CLAUSE 4.—(Payments to be either of cost of works or by reference to value.) (Hansard, 29 January 1941)

§ Sir Herbert Williams (Croydon, South)
Before our proceedings were interrupted on Thursday the Financial Secretary to the Treasury indicated that, in his judgment, this Amendment was not necessary because the situation was already covered by the Landlord and Tenant (War Damage) Act, 1939. I have looked up the relevant Section, which is Section 1, and, frankly, I found it difficult to understand. The purpose of Section 1 does render unnecessary the hon. Gentleman's Amendment—Sub-section (1) appears to govern the point—but when one reads Sub-section (2) the situation becomes ambiguous and I think we ought to have a rather more extensive statement from the Financial Secretary or the Attorney-General as to the correct interpretation of the Act of 1939.

§ Mr. Spens (Ashford)
May I add a word? Whether the construction which the Financial Secretary put upon the Act on Thursday was right or not, this does raise a major point of difficulty under the Act. Under the Act there is a statutory liability to restore premises to the state which they were before the damage occurred, and quite apart from the statutory liability under that Act there may be a statutory liability to provide lateral support or something of that sort under a building scheme allowing premises only to be used for a certain purpose and in a certain way. These matters do not at present appear to be dealt with in any way by the Bill. The question arises again much more acutely under Clause 8 584 than under this Clause, and I myself have a series of Amendments to that Clause to deal with this same sort of point. I should like to know that the whole thing generally is being considered and that it will be made clear that if a person carries out a direction given by the Commission, he will be relieved from all other liabilities, statutory, personal or otherwise, in carrying out such a direction.

§ Mr. Silkin (Peckham)
As the mover of the Amendment, may I refer to a difficulty which I can foresee? Under Section 1 of the Landlord and Tenant (War Damage) Act, a tenant cannot be compelled to make good war damage, but supposing that he does purport to make good the war damage, cannot he be required at the end of his tenancy to restore the premises to their original condition? Although nobody can compel him to make good war damage, when he has purported to do so under direction of the Commission, he has not done what the lease required him to do, but something less, and I am concerned lest he should then have to restore the premises to their original condition.

§ The Attorney-General (Sir Donald Somervell)
I quite understand the point made by the hon. Member for Peckham (Mr. Silkin). Although the Landlord and Tenant (War Damage) Act removes the liability to declare, there may be a question whether a difficulty might not still arise under the liability to hand over at the conclusion of the lease. Certainly, I will have that point looked into in order to see whether it is already covered. The matter raised by my hon. and learned Friend the Member for Ashford (Mr. Spens) will also be looked into. His point was whether, if a person carried out a direction given by the Commission, there would be any question of a difficulty arising out of the covenants of the lease. I will have that matter looked into, and see whether any alteration is necessary.

§ Mr. Silkin
With those assurances, I beg to ask leave to withdraw the Amendment.

§ Mr. Woodburn (Stirling and Clackmannan, Eastern)
I beg to move, in page 3, line 26, at the end, to insert: Provided further that in the event of it being agreed between the insured contributor and the Commission that the reinstatement of the hereditament in a form other than that in 585 which it existed immediately before the occurrence oil the damage would be more acceptable and involve a less payment than required under this paragraph, the amount of the payment shall be the lesser amount required to reinstate the hereditament in the new form. I gather that, with reference to points which I made when last we discussed the Measure, the Attorney-General agrees it would be a tragedy if, in the wording of this Clause, there were an implication that buildings which were destroyed had to be reinstated in their original form. Subsection 2(a) of the Clause contains the following: provided that if the reinstatement of any part of the hereditament could have been omitted … These words imply that the buildings are to be built again. In the case of a large number of buildings of an ornamental nature and belonging to a past decade, if the building were damaged it would be a matter for simple agreement between the Commission and the owner to have built an entirely new building at much less cost and on more modern lines. I should like the Chancellor either to agree to my Amendment or to alter the wording of the previous provision in such a way that it does not imply any obligation on the part of the Commission to reinstate ornamental or out-of-date buildings when modern buildings be far more suitable.

§ Sir Joseph Lamb (Stone)
I support this Amendment. I have an Amendment on the Order Paper later on aimed at the same purpose. It is considered by the local authorities to be undesirable that they should be compelled to reinstate buildings which are out of date and for which they would be prepared at a later date to provide something much more modern. Under the Bill, there is not that option. I feel that for that portion of the building which can or should be replaced, there should be a cost-of-works payment, but for any other portion there might be the other payment, which would be very much more suitable.

§ The Chancellor of the Exchequer (Sir Kingsley Wood)
I am obliged to the hon. Member for Stirling and Clackmannan, Eastern (Mr. Woodburn) and my hon. Friend the Member for Stone (Sir J. Lamb) for putting this point. I am advised that under Sub-section (2, b) of this Clause, we shall be able to effect the 586 arrangements that have been suggested by them. There is no intention of insisting on exact reinstatement where it is unnecessary and where it is obviously against the public interest to do so. I am advised that this matter is covered by the Bill, but I will undertake to consider the matter again in order to be absolutely sure. I will take steps to see that that point is covered.
I should like to take this opportunity of saying a few words about the position of the Bill generally and the Amendments on the Order Paper. There is, of course, a very large number of Amendments, and I do not dispute that a good many of them are very material ones and will have to be discussed; but hon. Members will appreciate that I am rather concerned about how long the Bill will take in this stage. I wish to thank hon. Members for what they did at the last sitting, and what no doubt they will do to-day, to expedite the passage of the Measure, subject of course to reasonable discussion and criticism. We shall be approaching in a very short time now one of the major problems of the Bill—the value payment; and it sems to me that on that matter, and on a good many other major matters which may arise, it would be useful that a general discussion should take place on particular Amendments and that I should at an early stage state the general position of the Government with regard to the matter. I should also be in a position to hear the criticisms of hon. Members and take them into account at another stage in our proceedings. I think that in this way we should be able to get a proper discussion on all subjects and make the most rapid progress with the Bill itself.

§ Mr. R. C. Morrison (Tottenham, North)
Will the right hon Gentleman consider making a brief statement on his attitude towards the proposals on the Order Paper which emanate from the public utilities authority, as this, equally, might shorten discussion on a number of Amendments?

§ The Chairman
The hon. Member must wait until we reach that part of the Bill.

§ Mr. Graham White (Birkenhead, East)
I listened with great satisfaction to the Chancellor's remarks. I wonder whether he has been able so far to form in his own mind any time-table for the Bill.

§ The Chairman
To put the matter in Order, perhaps the hon. Member for East Birkenhead (Mr. White) will formally move to report Progress, and then the Chancellor can reply. We cannot carry on this discussion on this Amendment.

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

§ Sir K. Wood
I have given consideration to what we can do and have consulted a number of my hon. Friends on the matter. There is, of course, the possibility of sitting to a later hour. That is a point upon which the Chief Whip and others will have to advise. There is also the possibility of sitting an extra day. I did also think that at a later stage in the Bill, when we have seen how the discussions are going, we might have some perhaps informal discussions, such as I have already had, on the Measure which might perhaps expedite its passage. There are on the Paper Amendments which, while they are important, are of a minor character and I might be able to satisfy my hon. Friends as to where the Government stand on them, and in that way we might save some discussion. I might not always be able to accept the Amendments, but perhaps hon. Members would take the view of the Minister who is in charge of the Bill and is only anxious to get a workable Measure. I will consider seeing some of my hon. Friends in the next few days, as I have seen them in the last few days, to ascertain whether we can expedite the passage of the Measure.
I do not want to suggest any sort of time-table at this stage. We are all anxious to get this Bill and to get it into workable form, and it is very difficult to think of a time-table in that connection. Therefore, I suggest that we might have personal consultations with Members to see whether it is necessary for us to have any extension of our sittings. We might see what progress is made and then consider the matter further in the light of the experience of the next few sittings. To my mind there are three or four major questions which ought to receive what I would call really proper and adequate discussion. On the other hand, there are many Amendments of a minor character, some of them drafting Amendments. During the last few da[...] I have seen, for instance, representatives of the municipal 588 corporations and other bodies, and discussed the Amendments in which they are interested. I think by that means I shall be able to dispose of a number of Amendments. At the moment I would prefer to adopt that method, and see what progress we make, and then I will bring forward the matter again in the light of experience.

§ Mr. Pethick-Lawrence (Edinburgh, East)
I think that what the Chancellor of the Exchequer has proposed is a reasonable and satisfactory method of dealing with this Bill. I should not favour anything like a time-table. I do not think it would work satisfactorily and the net result would be to waste time, and I feel that the course suggested by the Chancellor would be beneficial. The Chancellor will realise, of course, that the Bill itself comes to an end in August, and that it will not be very long before he will have to consider the Bill which will follow.

§ Mr. White
I should like to thank the Chancellor of the Exchequer for his suggestions, which I have no doubt will expedite the progress of the Measure. When I first saw the Bill I thought that in peace-time it would have gone to a Committee and that it would have been very doubtful whether it ever emerged again. Seeing that at this time we are concerned not to produce meticulous Measures, scrutinising every detail, but just, equitable and workable Measures, I cannot help thinking that we ought to make rapid progress.

§ Earl Winterton (Horsham)
I think the hon. Member for East Birkenhead (Mr. White) has put the position wrongly. I am in entire agreement with what the Chancellor of the Exchequer has said. There are certain very important parts of the Bill which must be considered, and it is wrong to suggest that details must not be scrutinised. In the past great harm has been done by passing housing Measures rapidly, sometimes under the Guillotine, so that there has been no opportunity of giving proper consideration to certain points. Therefore, I support what the Chancellor has said, and would even put the case perhaps more strongly than he has done, because those not in office can put such a case stronger than a Minister. On every Bill 589 of this kind, I would point out, without making any unfair criticisms against my hon. Friends, there are Amendments which are really redundant and can be disposed of by discussion, and I hope that in a number of cases my hon. Friends who have Amendments may, after they have had an interview with the Chancellor of the Exchequer, be ready to withdraw their Amendments, so that we may not be too much curtailed in our opportunities for discussing the really important questions. Further, I think the Chancellor ought to press very strongly the Prime Minister, whose business it really is to deal with Sittings of the House, to consider the question of sitting an hour later. With the shorter black-out I do not see why we should not sit an hour later.

Mr. Barne (East Ham, South)
While the procedure suggested by the Chancellor of the Exchequer appears to meet the general convenience of the House, there is one reaction arising from his suggestion about dealing with Members' Amendments which we ought to consider further. Although many Amendments may be of a drafting character or raise relatively minor points, they may have been put down for the purpose of getting an interpretation or an explanation from the Chancellor himself. He now proposes that that explanation should be given to the Member direct. It often happens that the point raised is minor in character, but it brings a statement from the Front Bench which becomes public information. It may be that the point covers a limited interest, but the explanation serves a wider public purpose. I wonder whether the Chancellor of the Exchequer or the Financial Secretary would, under this procedure, give to Members who have put forward Amendments a written statement of the explanation they have given in private. I think that would be of value if the Chancellor could agree to that.

§ Sir K. Wood
Certainly I will do that.

§ Mr. Bellenger (Bassetlaw)
In view of what the Chancellor of the Exchequer said about the general discussion of the principle in Clause 4, and also Clause 5, I wonder whether he could indicate on which Amendment he thinks that discussion might take place. We do not know what Amendments are to be called, and usually such a discussion would take place 590 on the Question of the Clause standing part of the Bill.

