire it?" If the prospective mort- gagor says, "I acquired it 15 years ago, and I paid £500 for it," it is not much use the mortgagor saying, "But the value to-day is £1,000."
Insurance companies and building societies are not concerned with enhanced values, generally speaking. Most of the money lent on mortgage is lent on the purchase price of the property. I suggest to the Chancellor of the Exchequer that he ought not to close his mind at this stage. If he is going to reject the Amendment moved by my hon. Friend the Member for Chesterfield (Mr. Benson), he ought to leave a way open for us to put points to him before the Report stage, so that we can get a better definition of the value basis before we pass this Bill.I would like briefly to put two suggestions which spring to my mind during this discussion. I cannot see that the price of acquisition would be a useful basis, because that might be a matter for antiquarians to find out if the house was bought sufficiently long ago. But it seems to me that if a mortgage was settled, there must have been some settlement for value at the time of the fixing of the mortgage, and therefore it might be possible to deal with the relevant share of the mortgagee and the mortgagor on the basis of the value at the time that the mortgage was fixed on the property. That is the one definite thing that could be assessed. The other suggestion I would make, to revert to my original proposition which I withdrew as an Amendment in order to support the hon. Member for South Croydon (Sir H. Williams), is that we should depart from the idea of the rateable value of the contributions so far as the mortgagee is concerned, treat all mortgages on the same basis, and deduct one shilling per annum for every fro borrowed. That would bring more money to the Chancellor and would be much fairer as between mortgagee and mortgagor.
I only want to arrive at a reasonable solution. I will examine carefully in the next few days anything that hon. Members have said.
In view of that assurance, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move in page 15, line 25, at the end, to insert:
To put this matter quite briefly, under Clause 10, the moneys are paid to the mortgagee who deals with them in the same way as they would be dealt with if he had foreclosed on a property and taken possession of it. The object of this Amendment is that if, after the mortgagee has satisfied his claims, no money at all is left over for the direct or indirect contributor, the equity holder or the mortgagor, the latter shall at any rate be repaid by the mortgagee the contributions which he may have paid It may not be a very important point in fact, but I think it is an important point in principle; I cannot see that it is equitable or just that the equity holder should have to pay contributions under the War Damage Bill and then, if his house is bombed, see the whole of the compensation passed to the mortgagee, when he has paid most of the contributions."(c) If a valuation payment made to the mortgagee under Clause 10, Section 4, is entirely retained by the mortgagee, no balance payment being left available to the direct or indirect contributor, he shall be entitled to be indemnified by the mortgagee against all contributions made by the said direct or indirect contributor."
Everybody, of course, realises that the owner-occupier, like any occupier, has been placed in circumstances of great hardship by war conditions, not only by bombing, and this large section of the community are entitled to have their position sympathetically considered by this House I am, however, bound to say that this Amendment appears to be based on an entire misconcepton of the position. Suppose a mortgagor has borrowed £1,500 The house is destroyed. As has been said more than once, but for this Bill the mortgagor and the mortgagee, in some places, might be unable to build it up again and the mortgagor would remain liable in law for the £1, 500 which he has borrowed. The value payment does no more than extinguish the debt. It is quite wrong to suggest that, in that case, the mortgagor has nothing for his contribution.
He has no share of the payment.
But the whole debt is wiped off. It is wrong in that case to suggest that he gets nothing. Then, take a case where a mortgagor gets something more than the amount of the debt. It would be equally wrong to suggest that all he gets out of the Bill is the amount over his mortgage debt. The main benefit will be the wiping out of the £1,200 mortgage debt. If he gets £300, over, he will have got £1,500 altogether. The Amendment says that, in that case, he should pay a contribution, and there is no question of an indemnity. The only case where the question of an indemnity arises is where he has got all his benefit by the wiping out of debt. I think it would he unfair to the mortgagee in that case to adopt the Amendment. The fact is that the mortgagor benefits through the payment off of the mortgage debt, but we must not recapitulate now the discussion that we had this morning on payments to the mortgagee.
