Commons Sitting of 4 June 1942

Preamble
[Mr. SPEAKER in the Chair.]
NEW WRIT.
For the County of Essex (Maldon Division), in the room of Colonel Sir Edward Archibald Ruggles-Brise, Bt., M.C., deceased.—[Mr. James Stuart.]
ORAL ANSWERS TO QUESTIONS.
  NATIONAL WAR EFFORT.

    ORDNANCE FACTORIES (MINERS).
    Mr. Culverwellasked the Minister of Labour how many miners, who are fit for work in mines, are now employed in Royal Ordnance factories; and how many it is proposed to release?
    The Minister of Labour (Mr. Ernest Kevin): I cannot give figures, but I can say that arrangements are in hand for transferring to coal-mining all ex-face mine workers employed at Royal Ordnance factories who are fit for underground work, except those employed on supervisory duties.
    Mr. Culverwell: Is my right hon. Friend aware that there are a great number of coal face getters still employed in Royal Ordnance factories, and is it not extraordinary that, while the coal situation has been obviously getting worse for many months, he is only just now taking action to take those men away?
    Mr. Bevin: I am afraid that my hon. Friend is not aware of the facts. In the last six months I have transferred, at a great loss of wages to themselves, over 36,000 men from munition factories to the mines.
    Mr. Culverwell: Is the right hon. Gentleman aware that there are still a great many potential coal getters still employed, and even redundant, in Government Ordnance factories?
    Mr. Bevin: I do not accept that they are redundant, but my hon. Friend must remember that this is a total war, and all phases of production have to be carried on.
    Mr. Culverwell: I wish my right hon. Friend would remember that.
    Mr. Stephens: Will the right hon. Gentleman make arrangements for the hon. Gentleman who put the Question to work at the coal face?

    WOMEN.
    Mr. Craven-Ellisasked the Minister of Labour whether it is part of Government policy to continue the conscription of women in industry after the war?
    Mr. Bevin: No proposal of this kind is at present in contemplation.
    Mr. Craven-Ellis: Does the right hon. Gentleman in any way associate himself with the report in the "Sunday Express" last Sunday?
    Mr. Bevin: I never read the "Sunday Express," and I do not know what was in it.

    JOINT WORKS COMMITTEES.
    Sir Patrick Hannonasked the Minister of Labour whether he will make a statement on the progress which has been so far accomplished in the organisation of elected works committees in munition factories; and whether the experience gained so far indicates that these committees are functioning satisfactorily and in friendly relationship with the managements?
    Mr. Bevin: I am advised that good progress has been made in the establishment of joint committees following upon the recent agreements concluded between the Ministry of Supply and the Unions concerned, and between the Engineering and Allied Employers' National Federation and the Unions. I am advised also that these committees are already performing a useful service and are contributing to the development of a closer relationship between management and workers.
    Sir P. Hannon: Does the right hon. Gentleman think that the operation of these committees will tend to increase production in munitions factories?
    Mr. Bevin: I think so, yes.
    Mr. Rhys Daviesasked the Minister of Labour whether he will consider granting powers to local education committees to inquire of young persons when registering at 16 years of age whether they are employed for long hours in violation of the Factory Acts, so that such information may be conveyed to the factory inspectorate?
    Mr. Bevin: Arrangements have already been made for local education committees to send particulars to factory inspectors of cases coming to their notice in the course of the follow-up of registration where boys or girls under 18 are working for hours which are excessive and proving too tiring. It would not be possible for the education committees to investigate the question whether the hours are in violation of the Factory Acts.
    Mr. Davies: May I take it, therefore, that the procedure is that where a boy or girl volunteers this evidence to the education committee information is sent to the factory inspectorate, but that where there is no volunteering of the evidence nothing is done?
    Mr. Bevin: No, it works two ways. It is the duty of the inspector himself to inspect, but with the magnitude of operations at the present time the inspectorate may not be able to cover everything. I therefore took the precaution of asking my right hon. Friend the President of the Board of Education to supplement the work of the factory inspectorate. Where his officers come across any cases, in addition to the factory inspectorate's own discoveries, they send information along so that we can follow it up.
    Mr. Davies: Does not the right hon. Gentleman see that the weakness of the position is that no complaint is sent to the factory inspectorate at all unless the evidence is volunteered, and is it not a little unfair that some education committees are put in a position in which they cannot do it?
    Mr. Bevin: I have tried to explain that I regard the work of the local education committees as being helpful and supplementary, but I cannot pass over to them my duty or responsibility for inspection. That would be quite improper.
    Mr. Kenneth Lindsay: While agreeing with my right hon. Friend that education
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    committees have supplied this information, is he not aware that some 20 education authorities have now found fairly large numbers of boys between 16 and 18 working excessively long hours, and will he keep a very close watch on this?
    Mr. Bevin: I am keeping a close watch on it. I have reduced hours in all sorts of directions where my attention has been called to cases, and I have the matter constantly under review.

  MILITARY SERVICE.

    CALLING-UP NOTICES.
    Mr. Bellengerasked the Minister of Labour whether calling-up notices are sent per registered post to individuals ordered to report for service with the Armed Forces?
    Mr. Bevin: The notices are sent by ordinary post.
    Mr. Bellenger: Is my right hon. Friend aware that in some cases, when evidence has had to be given of the service of a notice on a man, it has been very difficult for his own officer to say that service has been properly effected, and as this is a very important piece of evidence when a man is charged with desertion or with non-compliance with a calling-up notice, will he consider some more effective method of making certain that a man receives the notice?
    Mr. Bevin: The present practice is that laid down in the Act, under which it is my duty to send a notice to any person, for the purposes of any provision of the Act, by post to the person's last known address. I have looked into the matter very closely, and I cannot think it is practicable, in view of the thousands of notices which have to be sent out under the various parts of the National Service Acts—not only concerning military service—to do the whole business by registered post.

    PRE-ENTRY TRAINING.
    Mr. David Adamsasked the Minister of Labour whether he has now a statement to make as to any agreement with the President of the Board of Education relative to the opportunity for education and training at Government training centres of pre-entry recruits for the Services?
    The Joint Parliamentary Secretary to the Ministry of Labour (Mr. McCorquodale): The vast majority of boys are engaged full-time in work of national importance up to the time when they are required to join the Armed Forces, and it would not be in the national interest to take them off such work and give them full-time training. I understand that my right hon. Friends, the Secretary of State for War and the President of the Board of Education, are considering a scheme for provision of evening courses of technical instruction-for members of the Cadet Force. There are still a few boys unemployed in certain parts of the country; if they are over 16 and satisfy certain conditions, they are eligible for admission to Government training centres, where 1,136 boys are now receiving courses of instruction.
    Mr. Adams: Can the Minister inform us when we are likely to have the report on this matter which was promised some time ago?
    Mr. McCorquodale: I think my right hon. Friend would welcome a discussion with my hon. Friend on the subject.

  CIVIL DEFENCE.

    SHELTERS (ANTI-GAS MEASURES).
    Mr. Graham Whiteasked the Secretary of State for the Home Department whether he will inform the House what instructions have been given to shelter-wardens for their conduct in case of gas attack; and whether all public air-raid shelters with a scheduled accommodation for over 50 persons have been gas-proofed?
    The Secretary of State for the Home Department (Mr. Herbert Morrison): Instructions have been given that the shelter wardens should receive basic wardens' training, or a simplified form of such training, both of which include training in anti-gas measures. In addition, directions have been issued that instruction should be given to wardens in charge of shelters on arrangements for the safety, comfort and convenience of the public. As regards the second part of the Question, I am sending my hon. Friend copies of circulars which were addressed to local authorities concerning the gas proofing of shelters. The matter is being kept under
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    constant review in the light of the relevant factors obtaining.
    Mr. White: May I ask whether any refresher has been sent out, in view of the war situation?
    Mr. Morrison: I do not think so, speaking from memory. I doubt whether it is necessary, but I will consider that point.

