HC Deb 25 February 1941 vol 369 cc385-98
Mr. Pethick-Lawrence (Edinburgh, East)

Before you call the first Amendment, Sir Dennis, may I put to you a point of Order? We are now carrying through an unusual procedure, but one the reason for which we fully understand. The Bill has been recommitted, and we are to consider the Amendments in the name of the Chancellor, and in the names of other hon. Members, not on the Report stage, but in Committee. The reason is that a number of very important questions were left in abeyance on the original Committee stage. I think it would be of value to the Committee if, before the Amendments are discussed seriatim, you would permit the Chancellor of the Exchequer to make a somewhat wide statement on the scope of the major changes he proposes in the Bill. Subject to what any other hon. Member may say, I feel certain that, if you can see your way to permit the right hon. Gentleman to do that, it will very much facilitate the understanding of the Committee and no doubt, in the end, shorten the proceedings on the Committee stage.

The Chairman

I appreciate what the right hon. Gentleman has said. A convenient method of enabling such a course to be taken is provided for in our procedure. The proper method to enable the right hon. Gentleman the Chancellor of the Exchequer to make such a statement would be for him to move to report Progress, and the statement could be made on that Motion.

Sir Irving Albery (Gravesend)

May I ask for your guidance, Sir Dennis? Am I to understand from what has just been said that the Motion, "That the Bill, as amended, be recommitted to a Committee of the Whole House," is not debatable?

The Chairman

The Motion was on the Order Paper to be dealt with by the House, and it has already been agreed to by the House. It has nothing to do with the Committee.

The Chancellor of the Exchequer (Sir Kingsley Wood)

I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

I move this Motion in order that, in conformity with the wish expressed by the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) and other hon. Members, I may explain the principal changes in the Bill involved in the Amendments in my name on the Order Paper. There are, of course, a large number of Amendments on the Order Paper, some of them involving radical alterations, which show that we have made every effort to profit from the recent discussions in the Committee. Hon. Members will see that I have been able to adopt many of the suggestions that were made from all parts of the Committee. I should doubt if in connection with a Measure of this magnitude hon. Members have ever played such a considerable part in shaping and improving a Bill. There are some 150 Government Amendments on the Order Paper, the great bulk of them being designed to meet points that were made by the Committee in the course of the Debates. Some of these Amendments are of a minor character, some are more important, and some affect the scope of the Bill considerably.

I want, first, to refer to Clause 1, which has an important aspect in connection with the administration of the Measure. Hon. Members will remember that it deals, among other things, with the relationship between the Treasury and the Commission, which, of course, also involves the position and authority of Parliament. The Committee desired to secure, first, that there should be publication of any regulations or directions concerning these matters, secondly, that the directions should be general, and thirdly, that Parliament should have control over any such directions as might be given. Therefore, the Amendments which I shall move provide, first, that the directions under this Clause shall be made by way of regulation, secondly, that they shall be of a general character, and, thirdly, that nothing In them shall be construed as authorising the Commission to exercise any or its functions in a manner inconsistent with the provisions of the Act, and —by virtue of a new Clause to replace Clause 50 in the Bill—that they shall be laid before Parliament so as to secure the necessary control which the Committee thought desirable.

The next matter to which 1 want to refer, which was the subject of considerable discussion in the Committee, is the position of claims under £5. I shall make new proposals dealing with the difficulties that may arise in connection with the provision that claims for payments under £5 shall not be admitted. I think there was general agreement that the justification for this limitation was that if there was a very large number of small claims, as one might perhaps expect and there was no limitation of this character, it would involve a general hold-up of the work of the Commission, and in any event a considerable dislocation in the assessment of claims. Accordingly, I considered the matter afresh in conjunction with my right hon. Friends, and I am now proposing, in the Amendments on the Order Paper which deal with this subject, certain Amendments designed to mitigate any hardships which may arise. I am suggesting to the Committee three or four alterations in that respect. Firstly, I am suggesting that a claimant may aggregate cost of works claims for repeated damage to the same property, whether a developed or an undeveloped hereditament. For instance, if the same house is damaged on three occasions to the extent of £2, £1 and £4 respectively, a total claim of £7 can be made.