The Attorney-General seems so hidebound by tradition that he imagines that the mortgagor is concerned with his mortgage. In many cases he has borrowed up to the hilt; and if his house is down, he does not care two hoots whether he pays his mortgage or not. In many cases the house owner is not worth more than the payment he has put into the house. He is a wage-earner, with no more resources. When the Attorney-General says that he is gaining something by extinguishing his debt, the answer is that you cannot get blood out of a stone; and if the mortgagor has lost his house he has lost everything. He is not concerned whether the building society that lent him the money is getting its money back or not. But that man is the direct contributor; he has to pay his 2s. in the £ on Schedule A. You will find that many of those direct contributors will default. They will say, "What are we going to get out of this?" Here is a man whose house is razed to the ground—and probably his wife and children killed as well [Interruption.] Quite so; if his house has gone he will not be liable. But let us take the case of a man whose house is partly razed to the ground. There is one room left, in which he can live. He is told that he is to pay 2s. in the £ on his assessment, in order to provide compensation, which is not going to him, but which will extinguish his mortgage debt. I tell the Government that there will be many defaults among house-owners, and I ask the Attorney-General and the Chancellor of the Exchequer not to look at the matter in the narrow legal way, that a mortgage debt is a debt on the individual's own assets. In many cases it is the entire asset, and if you look at it in that way it is going to affect his own interests and he will not get direct protection.
I apologise for intervening again, but there has been a complete fallacy in the arguments put forward in regard to this matter. On each occasion, when this question has been raised, the point has been made that it is a personal bond that is taken in regard to these funds. If it is a personal bond, why does this Bill not leave it as a personal bond? If the contributor is at liberty to mortgage his personal bond, why has he not the right to enforce his personal rights in regard to Government money paid for the property? That is the legal position, as far as I see it, but I am not a lawyer. Along come the Government with a Bill, and they say that they are not going to allow the owner of the property to have compensation for his property. They step in and say that before he receives anything they must safeguard the position of the mortgagee. That is an entirely arbitrary position on the part of the Government to protect the mortgagee, and they are not taking the same position in protecting the right of the mortgagor. That is the fallacy which has been in this argument about the personal bond. I come back to the important point as far as we are concerned, and not the commercial one to which the hon. Member for South Croydon (Sir H. Williams) referred. That may be a purely money-lending transaction, but in regard to the 4,000,000 people who own property, not so much perhaps because they were out to buy property—
The hon. Member is now getting rather wide of the Amendment.
The point is with regard to the contributions. These people actually were very often induced by building societies, as a method of investment, to buy their own house. Supposing the house is wiped out and the owner has no means of meeting his personal bond, if he goes bankrupt the Courts will absolve him, in present circumstances, of any liability to pay the mortgagee at all. Therefore, why do the Government step in and say that he is not to have that legal right in regard to war damage, and that they are going to subsidise the mortgagee, and give no consideration to the relative contributions and payments in regard to the owner of the property itself?
I think that my hon. Friend will agree that he cannot very well press this Amendment. I have already said that I will give consideration to this very difficult and troublesome matter. My hon. Friend knows that when a person is made bankrupt, all his assets are taken into account.
What has he got, anyway?
That may be, but perhaps my hon. Friend will leave the matter as it is at present as being a reasonable way of dealing with it.
Amendment negatived.
I beg to move, in page 15, line 40, to leave out from the beginning, to "is," in line 41, and to insert:
This and the three subsequent Amendments look rather complicated, but I hope that the Committee will agree to them. Three of them are, in fact, drafting Amendments, and the other is to correct a mistake which was made in the original Bill. The Clause deals with the right of payment to mortgagees, and the Amendments relate to Sub-sections (2) and (3), which deal with cases where there is more than one mortgage. The first two Amendments and the fourth improve the language of Sub-sections (2) and (3) removing the difficulty which arose under their original wording. As worded you had to look at Sub-sections (2) and (3) to find out what cases were covered by Sub-section (1). This difficulty is now removed. Further, under Sub-section (3) as originally drafted by the time you get to the second mortgage you have deducted the amount of the first mortgage twice over."Where the interest of a direct or indirect contributor in respect of a contributory property to which this Section applies."
Amendment agreed to.
Further Amendments made:
In page 15, line 42, leave out from "then," to the end of line 7, page 16, and insert:
"in considering whether the contributor is entitled to any and, if so, what indemnity against the mortgagee under any such mortgage other than the first mortgage of the in- terest, Sub-section (1) of this Section shall be construed as if."