    DETAINEES.
    Sir Irving Alberyasked the Home Secretary what period usually elapses after receiving the findings of the Committee considering the cases of persons detained under Regulation 18B before his decision is announced to the detained person?
    Mr. H. Morrison: For the reasons which I explained in reply to a Question by the hon. Member for Reigate (Mr. Touche) on nth November last, these cases differ in character, and to specify any particular period as normal would be misleading. Every effort is made to avoid delay, but the time taken to reach a decision necessarily varies according to the circumstances.
    Sir I. Alberyasked the Home Secretary whether any money allowance is made to persons, without any personal means, who are detained under Regulation 18B?
    Mr. Morrison: The general principle in this matter is to provide work by means of which interned or detained persons who are without means can earn some money. If work is not available or the person is unfit for work, a small grant of pocket money would be made from the Camp Welfare Fund, which is derived mainly from canteen profits. In the case of the women detained under Regulation 18B in the women's camp or the married camp, a grant of pocket money from public funds has been made in a very small number of cases as the welfare fund of these camps, where there are no canteens, are insufficient for this purpose.
    Sir I. Albery: Can the right hon. Gentleman give any information as to the kind of work which men detainees do in prison?
    Mr. Morrison: No, Sir, not without notice.
    Sir I. Albery: Will the right hon. Gentleman try to let me have that information?
    Mr. Morrison: I will do my best.
    Mr. Edmund Harvey: Have any arrangements been made regarding the rates of pay for prison work undertaken by detainees?
    Sir Herbert Williamsasked the Home Secretary whether his attention has been drawn to the fact that a detenue under Regulation 18B at Holloway Prison wrote a letter on 3rd May to the hon. Member for Croydon, South; that this letter was not passed by the censor at the prison until 13th May and was not posted until 22nd May; and whether he will take steps to ensure that letters written by detenues are posted more promptly in future?
    Mr. Morrison: The letter to which my hon. Friend refers was one of a collection of over 200 identical communications sent out by some of the women in Holloway Prison for the purpose of making representations against their continued detention under Defence Regulation 18B, and purporting to give their collective views on that Regulation and its administration: and the Prison Authorities felt that they ought to submit for my decision the general question whether the facilities given for letters to M.P.s were intended to cover circular communications of this kind. As the despatch of the letters did not appear to be a matter of immediate urgency, posting was held up pending my decision. In the ordinary course letters are posted without any delay.
    Sir H. Williams: Am I really to understand that a person in prison who writes to her Member of Parliament can have the letter examined by the Censor on the 13th and then have that letter sat on until the 22nd before it is posted?
    Mr. Morrison: In the ordinary way, no, Sir, but this started a new process in which circulars on a large scale and on general issues were involved. The Prison Commissioners took the view that a point of principle arose on which a decision was necessary. That was the reason for the delay. I did sanction the posting of the letters.
    Sir I. Alberyasked the Home Secretary how many of the 62 persons detained under Regulation 18B, against the advice of the Advisory Committee, are British subjects not of hostile origin;
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    and whether he now proposes to give such persons any opportunity to justify the recommendation of the Advisory Committee?
    Mr. Morrison: Twenty of the 62 persons referred to are British subjects not of hostile origin, and at the present time I am not satisfied that their release can properly be authorised having regard to the interests of national security.
    Sir I. Albery: Does my right hon. Friend propose to adopt any measure by which these persons can, at some time, at any rate, remove the stigma which their internment places upon them?
    Mr. Morrison: It has always been open to persons detained under this Regulation to apply to be reheard by the Advisory Committee. These applications are always given the most careful consideration.
    Sir I. Albery: But these persons have already been heard by the Advisory Committee, and the right hon. Gentleman refuses to accept the decision.
    Mr. Morrison: I assume that they have already been heard by the Advisory Committee, but Parliament holds me responsible for the security of the State, and I cannot be responsible to Parliament unless I use my own judgment in this matter.
    Mr. McGovern: Has the case of Cahir Healy been considered?

    TRAVEL PERMITS (NORTHERN IRELAND).
    Dr. Littleasked the Home Secretary whether he will review the whole position regarding the granting of travel permits to Northern Ireland people in Britain to visit their friends at regular intervals, with a view to the removal of vexatious restrictions which are causing inconvenience to many people?
    Mr. H. Morrison: The whole question is reviewed periodically, but I regret that I cannot at the present time add anything to what I said in reply to my hon. Friend's Question on 14th May last.
    Dr. Little: If I put before my right hon. Friend some of these very vexatious restrictions, will he give them his careful consideration with a view to their removal? They are intolerable at the moment in some cases.
    Mr. Morrison: I will certainly give consideration to any representations which my hon. Friend may make to me.

    "DAILY WORKER."
    Mr. William Brownasked the Home Secretary whether he will now repeal the ban on the "Daily Worker" and withdraw the warnings issued to other papers?
    Mr. Fosterasked the Home Secretary whether he will reconsider the lifting of the ban on the "Daily Worker" in view of the widespread feeling in the country that the ban should be lifted?
    Mr. Dobbieasked the Home Secretary whether, in view of the widespread desire manifested by resolutions from many parts of the country, he is now in a position to make a statement in regard to lifting the ban on the "Daily Worker"?
    Mr. Gallacherasked the Home Secretary whether, in view of the demand from all sections of the working-class and the people of the country in general, he will now lift the ban on the "Daily Worker"?
    Mr. J. J. Davidsonasked the Home Secretary whether, in view of the decisions of strong industrial and political conferences recently, he intends to review the whole position of the freedom of the Press, including the repression of the "Daily Worker"?
    Mr. H. Morrison: To the Question whether in consequence of the opinions expressed in various quarters the Government are now prepared to cancel the Order prohibiting the "Daily Worker," the answer is in the negative. To the Question about the warning given to the "Daily Mirror," the suggestion of the hon. Member for Rugby (Mr. Brown) would mean announcing that it is open to any newspaper systematically to publish matter calculated to foment opposition to the war effort, and that course could not properly be taken by a Government which exists to wage war to a victorious conclusion.
    Mr. Brown: Is the Home Secretary a ware of the very bad effect which this continued suppression is having in the industrial factories and the workshops, and if he will not remove the ban, will he advise me how I can proceed against him
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    for causing public alarm and despondency?
    Mr. Morrison: In answer to the first part of the question, I am not aware of that fact. In answer to the second part, I do not think it would be appropriate for me to advise the hon. Member how to proceed against me.
    Mr. Gallacher: If the Government are not prepared to give any consideration to the very widespread public feeling that has been expressed in this country and to reconsider this question, is the Minister prepared to make a statement that this ban is absolutely permanent and that no matter what opinions are expressed from any quarters or any sources he is not prepared to give any consideration to them?
    Mr. Morrison: In answer to the first part of the question, the Government always take into account public opinion, but this is a matter on which the Government must decide in the light of a wide variety of considerations. As to the hon. Member's last point, as to whether the ban is permanent, I have never made such an assertion, and I do not now.
    Mr. Shinwell: Is my right hon. Friend going to flout the decision of the Labour Party Conference last week?
    Mr. Morrison: I think that my hon. Friend is uttering a curious constitutional doctrine. I have always understood that a Minister of the Crown is responsible to Parliament. While as a politician it is my duty to take account of everybody's point of view, including that of my own party, I can only express my own hope that my hon. Friend will himself never be backward in taking account of the opinion of his colleagues.
    Mr. Shinwell: Does my right hon. Friend accept no responsibility at all to the Labour Party?
    Mr. Gallacherasked the Minister of Information whether his attention has been called to the attack on the "Daily Worker," made by a British Broadcasting Corporation spokesman, on Tuesday, 26th May; and will he instruct the British Broadcasting Corporation to provide a representative of the "Dairy Worker" with an opportunity to reply?
    The Parliamentary Secretary to the Ministry of Information (Mr. Thurtle): I have read the broadcast in question I

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    think that the speaker was attempting no more than to reply to a question sent in by a listener asking, "Why do we continue to enforce the ban on the 'Daily Worker'?" He explained in his answer that he could only give the Government's reasons for their action. I do not think that this calls for a counter-broadcast by a representative of the "Daily Worker."
    Mr. Gallacher: Are we to understand from the Parliamentary Secretary that the B.B.C. is to be used as a coward's castle where unprincipled attacks may be made on other people without there being an opportunity of reply? Further, is he aware that the Government's argument for the suppression of the "Daily Worker" is absolutely putrid?
    Mr. Thurtle: I have already said that the speaker gave only the Government's reasons for the banning and the continuance of the ban. The reason given for the ban was because for a long time the "Daily Worker" tried to stir up opposition to the war and take the heart out of our own war effort. The reason for the continuance of the ban was this: If these people could ridicule our war effort and jeer at our principles when we were in terrible danger, how do you suppose they would change their character just because circumstances have changed?
    Mr. Gallacher: Is the Parliamentary Secretary not aware that there is a very effective reply to all this insinuation, which is more lies than anything else? Would he not agree that a representative of the "Daily Worker" has a right to say something on the matter? It is scandalous.

    FIRE SERVICE.
    Mr. T. Henderson (for Mr. Dobbie)asked the Home Secretary what treatment fire-watchers are entitled to in cases where they have contracted a contagious disease while undertaking fire-watching duties; can they obtain treatment allowances and treatment from the Ministry of Pensions as suffering from War Service Injuries, or are they eligible for full wages or compensation when they are watching on the premises of their employers, or are they only entitled to Health Insurance benefit?
    Mr. H. Morrison: If my right hon. Friend the Minister of Pensions were satisfied that fire guards on business
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    premises to which the Order has been applied or who are members of the local authority's fire guard had contracted a contagious disease as the result of their duties, they would be entitled to a War Service Injury allowance and to a supplementary allowance in respect of loss of wages. They would also be eligible for the free treatment in hospital and by medical practitioners provided under the Emergency Medical Services Scheme for War Service Injuries.