§ The Chairman
Most of the Committee realise that when there are a number of Amendments, all directed to the same point, the Chair selects the one which it thinks most useful for discussion, and all other Amendments of a similar intent can be discussed on that Amendment.

§ Mr. Pickthorn (Cambridge University)
Like the Noble Lord the Member for Horsham (Earl Winterton) I venture respectfully to agree with the Chancellor of the Exchequer, but I should like to ask one question about his use of the word "important." If importance is to be measured entirely by the size of the interest concerned, there may be some matters which I think ought to receive full discussion which may not be regarded as falling into the "important" class. For instance if by act of God—or the devil—bombs happened to fall in particular directions, there might be so much capital damage that the whole control of higher education would be taken out of the independent hands in which it has been for many generations and become entirely centralised. Therefore matters, which may seem small in themselves from the point of view of money value compared with the whole amount of damage, may be of very great public and political importance in other directions. I should like to be assured that they will be taken into consideration in the conduct of these Debates.

§ Sir J. Lamb
While I entirely agree with the desire of the Chancellor, I would point out that this is a very important Bill; we must be very sure we do not make great mistakes in trying to accommodate ourselves to the moment in having shorter discussions. One point which arises is that a Member may withdraw his Amendment, thereby depriving other Members of the opportunity of expressing their points of view. Members might hope to support a particular Amendment when it came forward. I think there is a danger there. I should like to support what was said by the Noble Lord, the Member for Horsham (Earl Winterton), that we should sit an hour later. My other suggestion is that we all might do our bit by making short speeches.

§ Sir K. Wood
I am very much indebted to my hon. Friends for the points they 591 have raised. As far as I am concerned I would rather err on the side of having discussion, provided it was conducted with due regard to the number of Amendments on the Paper. If there is a question of discussing an Amendment or not, I would be in favour of discussion. It is also true, as my hon. Friends have reminded me, that I must deal with this matter again to cover the period after August, as far as the financial side is concerned. That will give me an opportunity, if matters come to light in the interim or have been overlooked, to deal with such matters again at that stage. Therefore, if necessary, we have that in reserve. I think that on those grounds we had better proceed as at present and see how we get along.

§ Mr. Woodburn
In view of the assurances given by the Chancellor of the Exchequer, I beg to ask leave to withdraw the Amendment.

§ Mr. Doland (Balham and Tooting)
I beg to move, in page 3, line 41, after "circumstances," to insert: including the cost of demolition and the removal of debris where borne wholly or partly by any owner or part-owner of a hereditament. I consider that this Amendment is self-explanatory and sets out clearly what is required. If it is not inserted in the Bill, much controversy may arise in regard to compensation. As the Chancellor is aware, there are many buildings now partly standing which have had bombs sent down on them, but which are not apparently demolished. Undoubtedly, before the end of the war many of these buildings will need demolition, and consequently the question of cost to the occupier or owner arises. It has been suggested to me and my friends that in many instances the cost may be found by selling the debris, but in many other instances that will not be the case. I think I am voicing the opinions of many who have already had damage done to their buildings in asking that this Amendment be included in the Bill.

§ Earl Winterton
Perhaps it would be right if I stated now that I am, under this Bill, a very considerable beneficiary. I think it should be disclosed, that whatever happens I shall gain to a very large extent indeed. However, I rise to say that I do not agree with the hon. Member for Balham and Tooting (Mr. Doland). I think it is an unfair charge to place on the general body of insured, and the Treasury. I, at any rate, do not associate myself with the Amendment.

§ Sir H. Williams
I am sorry to differ from the Noble Lord the Member for Horsham (Earl Winterton). We have this rather strange situation. In many parts of London sites have already been cleared by local authorities. In some cases the work will be done at public expense, and in other cases it will not. Therefore, you are creating a difference as between citizen and citizen. This Amendment provides that everyone is to be treated alike, and therefore on grounds of equity rather more consideration should be given to it than the Noble Lord suggests.

§ Mr. Glenvil Hall (Colne Valley)
Might I ask the Chancellor of the Exchequer, in order to shorten the discussion, to indicate whether he intends to accept this Amendment?

§ Sir K. Wood
I have been dying to do so for some time.

§ Mr. Hall
I think the Amendment is acceptable to the large majority of the Committee.

§ Sir K. Wood
Hon. Members have been very brief in their remarks; but I am advised that the point raised is covered by the Bill as far as reasonable costs are concerned. The draftsmen advise me that that is covered by the word "proper cost." I think that all points of this character which are raised I shall have to examine again.

§ Sir H. Williams
That will not cover value payments but only cost of work payments.

§ Major Milner (Leeds, South East)
Will it cover making good damage done by deterioration? Obviously many of these properties suffer considerably as a consequence of the original damage. I assume that it will probably come under "proper cost"?

§ Sir K. Wood
I would not agree to consent to that. I am dealing with the Amendment on the Paper.

§ Earl Winterton
I find myself in considerable disagreement with my hon. Friend the Member for South Croydon (Sir H. Williams), who is not, I think, an expert in this matter, although he holds wide interests on all subjects. The removal of the debris would be met by the selling of it. There will be a tremendous demand for debris of this kind, and I hope that my right hon. Friend will not go too far, otherwise the whole carefully-balanced scheme will not succeed. The main object, whether one is a house owner or not, is to get houses rebuilt.

§ Mr. Doland
In view of what the Chancellor of the Exchequer has said, I beg to ask leave to withdraw the Amendment.

§ Brigadier-General Clifton Brown (Newbury)
I beg to move, in page 3, line 42, to leave out "or".
This Amendment, and the second Amendment standing in my name, to insert "land agent", would make the Sub-section read as follows: (3) In this Part of this Act the expression 'proper cost' means in relation to any works, such cost as is reasonable, having regard to the prices of materials and rates of remuneration for services current when the works are executed and to all other relevant circumstances, and in computing the proper cost of any works the cost of the necessary employment of an architect, surveyor, land agent, or other person in an advisory or supervisory capacity, in connection with the execution of the works shall be treated as part of the cost of the works. I think that the Chancellor of the Exchequer may have omitted this point.

§ Sir K. Wood
I will accept the words "land agent".

§ Mr. Silkin
I do not know whether the Chancellor of the Exchequer appreciates that by deleting the word "or" a claimant might be entitled to charge the costs of both an architect and a surveyor. I do not know whether that was the intention.

§ Sir K. Wood
I will look into that. I want to make it plain that we intend to include land agents within the definition. I do not think it has the effect that the hon. Member says.

§ Mr. Doland
I beg to move, in page 3, line 44, after "works," to insert or the preparation and the negotiation of a claim either for payment of cost of works, or a value payment. The Amendment is self-explanatory. I hope that compensation will be paid for the services of an architect or surveyor where it is necessary for a claimant to engage professional help in the preparation, either in the first instance of a claim or, later, in the negotiations for compensation.

§ Major Milner
I support the Amendment though I think I had better say I am personally interested in it. As drawn, the Clause is extremely narrow. There are many cases where estates are conducted by firms who employ surveyors or estate agents. I am told that where matters have been left in their hands their charges are on a percentage basis. Presumably a solicitor would be able to charge only on an item basis for the work that he did, and he would employ a surveyor who would similarly be paid only for the work he did on a percentage basis depending on the result of the claim. In the long run, if the Amendment were accepted, it would probably result in an eventual saving to the Exchequer. It is reasonable in a complicated Measure of this sort, where legal aid must be invoked, that the claimant should be paid the reasonable costs thereof. Of course it would be paid only when the employment of a surveyor or solicitor is necessary and the cost has to be a reasonable one, so that there are really ample safeguards.'

§ Sir J. Lamb
The hon. and gallant Gentleman said the Amendment was drawn very narrowly.

§ Major Milner
No, I said the Clause was drawn very narrowly because it is confined to certain classes of individuals.

§ Sir J. Lamb
I accept the correction. I strongly support the hon. and gallant Gentleman's later contention that the Amendment is drawn too widely. It says "the costs." It does not say "taxed costs," and words should be put in to ensure that the costs would be taxed and should be reasonable.

§ Major Milner
I agree.

§ The Attorney-General
I think my hon. Friend would be the first to recognise the importance of not putting in words which would so widen the costs that the estate would bear that people would say, "We will employ so and so. It will all go on the bill." We are dealing with the cost of work, and that is the only matter that we can discuss. We have already in the Bill the cost of an architect, surveyor, land agent, or other person in an advisory or supervisory capacity. That seems to indicate a very wide and reasonable ambit of what can be included in the proper cost.

§ Mr. Benson (Chesterfield)
I am not quite sure whether the Attorney-General's statement means that there will be any charge at all allowed to an estate agent or surveyor for the preparation of the claim. That is the whole point of the Amendment.

§ The Attorney-General
The basis of the thing is that the Government pays the proper cost of works. There will be an estimate from a builder in the ordinary way. If you add the words "preparation and negotiation of a claim" you are inviting unnecessary costs.

§ Mr. Benson
I do not know whether I am an interested party or not, but I am an estate agent and I spent the whole of the Recess preparing forms. I shall charge my client anyhow, whether the Government pays or not. The Attorney-General says it is quite simple. The owner of the property gets an estimate and sends it in, but it is a great deal more than that. The ordinary small property-owner is simply boggled when he looks at the form. It is obvious that the Attorney-General has not had the experience that we have had in Manchester. The small property-owner cannot get his property repaired. The builders are far too busy to go round giving estimates. An estate agent has a pull in getting estimates because he probably has an account of £3,000 or £4,000 a year with the builder. I have received an immense amount of help from the builders and contractors employed by my firm. Had I been Mr. Jones or Mr. Smith owning one or two small cottages, I could not have got a builder at any price. The preparation of these claims involves a considerable amount of work. I spent a month on them, and as a professional man I expect to be paid by somebody. I shall 596 send in my claims to my clients. The question is whether for essential works, which in many cases the property-owner cannot undertake, where he is involved in expense, that expense is a proper one to be paid under the Bill. I think that it is.

§ The Attorney-General
I do not think my hon. Friend has a clear picture of the cost of works claim. There is no question here of getting out a claim prior to doing the work. We propose to have a similar form to V.O.W. 1. It will be a simple form recording the damage. The actual amount to be paid does not arise, as my hon. Friend will see under the later Clauses, until the work can be done. There is no question of a man having to evaluate a claim before the time comes when the work is to be done. I still think that the Clause as it stands, which authorises the cost of the necessary employment of an architect or surveyor, land agent or other person in an advisory or supervisory capacity meets the point of the Amendment.

§ Mr. Doland
Did I understand the Attorney-General to say that this Sub-section applies only to payment of cost of works and not to value payment? If he means that, will it give me the opportunity at a later stage of moving an Amendment in regard to value payment?

§ The Attorney-General
That is a matter for the Chair.

§ Mr. Doland
May I put the question to you, Sir Dennis?

§ The Chairman
I am afraid that cannot tell the hon. Member now. He must ask me on some other occasion.