I am also suggesting an Amendment by which a claimant will be enabled to aggregate cost of works claims in respect of more than one developed hereditament in the same housing authority's area. A landlord, for instance, may have a number of properties in one such area which have suffered minor damage; the expenditure on individual properties comes, in a number of cases, to less than £3 a house. In that case the landlord will be able to aggregate his expenditure. Take the case of a local authority which carries out first-aid repairs—many of the houses, of course, require only minor expenditure. Take an example which is quite frequent, say, that of 10s. per house. In that case the authority will be allowed to aggregate expenditure and present a total claim. I have had to confine the Amendment to particular housing areas, and that has had to be done. I do not think there will be any hardship. The arrangement is designed purely from the point of view of administration. I suggest that these Amendments will go a long way to meet the difficulty of the £5 limitation, especially when it is remembered that a very large proportion of the damage below £5 will be repaired by local authorities under their emergency powers; in which case, instead of the cost of repairs being charged to the individual, the local authorities will be reimbursed in bulk from the Exchequer. I am advised that the proportion of claims under £5 which are left uncovered by one or other of these arrangements will be very small indeed. There is another aspect of the matter which I will mention now. It may very well be that, after the war, when we are able to consider arrangements for the general replacement of temporary by permanent repairs, the Commission or the Government may be able to devise means by which they may be executed by some central agency, either the local authority or some other body, which will meet cases of small damage in a convenient and expeditious way. I hope the Committee will agree with me that this arrangement will avoid dislocation, and that the Amendment I have put on the Order Paper does, to a very large extent, meet the difficulties which my hon. Friends have raised in the earlier Debates on this Bill.

I would now like to say a word or two on another matter which was a subject of considerable discussion—the question of value payments, particularly as compared with the assessment of the compensation to be made in respect of cost of works payments. My right hon. Friends, who were associated with me in connection with this Bill, and myself, did, of course, give careful consideration to this matter during the framing of this Bill. Quite recently we again examined the whole position, and I considered what was said on this subject in Committee. Criticism centred on the comparison between the amount of the value payment and the cost of works payment, and particularly on the fact that value payments were to be made by reference to prices current in March, 1939. While the criticisms of the Clause put forward by the Government were such as 1 have indicated, the alterations proposed proved, in fact, impracticable and could not be sustained. The more one considers the matter the more one realises that the difficulty arises in endeavouring to say now what will be the position after the war. Many of my hon. Friends, in an endeavour to find a way out, have made suggestions by which there should be a certain percentage addition to the value payments. The fact remains that no one is in a position now to deal with the matter in that particular way. In other words, I suggest to the Committee that that matter must really be dealt with at the most appropriate time, and that is when the bulk of the value payments can be made.

I have, therefore, Tabled a number of important Amendments which provide that when the time comes for the payment of value payments in substantial volume the matter shall be considered by the War Damage Commission. The next Amendment provides that if they consider, in the light of their experience—and, of course, no one will have better experience or greater knowledge than the Commission—that the value payments are inadequate, they shall report to the Treasury. I have provided in another Amendment that the report shall be published. Every one will then be able to see the consideration that has been given by the War Damage Commission to the matter and their recommendation. It will not only be a matter of communicating with the Chancellor of the Exchequer. It will be for all plainly to see what has been done. There is also an Amendment providing for a further duty which, this time, will be on the Chancellor of the Exchequer. It will be his duty to consider the report and then I propose that the Treasury shall have power, in the light of the recommendations which may be made by the Commission, to increase the sums which would otherwise be payable under this Measure. I also propose to ensure that any order that the Treasury may make increasing the value payments under the provisions of this scheme, shall be laid before the House and shall be subject to an affirmative Resolution. In other words, the final decision must rest with the House of Commons and the matter must explicitly come before the House before anything can be done.

I suggest to the Committee that by these provisions we ensure that this very important matter shall be considered at the right time. In the first instance, the whole matter will be considered by the body which must have the best knowledge of all the facts; secondly their report is to be made subject to consideration by the responsible Minister, and, finally, I commend this proposal to the Committee on the ground that the whole matter will ultimately be decided by the House itself. I say again, having given this question a great deal of care and attention and knowing the anxiety which has been expressed about it that the more I consider it, the more confident I am that we are not in a position to-day to determine this matter and I believe the new proposals will ensure the best and fairest way of arriving at a just conclusion.