    CONSCIENTIOUS OBJECTORS.
    General Sir George Jeffreysasked the Home Secretary whether he is aware that certain organisations of conscientious objectors have been attempting to bargain with local defence committees as to the class of work which they might be called upon to perform in case of invasion; and whether he will make it clear that conscientious objectors can, in such circumstances, be ordered to perform any kind of work which other civilians may be called upon to do?
    Mr. H. Morrison: I have no information in regard to the first part of the Question. As regards the second, I am informed by my right hon. Friend the Minister of Labour and National Service that under Regulation 84AA of the Defence (General) Regulations directions to civilians to perform work (other than combatant duties) needed in connection with operations for meeting enemy action on land will be given not by local defence committees, but by specially appointed officers acting on his behalf and that in the conditions contemplated by the Regulation it would be impracticable to discriminate between one civilian and another.

  ALIENS (GAMING OFFENCES, LONDON).
  Mr. Wootton-Daviesasked the Home Secretary how many aliens have been convicted for taking part in gambling in London within the last six months; and whether he is satisfied that penalties are in these cases sufficiently repressive?
  Mr. H. Morrison: Since the beginning of December last 92 aliens and 366 non-aliens have been convicted in the Metropolitan Police District for gaming offences. The

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  penalty to be imposed, within the maximum for which the law provides, is a matter for the court to decide, and I have no information to suggest that the courts tail to make appropriate use of their powers.

  POLICE WAR RESERVISTS AND SPECIAL CONSTABLES (APPEALS).
  Mr. Bowlesasked the Home Secretary whether, in order to give police war reservists and full-time special constables a right of appeal against dismissal, similar to that enjoyed by members of the National Fire Service, he will amend the Temporary Constables (Emergency) Rules, 1942, and the Special Constables Order, 1923.
  Mr. H. Morrison: So far as I know, no cases have arisen to suggest any need for an appeal procedure for Police War Reservists and full-time Special Constables If, however, my hon. Friend has any specific cases in mind, I should be glad to look into them.
  Mr. Bowles: While thanking my right hon. Friend for that answer, may I ask what is the basis of the anomalous position in which right of appeal against dismissal by chief constables or senior officers is granted so far as borough police and the members of the National Fire Service are concerned, but there is no right of appeal so far as county police are concerned and, in the City of London, police constables and special constables?
  Mr. Morrison: The fundamental difference is that, in the case of the National Fire Service, I am the employer of the whole of the personnel, whereas in the case of the police the employer is the local authority.

  DELAYED BURIAL.
  Mr. Bowlesasked the Home Secretary why the body of the lance-corporal in the Auxiliary Territorial Service, whose name and particulars have been supplied to him by the hon. Member for Nuneaton, was kept from 7th April, 1942, the day of death, until 27th May, 1942, before a burial order was issued; whether he has taken any steps and, if so, what steps, to ensure that there shall never be any recurrence of a case where the body of any member of the Services or of the public shall remain unburied for so long?
  Mr. H. Morrison: I have made inquiries and find that this death was reported to the Coroner on 10th April by the authorities of the hospital in which it occurred with a view to investigation of the question whether death might be due to some form of poisoning. The Coroner ordered a post-mortem examination by a pathologist, thinking that possibly such an examination might render an inquest unnecessary: and pending the receipt of the pathologist's report he took the view that he was not authorised to allow the body to be buried, as the question whether an inquest should be held was still undecided and there was a possibility that the pathologist might want to see the body again. The pathological investigation proved difficult and the pathologist's report was not received until 23rd May. The Coroner was, I think, wrong in this case in not opening an inquest, adjourning it pending the receipt of the pathologist's report and issuing the authority for burial. I have caused him to be so informed. The delay in burial is much regretted and I would wish to express my sympathy with the relatives of the deceased.
  Mr. Bowles: Is it really necessary for the body of any person, whether a member of the A.T.S. or of the general public, to remain unburied for 50 days? Will the right hon. Gentleman write a kindly letter to the near relatives? Finally, would he also here and now publicly request the Press, if any of them happen to know the name concerned, not to go seeking information in the locality?
  Mr. Morrison: I am sure that the Press would not wish to rake over this business, which is of such a personal character. On the other point, I will certainly give sympathetic consideration to the suggestion which my hon. Friend has made.

  EDUCATION.

    BUILDING INDUSTRY (TRAINING).
    Mr. Oldfieldasked the President of the Board of Education what lead his Department have given to the education authorities in furtherance of a scheme for the training of boys in our schools as future workers in the building industry; and whether it is the intention of his Department to give some guarantee to the parents of these boys that continuity of employment will be one of its main features?
    The President of the Board of Education (Mr. Butler): A circular, of which I am sending the hon. Member a copy, has at the request of the Minister of Works and Buildings been issued to local education authorities for higher education, urging the importance of greatly increased provision in junior technical schools for the training of recruits to the building industry. The hon. Member will see in the circular that special attention is being devoted to the problem of continuity of employment.
    Viscountess Astor: Will the right hon. Gentleman see that the building trade do not do after this war what they did after the last war—keep the apprentices out?

    STUDENTS (VOLUNTARY WAR WORK).
    Mr. Edmund Harveyasked the President of the Board of Education whether his attention has been called to the efforts made by students to organise voluntary work as a contribution to the national need during the long vacation, in addition to military and Civil Defence duties already being undertaken by them; and what steps he is taking to encourage these efforts?
    Mr. Butler: I know and welcome the general desire among students to do war work in the long vacation. I understand that whereas no difficulty is anticipated in the students making their own arrangements for securing agricultural work, guidance is desired as to the best means of securing temporary work in factories. I am in consultation with my right hon. Friend the Minister of Labour and National Service on the subject, and hope that it may soon be possible to give such guidance in general terms.

    ELEMENTARY SCHOOL TEACHERS.
    Mr. Colegateasked the President of the Board of Education the approximate number of public elementary school teachers employed in England and Wales; and what number of such teachers hold university degrees?
    Mr. Butler: The number of teachers employed in public elementary schools in England and Wales in March, 1942, was 151,296. Owing to the necessity for reducing the collection of statistics to a minimum, I am unable to state what number of these teachers hold university degrees. In March, 1938, the corresponding number of teachers was 166,674, of which 11,685 held university degrees.

    GOVERNMENT POLICY.
    Mr. Sorensenasked the President of the Board of Education whether he is now in a position to announce when new education proposals are likely to be made; and whether, in connection with prospective proposals, his attention has been drawn to the resolution on education recently passed unanimously by the Labour Party Conference?
    Mr. Butler: I informed the hon. Member on 14th May that Government plans had not reached the stage of legislation, but that constructive ideas would be welcomed. It was in this spirit that I read with interest the resolution to which he refers.
    Mr. Sorensen: Can I take it that the resolution passed by that conference is helping the right hon. Gentleman considerably in preparing his plans for the future?
    Mr. Butler: Certainly.
    Sir H. Williams: Will my right hon. Friend give an assurance that the school leaving age and the old age pensions age will not be made identical?
    Mr. Woodburn: Will the right hon. Gentleman take steps also to improve the quality, the content, of the education given?
    Mr. Butler: Yes, Sir.

    EVACUATED CHILDREN.
    Mr. Lindsayasked the President of the Board of Education, how many children previously dispersed from public elementary schools now remain in reception areas; how many evacuated secondary schools have preserved their identity in reception areas; and how many separate authorities have leased camp schools from the National Camps Corporation?
    Mr. Butler: The number of evacuated children on the registers of public elementary schools in reception areas in March, 1942, was 376,784. The large majority of evacuated secondary schools are maintaining a separate existence in reception areas, but I am unable to give the hon. Member the precise figures. The answer to the last part of the Question is that the number of local education authorities in England and Wales conducting national camp schools is 20.

  EX-SERVICE MEN.

    HOUSING.
    Mr. Keelingasked the Minister of Health whether he is aware that men discharged from the Fighting Services for wounds or ill-health, are sometimes unable to get accommodation in their own districts, even if their old employers will re-employ them; and whether he will arrange that houses, kept empty by the local authority for persons who may hereafter be bombed out by the enemy, shall be available for such ex-service men until other accommodation can be found for them?
    The Minister of Health (Mr. Ernest Brown): I have no reason to think that the difficulty described by my hon. Friend is a general one, although I shall be happy to investigate any particular cases if he will send me details. The amount of accommodation held in reserve is under constant review, but he will appreciate the necessity of ensuring that, should heavy raids recur, homeless persons can be rapidly re-housed.
    Mr. Keeling: Does my right hon. Friend realise that this grievance of the ex-service men, which is a very serious one, is bound to grow as further casualties occur; and will he himself ask local authorities to report on this matter?
    Mr. Brown: I do not think there is any need for that. The question of accommodation is one of the major matters which are before me every week.

    NATIONAL HEALTH INSURANCE.
    Mr. Manderasked the Minister of Health whether he will consider the advisability of amending the regulations governing the position of those discharged from His Majesty's Forces with pensions, laying it down that no National Health Insurance sickness benefit can be paid until 26 weeks after the man is discharged in view of the fact that those discharged fit can claim benefit immediately they become ill?
    Mr. E. Brown: The rates of contribution payable under the National Health Insurance Acts are based on the expectation of incapacity under normal conditions and do not cover the risk of incapacity due to war service. I regret, therefore, that I am unable to propose any amendment of the specific provision
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    of the Statute whereby a person discharged from the Forces in the circumstances referred to by my hon. Friend is for a period of 26 weeks disentitled to sickness or disablement benefit if his incapacity arises from the injury or disease in respect of which he has been awarded a disability pension or allowance.