In page 16, line 9, leave out "shall be," and insert "were."
In line 14, leave out from the beginning to "as," in line 18, and insert:
"Where the interest of a direct or indirect contributor in respect of a contributory property to which this Section applies is at the relevant date subject to a mortgage to which this Section applies, but is not the only property subject to that mortgage, then, in considering whether, in accordance with Subsection (1) and Sub-section (2) of this Section, the contributor is entitled to any, and if so what, indemnity against the mortgagee under that mortgage, the said Sub-section (1) shall be construed."
In line 21, leave out from "interest," to "bears," in line 23.
In line 24, after "property," insert "(whether real or personal)."
In line 32, leave out "the," and insert "that."—[ The Attorney-General.]
I beg to move, in page 16, line 32, at the end, to insert:
The Committee will remember the discussion we have had on the question of values. It is obvious that there will be considerable differences of opinion as to the value of property for the purposes of contribution by the mortgagee. These differences will have to be settled, and the Clause at present provides no machinery for settlement. I quite realise that settlement can be obtained by going to court, but that is a very costly matter, and I am sure my right hon. Friend will not wish to go to court to settle a question of whether a contribution should be £2 or £4. Therefore, there ought to be some cheaper way of settling differences of that kind, and the proposal in my Amendment is that it should be settled in the first place by the Commissioners and, failing that, by an appeal to the referees."Any difference arising between the persons concerned as to the value of any property for the purposes of this sub-section shall be referred for determination by the Commission and the provisions of Section seven of this Act shall have effect in relation to any such reference."
In a great number of cases there will be settlement. We are afraid to leave the question to the referees, because they might have more work than they want and might well be swamped. I will, however, give consideration to the question of avoiding having to go to court, especially in these days. Perhaps my hon. Friend will leave the matter at that.
Amendment, by leave, withdrawn.
I beg to move, in page 16, line 33, to leave out Sub-section (5).
There are certain other Amendments to modify Sub-section (5), assuming that it is retained in the Bill, and I take it that you, Colonel Clifton Brown, will put the Amendment in such a form that it will save these others being called. Honestly, I cannot understand the principle underlying Sub-section (5). If Clause 19 is intended to do justice in a certain way, I do not see why justice should stop if the annual value of property is £100, nor do I see why it should stop when it reaches £250 in those cases where it is a growing proportion—It being the hour appointed for the interruption of Business, the CHAIRMAN left the Chair to make his report to the House.
Committee report Progress; to sit again upon the next Sitting Day.
National Expenditure
Ordered,
"That Sir Geoffrey Ellis be discharged from the Select Committee on National Expenditure and Mr. Cary be added to the Committee."—[Mr. Paling.]
Coal Supplies
Motion made, and Question proposed, "That this House do now adjourn."—[ Mr. Paling.]
I wish to draw the attention of the House to the serious coal shortage which has arisen in many parts of the country and which is largely due to inefficiency and a lack of foresight on the part of the Government. I want to describe the conditions which prevail in Bristol, not because that is the only city affected by the shortage, but because the position there is typical of that which exists, to a greater or lesser degree, in constituencies represented by hon. Members in all parts of the House. It is only because I am familiar with Bristol that I take the conditions in that city as an example. I want, first of all, to remind the House that the Government cannot shelter behind the excuse that they were taken by surprise. Last winter there was an acute coal famine in many parts of the country. At that time, we were living under more or less peace conditions; no bombs had fallen, and coastwise shipping had been very little interfered with. In the light of that experience, the Bristol Corporation asked permission to build up reserves of coal, but they were informed—and we were all delighted to hear the announcement—that the Government intended to build up reserves of coal all over the country, so that such a catastrophe would never occur again. After months of strenuous effort during the summer, the Mines Department managed to build up the magnificent total of about 5,600 tons of house coal in Bristol—suffident to last the city for about four days. I have no doubt that the dumps built up in other parts of the country were similarly helpful. No doubt the Minister will tell us that, in addition to this, the Department managed to build up a reserve of about 16,000 tons—it is, I am informed, nearer 10,000 tons—of steam coal, but clearly if an emergency arose it is very unlikely that the gas and electricity undertakings would be allowed to suffer in order that householders might be provided with coal.
