HC Deb 16 March 1939 vol 345 cc603-12
94. Mr. Ellis Smith

asked the Lord Privy Seal whether he can now make a statement on the policy to be adopted with regard to the provision of adequate air-raid protection in and around works, offices, factories, etc., for the workpeople while they are at their employment and for those who are employed on Government contracts, and as to whether it is intended to provide financial assistance to enable such provisions to be made, in order to enable the employers to carry out the work involved at once; and will he see that where possible unemployed men are given employment on this work at trade union rates and conditions?

The Lord Privy Seal (Sir John Anderson)

I apologise to the House for the length of the answer, but the question relates to a very important matter, on which the Government consider that a full statement should be made without loss of time.

For some time past it has been the declared policy of the Government that in industrial and commercial establishments employers should be responsible for providing protection for their workpeople against the risks to which they would be exposed if ever this country were attacked from the air; and, as the House is aware, the Government intend to introduce very shortly legislation which will impose certain obligations on employers in this matter. There are some indications that the organisation of air-raid precautions in industrial and commercial establishments is in danger of being delayed through uncertainty on the part of employers as to the extent of the statutory obligation which is to be imposed on them and the extent of any financial assistance which may be forthcoming from the Exchequer. I am most anxious that no time should be lost in pressing forward with these preparations—I stated in December that I hoped employers would not wait until a measure of statutory compulsion had been applied to them—and, in view of the anxiety of employers to know where they stand in this matter, I think it will be in the public interest that on this occasion I should, with the permission of the House, anticipate the introduction of the Bill and give in advance a brief outline of the Government's proposals on this subject.

The responsibility of employers for the protection of workpeople in industrial and commercial establishments consists, in the Government's view, in organising air-raid precautions services within the establishment and providing shelter protection suitable to the circumstances of the case. On these matters the Bill will apply certain statutory provisions to all kinds of industrial and commercial establishments in which more than 50 persons are employed, not counting any employed in connection with the use of the premises for residential purposes. This does not mean that firms employing a smaller number of persons will not be expected to take any measures for the protection of their workpeople; but for a variety of reasons it has been found desirable to confine the statutory obligation to firms employing more than 50 persons. The Government also attach very great importance to the principle of concentrating attention primarily on those areas which are most likely to be exposed, in the event of war, to the risk of intensive attack from the air; and the Bill will therefore provide for discrimination between the more vulnerable and the less vulnerable areas by giving power to the Minister to specify the areas in which this new obligation will apply.

In the organisation of air-raid precautions employers will be required to ensure that all their workpeople know what to do if there is an air attack, and they will also be required to train and equip squads in first-aid, fire-fighting and anti-gas measures. The numbers of men required for these squads will not be large, and this provision will not make any appreciable difference to the progress of the National Service campaign in enrolling volunteers for the public air-raid precautions services. Men and women in the Schedule of Reserved Occupations are, of course, eligible for enrolment in private air-raid precautions services organised by their own firms.

As regards shelter, the occupiers of the industrial establishments and the owners of the commercial buildings covered by the Bill will be required to provide air raid shelters for the persons working there. The Air-Raid Precautions Department, in consultation with the organisations representing employers and work people, will issue a code giving guidance regarding the various types of shelter appropriate to the differing types of lay out and construction.of industrial and commercial establishments. This code will be designed to give a variety of choice to an employer; and, as I have said already, we shall differentiate in this matter between those areas which are more, and those which are less, likely to be exposed to intensive air attack. The preparation of the code is already in hand, and we aim at publishing it, for the information and guidance of employers, well before the Bill has passed into law.

In the administration of these provisions we shall work through the factory inspectors in the case of industrial establishments, through the mines inspectors in mines and quarries, and in the case of commercial buildings through the local authorities. We recognise that the success of these proposals must depend very largely on the good-will and co-operation of employers; and we have every hope that we shall be able to enlist this co operation, with the assistance of the employers' associations and the other commercial and industrial organisations concerned.

Now, as to the cost of these measures. The present position is that, as indicated by my right hon. Friend the Chancellor of the Exchequer on 18th March, 1938, a number of items in air-raid precautions expenditure are allowable as deductible expenses, including the cost of training and equipping employees, and providing materials for obscuring lights and certain fixtures not forming part of the permanent structure. In answer to a question by the hon. Member for North Tottenham (Mr. R. C. Morrison) on 7th April, 1938, my right hon. Friend added that expenditure on simply-constructed trenches and sandbag ramparts would be similarly allowable. These replies will be reproduced in the Official Report as part of my present statement. In addition, by the Finance Act of last year and the Rating and Valuation (Air-Raid Works) Act, 1938, it was provided that the erection of a shelter structure to be used only for air-raid purposes would not involve an increased assessment either for rating or for Income Tax purposes. But no other financial relief or assistance has been given towards the cost of such shelters or other air-raid precautions works which are clearly capital expenditure.