  FARNBOROUGH HOSPITAL (MISS BROWNLOW).
  Sir Waldron Smithersasked the Minister of Health under what authority the gratuity of £500 is offered to Miss Brownlow, of Farnborough Hospital?
  Mr. E. Brown: After considering all the circumstances, I have informed the county council that I am prepared to approve the payment of a gratuity in this case. The sanction would be given under Section 228 (1) of the Local Government Act, 1933.
  Sir W. Smithers: In view of the fact that there is no complaint, or charge, whatever against the character or efficiency of this lady, how does my right hon. Friend justify her dismissal? Does not the fact that he has given a gratuity exonerate her completely? Will he have an inquiry made?
  Mr. Brown: My hon. Friend has sent me a letter, and I have sent him a long reply. Perhaps he will consider that reply.
  Sir W. Smithers: As the reply is most unsatisfactory, I beg to give notice that I will raise the matter on the Adjournment.

  SURGICAL APPLIANCES.
  Mr. Rhys Daviesasked the Minister of Health whether he is aware that difficulties are being experienced by sufferers in securing surgical appliances, especially trusses in hernia cases, and surgical boots; and can he do anything to relieve the position?
  Mr. E. Brown: I have been in communication with the several Departments concerned, but I can find no evidence of general shortage in supply of surgical appliances or of surgical boots. I am having inquiries made into the particular case to which my hon. Friend has drawn my attention.
  Mr. Davies: Is the right hon. Gentleman not aware that I have already sent him two cases of people who are unable to procure these instruments because the Ministry of Labour have conscripted the men who usually make them?

  CAMP SCHOOLS.
  Mr. Lindsayasked the Minister of Health whether the present billeting allow ance covers the cost of food at a camp school; and, if not, which Department or authority supplies the additional amount?
  Mr. E. Brown: Billeting allowances as such are not paid in respect of children accommodated at camps under the management of the National Camps Corporation. The cost to the corporation of the maintenance of these children is recovered by the corporation from the local education authorities concerned, and to the extent that the expenditure is not recovered from parents it is reimbursed by my Department as an evacuation expense.
  Mr. Lindsay: Would it be true to say that the local education authority themselves finance the boarding element in the schools?
  Mr. Brown: I would like to see that question in form.
  Mr. Lindsayasked the Minister of Health what are the total maintenance charges and the charge per head of ad ministering the camp schools now under the National Camps Corporation?
  Mr. Brown: I regret that the information asked for is not readily available. I am communicating with the National Camps Corporation, with a view to obtaining it, and will communicate the result to my hon. Friend as soon as possible.
  Mr. Lindsay: I thank the right hon. Gentleman very much. Would he also convey the information to the President of the Board of Education?
  Mr. Brown: I have no doubt that he will see it, but I will do so if necessary.

  ARMED FORCES AND CIVILIANS (PENSIONS AND GRANTS).
  Mr. Parkerasked the Minister of Pensions whether he is aware that East Ham and Barking War Pensions Committee
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  was constituted in 1922, when Barking's population was only 35,000; that Barking's estimated population in 1939 was 83,000, but that the borough still only has one representative; and whether he will give the borough more equitable representation when the present term of office of members ends in December?
  The Parliamentary Secretary to the Ministry of Pensions (Mr. Paling): The constitution of the East Ham and Barking War Pensions Committee provides that four members shall be local authority representatives. These are at present nominated as to three by feast Ham and as to one by Barking. The present period of membership of the committee terminates at the end of this year, when consideration will be given to the allocation of local authority membership on the committee.
  Mr. Rhys Daviesasked the Minister of Pensions how many claims for pensions have been received and awarded, respectively, in neurosis cases, where there has been no physical injury, after treatment has failed in the recovery of the claimant?
  Mr. Paling: I regret that this information is not available.
  Mr. Davies: As this raises a very important issue, is it not essential that the hon. Gentleman should find out whether the Ministry have actually given any awards of any kind in these cases, apart from awards for physical injury?
  Mr. Paling: We have given some awards.
  Mr. Buchanan: Should we not know these facts, as many people have been refused?
  Mr. Paling: It would entail a complete alteration of our system of keeping statistics. At present it would be very difficult, even if it were worth while, to do so.
  Mr. Buchanan: Surely it is worth while to know how the Minister of Pensions is dealing with the rights of ex-Service men. Surely information should not be refused to the House of Commons on the question of granting or refusing such awards?
  Mr. Stephen: Would the Parliamentary Secretary consider the speeches of the hon. Member for his own Division on this matter, previous to his taking office?

  SINGAPORE.
  Mr. Stokesasked the Prime Minister whether the decision to accept battle in the island of Singapore was a military or political decision; and, if the former, whether General Wavell recommended it?
  The Deputy Prime Minister (Mr. Attlee): The decision was taken on military grounds and was the unanimous decision of His Majesty's Government, their military advisers, and the commanders on the spot.
  Mr. Stokes: Is my right hon. Friend aware that Sir Keith Murdoch reported that he had every sympathy with General Wavell, because he had reason to believe that the decision was a political, and not a military one; and is that true? Many people believe that General Wavell was overruled in this country.
  Mr. Attlee: I am not prepared to check up on statements made by individuals. I have been asked for the facts, and I have given them.
  Viscountess Astor: Would it not be a good thing to send the hon. Member to Singapore, to look into these matters?
  Mr. Shinwell: Would it not be possible to clear this matter up if we had a statement from the Chancellor of the Duchy of Lancaster, who was in Singapore?
  Sir H. Williams: Why are the Government so reluctant to give us any information on this subject?

  GOVERNMENT DEPARTMENTS (PERSONNEL).
  Mr. Stokesasked the Prime Minister in what Department the services of Sir Charles Hambro, Lord Bearsted, Captain Lionel Montague, Mr. Brien Clarke, and Mr. H. Sporborg are now employed; and what is their correct military rank?
  Mr. Attlee: It would not be in the public interest to give the information asked for by my hon. Friend.
  Mr. Stokes: But why—
  Mr. Speaker: The right hon. Gentleman has said that it would not be in the public interest to give the information.
  Mr. Shinwell: On a point of Order. If a Minister says that it is not in the public interest, cannot that be questioned?
  Mr. Speaker: It is as well sometimes to give a Minister credit for knowing what is in the public interest.

  ATLANTIC CHARTER.
  Wing-Commander Jamesasked the Prime Minister whether the principles enunciated in the Atlantic Charter remain the basis of the Government's foreign policy in respect of war aims and intentions; and whether he will give an assurance that there will be no departure from these principles without the prior assent of Parliament?
  Mr. Attlee: Yes, Sir. The Atlantic Charter remains the basis of His Majesty's Government's policy. I feel bound to add, however, that it would not be possible for His Majesty's Government to depart from the established practice by binding themselves to seek prior Parliamentary sanction in all cases for their acts.
  Sir H. Williams: As every paragraph of the Atlantic Charter is susceptible to three separate interpretations, can we be told which of them is the policy of His Majesty's Government?

  WAGES AND PRICES.
  Wing-Commander Jamesasked the Prime Minister whether he is now in a position to define the Government's wages and salaries policy; and which Minister is responsible for it?
  Mr. Attlee: The policy of the Government with regard to wage levels and prices remains as stated in the White Paper of July, 1941. Many Departments of State are concerned.
  Wing-Commander James: Can the right hon. Gentleman say when we shall see any evidence of its application?
  Mr. Attlee: If the hon. and gallant Gentleman wants evidence, he had better look around for it.
  Mr. W. Brown: Does not the White Paper represent the complete abnegation of the Government in the matter of a wages policy since it washes its hands of responsibility and leaves wages to be settled within each industry?

  AGRICULTURE.

    FRUIT PICKING.
    Mr. De la Béreasked the Minister of Agriculture what provision the Government are making for the picking of the

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    plum crop in the Vale of Evesham and other fruit-growing districts; and what provision they have made for fruit-picking in general throughout the country, in view of the great importance of gathering in all possible fruit so as to avoid deterioration?
    The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. T. Williams): County war agricultural executive committees are organising supplies of supplementary labour from every available source for seasonal agricultural work, and in so far as growers are unable themselves to obtain the labour they will need for fruit picking, committees will do their best to assist if they are given sufficient notice of growers' requirements. In Worcester, the executive committee is arranging camps in the fruit growing districts for some 400 boys and girls from public and secondary schools to Supplement the local labour, and further labour will be available from this source if necessary. The plans being made by committees in Worcester and elsewhere should be adequate to enable the fruit crop to be gathered in good condition provided the circumstances are not too unfavourable.
    Mr. De la Bère: Will the Parliamentary Secretary see that this receives full publicity so as to assure the growers of fruit that everything possible is being done? It is very necessary to have publicity in this matter, as they do not know what is being done.
    Mr. Williams: I hope that this reply will be adequately publicised.