§ Mr. Douglas (Battersea, North)
I beg to move, in page 3, line 47 to leave out from "equal," to the end of the Subsection, and to insert to the difference between the value which the hereditament would have after the execution of the works necessary to make good the damage thereto and the value which it would have as a site clear of any buildings or works and with the damage so far as it affects the site not made good. This Amendment raises one of the most difficult points in the Bill. There is an anomaly in the Bill as between the measure of the value payment and the measure of the cost of works payment. As the Bill is drafted, the measure of the value payment is related to the difference 597 between the value which the hereditament would have had as at 31st March, 1939, if the damage had not occurred and the value after the damage had occurred; whereas the measure of the payment to be made in respect of cost of works under Clause 5 (1) is the difference between the value which the hereditament would have after the execution of the works and the value it would have as a site clear of any buildings or works. The injustice which arises out of these conflicting provisions is that as between owners of property of equal value the one who suffers the greatest injury will in many cases receive the least amount of compensation; and, as between property owners generally, those who own the largest and most expensive properties will be more likely to receive full compensation than those who own small properties such as the ordinary dwelling-house.
The way in which that arises is this. First let us consider two dwelling-houses side by side, precisely the same. One receives total destruction and the other is destroyed to the extent of 75 per cent. of the structure. In the latter case the probability is that the cost of repairing the structure and making it as it was before will not be any greater than the difference between the value of the buildings after the repair is made and the value of the site; and, therefore, it will be entitled to a cost of works payment under Clause 5. That payment may be equal to the full post-war value of the structure itself as repaired, and nobody knows what that will be, but with the amount of destruction which has already taken place and when life becomes normal again it may well be that the value of property where there has been extensive damage will be much higher. The measure of compensation in this case, therefore, is that difference, whereas in the other case where the house is totally destroyed the measure of the compensation is to be the value as at 31st March, 1939. Therefore, the owner who suffers the greatest loss receives the least amount of compensation. Let us consider the other case of a large property, a big building in the centre of a city, a ferro-concrete construction, or a large block of flats. It is obvious that in such a case destruction will never be so great in relation to the total property as to prevent a cost of works payment being applicable. In the cases 598 of large properties, where it is highly improbable that the property will be totally destroyed, the owner will have his property completely restored to him as it was before, whereas the unfortunate owner of a small dwelling-house which is completely destroyed will get a payment which is not related to the cost of replacing what he has lost but is related to a standard of value which may never operate in this country again. The Clause is extremely unfair and I have sought by the Amendment to reconcile it with Clause 5 by introducing into it the same measure and the maximum amount of compensation which can be granted as that which is provided for in Clause 5. I know that in certain cases—indeed, this is the object of the Amendment—it will mean that a larger amount of compensation will be payable, but there is no reason why certain cases should be discriminated against as they are under the Bill, under which the greater proportion of the loss is thrown upon those who are the most unfortunate.

§ Sir K. Wood
I would like to make a general statement on this matter so that the Committee will see exactly where we stand. The hon. Gentleman who has just spoken made a very powerful statement, as he always does, in criticism of the Government's proposal. I would like to examine it. We are now dealing with a very important part of the Bill, and it has given the Government considerable anxiety. We have given much consideration to this matter. Let me say at once that at no time, so far as I and my expert advisers are concerned, have we been animated by any other object than to do a reasonable and fair thing. The more this matter is examined the more difficult does it appear to be able to achieve that object; but there has not been any other idea than that.
At the moment, we are dealing with the case where reinstatement is not an economic proposition, or where it is not desirable, in the national interest, that there should be reinstatement. We are providing that the value payment is to be equivalent to the amount of depreciation in the value of the property, due to war damage and calculated in relation to values as they were in March, 1939. The reason for that date is to get the value as near as we can to what it was just before the war. Let me give an illus- 599 tration of how the Government's proposal would work. Take the case of a house worth £2,000 and situated on a site worth £500. Those are the values in March, 1939. The bomb falls. For the sake of simplicity, let us assume that the site is undamaged but that all the materials of the house are blown to smithereens by the explosion. Then, of course, the house, previously worth £2,000, has clearly depreciated to nil, and a value payment of £2,000 would fall to be made. It has been suggested with great emphasis by my hon. Friends that that payment is unfair to the property owner because it is less generous than the cost-of-works arrangement, under which the owner of a partially damaged house obtains, in general, the full cost of the restoration. It has also been said—and I will anticipate the criticism—that it is unfair in itself because of the fear of rising prices after the war, which would mean that the value payment might prove to be insufficient to construct a house of a similar kind. Those are the two main objections which have been made to the value payment proposal.
Let me deal with the second and major criticism. I will deal with the first criticism in a moment. It is said in particular that the value payment would be insufficient for the small property owner. This point is raised by a number of Members and they have tabled alternative propositions. The effect of the first of these, in the name of the hon. Member for South-East Ham (Mr. Barnes), would be to base the value payment upon the value of the property at the time when the damage occurred. That is to say, he suggests that the value payment should be based on war-time values. Let me say at once that I think that would be a most unfair proposal. It would be unfair to the property owners, and especially to the small householder, who would be penalised, particularly, by any temporary depreciation in values occasioned by war conditions. It would be most unfair also between one property-owner and another. Take, for instance, the value of a hotel and that of a four-bedroomed dwelling house on the East Coast—

§ Earl Winterton
Or on the South—

§ Sir K. Wood
—which would have an entirely different value from an exactly similar hotel or house on the West Coast. 600 How could you justify payment of compensation on a basis which penalised those with property in areas adversely affected by the war, and at the same time benefited those with properties in the safer areas? With all respect to my hon. Friend who puts forward that proposal, I think there is no question that this Committee could not possibly adopt the proposal.
I turn to the Amendment which has just been moved by my hon. Friend, and which is very similar to Amendments in the names of a number of hon. Members. Perhaps it makes the most radical suggestion of all. The effect of the proposal, as I understand it, is to take as the basis of the value payment the cost of reinstatement current when the work of reinstatement is carried out. My hon. Friend gave as his reason for the proposal that it adopts exactly the same principle as the cost-of-works payment. What does his proposal mean? It would, in fact, guarantee to property owners new property similar in kind to the old which had been destroyed. In other words, if I accepted this proposal, the State would have to provide a new house for every old house destroyed. The proposal completely ignores the factor of depreciation before the damage. It places the property owners in a privileged position compared with other members of the community, who hold, say, Government stocks or bonds, to which no such privileges are attached. These people would have to stand the racket of whatever the future might have, while the property owners, if this Amendment were adopted—it could not possibly be adopted—would be provided by the State with new houses for old.

§ Mr. Silkin
Is there not the same objection to the cost-of-works proposal?

§ Sir K. Wood
I will deal with that in a minute. I must remind the hon. Member that it does not make it any better on that account. I am going to give the reason why we have adopted the cost of works payment. It would give no encouragement to the Committee if I said that I would adopt what I would call this rather extraordinary proposition. There are very good reasons why the cost of works payment has in fact been made.

§ Mr. Woodburn (Stirling and Clackmannan)
The right hon. Gentleman has made a very important point. I agree 601 that it is obviously not the business of the State to replace depreciation, but, on the other hand, it must also become the business of the State to see that no one gets appreciation of property due to war conditions, and if the Government are open to replace the one they must take steps to recover any appreciation of property due to the war.

§ Sir K. Wood
What we have to do today is to decide what in fact is the right thing to do with this particular proposition which is before us. It would be most unfair both to the property owners themselves and to the State itself. I need only give one example. It would mean that the owner of a derelict building on a valuable site would receive at the end of the war a new building in the place of one the value of which, perhaps on almost any basis, was either nil or actually a minus quantity because of the liability which it imposed in relation to the value of the site. In other words, one can imagine a number of properties in London to-day, in certain parts not very far from here, where there is a tremendous value on the site and practically nothing on the building itself. Yet, under this proposal, the property owners have to make their heavy contributions under the Bill and the State has to undertake to put up a new building in place of this derelict structure. That, of course, is an impossible proposition.
Then I deal with the last Amendment of substance which relates to this proposal. It stands in the names of my hon. Friends the Members for North-East Leeds (Mr. Craik Henderson) and South Croydon (Sir H. Williams). I will Say this of this Amendment, that its sponsors do recognise the extreme generosity of the proposal of my hon. Friend to certain property owners. This Amendment recognises that that is an impossible proposition. It therefore suggests that the owners of the property should either be offered a value payment calculated in accordance with the provisions of the Bill, or, if certain conditions are fulfilled, that they should have the option of three-quarters of the cost of restoration. That is a little more reasonable than the other, because it is a 25 per cent. subtraction, but of course it is no more acceptable in principle than the proposal to pay the full cost of restoration in such cases.
602 The whole mischief of the Amendments on the Paper is that they aim at giving the property owner compensation related not to the value of what has been destroyed but to the cost of its replacement. Again, this proposal to which I am referring will involve payment of compensation on an unduly generous scale in many cases and more particularly when the property destroyed, by reason of its age or other causes, possessed only a small market value. I suggest that in fact when one comes to consider this matter in the light of the considerations which I have put forward, and tries and thinks of some really effective practical proposal, one is driven in the end to the same conclusion to which the experts and myself were driven when we examined this matter. We gave a tremendous amount of time to it, as obviously was necessary. In the end we were bound to come back to the proposals of the Bill. The basis of the proposals of the Bill is this, that where the restoration of property is not an economic proposition, monetary compensation should be paid on the basis which, while taking into account the vital factors of depreciation and market value—they must be taken into account—provides a reasonable basis and a basis fair between one property owner and another.
In other words, the more one looks at this problem the more one is driven to the conclusion that war-time values would certainly be unfair. Some properties today are worth practically nothing at all. Other properties have gone up tremendously in value according to the particular areas where they are situated. It would be impossible to base value payments upon such figures. Post-war values, as I have shown to the Committee, would in a very large number of cases provide new houses for old and we could not admit that. I must say that that proposal, apart from the objections in principle which I have put forward, would also involve interminable delay in the work of assessment which, of course, could not be justifiably begun until stable war value prices had been achieved.
The only matter with which I am left to deal is this: People may say, "How different this is to the compensation that has been given so far as cost of works payment is concerned." The main argument for the cost of works arrangement is that it is really in the national 603 interest that houses should be repaired. I do not know anyone who objects to that proposal; no one has put down an Amendment about it. Why are people to be paid full restoration for a property which is partially destroyed? We are doing it for national reasons that is the answer—national reasons in the interests of the individual himself and in the interests of the State itself. The reason why we are doing that and making that very substantial payment under the Bill is because we want to see the property restored and to see the man and his family back in the home again, and from the national point of view we also want to see all these houses repaired as quickly as possible. That is the reason for the differentiation between the cost of works payment and the value payment.
From the national point of view whether you give a man a sum of money, or whether you restore his property, are different considerations altogether. That is the real reason behind the proposal which has been made with reference to the cost of works payment and to the value payment. That proposal is really on good sound lines and I do not think there is any question in the mind of any hon. Member that we could do anything different as regards the cost of works payment. The only thing we are left with is the question whether we are doing the best we can as far as the proposal for the value payment is concerned. On the grounds I have already mentioned to the Committee, I submit that immediately you try any other basis for this you are in a position of hopeless confusion, and you are driven back in the end to a date immediately before the war. I have no doubt that all my hon. Friends will help me in connection with this proposal, which, while at first sight open to criticism, is in the end the best and most reasonable solution.

§ Sir Irving Albery (Gravesend)
On a point of Order. I understand that there was to be a general discussion on a certain series of Amendments? I gather that it is a part of the general discussion which has been covered by the Chancellor's present explanation, and I wanted to ask what procedure, in that case, is going to be followed in regard to the various Amendments on the subject of which I have been in touch with him. Will they 604 be formally put, or what will be the procedure?