The position in Bristol to-day is that, while the average normal weekly consumption of house coal is about 10,000 tons, we have been receiving over the last three months an average of about 5,000 tons—sufficient to last about half the week. Therefore, we are to a large extent living on reserves that have been stored in private cellars. Patriotic and prudent citizens adopted the advice of the Government to build up stocks of coal against an emergency and they did so in Bristol—and no doubt elsewhere—to the extent of over 50,000 tons. But clearly, if the experience of last winter is any guide, when those cellars begin to run out—and probably they will all do so about the same time—the acute shortage will become manifest and grievous. There is no reason why the Government should be complacent because there has not been such a violent outcry up to now as might have been expected. There is plenty of coal available at the pithead. We have lost all our Continental markets, and indeed, we are finding it difficult to find employment for miners who are at present out of work. The coal famine in Bristol and other parts of the country is partly due to inefficient marketing and distribution methods, but chiefly to the chaotic state of the railway system. Therefore, anything the Minister of Mines can do to assist or relieve our overworked railway system will ameliorate our conditions. I want to put one or two suggestions, not necessarily new, which deserve careful examination as affording a possible relief to the situation. First, I suggest that merchants should be forbidden to order small consignments of coal. It should be the general rule that only complete trainloads should be ordered from the coalfields, and that the order should be given either by merchants in co-operation, or, if that is not practicable, by regional coal officers. It is quite obvious that this system would avoid a lot of shunting of wagons and the making-up of trains, and that thereby the task of the railways would be considerably eased. In small places where accommodation for a complete train is not available, special arrangements should be made for them by conveying the coal by Army lorries or commercial vehicles from dumps and sidings. Secondly, I suggest that just as we have adopted pool petrol so the time may have come when we should adopt a policy of pool coal. There should be two or three grades of coal at standard prices, and merchants and consumers should be compelled to take whatever kind of coal was available. There should be none of this picking and choosing between one type of coal and another which makes the task much more difficult in these times. Thirdly, I have urged the Minister to develop the output from local collieries which would obviate the necessity of hauling coal by railway from distant coalfields. Where necessary, the Minister should draft labour into these coalfields. I understand there is some unemployment in the coalfields; he could, therefore, draft labour in from the more distant coalfields for this purpose. In this connection I wish to draw my hon. Friend's attention to some rather disquieting figures from a typical colliery. I do not know whether it is the general state of affairs, but if so it certainly deserves careful and serious examination. These figures show that while the wages of the miner has increased by 23 per cent. since October, 1939, the output per man has gone down by some- thing just over 7 per cent. That seems to disclose a state of affairs which certainly deserves examination. I do not know whether all my suggestions are workable, but I understand the Minister is moving on these lines. All I am doing is to endeavour to make him move a little quicker. Certainly these suggestions would help to relieve the burden on the railway system. I turn now to the Minister of Transport. His Department is certainly largely responsible for the present serious state of affairs. We all appreciate the added burdens on the railways and the difficulties with which they are confronted. Indeed, if we were not familiar with them we could quickly learn of their achievements and difficulties from the enormous number of advertisements which appear in the daily Press. I urge the Minister of Transport to try to cut through the red tape and bureaucratic methods which stop the proper functioning of our railways. I am quite convinced, and I think it is the general opinion, that there is a lack of co-ordination and unification in our railways. They are still working in separate compartments, and they are still jealous in these times to guard their profits rather than provide service for the community. The Government should guarantee their profits and take over that side of the work providing we can get the coal and other materials we require transported throughout the country. The Great Western Railway, for instance, I am told will not allow wagons to leave its system until it has an equal number of wagons in exchange. It seems to me that that is not the kind of thing that should be allowed to continue. I am told also that one railway will not allow another to use its sidings. That seems to me obstruction. We are all aware that wagons lie about for days and weeks, sometimes even for months, being used as warehouses. When the railways are complaining of lack of wagons, that seems to be a system that should be stopped. The Minister might by further increasing demurrage rates discourage the use of wagons as warehouses. I am told that there is great hindrance at the junctions where one railway system connects up with another—such cases as Bordesley and Banbury. No doubt the railway companies could put forward technical objections, but I am sure, if the Minister exercised drive and pressure, many of them could be overcome. Another point is that the Government should cut down all unnecessary traffic. They should not consider only the question of price. Last March I brought to the hon. Gentleman's notice a case in which 60,000 tons of bricks were brought from the London area to build air-raid shelters at Bristol, merely because they were cheaper, overburdening the railways and at the same time throwing local brickyards out of work. Exactly what was foreseen has occurred. Forty per cent. of the local brickyards have closed down, their labour is dispersed