    ALLOTMENTS (DAMAGE BY ANIMALS).
    Mr. Parkerasked the Minister of Agriculture whether he is aware that not only dogs but cattle and horses frequently trespass upon and damage allotments; and whether he will see that adequate powers are given to local authorities to deal with this evil?
    Mr. T. Williams: Cases of damage from the cause mentioned have been brought to my right hon. Friend's notice, but he is not satisfied that the existing remedies under common law are inadequate. He is, however, considering whether anything further can and should be done.

  SIND (OUTBREAK OF VIOLENCE).
  Mr. Sorensenasked the Secretary of State for India whether he will make a statement respecting recent events in Sind; whether any accusations are directed against members of the Provincial Assembly; and whether this Provincial Government retains its previous authority and power?
  The Secretary of State for India (Mr. Amery): The recent outbreak of violence in Sind has been caused by the Hurs, a fanatical sect with a long history of violent crime in the Province and in the neighbouring State of Khairpur—so much so that they are scheduled under the relevant law as a "criminal tribe." Their criminal propensities are said to be due to their traditional customs of giving their whole property to their hereditary Chieftain known as the Pir Pagaro, and thus having no other livelihood than robbery. Military measures were necessitated early in the century to round up Hur strongholds, and it has been necessary at various times to place the present Pir under restraint. Most recently he was arrested last October and is now under detention outside the Province because of grave suspicion that he was continuing to instigate murders and other serious crimes committed by his followers, notably upon the persons of all those who gave evidence against him when he was last convicted. It was impossible to bring him to trial for his responsibility for these crimes owing to terrorisation of possible witnesses. In the past few months a number of his followers, no doubt in revenge for the action taken against their leader, have engaged in a series of outrages of which the most serious occurred on the 16th May, when a party of them derailed the Karachi-Lahore mail train and murdered and looted a number of passengers. The son of the Home Minister of Sind was one of those killed. Military measures which, in the considered view of the Provincial and Central authorities, are once more necessary to deal with those implicated in the outrages, are now in progress and a large area of the Province east of the Indus has been placed under martial law.
  I am not aware of any accusation made against members of the Provincial Assembly in connection with these outrages. The attitude of the Sind Legislature to the situation is well indicated

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  by their action a couple of months ago in passing, in secret session and with very little debate, a Bill conferring wide powers on Government for dealing with the situation—the "Sind Suppression of Hur Outrages Act." The powers and authority of the Sind Government have not been affected except of course in the area placed under martial law.
  Mr. Sorensen: May I take it from the Secretary of State that in fact the Huns have nothing to do with the existing political situation in Sind, and can he say whether the Provincial Government were consulted in the matter before this rather drastic action was taken?
  Mr. Amery: Yes, Sir. The Provincial Government have acted with the Central Government throughout in this matter.
  Mr. Sorensen: Can the right hon. Gentleman answer the first part of my question?
  Mr. Amery: No, Sir.
  Mr. Sorensen: Does that mean that the right hon. Gentleman cannot answer the first part of my supplementary question?
  Mr. Amery: This matter has nothing to do with the political situation in India.

  CIVIL SERVICE.

    ORGANISATION.
    Mr. William Brownasked the Chancellor of the Exchequer what steps he proposes to take to reorganise the Civil Service so as to make it a more efficient instrument for the discharge of public business?
    The Chancellor of the Exchequer (Sir Kingsley Wood): The question of the efficiency of the Civil Service for the tasks which it is called upon to perform is kept constantly under review. Changes in organisation and procedure will continue to be made wherever they can properly and advantageously be introduced.
    Mr. Brown: Is the Chancellor aware that there are many thousands of civil servants whose services are not being fully utilised at the present time, that both they and their organisations are deeply ashamed of that situation, and that they have made strong representations to the Government about this matter; and does he propose to leave the existing situation where it now stands?
    Sir K. Wood: No, Sir. We keep the matters to which my hon. Friend refers constantly under review. My hon. Friend's statement in reply to Lord Perry, I think, generally took the line that the Civil Service as a whole was extremely efficient.
    Mr. Brown: When will the Chancellor of the Exchequer cease to keep this matter under review and do something about it?
    Sir K. Wood: We are always doing something.

    PENSIONERS.
    Mr. W. Brownasked the Chancellor of the Exchequer whether he is aware that many Civil Service pensioners who retired on low pensions are suffering acute hardship as the result of the rise in the cost of living; and whether he now proposes to take any steps to deal with this matter?
    Sir K. Wood: I would refer my hon. Friend to the answer I gave on 15th April to my hon. Friend the Member for Romford (Mr. Parker).
    Mr. Brown: Is the right hon. Gentleman aware that this section of recipients of State benefit are the only section of such people in the country who have had no relief whatever in respect of the rise in the cost of living, and does he not think that it is really time something was done about it?
    Sir K. Wood: I would like my hon. Friend to look at my reply, and I would also remind him of the many steps that have been taken in the policy of the Government in the stabilisation of the whole economic position.
    Mr. Brown: Is it not the fact that in spite of that policy there has been evidence—
    Mr. Speaker rose.

  NATIONAL FINANCE.

    POST-WAR CREDITS.
    Mr. Parkerasked the Chancellor of the Exchequer whether he will consider exempting men and women beyond 65 years of age from Section 7 of the Finance Act, 1941, in view of the uncertainty of the end of the war?
    Sir K. Wood: I regret that I cannot adopt my hon. Friend's suggestion.
    Mr. Parker: Is the Chancellor aware of the feeling of the old age pensioners in this matter?

    ENTERTAINMENTS DUTY.
    Professor Savoryasked the Chancellor of the Exchequer whether he can give an estimate as to what sum would be derived by the Treasury if the tax of ½d. were doubled on the lowest-priced seats at cinemas, which it is proposed by the Finance Bill to exempt from the in creased taxation about to be imposed on all other seats?
    Sir K. Wood: I assume that my hon. Friend has in mind all seats which, under the Finance Bill proposals, do not become liable to additional Entertainments Duty. They include seats at cinemas and other full-duty entertainments bearing ½d. and ¾d. duty and seats at theatres and other reduced-duty entertainments bearing ½d. duty. The yield from all such seats at the pre-Budget rates of duty was estimated to be something like £750,000 a year, which would therefore be the measure of the gain to the Exchequer if the rates were doubled and the numbers of admissions remained of the same order as before the Budget.
    Professor Savory: Is there any reason why these pleasure-seekers should not contribute their fair share to the revenue of the country?

    OLD AGE PENSIONS.
    Mr. Sorensenasked the Chancellor of the Exchequer whether he is aware that delegates representing over 2,500,000 citizens resolved recently to call for a substantial increase in the basic scale of old age pensions, the abolition of the present distinction between the new and old savings of old age pensioners, and the necessity of not taking into consideration superannuation benefits from trade union and other sources; and whether he pro poses to take any action in the matter?
    Sir K. Wood: I would refer my hon. Friend to the answer I gave to my hon. Friend the Member for Leigh (Mr. Tinker) on Tuesday, 3rd March.
    Mr. Sorensen: Is the right hon. Gentleman aware that a considerable volume of public opinion now exists that the whole question of old age pensions should be drastically reconsidered and revised in the direction of a more just scale being
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    granted to this section of the community? May I ask whether the Chancellor proposes to take any action about it?

    DIVIDENDS (LIMITATION).
    Mr. Manderasked the Chancellor of the Exchequer whether, in view of the fact that dividends are being paid by some companies in excess of those de clared pre-war, he will consider the advisability of taking steps to prevent this by the limitation of dividends to a pre war level?
    Sir K. Wood: Generally speaking, I think the request which I made two years ago for the limitation of dividends has been complied with, and I doubt whether any exceptions to the general rule have been sufficiently numerous or important to justify me in reviving proposals for legislation. I would, however, take this opportunity of stating that the objects of the limitation, where they are applicable, are even more important than in 1940. Those objects are to prevent increases in the purchasing power of shareholders and to enable the companies concerned to give their maximum support to our War Loans.
    Mr. Mander: Do I understand that the Government would not consider it in the public interest for dividends above the pre-war level to be paid in existing, circumstances?
    Sir K. Wood: I would like my reply to be taken as my own observations on that point.
    Sir H. Williams: Would it not be rather helpful if certain companies which were very prosperous before the war cut their dividends?

    MOTOR VEHICLE TAXATION.
    Sir G. Jeffreysasked the Chancellor of the Exchequer whether, in view of the changed conditions and of the prospective abolition of basic rations of petrol, he will consider levying, in lieu of the horse-power tax, a tax on all fuels used for the propulsion of motor vehicles, thus giving an additional stimulus to fuel economy and relating tax payable to the amount of use made of the vehicle?
    Sir K. Wood: I am afraid that I cannot regard the present abnormal conditions as a suitable occasion for changing the general basis of motor vehicle taxation.

  EIRE AND NORTHERN IRELAND (LIQUOR SMUGGLING).
  Dr. Littleasked the Financial Secretary to the Treasury whether he has made arrangements to bring to a speedy end the smuggling of liquor across the open border from Eire into Northern Ireland?
  The Financial Secretary to the Treasury (Captain Crookshank): My hon. Friend has been good enough to forward me certain statements, and I am having inquiry made into them.