§ The Chairman
All I can say is that my present feeling is that all these other Amendments can be called if required, though I hope there will be no discussion on them. It is for the convenience of the Committee that we are having this general discussion, and then perhaps many of the Amendments will not have to be called. I do not propose to cut anybody off from any chance they have of saying what they wish.

§ Mr. Craik Henderson (Leeds, North-East)
I have put down an Amendment under which the person entitled under the Bill to a value payment would be as an alternative entitled, under certain conditions, to receive three-quarters of the cost of work. The Chancellor has been able to criticise that proposal, as he has been able to criticise every other proposal of a similar kind dealing with this very difficult problem, but frankly I do not think any of the criticisms he has made are any more severe than those which can be made of the proposals contained in the Bill as it stands. As it stands at present, as has already been pointed out, the man who suffers most is to receive least, and this Amendment which I have put down is an attempt to meet that difficulty. I do not think it is unfair that a man who has had his house destroyed should receive a value payment based on the value in 1939 if he is not going to rebuild. That is a fair basis if he is simply going to get the money. But if he has got to rebuild, and a great many proprietors will require to rebuild, how is he going to do it? The cost of building even at the present moment would be at least double the value payment he would receive. Where is he to get the finance to rebuild at the end of the war?
It is for that reason that I have put down this Amendment. If the Chancellor would even accept the proportion of two-thirds it would enable the problem to be met very much more easily by this class of property owners, who are going to be very badly hit in comparison with the man who does get a cost of works payment. If a property owner knows that if he rebuilds he will receive, during a certain period, a payment of two-Thirds, three-quarters or whatever the cost may 605 be, he will be able to arrange the necessary finance, and we shall not have the extraordinary situation of having great areas of unbuilt property at the end of the war. Surely we want industry, trade and business to start as quickly as possible. I do hope the Chancellor will consider whether he cannot make some concession to meet this very vital and practical problem. How are these people who are entitled only to a value payment and who have to rebuild going to get the finance unless they have some assurance as to the date of payment and as to payment of some proportion of the cost of works?

§ Mr. W. H. Green (Deptford)
Notwithstanding what the Chancellor has said in a very clever speech which reveals that this subject is surrounded by very great difficulties—I do not disguise that fact at all—I still feel that the Committee might be well advised to accept the Amendment of my hon. Friend the Member for North-East Leeds (Mr. Craik Henderson) which views the problem from a rather different angle to the Amendment put down in the name of the hon. Member for East Ham, South (Mr. Barnes). I am convinced that the Chancellor's speech will create grave dismay among a very large number of fairly small property owners. What my hon. Friend's Amendment seeks to do is to introduce some sort of similarity or equality of treatment between those who are subject to a value payment and those who are to receive a cost of works payment. The Bill as it stands does not do that. None of us are objecting, as the Chancellor rather indicated that we might, to undue generosity of treatment to the recipients of cost of works payments. We do not say that that is wrong. We rather consider that it is right, for it really means that, in the case of a person who receives a cost of works payment, the damage done will be entirely met under this Bill. That, in our submission, is a right provision, but why the man whose property is totally destroyed cannot receive equally generous treatment, the Chancellor, with all his logic, has certainly not convinced me, and I doubt whether he has convinced a good many other people. The main purpose of this Bill, as I understand it, as the man in the street understands it, and as the ordinary small property owner who owns his own home understands it, is that the owner of a house which is destroyed shall 606 have an assurance that at the end of the war he will be able to rebuild his home.
It is possible to argue, as the Chancellor quite rightly says, that it may mean something beyond the loss sustained, that the person will receive, in place of a house built perhaps 20 years ago and subject therefore to depreciation, a new house of greater value. That is one way of looking at it, but I will ask the Chancellor or the Financial Secretary to the Treasury to look at it in this way: a man has struggled, as hundreds of thousands of our people have done, to be in a position to own his own house, which is about all that hundreds of thousands do own in this country. After years of struggle, a man has a house which he can call his own. It is destroyed. At the time of its dstruction it may be worth, say, £700 I take a case which is fairly general in the bombed areas. I am not concerned about the huge hotels or great houses in the West End—others will look after their interests. I am thinking of the working man who looks to this Act for the wherewithal to get his house erected again after the war. But, when the war is over, it may cost £1000 to rebuild that house. In hundreds of thousands of cases houses will never be rebuilt—at least, as the property of those who originally possessed them. I know that there are difficulties, and that there are arguments against it, but there is a good deal to be said for the principle that a man who loses his property should be in a position at the end of the war to replace it and, as the Bill stands, I do not see that that is possible.

§ Sir George Schuster (Walsall)
I do not propose to enter into the arguments on the equity of the case, because they are well known. They have been discussed fully in the Press; they have been dealt with in previous speeches, and I am sure they will be dealt with again. The only thing I would like to say on that is that there is very deep feeling in the country on this matter, and I hope that my right hon. Friend will do his best, if he is right, to satisfy everybody that he is right. I am not sure that they are satisfied of that yet. I have an open mind, and I see the strength of the arguments that he has put forward.
What I want to do is to put one or two points on which I am not quite clear. The 607 essence of what we are considering is whether the man who is to get the value payment is being treated fairly as against the man who gets cost-of-work payment. I want to try to understand the two positions. Let me take the position of the man who gets the value payment, and consider the pros and cons of his position. On the advantage side it is stated—I think I am correctly interpreting what the Chancellor of the Exchequer has just said—that he may expect to know at once where he is. He will have immediate certainty of a definite sum of cash. Also, he will get some compensation for loss of user, because he will be credited with 2½ per cent. interest on his money from the date of the bombing. Against that, he runs the risk that the value of money may have depreciated, and that he will not be able to replace his house with the money he gets.

§ Major Milner (Leeds, South-East)
And probably he will be paying 5 per cent. all the time, and he will only get 2½ per cent.

§ Sir G. Schuster
I want to check up on these points. I cannot feel clear from the wording of the Bill that he will have the immediate certainty. Clause 5, Subsection 1 (a), deals with the category of people who are going to get a value payment and says that they are to get that in cases of total loss. It then goes on to interpret "total loss." But the words used in the interpretation really mean something quite different. It defines total loss as applying to cases where the cost of repair would be more than the value of the repaired building. The important point, in my mind, is that it will not be possible to apply this criterion until after the war. Who is to say which is the greater or the less of these amounts until we have reached post-war conditions? The doubt in my mind is whether it will be possible to say at once, "This building is a total loss, and we shall assess your compensation at such and such a figure," so as to give the owner a sum on which 2½ per cent. interest is to be paid. It will not be possible to answer this question until you can weigh the relative costs in post-war conditions. Therefore, if I am right, the man who gets the value payment will fail in fact to get the advantage of immediate certainty. I ask my right hon. Friend to clear up that matter. 608 Another small question is, will the 2½ per cent. interest which is accruing, which the owner is not to get until perhaps many years afterwards, be liable to Income Tax and Surtax? If the interest is to be paid to him tax-free, it will put him in quite a nice position, if he gets immediately a claim which he can sell and which carries 2½ per cent. interest free of tax. But if lie is to be liable to Income Tax, when is he to pay the tax—as it accrues year by year, or at the end of the time? It is a small point, but it is, I think, worth while dealing with.
If one turns to the position of the man who is entitled to cost-of-works compensaiton, he, of course, has the advantage already pointed out by several speakers that what he gets will be based on the actual prices ruling in post-war conditions. On the other hand, he is left in uncertainty, because the Commissioners have very wide discretionary powers, and are bound to take into account the public interest as an overriding consideration. Also, he gets no compensation for the loss of user, because there is no interest accruing on the money that he will eventually get. It is quite possible that a great number of people would prefer an immediately determined value payment to the uncertainty attached to the cost-of-works payment.
That leads me to make a suggestion, which I hope will be considered. This is an extremely difficult matter, and it is quite easy to tear to pieces any Amendment which is put down. So I will only suggest with diffidence a general line of treatment. Could we not say to the owner whose house is a total loss, "You can have your house treated as a total loss. We are prepared to value it at once. You can have say £2,000 credited to you, with 2½ per cent. accruing. But if you wish to put yourself into the hands of the Commissioners, leaving it to them to assess the compensation to which you are to be entitled after the war, you can as an alternative at your own option choose to do so. The Commissioners must not be expected to give you anything of the nature that the Chancellor of the Exchequer fears—a new house for an old one—but when they [...]ome to assess your compensation at the end of the war they will take into account post-war values and the way in which prices have risen, and you will be entitled to your compensation on this basis, 609 on the express condition that you undertake to use the money you get in rebuilding your house in accordance with any town-planning scheme which may be in force at the time." We might add, as a safeguard, "If the cost of works which is allowed to you is more than the value of the building when it is reconstructed"—and in this I am referring to the provisions of Clause 5, Sub-section 1(a)—"you will have to pay the difference out of your own pocket." If an individual is prepared to put himself into the hands of the Commissioners, trusting to them to give him fair compensation, and thus avoiding all the difficulty of having to draft a Clause now, no one can complain about it, because it is at the individual's option, and you will perhaps eliminate the feeling of unfairness which exists at present.

§ Major Milner
It is not quite clear to me what is precisely the option that the hon. Member has suggested.

§ Sir G. Schuster
If your house is destroyed, and the Commissioners say, "That is a total loss; we are prepared to assess the value straight away; you are to get £2,000," the Government would say, "You can have your £2,000 down now if you want it, but if you prefer to wait and put yourself into the hands of the Commissioners, to get what they consider to be fair compensation, having regard to any change in values of repairs and of building costs which may have taken place—always taking account of the actual condition of the old house—you can do so; but, of course, you will be taking a chance."

§ Mr. Green
Would the hon. Member agree that the payment should be not less than £2,000?

§ Sir G. Schuster
According to my proposal the individual would have a free choice. He has the certainty, on the one hand; and we ought not to forget that there is this very important advantage on the side of the value payment. But if he exercises an option not to have this certainty, he cannot have it both ways, and must take his chance within any guaranteed minimum.

§ Mr. Craik Henderson
Does the hon. Member intend that the proprietor should get this payment for increased value at the end of the war unconditionally?

§ Sir G. Schuster
I made it clear that he would have to use the money for rebuilding. That brings in the national interest, of which the Chancellor spoke. I think I have made my suggestion clear. I have only one other small question to ask. Clause 5, Sub-section 1(a) provides that the test as to whether a man is to get value payment or not, is whether the cost of making good the damage is more than the value of the hereditament after it has been made good, lets the value of the site cleared of any buildings.

§ The Deputy-Chairman (Colonel Clifton Brown)
The hon. Member is entering upon a wider subject than the one which we are now discussing.

§ Sir G. Schuster
It is impossible to consider Clause 5 separately from Clause 4. We are considering the two together. If we are to weigh up what a value payment means, as compared to a cost-of-works payment, it is very difficult to discuss the matter without taking the two Clauses together. It is only a very small point which I want to put, but I should be grateful if I might be allowed to do so. In taking the site value into account, is it fair to take the site value cleared of buildings? Clearance may involve considerable cost, and you ought to take that into account. The net cost of clearing the site ought, I suggest, to be deducted from the site value factor in the formula.