It has been represented by hon. Members in this House and also from various quarters outside the House that capital expenditure of this kind, and for this purpose, should be treated exceptionally and allowed as a deductible expense in the year in which it has been incurred. After careful consideration the Government have felt obliged to reject this proposal—for three reasons. It would destroy the basic distinction between capital and revenue expenditure on which Income Tax legislation and administration have always rested, and on a long view it is by no means certain that industry and commerce would approve the result. Secondly, it would be inequitable. Being in fact an Income Tax relief, it would be of value only where appreciable profits are being made. Thirdly, the relief would come rather late after the expenditure, and this fact might press hardly upon some firms.

The Government are, however, sensible of the burden falling upon industry and commerce of this country in connection with air-raid precautions; and, although for the reasons which I have indicated procedure by way of Income Tax relief is not appropriate, they think it equitable that some contribution of the order of that asked for should be made at the cost of the Exchequer. The Bill will accordingly provide for an Exchequer grant to be paid towards reasonable capital expenditure incurred by employers in providing shelter for their workpeople. The grant will be equivalent to the standard rate of income tax upon the capital sum expended. It will be pay able, not only in the case of those establishments employing more than 50 per sons, to which the statutory obligation will be limited, but also to small establishments of the same types where expenditure is incurred in providing reasonable protection. But it will be subject to two restrictions. First, there will be an over-riding limit, to be fixed by reference to the ascertained cost of providing protection of the approved type for workpeople, and expenditure incurred in excess of that limit will not rank for grant save in exceptional cases where express sanction has been obtained in advance. Secondly, in the case of establishments in areas which may be broadly described as non-vulnerable, grant will not be payable.

The grant will be payable to public utility undertakers as employers, quite apart from the financial assistance already announced for the special measures which such undertakings are putting in hand with a view to maintaining their essential services in time of war, and to local authorities in their capacity as employers. The Government are providing this grant for the purpose of ensuring speedy progress. It will be payable, therefore, only in respect of shelters completed or effectively begun by an early date to be specified in the Bill. In the case of shelters already constructed it will apply retrospectively.

This statement would be incomplete without some reference to the special measures which may have to be taken in certain areas—for example, by obscuration of lights or by camouflage—to make industrial establishments less easily identifiable by aircraft. These form an essential part of defence against air attack, and certain preparations must be made in advance if they are to be put into effect quickly, when an emergency arises, without serious interference with industrial production. The Bill will therefore empower the appropriate Minister to make Regulations to ensure that these preparatory steps are taken in advance. As regards cost, the statement by my right hon. Friend the Chancellor of the Exchequer indicates that in the ordinary case most, if not all, of the expenditure incurred in these preparatory measures would be allowed as a deductible expense. There are, however, some special cases, mainly in continuous process industries, where the measures necessary to shield glare from blast furnaces, steel furnaces and similar types of industrial plant would involve special structural work representing capital expenditure which would not be deductible and might be of large dimensions. In these special cases, which form a separate problem because the object is, not so much to protect the particular establishment, as to render the surrounding area less vulnerable as a whole, a grant not exceeding half of the cost will be payable towards approved expenditure incurred on such measures taken before the date to be specified in the Bill.

Following are the questions and answers referred to: Mr. SIMMONDS asked the Chancellor of the Exchequer whether he can now make any statement regarding Income Tax allowances in connection with expenditure upon air-raid precautions schemes? Sir J. SIMON: The question of the extent to which expenditure on air-raid precautions may be admissable as a deduction in computing trading profits for Income Tax purposes is primarily one for the respective bodies of Income Tax Commissioners, to be determined in accordance with the provisions of the Income Tax Acts. So far as the Board of Inland Revenue are concerned, the treatment which, in their view, would be appropriate to the various classes of expenditure which a trader might incur is indicated below. It will be appreciated that it is not possible on such a subject-matter to give more than general outlines: the particular application will depend upon the particular facts of different cases. 1. Expenditure on such items as the following would be deductible:
  1. (a) civilian duty and service respirators;
  2. (b) protective clothing for staff engaged on air-raid precautionary duties;
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  3. (c) the training of employé s in such duties;
  4. (d) covering of glass with wire netting;
  5. (e) dark blinds, screens and paint to render windows opaque;
  6. (f) equipment and stores for first aid parties;
  7. (g) equipment of decontamination squads.
 2. A wear and tear allowance would be due in respect of equipment in the nature of plant and machinery, such as fire appliances and air filtration plant. 3. No deduction would be allowable in respect of expenditure of a capital nature, for example, expenditure which results in the physical alteration of, or in the incorporation of additions to, the structure of the trading premises. The Board, however, would not be disposed to regard as within this category expenditure on items such as steel shutters for protection of windows or timber frames and screens to provide air locks at doors or windows, which are not part of the permanent structure but represent fixtures or fittings required and used only for the emergency, and they would not object if the commissioners allowed deduction of such expenditure."—[OFFICIAL REPORT, 18th March, 1938; cols. 748–49, Vol. 333.] Mr. R. C. Morrison asked the Chancellor of the Exchequer whether expenditure on air raid precautions incurred by business firms in making tunnels, trenches, and ramparts for the safety of their employés will be treated for Income Tax purposes as allow able expenses? THE CHANCELLOR OF THE EXCHEQUER (Sir John Simon): How far such expenditure may be allowable in the computation of business profits for Income Tax purposes is a matter primarily for determination by the respective bodies of Income Tax Commissioners by reference to the facts of particular cases. So far as the Board of Inland Revenue are concerned, they would regard expenditure on, for example, elaborate underground galleries as capital expenditure and not allowable, but they would not object to the allowance of expenditure on simply-constructed trenches and on sandbag ramparts."—[OFFICIAL REPORT, 7th April, 1938; col. 506, Vol. 334.]
Mr. E. Smith