I would call attention to another important matter which deals with a different category of beneficiaries. That is the arrangement for advances under Clause 9 (4). In the first place, the Committee will appreciate the fact that these advance payments to people who are able to satisfy the Commission of the justice of their case will, of necessity, be payments on account of final compensation. We have always to bear in mind that that final compensation may be required for the rebuilding or repair of property and we must never forget, but always keep in front of us, the interests of the persons themselves. Therefore we consider—and I do not think there is any criticism of this—that these advances should be restricted to cases of necessity and should be limited in amount. Otherwise, advances on account of final compensation might be made to such an extent that when the time came for the repair or reconstruction of the property, all that the person concerned was entitled to would be gone. Thus not only would the benefits of the Measure not come to him, but, from the national point of view, the whole object of the Measure to a large extent would be defeated. Therefore, as I say, these payments must be limited to cases of necessity and also limited in amount.

1 have, however, considered a suggestion which was made from all parts of the Committee that the original limit of £500 as the measure of advance was on the low side, especially in the case of a business. I shall, therefore, move an Amendment to raise the maximum amount of such advances to £800. A person who is in need both of a new home for his family and of new premises for his business will, if my Amendment receives approval, be able to secure advances up to the maximum of £800 under each of those heads. I think that easement of the position will, at the same time, preserve the national interest and be of considerable assistance to large numbers of people. An advance of this character will enable people in many cases, either to rent a new house or new business premises or in some cases to purchase. I hope the Committee will think that I have met them in that respect while, at the same time, preserving the general tenor of the Measure, namely, that compensation should, as far as possible, be used not only in the interests of the individuals but in the national interest.

I pass to another important Clause which was also subject to considerable discussion in Committee, namely, Clause 20, which deals with the contributions of mortgagees in certain cases. I think there were two main criticisms of the original Clause, first, that the methods proposed to determine the respective liabilities of mortgagor and mortgagee were not flexible enough to get a fair apportionment between the parties, and second that the Clause, as then drafted, would create great difficulties in that it left the mortgagee and mortgagor to find out for themselves the value of the mortgaged property—the figure which would determine their respective liabilities for contribution, and therefore very important. It was also urged that the Clause should be widened by increasing the limit on both residential and agricultural contributory properties. In the light of these constructive criticisms we have accordingly reframed the Clause. Under the Amendments which appear on the Paper in my name, the area will be widened in which contribution by mortgagees will be made and the amount of some of those contributions will be increased. It is also proposed that the scope of cases in which the mortgagee will contribute should be widened by increasing to £150 and £500 the figures of annual values for non-agricultural and agricultural properties respectively. These new figures, of course, compare with the original figures of £100 and £250; therefore I have again made a considerable extension in that matter.

Perhaps more important still is the new scale which I am now proposing so far as the contribution of mortgagees is concerned. These contributions will now begin where the interest of the mortgagee is more than 33⅓ per cent, instead of where the interest is more than 50 per cent., and it is proposed that between 33⅓ and 50 per cent, the mortgagee will contribute a sixth, that between 50 and 66⅔ per cent, he will contribute a third, between 66⅔ and 75 per cent, he will contribute a half and above 75 per cent., if he has that interest in the property, he will contribute two-thirds. That is a very considerable alteration on the original proposal. There will also be a new provision applicable to special conditions existing in Scotland to provide for contributions by mortgagees in the case of tenement properties comprising small dwellings of a rateable value not exceeding £35, which will be explained by the Lord Advocate when he deals with the Scottish Application Clause.

I have also, at the suggestion of many hon. Friends, who have been most helpful, remodelled the valuation provisions required for the purpose of ascertaining the mortgagee's contribution. The Clause in its original form involved the valuation of each property as at 31st March, 1939, in order to establish the relationship between that valuation and the amount of the mortgage. In the light of the discussions on the Clause it is now proposed to substitute the purchase price for the March, 1939, value except that in case of properties acquired before 1st January, 1932, the value is to be taken instead of the purchase price in cases where the value is less than four-fifths of the purchase price. This is necessary in order to deal with the fact, that in the case of many properties more than nine or ten years old it is only to be expected that there will be a substantial divergence between value and purchase price and to take the purchase price in such cases would not only be artificial but would be unfair to the mortgagor.

There is one further alteration that I should mention. In the course of the discussion it was suggested that there ought to be some simple method enabling the value of residential property to be ascertained without recourse to the courts, and, to meet that suggestion, it is now proposed that, in the event of a dispute, and at the request of the parties concerned, the Inland Revenue, who, of course, have no interest at stake in the matter, may determine the value for parties who are not able to agree, and in that event their decision shall be taken as final.

Mr. Barnes (East Ham, South)

Do both parties have to agree to that request?