§ Mr. Silkin
The Chancellor of the Exchequer was, I think, much more successful in his criticism of the Amendments on the Paper than in his defence of the Clause as it stands. There is a good deal of validity in his criticism of the Amendments, but nobody can feel happy about the Clause as it stands. Clearly there is a very big difference between the treatment of two individuals who have both suffered as a result of enemy action. The person who has suffered more is to be treated worse than the person who has suffered less. The Government must find a way out of this difficulty. Nobody can feel satisfied when he sees that the fellow next-door who has suffered less than he has is getting more favourable treatment than he is. There is no doubt that the cost-of-works payment is intended as a complete indemnity to the person who has suffered. While I see the force of the argument that the person who has had a total loss of old property ought not to 611 expect a new property in its place, I feel that the Chancellor is really giving that benefit, in a large measure, to the person who gets a cost-of-works payment. It is important that we should get compensation on the basis of a new reinstatement for the others. If it is wrong that a person who gets a value payment should be treated in that way, it is equally wrong in the case of a person who gets a cost-of-works payment. The Chancellor is not doing anything about that. I recognise that the person with an old property ought not to expect a new property in its place.
But the Chancellor must deal with the case of the person who loses a relatively new property. The argument of the Chancellor of the Exchequer is that there may be old houses, and therefore they ought not to expect them to be reinstated in a new condition, which at the best only applies to a proportion of the houses in this country. While I recognise that it is exceedingly difficult to find the answer to-day, and to ensure equality of treatment between the persons concerned, I would ask the Chancellor of the Exchequer to look at this question again in the light of the discussion which has taken place, and to consider the suggestions made by the hon. Member who has just spoken. We ought to consider this in all its bearings and ensure that a person who has a relatively new property totally destroyed should be put into a position of having a new property in its place.
This principle is not a new one. The Chancellor of the Exchequer is demanding the same contribution from the owner of a new property as from the owner of an old property. This applies to rateable value. When I insure against fire, the fire office does not ask for an extra premium based on the value of the property. There is a uniform premium, and the obligation of the fire office is to reinstate the property in the condition in which it was before. If an old building is burnt down, they undertake to give you the value of the building as it was before. Therefore I see an inherent difficulty in the proposal of my hon. Friend the Member for North Battersea (Mr. Douglas), which is subject to the same kind of variation, admittedly, as in the case of old property.
In another part of the Bill it may well be that a person who would normally be 612 entitled to a cost of works payment will get a value payment, because it is necessary in the public interest. It is the case of the person whose property is not necessarily a total loss. He goes to the planning stores where he will get the cost of works payment and not the value payment, and he will therefore suffer through no fault of his own. That inequality will be there.
Finally, in another part of the Bill it is proposed to compensate in full on a reinstatement basis property which has been damaged, although it is old property. That principle is conceded in another part of the Bill. You are to get the value of a new article in place of an old article which has been destroyed. If it is conceded in one place, I see no reason why it should not be conceded in another. This matter really cannot be left where it is at present. The Clause is most unsatisfactory, and while I am not able to put forward an acceptable proposal at this stage, and the Amendments, I admit, require further consideration, I hope the Chancellor of the Exchequer will consider the question again and again in order to remove this inequality of treatment before he says that he is not in a position to make any alterations in this Bill.

§ Mr. Ernest Evans (University of Wales)
Like many hon. Members, I approach the Committee stage of this Bill with great difficulty. In view of the fact that it is being taken in Committee of the Whole House, it is obvious that, if anyone puts down Amendments on things that occur to him, these proceedings might be interminable. Therefore, I have refrained, except in one or two matters where great difficulties are involved. My first difficulty in regard to this particular Clause is that it differentiates between cost of works payment and value payment, and I confess that I still fail to find any logical explanation of the provisions of this Bill. At the same time, I regard the Bill as an experiment. It may be that the Treasury may prove to be right, but my nervousness still continues. I agree with the criticisms that have been made and with the definite suggestions which have been offered, particularly by my hon. Friend on the Bench opposite. There is one general difficulty which presses itself upon my mind very much. The people of this country are 613 very shrewd, and when this Bill was produced, and explanations were given in the Press and elsewhere, I found that people were concerned about it. The trouble, unfortunately, arose from the fact that they were led to believe they were to be offered an insurance Bill. This Bill does not profess to be an insurance Bill but a taxing Bill, with the promise that they shall be given something in return for the taxing. Clause 4 proposes to tell them what they will get in return either by way of cost of works payment or by way of value payment, and the Clause proceeds to define the main object of these terms, but when I look at the Bill a little further I find that in Subsection (5) of the Clause there is a proviso that The Treasury may by regulations prescribe principles for the valuation of hereditaments of any class specified in the regulations, either by way of modification of the preceding provisions of this Sub-section or in substitution therefor. The result is that, whereas I thought that the Government had given a definition as to what they meant by cost of works payment and value payment, they now reserve the right—

§ The Financial Secretary to the Treasury (Captain Crookshank)
May I clear up this small point so that we do not get confused? That refers to the principles of valuation for specified classes—those classes specified by regulations to cover the point where ordinary valuations could not possibly be made because they were of a special character.

§ Mr. Evans
I am very grateful to the Financial Secretary for saying that, because when I read the Clause it made me very nervous, but, of course, I accept his statement, and my criticism about that goes by the board, and I gladly resume my seat.

§ Mr. Woodburn
I am sure that those who listened to the explanation of the Chancellor must feel some timidity in tackling this Bill. He certainly showed how complex it was, but in his illustration of the difficulty of applying my hon. Friend's Amendment he drew his example from some old and dilapidated property with a high site value, and made no reference to up-to-date property where there is no site value to speak of. If we are to deal with a Bill that applies generally, then the principles must apply generally, 614 and not some extraordinary example such as dilapidated buildings. He mentioned depreciated property or depreciated values. Depreciation might mean one of several things. You might have dilapidated property, in which case the property itself has depreciated. You might have property kept in a good state of repair, with no depreciation as far as its utility or value as a house is concerned. I could show the Chancellor of the Exchequer houses that are 40 or 50 years old—and the Lord Advocate knows many such houses—which could not be replaced to-day in the condition in which they are because they have been kept in a good condition. They were built at a time when labour and materials were cheap, and it would be almost impossible to replace them as they were.
Let us take, for example, a most up-to-date property in a new housing scheme under a town-planned area. Supposing that one or two of these houses are completely knocked out. It is almost inevitable that they will be replaced almost exactly as they are to-day. That is bound to be the case from the point of view of town planning, and, if so, what justification is there for refusing to give a cost of works payment just as it is given to the owner of a block of buildings whose property must be replaced in the interests of national planning? A poor person who has put all his savings into building in recent years, following encouragement by the Government, will be ruined, so far as his house is concerned, because the value he will get may not even be sufficient to replace the mortgage, let alone the construction of the building. Most of the money paid by the Government will go to the mortgagee and not to the person who owns the house, who will thus get no home or value payment.
Therefore, I want to reinforce what has been said and to ask the Chancellor to take back this Clause and consider some method of making it adjustable to meet such cases so that they get the same generous treatment in the question of national and local planning as in the case of a block of buildings. In legislation today the Government are being trusted in a way that they have never been trusted in past history. In all kinds of things we are trusting to the Government's good will and kindness of heart. We are trusting them to treat 615 the unemployed and pensioners decently with regard to the means test and I think we are prepared to trust them and the War Commission to deal decently to the people who suffer war damage. The Chancellor should give the Treasury or the Commission discretion to deal with these properties in what they regard as a fair way and I think we can leave it to them to see that a person who is placed in a position such as I have described will be given the same generous treatment as in other cases and that in the case of a dilapidated property the Treasury will have equal discretion to give nothing at all if that is the proper treatment. Some flexibility should be introduced into this Clause so that it will not create the injustices which I and other hon. Members are convinced it will create as it stands at present.

§ Mr. Benson
Let us visualise what will happen after the war when the Treasury will be faced with unparalleled difficulties Does anybody think it will be the type of body which will be capable of dealing generously with anybody after the war? It will have its own troubles and I think that to leave this matter to the discretion of the Treasury is largely like leaving the canary to the discretion of the cat. The Chancellor has dealt very efficiently with all the Amendments which have been put down. No one has pressed his Amendment to a Division. One after another they have been completely killed by the Chancellor and this Clause will be completely killed by the Committee. In its present form this Clause will have to be withdrawn. I quite admit that there have been no adequate or alternative suggestions to the Amendment, but it is an extraordinarily difficult Clause. Otherwise, it would not have been put forward in the unhappy state in which it is introduced in this Bill. Amendments have been withdrawn because they have been proved to be incapable of administration but exactly the same thing applies to the Clause itself. I do not see that Amendments are any more unworkable or inadequate than the Clause, and I want to add my voice to those who have said that this Clause must be taken back by the Chancellor and modified in some way. Inequities are bound to occur as it is now drafted and the House and the country would not possibly approve. The Chan- 616 cellor must introduce modifications in some form or other which will meet the very damaging criticism this Clause has received.

§ Mr. Wootton-Davies (Heywood and Radcliffe)
I am disturbed about the word "reinstatement." The obvious intention of this Bill is to be fair and equitable to everybody, but I think too much is being said about replacing houses. There is a lot of property in this country to-day which would not be standing if it would pay for the cost of removal, and the Amendment I have put down on the Paper will endeavour to make it impossible for people to make a profit from war damage. Take any big city: a house is damaged and the cost of reinstatement might be many times its intrinsic value, and I do think some means must be found for assessing this value long before damage takes place.

§ Mr. Garro Jones (Aberdeen, North)
The Chancellor of the Exchequer has not had the advantage of being present for all the speeches which have been made today. If he had been I am sure he would have found himself in the same position as that in which many of us now find ourselves, namely, that we do not know whether the Bill or the Amendments proposed to it are more subject to criticism. At the same time the Clause as it stands is not entirely logical or satisfactory. We recognise that this is a scheme to which the value of money paid at the time the premium is paid must bear some relation to the value of the money when compensation is paid. That will not be achieved as the Bill stands. I want merely to put one point. We cannot make this Bill perfect in the short time at our disposal, but we are trying as far as we can to meet cases of direct, immediate and most urgent hardships, and I want to say a word for the property owner who has mortgaged his house, the owner-occupier. It may be that it will be very difficult to distinguish between cost-of-works and value payments as made to owner-occupiers and as made to owners of other forms of property, but if there is one person who will suffer tremendous personal hardship under the Bill, it will be the owner-occupier who has mortgaged his house to a building society and who has to subject himself to a value payment after the war. I will quote a case which has been put to me, and I 617 want the Chancellor of the Exchequer to give an assurance that this kind of case will be dealt with: Owing to enemy action my house is a total loss. I had it mortgaged to a building society to the extent of £500. After the end of the war I shall be compensated for the total loss of the house at pre-war value. In the meantime I shall be credited with 2½ per cent. interest, and shall be paying 5 per cent. to the building society, as well as renting another house in the meantime. But in all probability, owing to shortages of supplies and other causes, building costs may be double pre-war prices, and it will cost twice as much to build a house similar to the one I have had destroyed. This means that alter paying the building society what I owe it. I must borrow £1,500 to build a house costing £2,000. This is grossly unfair, as I shall be called upon to pay £1,000 more than I did when I bought my first house. This is not the only class of persons who will suffer hardship, but I submit this is a class that will suffer tremendous hardship. The man is bombed out of his house, he has to pay 5 per cent. to the building society, capital and interest, and he is bound to find from somewhere the rent for another establishment. I hope the Chancellor will be able, if not before the Bill becomes law, at any rate in the immediate consideration which must be given to the Measure when it becomes law, to deal with that class of persons, and in the meantime to give these people—said by my hon. and gallant Friend the Member for South-East Leeds (Major Milner) to number some 4,000,000—some assurance that their case will receive consideration.