and they are unable to start again. In normal times, this serious state of affairs, exhibiting such lack of foresight, inefficiency and lack of drive, would have justified a Vote of Censure on the Government, and it would have been carried by a large majority. As these are not normal times, as one does not want to put difficulties in the way of the Government or dwell on past mistakes, I have couched my remarks in very mild language, but I can assure my hon. Friend that feeling is very strong and, unless he takes energetic steps and brings pressure to bear on the railway companies and the coal merchants to bring their methods up to date and cut through their inefficient methods, we may be faced with a disaster of the first magnitude. I cannot do better, in conclusion, than quote from a leading article in the "Daily Telegraph" yesterday:I think I shall be voicing the views of other Members if I say that not only the public but the House will be looking for immediate measures and concrete results."What is needed now is not emphasis on difficulties which should never have been allowed to arise, but more energetic collaboration between the Ministries of Mines and Transport to overcome them. The public, which has shown great patience, will look for immediate measures and concrete results."
I am sure the House will be grateful to the hon. Member for the general tenour of his remarks and, in particular, for the quotation from the "Daily Telegraph" which he has read. This problem is one of distribution, transport and right methods of buying and selection. The problem of distribution, particularly, is a serious one, and I think that a solution is to be found in right co- operation between the responsible Ministers. I was disappointed when my hon. Friend referred to the coal shortage and attributed it generally to the inefficiency of the Government. There are many things which we have to endure which are not attributable to the Government. I do not resent taking, as head of the Mines Department, a share of the responsibility, but the hon. Member must know that new problems and difficulties have arisen which are not attributable to the Government. There are war conditions from which many inconveniences arise, and one of the problems is that of internal transport. We are not alone in that. Fortunately, the enemy has the same problems and we have added to his difficulties as he has added to ours.
It is wrong for the hon. Member to say that we might have avoided all the complaints which he said had arisen from various parts of the country. He said the Government were responsible because they had received due warning 12 months ago. If the Government had done nothing in consequence of what happened, then they would have been to blame. Representing the Mines Department, I take a measure of credit to ourselves that we embarked on an ambitious scheme for storing coal in all parts of the country. As a consequence, we were successful in setting aside many million tons. We have stocked nearer 30,000,000 tons of coal than 20,000,000 because of what happened previously and we realised that there might be great danger to our fuel supplies if we did not make preparations in time. I want to assure the hon. Member that these preparations extended as far as Bristol, and there is not a town which has not got a substantially larger quantity of coal in stock than was in stock last year. The hon. Member said that the reserves in Bristol amounted to 50,000 tons of house coal. The Bristol householders, urged by the Department and by publicity of all kinds—I myself advocated the stocking of coal by householders—set aside, and the merchants disposed of, 113 per cent. more coal last summer than they did in the summer of 1939. We more than doubled the storing of coal in the consumers' cellars in Bristol compared with the previous summer. There is now no danger of a widespread famine in Bristol because of any unwillingness on the part of the Government to provide stocks in the summer time in readiness for the winter. There are people in Bristol, as elsewhere, who, unfortunately, have no room to stock coal. In all our large cities accommodation for stocking coal and the means to buy it are not available to all. There are people in Bristol about whom we are very much concerned. But it is not true to infer that there is a general famine of house coal in Bristol. There are people there who can go throughout the winter without further supplies. I am not suggesting that there is no shortage, because there is, but there are large stocks of coal in Bristol. The gas company, for instance, holds stocks for five weeks. If no coal went into Bristol at all, there would be no danger for more than five weeks of a discontinuance of operations at the gas works. There are two electricity works there; one has stocks of coal for seven weeks and the other for 16 weeks. My hon. Friend said there was no reason why more coal should not be brought to Bristol. More coal is being brought to Bristol. We are overcoming some of the difficulties by the very means which he advocated. He suggested that we should make up complete trains which would make the journey direct from the Midlands or Durham to Bristol, and that has been done. They travel to Bristol without further attention at marshalling yards or elsewhere until they reach their destination. Then he suggested that we should pool supplies and that customers should be compelled to take whatever coal is provided for them, that customers should be told, if it is house coal, "This is your ration, and you must take it." I advise him to try that plan first in a public meeting at Bristol. It is easy to suggest it in this House, and to receive the concurrence of Members here, but it is not very easy in practice; and, further, it is not always the right thing to do. Not all houses have the same equipment for consuming household fuels. There are houses fitted with anthracite stoves, there are houses with wide, low fireplaces that want one kind of household coal, and others in which the draught is not sufficient to burn another type of household coal. In Bristol we are finding it difficult to get people to accept house coal that has been taken from a neighbouring coalfield in order to meet the shortage.I suggested two or three grades of coal.