Sir K. Wood

Yes. If they cannot agree, there is no recourse but to go to the Courts, but I should think most people would be reasonable as this independent valuation is available and it would be cheaper.

The last matter I want to refer to is one which also received a good deal of attention in Committee and is of considerable public importance—that is, the private chattels scheme. The President of the Board of Trade and I have given much attention and consideration to the criticisms and suggestions made in the House and outside concerning this very vital matter to so many people. All the criticisms and suggestions which have been made up to the present, though various people had various ideas how it should be done, were directed to securing that such a scheme for the insurance of chattels should give the widest protection possible and that the charges should be such, whether compulsory or voluntary, as really to be within the financial capacity of the persons concerned. It was strongly urged on the Government that we should make every effort so that such a scheme should be on broad and generous lines, covering the largest amount of effects, and broadly comparable with the cover which has already been given in respect of personal injuries and which we are now about to give in respect of property under this Bill. In other words, the great desire of the House was to see whether we could not bring the scheme up to what we are in fact doing in relation to personal injuries, and what we are doing; as far as property is concerned in the first part of the Bill. Compulsion was not urged upon the Government for compulsion's sake but because many of my hon. Friends, although others disagree with them, thought that the widest and cheapest scheme could be secured if compulsion was adopted. That is really what animated them and others who had their own suggestions to make.

Sir I. Albery

I think the right hon. Gentleman ought not to leave out that a further consideration was that all who have property of that kind should make some contribution.

Sir K. Wood

And should make it with a view to getting the premium as low as possible. If that was not secured, there would be no object in levying any contribution of that kind.

There is already provision by way of free grants in respect of essential furniture and clothing to those whose incomes fall below £400 if married or £250 if single. That is the scheme which is now established, and I do not think anyone would suggest that we should go back upon such a provision, nor do I think it could be suggested that compulsion could be applied as a practical measure to the insurance of the remainder of the chattels of those people. That would be too difficult altogether. People within those income limits are already getting essential furniture and clothing free, and it would be practically impossible from an administrative point of view to contemplate imposing insurance upon that large section of the community as regards the remainder of their chattels.

With that consideration in mind it is estimated that the total value of the furniture owned by persons not falling within the free grants limit may be something between £600,000,000 and £700,000,000, but even that figure must be reduced as it is plain that compulsion should not be applied to such things as costly furniture and antiques. Therefore, when you exclude such, items and measure the scope of the field you come down to something of the order of £400,000,000 or £500,000,000 worth of furniture in respect of which any compulsory scheme could operate. When you have arrived at that conclusion, and take as premium a figure which has been suggested in this House but which would not be satisfactory to everybody, a premium of £1 per cent, charged by way of compulsory levy, the revenue which I should receive as Chancellor of the Exchequer might be put at between £4,000,000 and £5,000,000 a year. But, of course, there would have to be an upward limit as regards compulsion, and on such an assumption the yield would be further reduced, and I am advised that, broadly speaking, the amount which I receive would by that time have come down to between £3,000,000 and £4,000,000.

I will not detain the Committee with estimates of what the cost of such a scheme would be, because we all have our own ideas about it, but that £3,000,000 or £4,000,000 must obviously be reduced again by the considerable charges there would be for collection and for the strict enforcement of premium payments. I will content myself by making this further observation, that it is obvious that so small a yield must fall below the liabilities of the scheme. If we were able to do anything at all in connection with such a proposal the rates of premium would have to be increased, and we know that in fact they could not be increased to what would be anything like a proper figure. Therefore, I am bound to come to the conclusion, and all my friends agree with me, that with such a small yield from the premiums the bulk of the money would have to come from the general taxpayers. That is quite obvious to anyone who gives the problem any examination.

With all those considerations in mind my right hon. Friend the President of the Board of Trade and I have come to the conclusion that it is in the general interest that a scheme should be devised which should be simple in character and follow the lines of the Personal Injuries scheme, that such a scheme should give free cover and protection up to a certain sum to all owners of chattels irrespective of income, and that beyond that amount it should be made possible for voluntary insurance to be effected up to a reasonable amount. This, of course, is a very important departure. We propose that every householder in the country should receive free compensation up to £200, together with an additional £100 for his wife and an additional £25 for every child under 16. and for persons who do not come within those categories—like lodgers and persons living in hotels—there shall be free compensation up to £50. In addition to the free grants it is proposed that people should be able to insure at the following rates: Up to £2,000, £1 per cent.; from £2,000 to £3,000, 30s. per cent.; from £3,000 to £10,000—I took the highest limit put on the Order Paper by hon. Members—£2 per cent. The only restriction I would make would be the obvious one that the amount of cover should be limited in respect of such things as jewellery, antiques and specially valuable articles.