  WEST INDIES (CHOCOLATE AND SWEET MANUFACTURE).
  Mr. David Adamsasked the Under-Secretary of State for the Colonies whether, in view of the fact that in certain West Indian Islands there are abundant raw materials, coco beans, sugar, etc., for the manufacture of chocolate and sweets which are at present imported, encouragement is being given to the manufacture of these in the islands concerned?
  The Under-Secretary of State for the Colonies (Mr. Harold Macmillan): West Indian Governments were long ago urged to take all possible steps to reduce the dependence of the West Indies on imported foodstuffs of all kinds; and this would include the stimulating of local production of confectionery in so far as facilities existed or could be created for this purpose.
  Mr. Adams: Is the Minister fully aware that the present situation is detrimental to local industries in the West Indies?

  ELECTRICAL DOMESTIC APPLIANCES.
  Mr. David Adamsasked the President of the Board of Trade whether it is proposed to restrict the supply of electrical apparatus for installation in private houses for such purposes as immersion heaters, radiators, etc., when these may be used only intermittently in lieu of coal fires?
  The Parliamentary Secretary to the Board of Trade (Captain Waterhouse): The supply by manufacturers and wholesalers of electric space-heating appliances
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  of the kind used for domestic purposes has been restricted from 1st June under the Limitation of Supplies (Heating Apparatus and Polishes) Order, 1942. I am satisfied that there are sufficient appliances available for all necessary domestic uses.
  Mr. Adams: Where these are still available is it in order to purchase them?
  Captain Waterhouse: Yes, Sir.

  TRAFFIC LIGHTS, LONDON.
  Sir H. Williamsasked the Parliamentary Secretary to the Ministry of War Transport whether he will consider restoring the traffic lights in London in the daytime to their pre-war brilliance and obscuring them at night in the same way as is done in many other parts of the country?
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Noel-Baker): Yes, Sir. My Noble Friend is considering this proposal in consultation with my right hon. Friend the Home Secretary.

  ROAD VEHICLES (PRODUCER-GAS).
  Mr. Thorneasked the Parliamentary Secretary to the Ministry of War Transport how many vehicles there are on the road being driven by producer-gas; and whether he can make a statement as to the success or failure of producer-gas for road vehicles?
  Mr. Noel-Baker: In answer to the first part of the Question, I would refer my hon. Friend to the reply which I gave on 19th May to my hon. and gallant Friend the Member for East Renfrew (Major Lloyd). In answer to the second part, it would be unfair to judge the success or failure of producer-gas by the results so far achieved. Compared with engines driven by petrol or diesel oil, it has certain disadvantages; but the results have been sufficiently encouraging to enable the Government to decide that it is the best alternative to petrol for ordinary commercial transport, and that, in view of the need for stringent economy in imported fuel, its use shall be considerably extended.

  FOOD SUPPLIES.

    MODEL BUDGETS.
    Mr. Manderasked the Parliamentary Secretary to the Ministry of Food whether he will consider the advisability of publishing alternative model budgets which would be fully adequate from the point of view of health and would require a minimum of imported articles with a view to saving shipping space?
    The Parliamentary Secretary to the Ministry of Food (Major Lloyd George): My Department endeavours to give housewives advice on food in war-time in the most useful form possible. I am, however, advised that the publication of model food budgets would not be desirable in view of the variations in the supply of particular commodities from time to time and in different localities. Moreover, the variations in food habits as between different parts of the country, and the varying needs of individual classes of consumers, would greatly reduce the value of any budgets which might be prepared.

    COMMUNAL JAM MAKING.
    Mr. Thorneasked the Parliamentary Secretary to the Ministry of Food whether he can give any information in connection with the Osgodby pioneer village in Lincolnshire communal jam making drive refusing to make any more jam this season; whether he is aware that the women's institute state that they have a large quantity of last year's jam on their hands; and what action he intends taking about the matter?
    Major Lloyd George: My Department has not been informed of the Osgodby Centre's refusal to take part in this year's preservation scheme nor of the fact that jam still remains unsold at the centre. On confirmation that jam is still outstanding from last season, arrangements will be made forthwith by my Department for its collection. It is for the National Federation of Women's Institutes to consider the refusal of Osgodby Centre to make jam this season.

    PROSECUTION, MARYLEBONE.
    Mr. Thorneasked the Parliamentary Secretary to the Ministry of Food whether he can give any information in connection with the £3,000 sale
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    of sardines, when Mr. S. K. Sequerra was charged at Marylebone on seven summonses relating to tinned sardines alleging sales above controlled price, selling wholesale without a licence and failing on two dates to make the return required from holder of more than 100 cases; and what action he took in the case?
    Major Lloyd George: As the answer is somewhat long, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The person referred to was prosecuted at the instance of the Ministry of Food on 1st June at the Marylebone Police Court on the following summonses:

    (a) Two summonses for selling sardines by wholesale above the maximum price.

    (b) Sale of sardines in 5 kilo containers without a licence.

    (c) Two summonses for selling by wholesale without a licence.

    (d) Two summonses for failing to make a return of canned fish to the Ministry of Food.

    The two summonses mentioned in (a) were adjourned sine die: the defendant was convicted under (b) and fined £50 and ordered to pay £25 costs. The two summonses under (c) were dismissed and there was a conviction under the two summonses under (d), a fine of £5 being inflicted on each summons.

  CLOTHES RATIONING (COUPON DISTRIBUTION).
  Mr. Rileyasked the Parliamentary Secretary to the Ministry of Food whether he is aware of the inconvenience to which householders have been put in connection with the recent national distribution of clothing coupons; whether he is aware that in many towns applicants for the coupon book have spent as many as six and seven hours in queues; will he have inquiries made as to the reason for this public inconvenience and take steps to avoid its recurrence?
  Major Lloyd George: I am aware that in the early stages of the distribution queues formed in certain areas although many sub-offices were opened and wide publicity was given to the fact that these

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  facilities would be available for 14 days. I believe that generally the scheme worked smoothly, but reports on the arrangements will be carefully studied with a view to effecting any possible improvements on a future occasion.
  Mr. Riley: Is the right hon. and gallant Gentleman aware that in some districts police were called in to prevent incipient riots breaking out, and will he take steps to prevent this sort of thing happening again?
  Major Lloyd George: I am aware that inconvenience was caused in some places, some of it being due to kindness. In one instance which came to my notice one gentleman at the head of the queue had a suit-case in which there were 300 cards, and this rather upset the office.
  Viscountess Astor: Is not the amazing patience of people in queues one of the most extraordinary things in England?

  HOUSE OF COMMONS CHAMBER (RE-BUILDING).
  Mr. Bossomasked the Parliamentary Secretary to the Ministry of Works and Buildings whether any action has yet been taken by the Government with the object of rebuilding the Chamber for the Commons; and what progress has been made?
  The Joint Parliamentary Secretary to the Ministry of Works and Buildings (Mr. Hicks): As I informed the hon. and gallant Member for Lewes (Rear-Admiral Beamish) on 3rd December last, preliminary information is being collected by the Ministry with a view to the preparation of plans and the starting of the work of reconstruction when hostilities are over. As the Prime Minister has already announced, it would be premature, at this stage, to consider any proposals for setting up a Select Committee of the House to examine plans for rebuilding the destroyed parts of the House of Commons.
  Mr. George Griffiths: On a point of Order. Why has Question 75 not been asked to-day? The hon. and gallant Member is present.
  Mr. Speaker: I was informed that it had been withdrawn by the questioner.
  Mr. Griffiths: Then he must have seen the red light.
  Wing-Commander James: The Question was not withdrawn by me; it has been postponed by request.
  Mr. Bossom: May I ask a Supplementary Question to my Question on the Order Paper? Would the hon. Gentleman consider getting a number of the Members who sat in the other Chamber for several years to give advice as to the defects which were there so that they will not be repeated in the new Chamber, whenever that is built?
  Mr. MacLaren: Those men were the defects.
  Mr. Hicks: I can assure the hon. Gentleman that Members of the House of Commons will not be neglected in the consideration of this matter, but I am sure it would be improper to try and press me to give a more extended answer than I have given now.
  Mr. Buchanan: Will my hon. Friend give us a guarantee that Messrs. Wimpey will not build the new House of Commons?
  Mr. Hicks: I think it would be unfair to exclude any competent firms.
  Mr. Buchanan: Then will he give us a guarantee that if they do have the job they will not do it as badly as they have done almost every other job?

  FRENCH WARSHIPS (GERMAN SAILORS).
  Sir William Davisonasked the Secretary of State for Foreign Affairs whether his attention has been called to the fact that Laval, on behalf of the Vichy Government, has given permission for German officers and men to train on French warships while at the same time French officers are being removed from their ships; and what action is being taken to prevent such ships, with their German ships' companies, from putting to sea notwithstanding the definite assurances given by Marshal Pétain that no warships would be handed over to Germany?
  The Under - Secretary of State for Foreign Affairs (Mr. Richard Law): I would refer my hon. Friend to the reply given to my hon. Friend the Member for Moseley (Sir P. Hannon) on 3rd June, to which I have nothing to add.
  Sir W. Davison: Have the Government taken any steps to check the statement made in this Question, which is very widely believed to be accurate and is entirely in accordance with Laval's policy of helping the Germans without giving away Marshal Pétain's assurance?
  Mr. Law: Yes, Sir. The Government take such steps as are open to them to check all these things.