I agree that we should produce a number of qualities of house coal, but you cannot compel people to take any coal you choose to offer to them. In the last few weeks we have been able to augment supplies by various means. More trains have been going to Bristol, and we have improvised in ways which I shall not mention in detail, and more coal has been got from the neighbouring coalfields. Bristol does not draw all its coal from distant coalfields. No city of large size is closer to the coalfields than is Bristol. It has a coal mine within the city boundary. It is within 17 miles of the Somerset coalfield and within 40 miles of the Forest of Dean. In these three coalfields there is an output of nearly 2,000,000 tons a year. In those coalfields there is not a sufficient variety of quality compared with the supplies outside those three coalfields, and Bristol actually draws 75 per cent. of its supplies, not from the coalfields near it, but from the Midlands and elsewhere.
The third point made by the hon. Member was in regard to increased production in Somerset. That is not as easy to deal with. He raised a point concerning wages which I have not time to discuss in detail, but it is not true that wages in Somerset have gone up disproportionately. The wages of miners in Somerset, the Welsh coalfields, the Midlands and Scotland have varied in accordance with the increases in the cost of living.My point was that output had gone down.
The hon. Member said that while wages had gone up by 23 per cent., the output had gone down. If I were speaking to an audience of miners, I could quite easily explain the reason for that. The Somerset coalfield is very difficult. There is a shortage of labour, strange to say, in the Somerset coalfield. We are trying to attract more labour there. The hon. Member may truly say that output has gone down by a small percentage as compared with 12 months ago, but there are many factors to account for that fact. I can assure him that one of the matters connected with the present output is the dearth of young men; this has not arisen in the last few months and is not due to my presence here. It is due to the general unwillingness of young men to enter this industry. We find ourselves without sufficient young men in the Somerset coalfield, and we are not now likely to get them.
Is there not considerable unemployment in the coalfields?
There is a search of coalfields for men of military age. I am sure that I can convince my hon. Friend that no charge rests against the workers concerned, in regard to output. The additions which have been received to wages have been awarded to all the districts in the miners' organisation in this country and are awarded on a scale in accordance with an increase in the cost of living. I can assure my hon. Friends that the points which have been put to me and to the Minister of Transport have been noted, and that we shall pay attention to what has been said. To the hon. Member who suggested that we should take control of the railways and work them, I would observe that while that is rather a revolutionary proposal I am quite willing for him to endeavour to persuade the House to acquire and control the railways. If he wants to do that, I am a candidate for the post of Minister of Transport in those conditions, but I am afraid the hon. Member will find some difficulty among the people to whom he talks in regard to that proposition. He said that if we were to increase the demurrage, that might have an effect. We have been trying to get people to secure the return of wagons, and we are not at all satisfied that it would be just or expedient to increase the demurrage.
There are difficult conditions for transport in these days. An appeal has been made, and a request, that my right hon. and gallant Friend the Minister of Transport and I should work together for the common interest in order to secure and maintain the distribution of coal. I agree entirely, and I am glad that my right hon. and gallant Friend and I have been giver the opportunity to sit together on this Bench to-night to demonstrate our willingness to work together. I can assure the hon. Member that steps are already in operation, and that the outlook for the future is slightly better.it being the hour appointed for the Adjournment of the House, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.