§ Major Milner
It is clear that the feeling of the Committee is that there must be some nearer approach to substantial equality and justice in this matter. It is not right that a man whose house has been only partly demolished shall have it rebuilt and re-instated and that another man whose house has been wholly demolished shall receive what may be quite an insufficient and inappropriate value payment. One of my hon. Friends made the useful point that everybody is paying the same contribution and that therefore, the payment of the claim should be on the same basis. I am not at all satisfied with the differentiation which the Chancellor sought to draw between the different classes of damage. He said that in the case of a cost-of-works payment, it would be in the national 618 interest to re-build. It would be just as much in the national interest that a house should be re-built after it has been demolished. What is the distinction between one house which is one-half or two-thirds demolished and another house, let us say in the same city of Leeds, which is wholly demolished? Both the people need housing accommodation, probably in the same place, and certainly in the same city—for nobody would leave Leeds when he had settled in such a place. The Chancellor's argument is a wholly fallacious one, unless it is to be said by some Government Department or by the Government themselves that it is in the national interest that a certain building which has been demolished should be rebuilt. That argument might be all right in the case of a property which is a Post Office, or some other nationally necessary and useful building. In a few cases of that sort, it is possible to make some distinction, but in the case of ordinary houses, factories or commercial buildings, there is no justification for the discrimination which the Chancellor has sought to draw. That being the case, the only logical way of dealing with the matter is to treat everybody on a cost-of-works basis, and if it is suggested that this would be too expensive and that there must be some smaller computation, then we shall have to find some other basis.
The hon. Member for Walsall (Sir G. Schuster) made a proposal which, although it sounds rather attractive, is, I think, void for uncertainty. He suggested that the claimant might have the option either of taking a sum decided by the Commission to-day or leaving it to the Commission to pay him some other sum at an indefinite future date. I do not know whether that other sum would of necessity be a larger sum; we are not told at what date it would be paid; and we are not indeed clear under the Bill as to the date at which the value payment is to be made. That is a matter which has to be settled by the Commission. I submit that the hon. Member's proposal is too vague. The case with which I am concerned is that of a man with a house purchased at £500, which, when it comes to replacement or reinstatement, cannot be rebuilt at less than £800. If such a house were partially demolished the man would be entitled in the ordinary case to have it rebuilt and completed free 619 of expense to him. If it were wholly destroyed, he would get only a value payment, but the value payment would probably be in the ordinary case the £500 which the house probably cost him and which probably it was still worth on 31st March of last year. However, it would cost him £800 to get another house like it, and this on the face of it would be a very great burden upon him. There is, of course, the further question to which my hon. Friend the Member for North Aberdeen (Mr. Garro Jones) referred, and which at some stage must receive consideration, as to the respective positions of the mortgagor and the mortgagee, and whether, in the event of the amount not being sufficient, there should be some apportionment of the claim between them.
The object of this Bill is to do substantial justice. I have given the Committee a case which I imagine will be typical of the great majority of cases under this Bill. Would it not be possible to create a formula, something like this, that if the value of a house on 31st March, 1939, was £500 and the cost of replacement was £800, then substantial justice would be done if the value payment could be made at £650? The loss would then be shared between the individual and the State or the War Damage Commission—at any rate that would be quite clearly an improvement on the present position where the individual concerned would only have £500. I would go so far as to say, if we cannot replace and reinstate every building, that even in the case of cost of works payments it might be dealt with on a somewhat similar basis.
Substantial justice would be done if half the difference was paid between the value of the house on 31st March, 1939, and its cost of replacement. In the case of the ordinary individual with a £500 house he would probably spend the £650 he received on building a smaller house, which that sum would enable him to do, whereas the £500 he would at present receive would probably be insufficient. If both parties who have suffered total damage or partial damage cannot be put on the same basis, we have to find some formula which will do substantial justice between them. I agree with those who have spoken, and I am sure the Chancellor of the Exchequer will see it too, that the Clause as it stands is unsatisfac- 620 tory with this discrimination and distinction. I for one do not think it is justified—at any rate it does not justify the treatment between cost of works cases and value cases. We should like the Chancellor of the Exchequer, with his advisers, to find some better formula, otherwise I am afraid there will be great difficulty in the administration of the Bill in the future.

§ Mr. Spens
I am not one of those who say that this differentiation is perfect. There is one consideration of great importance which, I think, ought to be borne in mind. A cost of works basis means that the owner of a piece of land is left in absolute uncertainty. All he knows is that at some quite indefinite period in the future, after the war, he is to receive something to do up his property. From a commercial point of view, and from the point of view of those who have put their savings into property, all of which has been damaged, it is a terribly difficult state to be in, because it means that you have x pounds to come to you at some time in the future. In my view there are many people in this country, both commercial and individual owners, who desire certainty at the earliest possible moment. In order to get certainty you must have a yard-stick, and there is no yard-stick whatever for the prices which will prevail after the war. But you have a yard-stick by taking the value at some date, and the date here is the nearest to the commencement of the war. It is perfectly clear that if my house is reduced to a state in which it is most unlikely that it can be repaired, I can then find out pretty accurately what I shall receive in the future, worked out on the 1939 valuation. In that case I can deal with the situation, although I quite agree with the arguments which have been raised pointing out anomalies. However, I do not think the Committee ought to omit that point, because I think it is a very valuable one. I suggest that you should have a yard-stick, and this is the nearest yard-stick which can bring any certainty. Of course it would be terrible if money values altered between now and the post-war period. If anything like this remains in the Bill, the Committee will expect some understanding if there is a radical alteration in the value of money that this matter will be reconsidered.

§ Rear-Admiral Beamish (Lewes)
On a point of Order. As I understand it we are 621 now discussing Clause 4, although a certain amount of the discussion took place on Clause 5. Will you, Colonel Clifton Brown, inform me, and the Committee, whether the other Amendments on the Order Paper to Clause 4 will be discussed, and whether some, or all of there, will be called if relevant to the Bill?

§ The Deputy-Chairman
I have to give this ruling at intervals, although it has been given already. I have no wish to stop any reasonable discussion. Now we are discussing the first Amendment, and I propose to give everybody an opportunity of expressing their points of view. A great many of these Amendments will be withdrawn in view of the discussion, but where there are any new points I understand they will be called.

§ Captain Crookshank
Perhaps I may now say a few words, although I have nothing really novel to put forward. I was interested in the suggestions which have been made that my right hon. Friend and the rest of us concerned with this Bill should go away and think again, as if we had not been thinking ever since the subject was mooted. It is the most difficult thing of all to decide how you are to deal with this aspect of damage, but our thoughts are positively night and day on this problem, and will continue to be as they are stimulated from time to time by hon. Members. I hope, however, that they will not think that we put this in the Bill without knowing its ramifications. What the Debate has shown is that while none of the Amendments could possibly stand, no one is prepared to do anything about his own Amendment. A great number of hon. Members think the Clause does not stand. Well, somebody has got to decide something sooner or later. I do not think my right hon. Friend or the Government have ever claimed that this was a logical proposal. I do not think anyone would say that this Bill was frightfully logical, but what we do say is that it is a rough-and-ready way of dealing with very urgent and immediate problems of the near future which none of us can foresee. If we all knew what things would be like after the war, what prices would be, what the possibility of physical reconstruction would be, and if we could see here and now how far town planning was a settled thing, it would, of course, 622 be very much easier to deal with this Bill. Unfortunately, on a great number of these points we are in a vacuum. We just do not know, and so we have to go along as best we may on what we hope is an equitable and just basis.
My right hon. Friend will consider the various arguments and points which have been put, but I must say that no alternative has been put up by anyone. The hon. Member for East Stirling (Mr. Woodburn) did, however, suggest an alternative, and I am going to say something about that. He thought that instead of tying these various things down in legislation we should submit these points to the discretion of the Commission. I must say that my impression from the first day's Debate was that the Committee was not quite so unanimous that the Commission should have discretion to do everything. This is a most startling change.

§ Mr. Woodburn
I think there has been a misunderstanding. At the moment it is firm and binding on the side of what we consider injustice. I am suggesting that, in addition to what you have, there should be a Clause taking power for the Commission to vary on the side of fairness when they see that unfairness exists.

§ Captain Crookshank
That means that the Commission would in fact be able to override the decision of Parliament on this point. There is one point which I do not think has been in the minds of all hon. Members. As I have listened to the discussion it has rather been pointed at house property, and even then at small house property. Do not let us forget that this covers factories, workshops, warehouses and every kind of property. Some of the arguments which have been put up which may, on the point of small house property, have some attraction, they would be the first to disregard if we were dealing with the other kinds of property because the arguments are not on all fours. We cannot, after the bombing that we have had and may have, hope, with all the King's horses and all the King's men, to replace England as it was on the outbreak of the war in a physical sense, and nobody wants to. That is part of the difficulty that, with hon. Members stressing that we ought to be able to get back the same house as near as maybe to what it was before, it is 623 neither possible nor necessarily desirable. The hon. Member for Walsall (Sir G. Schuster) made the criticism that the result of criterion of cost of works or value payments in Clause 5 (1, a) might be that the claimant would not know till after the war what he was going to get. He might know long before the war was over, because there might be no objection to repairs being carried on now.
There are some cases where cost-of-works payment would be necessary because some particular building might have to be repaired in order to carry on the war effort, and in that case the owner would know what he was going to get. If the repairs cannot be carried out during the war I do not see that necessarily the person concerned would be damaged by not knowing what he is going to get for repairs which there is no possibility of carrying out. Surely he could wait for the information. Incidentally I was asked whether the 2½ per cent. would be liable to Income Tax. Of course it is clear income and is liable to tax in the ordinary way.
My hon. Friend suggests that an option should be given—either value payment now or that the claimant should wait till after the war when the Commission could deal with it and might make an alternative suggestion. That seems to assume that there is a probability that an assessment will be made and claimants could get their value payment, but it is not intended that large value payments should be made now because it is not anticipated that they will be able to be assessed. My hon. Friend is running a little ahead, at any rate, of our views in considering the possibility of value payments being made immediately.
There is one other point with regard to Clause 5 which, as it is a detailed matter, it would probably be more convenient to deal with when the time comes. I suppose I have as open a mind as anyone else on the problem and, having heard the arguments, while I recognise that our proposal must in the nature of things have its defects, I think on the whole it holds the field against the alternatives which are put forward. Whether we can think of something else before we have finished with the Bill is another matter, but, as it stands to-day, 624 the proposal is far better, and deals on a reasonable basis with the problem that we have to face, and does not get us into the really even more serious difficulties which the Amendments would get us.

§ Major Milner
My hon. Friend's Amendment does not get the right hon. Gentleman into any difficulties. The only objection to it is that it must be on the generous side.

§ Captain Crookshank
No, there is a great deal more than that.

§ Major Milner
The difficulty is really created in the Bill.