  SENTENCED YOUTH (DEATH IN HOSPITAL).
  Mr. T. Henderson (for Mr. Dobbie)asked the Home Secretary whether he will cause an inquiry to be made into the cause of death of H. Mitchell, of Raw-marsh, Rotherham, aged 17, who was sentenced to three months' imprisonment under the Essential Work Order, was taken to Armley gaol after his sentence on 5th March, returned to the municipal hospital at Rotherham on 6th May, and died on 14th May, before his sentence was completed; and will he arrange that, in future, when boys are tried under this Order and sent to prison, investigations are made as to their physical condition and a medical examination made before they are sent to prison?
  Mr. H. Morrison: I have received full reports on this case. In accordance with the usual arrangements Mitchell was medically examined on his reception into prison on 5th March and he was then reported to be in good health. He first complained of not feeling well on 2nd May and was at once admitted to the prison hospital. His condition did not improve and on 5th May he was removed on the advice of the medical officer to Rotherham Hospital for examination. It was then found after laboratory investigation that the lad was suffering from an acute form of sleepy sickness, and though he was given expert treatment at the hospital he died on 14th May. I much regret that all the care devoted to this patient both at the prison and the hospital proved of no avail and I should like to express my sympathy with the lad's parents.
  Mr. Sbinwell: Does not this show how wrong it is to send boys of this age to prison under the Essential Work Order without at least conducting a medical examination?
  Mr. Morrison: That is not my responsibility—
  Mr. Shinwell: It is the Government's.
  Mr. Morrison: I am answering for the Home Office—but I have no reason to believe that the fact that this lad went to prison had a damaging effect on his health.

  MEDICAL TRAINING SCHOOOLS (WOMEN STUDENTS).
  Dr. Edith Summerskill (for Mr. Douglas)asked the Minister of Health whether he will, in connection with any reorganisation of the hospital system, give consideration to securing the admission of women students into all medical training schools on equal terms with men?
  Mr. E. Brown: I will bring my hon. Friend's suggestion to the notice of the Committee that I referred to in my reply on 26th March to my hon. Friend the Member for Great Yarmouth, (Mr. Jewson) which is considering the organisation of medical schools.

BUSINESS OF THE HOUSE.
Mr. Greenwood: Will the Leader of the House state the forthcoming Business; and has his attention been called to a Motion on Old Age and Widows' Pensions which appears on the Order Paper in the names of my right hon. Friend the Member for East Edinburgh (Mr. Petnick-Lawrence) and myself; and also is it the intention of the Government to find time for the discussion of the Motion on the Order Paper relating to Family Allowances?
The Lord Privy Seal (Sir Stafford Cripps): The forthcoming Business will be as follows:
First Sitting Day—Report stage of the Finance Bill, and it will no doubt be agreeable to the House to take the Third Reading immediately afterwards; the Committee and remaining stages of the Royal Naval Volunteer Reserve Bill [Lords]; and, if there is time, we hope to make progress with the Coal (Concurrent Leases) Bill [Lords], and the Marriage (Scotland) Bill [Lords].
Second and Third Sitting Days—A Debate will take place on a Government Motion to approve the coal proposals.

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With regard to the other two matters which the right hon. Gentleman has mentioned, I am aware that a Motion appears on the Order Paper in the name of himself and the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence), and the Government hope it will be possible to give time for that at a very early date after the next series of Sittings. Similarly, they hope there will be an opportunity to discuss Family Allowances also at a fairly early date.
Mr. Shinwell: Is it necessary to make the coal question, which is to come before the House shortly, a matter of confidence in the Government? Does the right hon. and learned Gentleman appreciate that there is quite a considerable division of opinion about this matter, and does he realise also that if I should vote against the Government on this matter, I might find myself in the same unfortunate position as he is, of being expelled from the Labour party?
Sir S. Cripps: It is not appropriate to comment on the misfortunes which may befall the hon. Gentleman, but the Government have decided that in this matter it is better to have a Motion definitely approving the Government's scheme.
Mr. Buchanan: Is there on this occasion any guarantee that the Government are really in earnest about the coal proposals, or are we to be faced with a situation similar to that which occurred before, that the Government say the thing must be done and then afterwards throw it over? Is there any guarantee that on this occasion if a certain body meets, the right hon. and learned Gentleman and his colleagues will not run away at the first shout from that body?
Sir S. Cripps: I should have thought that the fact that the Government have put down a Motion would be a sufficient guarantee.
Mr. Buchanan: With the right hon. and learned Gentleman's agility of mind and well-known capacity for change from day to day, is there any guarantee in this matter that he will not do the same again? Is there any guarantee that if another body meets—not the workers, for there is never any change because of the workers—and is dissatisfied, the right hon. and learned Gentleman will not change his mind?
Mr. Charles Williams: Does not the right hon. and learned Gentleman think it is rather a pity that he did not broadcast on this matter a fortnight ago?
Mr. Shakespeare: In view of the fact that the post-war organisation of the coal industry must have such an intimate bearing on war-time production, would it be possible for the Debate to range over a wide field?
Mr. A. Bevan: Will my right hon. and learned Friend consider the form of the Motion to be put before the House? There are two aspects of this matter, fuel rationing and the proposals for the reorganisation of the mining industry. Would it not be highly inconvenient to take the two things together, as they are not even remotely associated? Will there be a composite Motion or two Motions on the proposals?
Sir S. Cripps: If the hon. Gentleman will look at the Order Paper, he will see that there is a single Motion on it in this form:
"That this House approves the proposals of His Majesty's Government embodied in Cmd. Paper 6364 relating to coal."
Mr. Bevan: That is precisely why I raised the matter. As the White Paper includes a scheme for fuel rationing, then, if it is necessary to vote against it, we shall have to vote against the two proposals. Can a reasoned Amendment be put down, if necessary? Cannot we have two Motions? Will the Government reconsider the matter, and allow the House to deal separately with two separate issues?
Sir S. Cripps: Anyone can put down a reasoned Amendment in order to make whatever proposals he wishes.
Mr. Bevan: Would it not be much more convenient for the House to consider the proposals for the reorganisation of the mining industry and fuel rationing separately?
Sir S. Cripps: In the opinion of the Government all the proposals to deal with coal come under one single scheme. [Interruption.] That is so in the opinion of the Government; they consider it better to deal with the matter as a total scheme.
Mr. Bevan: This is very important. Are not the Government laying a silly trap for the House, because if we vote

823
against the Motion we shall appear to be voting against equitable rationing, when, in fact, we want to vote against the other part? Would it not be a much more honourable thing, and would it not be simpler and clearer, to have two Motions before the House for what are two separate issues?
Sir S. Cripps: The Government do not so regard it, and, if the hon. Member so regards it, he is at liberty to put down an Amendment.
Mr. Stephen: Is the Lord Privy Seal aware that the 1922 Committee is meeting to-day?
Mr. Maxton: Will the Report of the Committee of Privileges on matters remitted to them some weeks ago which affect two Members of this House, be shortly available?
Sir S. Cripps: I understand that the Report is now in draft. I cannot say when it will be ready, although I presume it will be ready shortly.
Mr. Maxton: Is the Lord Privy Seal aware that there is no provision in the Business which he has announced for dealing with the Report, and is it not against the usual practice to keep a matter of this sort hanging over, indefinitely?
Sir S. Cripps: I understand that it will not be ready for debate in the next series of Sittings.
Mr. Maxton: The Lord Privy Seal will remember that there was the most tremendous urgency about getting this matter to the Committee of Privileges, so much so that the ordinary steps to inform those affected were not taken, whereas now it seems that there is unlimited time to deal with the matter from the point of view of the Government.
Sir S. Cripps: The hon. Gentleman will appreciate that it is not a matter for the Government but for the Committee of Privileges. As soon as the Committee make their Report, steps will be taken to enable the House of Commons to deal with the matter.
Mr. Clement Davies: Is it proposed to give early facilities for a Debate on shipping, especially in view of the White Paper which has been issued regarding the allocation of new shipping? Is it proposed to bring in that policy before the Debate or after?
Sir S. Cripps: That is a matter which, as has already been stated, can be debated on the Supply Vote for the Ministry of War Transport.
Sir H. Williams: Will the No. 2 Budget be introduced before or after the Recess?
Sir S. Cripps: So far as I know, there is no such thing.
Sir H. Williams: Will it not be needed if all the Resolutions of the Labour Party Conference are to be given effect to?