Sir Frank Sanderson (Ealing)

May I ask whether the category of other persons in the house covers domestic servants?

Sir K. Wood

Yes, we shall make provision by which they can be included. I have given the outlines of the scheme to the Committee. The grants scheme will, of course, under the provisions of the Bill, be subject to Regulations to be made under Clause 60 and the whole thing therefore will in fact be laid before Parliament. I suggest, for reasons which I will give in a minute, that the scheme will bring much relief and assurance to the people of this country. It can be said that the contents of a house are of as much moment as is the house itself. In any event, the protection which the State is generally affording in many directions to our citizens will not be regarded as complete and adequate unless we make due and ample provision in this direction.

I will give two or three examples of what will follow as a result of this scheme. A husband and wife with two children will receive free protection for their furniture and clothing, up to £350. Further, the existence of the free grants means that the net burden of the voluntary insurance is much reduced. For instance, a married man will be able to cover his chattels up to £600 in effect at 10s. per cent, or £3; or, if he wanted to insure his furniture, valued at £900, he could do so at 13s. 4d. per cent, or £6. That is a tremendous consideration to a number of people who are in the category which is so often neglected by the State. Everybody can make his own judgment on the matter, but, from the figures that have been provided, it can be said that we shall be covering by the free grants the majority of the householders in the country. Of the rest, all but a very small proportion will be able to claim lull cover for what, 1 think, in the circumstances of the time, we may well call the modest premium otf£1 per cent.

Further particulars of the scheme will appear in our draft Regulations. I suggest that the proposals I am outlining show that we have responded to the suggestions which were made in Committee on the original Bill. I have endeavoured to bring forward a scheme which I hope and believe will receive the support of the whole country. I am reminded that the essential furniture part of the original scheme, by which we gave free protection for that and for essential clothing, disappears. Persons in those categories will receive cover for their furniture, irrespective of whether the furniture is essential or not. We will now cover what I would describe as staple furniture. There was a good deal of criticism of how the definition of essential furniture was to be arrived at The very important major alterations in the Bill will, I hope, show the Committee that I have been prepared to give consideration to all points that were put forward. I hope that the new proposals will commend themselves to the Committee

Sir I. Albery

What machinery is to be set up in connection with chattel insurance?

Sir K. Wood

For the voluntary side of the scheme we are proposing to utilise the services of the fire offices of the country, that is for the collection of premiums. The actual assessment of claims will have to be carried out by representatives of the Inland Revenue because that is a matter in which the State is involved, in regard to compensation.

Mr. Pethick-Lawrence

I am sure that the Committee are very much indebted to the Chancellor of the Exchequer for the broad picture he has given of the scope of the Amendments which he proposes to move. No good purpose would be served by going at this moment into the detailed consideration of them; we shall have our opportunity to do so when the individual Amendments are moved. So far as I can see. the Chancellor of the Exchequer has succeeded in meeting; nearly all the criticisms which were levelled at the Bill in the earlier Committee stage, and to that extent he deserves our hearty congratulation.

Sir K. Wood

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

The Chairman

I should like to make a suggestion to the Committee. Before very long we shall be getting to whole strings of Amendments which all deal with one particular point. After the first Amendment, the rest of the batch will be consequential. It may save the time of the Committee if I do not separately call on the right hon. Gentleman the Chancellor to move all Amendments of that kind, but merely put the Amendments to the Committee and now and again the Committee may possibly assent to my putting the Amendments in blocks. I would warn hon. Members that, if that procedure is followed, they should watch their papers very carefully in order to interrupt me if they want to raise a question on any particular Amendment.

Amendment made: In Clause 1, page 1, line 16, leave out Sub-section (2), and insert: (2) The Commission shall, as respects such matters as may be specified in regulations made by the Treasury, exercise their functions under this Act (including any discretionary power exercise able by them) subject to and in accordance with the provisions of regulations so made: Provided that any regulations made for the purposes of this Sub-section shall be of a general character, and nothing in this Sub-section shall be construed as authorising the making of any regulations requiring the Commission to exercise any of its functions in a manner inconsistent with the provisions of this Act." — [Sir K. Wood.]

Clause, as amended, ordered to stand part of the Bill.