§ Captain Crookshank
It is true that it is in the Bill. The Bill makes a difference between value payment and cost of works payment, because that was the only way we could see to make a differentiation between the restoration of a structure—I do not want to be limited to houses—while it was an economic proposition to carry out and the case where it is not an economic proposition. The only way to make a distinction between economic and uneconomic was to make it cost of works payment or value payment. When my hon. Friend says it will be very difficult to know which you are likely to get, I do not think that is the case. I think the great bulk of the cases will fall definitely one way or the other and you will be able to tell what will happen. The border-line cases where it is going to be a point to be decided whether it is worth cost of works or not will be a small minority of the total cases.
Up to now I do not think there has been any difficulty in dealing with somewhere about 90 per cent. of the cases. That is not one of the causes of delay which need be feared. I think that all the alternatives to our proposals fall to the ground. Granted that there are difficulties and anomalies, I think our proposal stands, but any fresh light that is thrown on the problem must be considered, because this is one of the vital points in the Bill, make no mistake about that. It is one of the few solid foundations on which we have been able to build. If that was undermined I do not know where we should end up. Having had this general and interesting discussion, perhaps we may now be allowed to get down to more detail.

§ Sir I. Albery
I have listened to most of this Debate and have heard with interest the remarks of my right hon. and gallant Friend the Financial Secretary. It appears that there is general agreement in the Committee that the Clause as drafted is not entirely satisfactory. Every Amendment which has been put up by my hon. Friends in different parts of the Committee has been demolished by either the learned Attorney-General, or the Chancellor, or the Financial Secretary. In demolishing them they have had to admit that there are anomalies and I think that that is putting it moderately. My view is that if the Bill is put into operation in its present form there will be real cases of great hardship. On the other hand, there will be many cases of what might be termed unearned increment in which people will derive great benefit for no substantial reason. In regard to value payment, there will be many cases in which the payment will be quite insufficient to meet the mortgage obligations. On the other hand, there will be property which presumably will be reinstated at the cost of the Fund at a much higher building cost than is yet contemplated, at a time when there will probably be some shortage of housing property, and the property when reinstated will probably, be worth much more by comparison than it was before.
Several of my hon. Friends who usually have good judgment in these matters have put up suggestions, and none of them apparently have been good enough and have been turned down. Therefore, I have not much hope that if I make a suggestion it will meet with any better response. I will, nevertheless, make one in rather loose terms. I suggest that it would be advisable, if we are to stick to the 1939 value basis, that there should be added to it some proviso that if an owner rebuilds he can get a specified percentage over and above the 1939 value. I will not suggest what it should be; it might be 10 or 20 per cent., but that is a matter for the experts. That would enable the owner to rebuild, and provided it was not against the public interest it would be to some extent a national service. That percentage could be made on such a basis that he would get real and adequate compensation but no undue advantage. One of the advantages of having a fixed percentage on the 1939 valuation would be 626 that all the cases could be dealt with generally and there would not be a lot of individual cases to consider.
Turning to the other aspect of the question, certain properties are to be completely reinstated at the cost of the Fund and on that account are to have a greater value afterwards than they would have. In that case, I do not see why the owners should not make some contribution towards that increased value. I suggest that it would be equitable that some percentage, say 10 per cent., of the cost of restoring the property should be paid. The question would arise where that money was to come from. Possibly the most difficult cases would be houses, and I therefore suggest that the percentage could be added to the mortgages. The houses would be reinstated and would command a higher value than before, and could, therefore, bear some percentage of extra mortgage. These are rough-and-ready suggestions, but I do not see why something of that kind cannot be entertained for it would minimise some of the difficulties that are likely to arise with the Clause as it stands.

§ Sir Harold Webbe (Westminster, Abbey)
It may be refreshing to my right hon. Friend to hear a word from one who does not wish to challenge the fundamental principle of the value payment. It seems to me that the arguments adduced by my right hon. Friend for this differentiation to meet particular cases were answerable. Quite clearly the universal adoption of the cost of works payment would mean that the Fund, contributed largely by the body of property owners and the State, might well be applied in a manner which would be unfair and unreasonable. The Committee is in great difficulty in considering this matter because the criterion which determines whether a cost of works payment or a value payment is to be made is provided in Clause 5, which we have not yet been able to discuss. If my interpretation of that criterion is correct, a great many of the cases for which our sympathy has been invited will prove, under the formula in Clause 5, to be cases of cost of works payment and not for value payment at all. Therefore, it is difficult to discuss this Clause without reference to Clause 5. I find myself in a difficulty, which has not been removed by the Financial Secretary, on the point 627 which was raised by my hon. Friend the Member for Walsall (Sir G. Schuster). The criterion set out in Clause 5, by which is determined whether a cost of works or a value payment is to be made, can only be operated after the war. In other words, the actual decision whether a cost of works or a value payment is to be made cannot be determined until after the war. So that the argument in support of the value payment which was made by my hon. and learned Friend the Member for Ashford (Mr. Spens), that you have certainty at an early stage, does not apply.

§ Mr. Spens
I appreciate that, but I have an Amendment down in order to get certainty, and I hope to persuade my right hon. Friend that the Commission ought to give decisions as soon as possible so that there can be certainty.

§ Sir H. Webbe
My difficulty is that I cannot see how the criterion in Clause 5 can be applied until after the war. The Clause says that there will be a value payment in cases where the cost of making good the damage—cost on what basis?—on pre-war basis? on prices at the time of the damage, or on post-war prices?—would be more than a certain difference. At the time the damage is done, when there has to be a determination whether it is a value-payment case or not, who can say what the cost of works will be when that work is done, if it has to be done? It has to be compared with the value after the execution of the work, that is, a postwar value, and the value of the cleared site, against a post-war value. How can a determination be made when the factors upon which the judgment is to be based will be post-war values? That difficulty seems to be made stronger—

§ The Deputy-Chairman
I have listened to the hon. Member for some time, but I cannot help feeling that the argument which he is using ought to be raised on Clause 5 and not now. I allowed the hon. Member to ask a question, but I do not think we ought to have a discussion.

§ Sir H. Webbe
In that case, I will reserve the remarks which I have to make until we come to Clause 5, when I want to raise a further point in connection with this argument.

§ The Deputy-Chairman
Does the hon. Member for North Battersea (Mr. Douglas) wish to withdraw his Amendment?

§ Mr. Douglas
No, Sir, I am not prepared to withdraw the Amendment. The Chancellor has not given us much encouragement for a settlement of this question, and the arguments in favour of the Amendment have not been met. The Chancellor and the Financial Secretary to the Treasury have used arguments, which apply equally to the cost-of-works payment, with which the Chancellor is quite content. If a property is four-fifths damaged, it is likely that a cost-of-works payment will be made, although the payment will be greater than the value of the damage. The Chancellor also said that he proposes to give compensation in cases where it would be uneconomic to rebuild. I have adopted the measure of depreciation which the Chancellor himself is prepared to accept in the case of cost-of-works payment, and my Amendment limits the amount of value payments to the maximum amount of cost-of-works payment. Not a penny more can possibly be given in that way than might be given under the most favourable circumstances in respect of cost-of-works payments. The object of the Amendment is to remove the very serious anomaly which now exists, and which will cause a great deal of dissatisfaction all over the country, especially between people in the same street, one whose house is only partially demolished and is able to get a practically new house built for him, and another whose house is completely demolished and who gets a payment which is in no way related to the cost of replacing the house. The Chancellor of the Exchequer is not prepared to reconsider this matter, and I am not prepared to withdraw the Amendment.

§ Sir I. Albery
Before you put the Amendment, Colonel Clifton Brown, may I ask a question of the Chancellor of the Exchequer? I believe that we all have the same object in view. Perhaps my right hon. Friend, who is anxious to see a way of narrowing the discrepancy and is anxious to do so, would be able to give an assurance that, if any suitable proposal is brought to his notice with that end in view, between now and the Report stage, he will give it favourable consideration?

§ Sir K. Wood
Certainly. That is the difficulty, and I am anxious to hear of such suggestions. A month has gone by since the Bill was given a Second Reading, and those of us who have spent a tremendous amount of time upon this point have been anxious to see whether there were any practicable alternatives of which we had not thought. I sympathise entirely with the case that has been made out, but I am left in the position in which I was when considering the terms of the Bill. I was strengthened in the view which I took by the fact that the matter had also been examined by a committee under an expert who is now a Judge of the High Court. He came definitely to the same conclusion as myself. He saw no other way than this. I listened with interest to the Debate for any suggestion to improve the position. My hon. Friends can judge as well as I can whether any other practicable proposal has been made in the course of the Debate, but if, between now and the Report stage, any hon. Member can suggest anything of a reasonable and practical character I shall be only too glad to consider it. That is our attitude towards the whole proposal.
My judgment is that we shall have to rely on the proposals in the Bill and upon the March, 1939, figure. It is true that it might be maintained that great injustice may be occasioned by the proposals of the Bill if there is a complete change in money values after the war. That is the real criticism of the proposals, and that is where hardship and uncertainty might come about. My answer is that if there is a great change of that kind the proposals will obviously have to be examined at that time. That is the proper and sensible way to deal with the difficulty. We must have some sort of standard in the Bill, and we have chosen the only one which we can put down as reasonable at all. At the same time to those who have spent a long time on this matter it was most interesting to hear what was said in the course of the Debate.
In conclusion, I will repeat that if there is a complete change in the value of money, the matter must be re-examined. I am sure that anybody who occupied this position at that time would review the matter, in those circumstances. I am not giving an undertaking which will not be carried out by any successor of mine. Certainly, I would review the matter. 630 Only in that event will the March, 1939, figure be obviously unfair. If there should be no such change, the March, 1939, standard will prove to be the least objectionable of all the proposals which can be made. Therefore, I hope that my hon. Friend will be comforted by those observations of mine. They really meet the substantial objections to the Government's proposals, though, as I say, I shall be only too glad to consider any new proposals designed to improve the situation.

§ Mr. Spens
I beg to move, in page 4, to leave out lines 17 to 20, and to insert: Provided that in any case in which such value as aforesaid cannot readily be ascertained in the manner hereinbefore prescribed, such value shall be ascertained in accordance with such principles as the Treasury may from tune to time by regulations prescribe. It has already been said in the course of the proceedings in the Committee to-day that the proviso at the end of Sub-section (5) was intended only to give discretion to the Treasury in regard to the value of different houses in special circumstances; in other words, where the basis laid down in the earlier part of Sub-section (5) could not apply. That is what my Amendment is intended to do, and not to give power to the Treasury to undo anything which we have done during the last few hours. It is only in special cases where the basis which we had laid down cannot be applied that they must have a means of varying the basis of valuation.

§ The Attorney-General
When I first saw this Amendment on the Paper I was not quite sure what my hon. and learned Friend had in mind. I think there might he a class of hereditament the value of which it might be possible to ascertain but in regard to which there were exceptional circumstances which made it necessary to invoke this proviso or the proviso in the Bill. I do not think that the words of our proviso could reasonably be interpreted as referring to the class which my hon. and learned Friend has in mind; the words are restricted to classes specified in the Regulations. Now that I appreciate my hon. and learned Friend's point, namely, that the proviso might be rather wide, I am content that it should be looked into to see whether the proviso could be narrowed so as to give the power which everybody wants.

§ Mr. E. Evans
I would like to say a word or two because the Amendment which I have is designed to achieve the same object as the hon. and learned Member. The Financial Secretary satisfied me, and his assurance has been borne out by the Attorney-General, so that I do not wish to press the matter any further.