In view of the fact that this is now a question of urgency, will the Lord Privy Seal consider the advisability of sending out, as soon as possible, a circular in simple language to all employers in order that they may be in formed of the statutory obligations which will be theirs under the proposed legislation, and also in order to expedite preparations for carrying out those statutory obligations?

Sir J. Anderson

I had ventured to hope that my statement might go some way at any rate, towards informing the minds of employers. My Department will maintain touch with the organisations of employers with the object of ensuring speedy progress.

Mr. R. C. Morrison

Would the right hon. Gentleman bear in mind, in laying down in the Bill vulnerable and non-vulnerable areas, the difficulty that may arise if the same process as that followed recently by the Ministry of Health is adopted; and will he, as far as Greater London is concerned, lay it down that the Metropolitan Police area shall be regarded as a vulnerable area, in order to prevent difficulties?

Sir J. Anderson

It is not proposed to lay down precise areas in the Bill, but power will be taken in the Bill to do so, and every possible consideration will, of course, be given to all the knowledge and experience which has been gained in that matter.

Mr. J. Griffiths

Are the Government making all these provisions in establishments under their own control, and is that being done now?

Sir J. Anderson

I understand so, but that is not a matter directly for me.

Mr. Sandys

Can my right hon. Friend assure us that, apart from the division of areas into vulnerable and non-vulnerable, provision will be made in the scheme for factories engaged in essential defence work which will have to go on whatever happens; and in view of the fact that a higher degree of protection will be required in those than in other factories in the vulnerable areas, will be consider affording additional financial assistance in such cases?

Sir J. Anderson

My hon. Friend may not have noticed that in my statement I did say that in special cases where expenditure in excess of the general over riding limit might be called for, a grant would be payable if sanction was obtained in advance.

91. Mr. J. Griffiths

asked the Lord Privy Seal what is the basis upon which Government orders for steel sheets for Air-raid precautions shelters have been allocated among the producing firms; and whether he will take steps to ensure that the steel works that have been idle for a long period shall be allocated a share of these orders?

Sir J. Anderson

In allocating orders for the steel air-raid shelters due regard must be paid to the capacity of the works for speedy, economic and efficient production and to the location of the works in relation to the area of distribution, but preference on the usual terms is being given to firms situated in Special Areas.

Mr. Griffiths

Does not the right hon. Gentleman think it desirable that' where there are works capable of turning out these steel sheets, they should get a share in the orders?

Sir J. Anderson

I am anxious that the work should be spread as widely as possible.

92. Mr. Dobbie

asked the Lord Privy Seal whether he will inform the House as to the number of air-raid shelters that have been provided to the city of York by the Government; the calibre of same; the price per shelter; the proportion of the population who have been supplied with this safety device; the number de livered free; and the cost of those to the receipients who were charged for same?

Sir J. Anderson

The city of York is not yet included in the list of towns to which steel air-raid shelters are being issued by the Government. The remaining questions do not, therefore, arise.

93. Mr. Logan

asked the Lord Privy Seal whether he is aware that the Liver pool City Council has decided to speed up work on air-raid precautions; has he had any schemes submitted, more especially in regard to underground bomb-proof shelters; in view of the great number of unemployed in Liverpool, will he consider how best to utilise this labour; and will he meet a deputation of the council, at an early date, to discuss the financial contributions to be allocated to Liverpool?

Sir J. Anderson

I am aware of recent developments in Liverpool. As I stated in an answer to the hon. Member last week, certain proposals, not however for "bomb-proof" shelters, have been submitted and are under examination; and it will be in accordance with the policy of the Government that, when any work is put in hand, recourse should be had to the Employment Exchanges for any labour required. As regards the last part of the question, I must point out that there could be no question of financial arrangements which would place the city in any specially favoured position.

Mr. Logan

Do I take it that it is the intention of the right hon. Gentleman to give permission for underground bomb proof shelters to be erected?

Sir J. Anderson

I have not spoken of bomb-proof shelters. It is the intention of the Department to consider proposals that are put forward by local authorities.

Mr. Logan

In my question I asked about bomb-proof shelters. Will the right hon. Gentleman answer that question?

Sir J. Anderson

The hon. Member asked in his question whether any schemes have been submitted in regard to under ground bomb-proof shelters. I said in reply that the proposals which have been submitted and are under consideration do not relate to what can be described accurately as "bomb-proof" shelters.