§ Brigadier-General Clifton Brown (Newbury)
I have put down an Amendment and the object is concerned with the principles of valuation. After all, those principles are very old-established principles laid down by surveyors, architects and valuers, and it is important that they should not be overridden more than they need be. It, as I understand, what is meant by my hon. and learned Friend the Member for Ashford (Mr. Spens) is accepted in principle, I think it more or less covers our suggestion made later on about the principles of valuation. What I did wish to bring to the notice of hon. Members was that though there may be in the War Damage Bill certain principles which differ from ordinary valuation principles, it is very important that the latter, which have been established over many years, should be kept, especially in rural and country districts. I should not like anything in this Clause to override those principles any more than is necessary, and I hope that in any proviso introduced they will not be interfered with.

§ Sir H. Webbe
I also have put down an Amendment to this Clause to much the same effect, but I added my name to the Amendment of the hon. and learned Member for Ashford because it seemed to me to limit adequately the rather wide proviso which appeared under the Bill. In view, however, of the assurances which have been given by my right hon. and learned Friend the Attorney-General, I shall not seek to move the Amendment.

§ Mr. Spens
That is one of the matters on which the Treasury will give directions to the Commission, and, having regard to the undertaking given by my right hon. Friends on the Front Bench, so far as I am concerned I am quite satisfied that direction should be given that the special basis of valuation should only be employed in the particular cases to which they have referred. In those circumstances I ask leave to withdraw the Amendment.

§ Captain Crookshank
I beg to move, in page 4, line 31, to leave out from the beginning to "otherwise," in line 32, and to insert "emergency powers."
This is the first of five Amendments of a similar nature. In several provisos in the Bill reference is made to the Regulations under the Emergency Powers (Defence) Act, but it is important that all the references to that Act should be in the same terms. This Amendment proposes to remove all reference here and merely to use the words "emergency powers," and then in the interpretation, Clause 68, will come a definition of the Defence Regulations.

§ Rear-Admiral Beamish (Lewes)
I beg to move, in page 4, line 42, at end, to add: (7) The Commission shall have power at their discretion—

(a) where the obligations imposed by statutory authority for the safeguarding of buildings have not been fulfilled, to pay to the claimant such lesser compensation as seems to them equitable, and to apportion as seems to them equitable the reduced compensation amongst those entitled to share therein;

(b) to pay expenses reasonably incurred in limiting or lessening damage caused by a fire."

I had certain Amendments down myself on the same sort of subject, asking for proof of precautions against damage through enemy action, and I must agree that when I looked at this Amendment my own seemed rather crude. At the same time they do enshrine a very important principle, and the Committee will note that in the present Amendment reference is made to the obligations imposed by statutory authority. On the Second Reading very little, if anything, was said on the subject of damage by fire or of the precautions that ought to be taken. The Committee will agree that since that time—19th December—some of the greatest fire disasters this country has ever suffered have taken place. I have had a great deal of information, as other hon. Members no doubt have, to the effect that something like 90 per cent. of the damage from enemy action has been 633 caused by fire. I have also had a good deal of proof and support for the contention that if reasonable precautions had been taken, that enormous injury running into fifties of millions, if not hundreds of millions, of pounds could have been largely reduced.
That being so I feel very strongly that as all this money is to be paid out of the pockets of property owners and taxpayers, the least we can do is to introduce somewhere in the Bill the principle that the citizen must do more than he has done in the past to protect, not only his own property, but also what in effect is the property of the State, seeing that the State is now taking the responsibility of paying for the enormous damage that has been clone. I confess that the spectacle of perhaps hundreds of millions of pounds of State money being wrangled over by claimants and their representatives is sordid indeed, and the least we can do is to ask for the most rigid safeguards and place them in the hands of the War Damage Commission to see that the State and its purse are adequately protected. I am very likely to be told that the War Damage Commission will be told by the Treasury by regulations and otherwise and will be given directions to see that they are adequately protected, and the Treasury has a good capacity for looking after itself.
At the same time I cannot help feeling that we ought to go rather further and define the safeguard and see that the State money is safeguarded. It is apt to be forgotten that the social services of this country are paid for by taxpayers' money, and every pound that is unnecessarily paid out for war damage is a pound less for the thing which every Member of this House wants to see promoted. That is a very important matter. There cannot be much doubt from the evidence that has come to me, and I am sure to other people—and the Press has been very clear in ma king accusations that insufficient care has been taken—that it would be true to say that in some instances there has been deliberate hesitation about making use of precautions. I have often heard it described as calculated carelessness. If more trouble had been taken there would have been a great deal less damage.

§ The Deputy-Chairman
I am afraid that the hon. and gallant Gentleman is now discussing fire precautions as a 634 whole, but he must confine himself to the provisions of the Bill.

§ Rear-Admiral Beamish
I apologise for getting away from what I was discussing. The main point I want to impress upon the Committee is that unless the obligations laid down by the State are carried into effect for safeguarding buildings compensation should be withheld if necessary and at least only part of it provided. To sum up in one short sentence, I want to introduce the principle that contributory negligence shall not result in money being paid by the Treasury to the owners of property.

§ Sir K. Wood
I am afraid everyone will sympathise with many of the contentions which my hon. and gallant Friend has raised this afternoon. It is deplorable that a great deal of damage has been done through the neglect or carelessness of others, and I can understand his anxiety to prevent, if he can, that course being profitable to anybody. He has put an Amendment on the Paper, and I know that he himself says that he has put it down for the purpose of raising a discussion, and he would not press for such proposals being inserted in the Bill. If one looks at the Amendment it places an almost impossible task upon the Commission. It would obviously be almost impossible for the Commission to decide in the first place whether there had been any such neglect as my hon. and gallant Friend indicates, and secondly, the measure of the penalty that should be enforced. It would be a very difficult matter indeed.
There is another aspect. As we know there is, in connection with many properties, a variety of interested parties such as mortgagees, landlords, tenants, ground landlords and so on, the Commission would have an almost unbearable task. Not only would they have to deal with the property, but they would have to deal with the matter in such a way as not to operate harshly against certain interests in the property. It may be that some people might fail in their duty in this respect, and it is unfair that other people interested in the property should be penalised on that account. It is an exceedingly difficult thing to put into practice. One must bear in mind, too, the position of the courts. At the moment, if a person commits an offence there is a cer- 635 tain remedy and he can be punished. Suppose, in addition to that punishment, some eminent advocate like my right hon. and learned Friend the Solicitor-General is able to go to court on behalf of the accused person and say "Be careful before you punish this man. Remember what may happen. Not only may he be fined but he may be mulcted by being required to give up compensation to the value of £1,000. I would ask the court to hesitate very much before convicting my client, because he may be ruined." By that means you are making it very difficult for the court to carry out its duty, but I will take note of what my hon. Friend has said and consider whether there is any way out.
There is a good deal to be said for taking the line that anybody who does not do his duty ought to be dealt with under the law of the land and that adequate penalties ought to be imposed upon him by that means, so that there is no complication of the matter by some additional procedure under the War Damage Bill. I will see whether there is a way of helping in this matter, because I know that many hon. Members feel very much as my hon. Friend does. There are practical difficulties, and there is a great deal to be said for the argument that if people behave in this way they should be dealt with under the law as it stands, and an appropriate penalty should be imposed. On the other hand, it is only reasonable that we should take proper precautions; in the case of fire policies, there is a provision that reasonable precautions must be taken. But the practical difficulties of doing anything of this kind would have to be considered. I will have regard to what my hon. Friend has said on this matter.

§ Mr. Selley (Battersea, South)
Is there not danger that the person responsible, the tenant, might escape, and the owner, who is perfectly innocent, might have the penalty imposed upon him? Surely, the penalty should be imposed upon the tenant, who is the person responsible for the property.

§ Mr. Hely-Hutchinson (Hastings)
My right hon. Friend has not replied to paragraph (b) of the Amendment, which reads: To pay expenses reasonably incurred in limiting or lessening damage caused by a fire.

§ Sir K. Wood
I will look into that question.

§ Mr. David Adams (Consett)
I have considerable sympathy with the Amendment, but I recognise, as the Chancellor has done, that in its present form it is impracticable. It places upon the Commission new obligations and duties not only with regard to the assessment of the penalty to be imposed, but with regard to determining how the imposition should be distributed. That is why the Chancellor has promised to consider the matter and ascertain whether it is possible to insert some provision which will obtain the same result in another way. Probably many hon. Members are aware that in the recent fires in London certain very scandalous things occurred, particularly in the great warehouses in and about Bermondsey. These were of a very valuable character, containing all sorts of goods that are essential to the war effort.
I am advised by wardens in the area that they made repeated requests to the owners of the warehouses to leave with the wardens the keys of those warehouses, so that entry could be made in case of fire. These requests were refused. The result was that when the fires came the wardens endeavoured, not having keys, to break in the very heavy and strongly built—in some cases steel—doors in order to get entrance to put out the fires. They were in every case quite unsuccessful, with the result that many hundreds of thousands of pounds worth of leather, edible goods, and so on, on Government account and Government property, were entirely lost. After the fires were ultimately extinguished we had the spectacle in one part of the area of warehouses entirely gone, in some cases with only the four walls left standing, and in another part working-class houses, to which access had been easily available, saved. When I made full inquiries as to what the owners of the warehouses thought on the matter, I was advised that apparently they preferred to receive the compensation which would naturally ensue to them for the loss they had sustained, rather than risk the little pilferings which might occur in providing access to their property. Cases of this sort may occur again and again, and therefore the Chancellor ought to make some provision for the punishment of those who neglect the 637 interest of themselves, of their clients and of the community in this matter.

§ Mr. Denman (Leeds, Central)
I apologise to the Chancellor for not being present to move this Amendment in person. I had regard to all the arguments he had produced and recognised with great force that there is one consideration in favour of some such provision as this. It will not, in fact, be frequently used. The Commission will not often, if this provision is passed, have occasion to make use of it, but the fact that they are able to pay lesser compensation, which would be widely advertised and generally known, should be a very powerful deterrent in the case of people disregarding statutory obligations. It is to produce such deterrent effect that I hope that some provision of this kind will be made.

§ Mr. Graham White
Can the hon. Member give an indication as to the number of cases in which persons who have obligations under other legislation would be the same people who would have obligations under this Bill? It seems to me that the Amendment imposes on the Commission something which is quite impossible for them to administer.

§ Mr. Denman
I am afraid I do not understand the latter point of the hon. Member. I do not think that this imposes any obligation on an occupier or owner that is not imposed by other Statutes. It is only where the occupier or owner has not fulfilled obligations and the fact comes to the attention of the Commission that a provision of this kind could operate. I should not anticipate that the Commission would hunt about to discover whether in fact there had been neglect. It would be brought to their attention by some notorious fact, and it would be for them to consider whether they should put it in operation. The real effect would be that it would be a deterrent and frighten people to do what the law compels them to do.

§ Mr. Benson
I do not see how this Clause would operate. The hon. Member refers to occupier or owner. At present the obligation is on the occupier. Why should a penalty on the owner frighten the occupier?

§ Mr. Denman
The claimant is the person who would get a reduced figure, 638 and the distribution of that reduced figure would be in accordance with the decision of the Commission. However, we ought not to occupy time on a matter to which the Chancellor has stated he will give full consideration.

§ Rear-Admiral Beamish
In asking leave to withdraw the Amendment, may I say to the Chancellor that the principle at the back of my mind is a very old and a very deterrent one, namely, pour encourager les autres.