PERSONAL EXPLANATION.
Mr. J. J. Davidson (Glasgow, Maryhill): I desire first of all to thank you, Mr. Speaker, for this opportunity to make a statement to the House. At Question Time yesterday, when I was unavoidably absent from the House, a Member raised, by Private Notice, a question which implied that I had made a statement in a speech on Tuesday which was incorrect and false. I desire to say at the outset that I have no objection at all and no hard feelings toward the Member who raised this particular question, realising that he is a director of Sir Lindsay Parkinson and Company, Limited. I can quite realise his anxiety with regard to this particular subject. I desire, however, to substantiate my statement, and to lay before the House one or two facts so that hon. Members can consider the whole position.
The "Daily Sketch" on 21st February, 1941, stated:
"281 Summonses say cars misused 145,600 gallons."
The defendants were Sir Lindsay Parkinson and Company, Limited, Hugh Beaver and Brian Colquhoun. I wish to point out that in my speech I asked for an assurance that personnel and organisations who are involved and convicted with regard to petrol offences should not participate in the future planning of this country. In the "East Anglian Daily Times" it was stated on 22nd February, 1941:
"Mr. Brian Colquhoun was recently appointed Director-General of Aircraft Production factories."
On 19th March, 1941, the "East Anglian Daily Times" stated: "
£402 petrol case fines."

825
The fines imposed were:
"H. E. C. Beaver £12, C. B. H. Colqunoun £10."
All defendants gave notice of appeal. On 22nd April, 1941, the, "Daily Telegraph" stated:
"Mr. Hugh Beaver to be Director-General of Works and Buildings, Ministry of Works and Buildings."
On nth June, 1941, the "Daily Telegraph" stated:
"Petrol appeals dismissed. Appeals by Hugh Beaver and Brian Colquhoun against convictions and" penalties imposed at Newton-le-Willows for a breach of the petrol regulations were dismissed at Liverpool Quarter Sessions."
The "Daily Telegraph" then refers to another case of a petrol officer, Mr. Arthur Fox, which has been dismissed. The Secretary for Petroleum (Mr. Geoffrey Lloyd) stated that the employment of the officer in question had now been terminated. The "Daily Telegraph" on 8th April, 1941, stated—
"Another Petrol Prosecution; 170 Summonses."
The defendants were—
"Sir Alexander Gibb and Partners, Hugh Beaver, at Liverpool."
On 9th April, the "Daily Telegraph" stated:
"Firm's Misuse of Petrol. One of the largest firms of building contractors in the country, George Wimpey and Company, Limited, were fined £600 and £63 costs … for misusing petrol."
I want to remind the House that this misuse of petrol was taking place when the Government were putting out posters appealing on behalf of the many sailors who were losing their lives in carrying petrol to this country. After Wimpey's had been fined, the Ministry of Works and Buildings appointed their Chairman, Mr. G. W. Mitchell, to be Controller of Building Materials in succession to Mr. H. Beaver, now Director-General of Works and Buildings. Mr. Mitchell resigned his directorship of George Wimpey and Company, Limited, in order to take up his appointment.
I want to be very brief. Here is the case in a nutshell. I referred to the organisations which are participating in the work of the Ministry of Works and Buildings, and I mentioned Sir Lindsay Parkinson and Company, Limited, who have been acting in an official capacity to the Ministry of Works and Buildings in various contracts, and George Wimpey,
826
and I mentioned personnel attached to those firms. It was stated on 8th April that the firm of Wimpey's were fined £600 and £63 costs, and, as I have already said," in July, 1941, the chairman of the company was appointed to the Ministry of Works and Buildings. Mr. Hugh Beaver was fined £12 and costs for the misuse of petrol when engaged on Government contracts. In July, 1941—this seems to be a lucky month for those who contravene the laws of this country—we find it announced that Mr. Hugh Beaver is to be Director-General of Works and Buildings and Mr. B. H. Colquhoun, fined for the same offences as Mr. Beaver in March, was later appointed to the Ministry of Works and Buildings. [Interruption.] He was appointed to the Ministry of Works and Buildings in July, 1941.
The Joint Parliamentary Secretary to the Ministry of Works and Buildings (Mr. Hicks): Mr. Colquhoun was never appointed to the Ministry of Works and Buildings. It was the Ministry of Aircraft Production.
Mr. Davidson: Those statements are statements that cannot be disputed. For the sake of brevity and out of respect for the time of hon. and right hon. Gentlemen, I have selected only some instances regarding this deplorable state of affairs, and I feel that I was fully justified in asking, during the proceedings on the Ministry of Works and Planning Bill, for assurances that such practices would not be continued with regard to the great task of rebuilding and planning for this nation. I do trust that hon. and right hon. Gentlemen will agree that the task of planning this nation should be in the hands of men and women of proved integrity who will give to this House and to the nation that high standard of administrative impartiality, without being associated with any organisations at all, that we have always expected and generally receive from the great Civil Service of this country.
Major Braithwaite: I should first like to say that I am sorry that the hon. Member has not seen fit to withdraw his statements that the firm of Sir Lindsay Parkinson and Company have had representatives appointed to the Ministry of Works and Buildings. They never have had any there. There never were any there, and they have not done any work

827
for the Ministry of Works and Buildings since 1936, when they built Chorley Ordnance factory for the Office of Works, so there is no connection there at all. As far as any petrol offences were concerned, they were convicted of a technical offence as agents for the Ministry of Supply, and there was no implication of any irregularity in any shape at all. I feel sure that the hon. Member, if he is fair, will take these facts into consideration and withdraw the allegation about private firms, who find it very difficult to defend themselves.

PERSONAL EXPLANATION.

  PRIVATE BILLS (GROUP A).
  Leave given to the Committee on Group A of Private Bills to make a Special Report.
  Special Report relative to the Bilston Corporation Bill brought up and read; to lie upon the Table, and to be printed.

  STANDING ORDERS.
  Resolution reported from the Select Committee:
  That, in the case of the South Wales Electric Power, Petition for Bill, the Standing Orders ought to be dispensed with—That the parties be permitted to proceed with their Bill.
  Resolution agreed to.

BUSINESS OF THE HOUSE.
Ordered,
"That the Proceedings on the War Damage (Amendment) Bill be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[Sir S. Cripps.]

ORDERS OF THE DAY.

  WAR DAMAGE (AMENDMENT) BILL.
  Considered in Committee [Progress, 3rd June].
  [Sir DENNIS HERBERT in the Chair.]

  WAR DAMAGE (AMENDMENT) BILL.

    FIRST SCHEDULE.—(Amendments relating to the principal Act generally.)
    Mr. Bellenger: I beg to move, in page 13, line 3, at the end, to insert:
    Proviso regarding grants to local authorities.
    following proviso shall be added to section eighty-two:
    'Provided that this section shall not affect the principles upon which any grant of payment from the Exchequer to any local authority depends.' "
    I desire to bring to the notice of the Committee and the Chancellor of the Exchequer something which is, I think, in the nature of an anomaly. The Committee will note that War Damage Contributions are to be treated as being in the nature of capital payments. This is quite clear in the case of private individuals or private trusts or property companies because they have some capital, but when we come to the case of Government Departments we find a somewhat confusing state of affairs. I understand that the Board of Education permits the debiting of these contributions to education accounts, but the Ministry of Health prohibits local authorities from debiting War

    837
    Damage Contribution, in the case of local authority housing schemes, to the housing account of the local authority concerned. The result is that the payment of War Damage Contribution which has to be met on housing estates belonging to local authorities has to be obtained out of the general rate and in some cases it is conceivable that, in order to pay these heavy amounts, a general rate may have to be increased. I submit that these payments ought to be debited to the housing account in each case and not thrown on the general rate. I hope the right hon. Gentleman has followed my explanation sufficiently to find himself in sympathy with that view.
    There is another implication. Where local authorities in heavily blitzed areas are not able to gather in sufficient rates to meet their own requirements and those of the precepting bodies, they come to the Ministry of Health for assistance. The Ministry of Health may, however, get out of the liability for any deficiency on the housing account if the war damage contributions are not debited to that account but are thrown on the general rate. In such circumstances, the housing account would not show the loss or the deficit which it might show if these contributions were debited to that account and if the amount of the contribution went on to the general rate, then, obviously, the ratepayers have to find the money. Therefore, the contention which has been put forward by the Chancellor that this contribution is in the nature of a capital payment, is not borne out in the case of local authorities who will be compelled to find it out of the general rate. The object of my Amendment is to rectify this anomaly. I hope the right hon. Gentleman will appreciate my point and even if he is not prepared to concede it to day will at any rate give it further consideration.
    Mr. Silkin: I support the plea which has been made by my hon. Friend the Member for Bassetlaw (Mr. Bellenger). This is really a question of local authority finance. When a local education authority pays a contribution in respect of educational buildings, it is allowed to charge that contribution to revenue and it gets the appropriate grant from the Board of Education. But when it comes to dealing with a housing revenue account the Ministry of Health do not
    838
    take the same view as the Board of Education and do not permit a local authority to charge War Damage Contribution to its housing revenue account. The result, according to the contention of the local authorities, is that their housing revenue accounts become unduly inflated. Under the Housing Act, 1936, at the end, I think, of every quinquennial period, the surpluses on these housing revenue accounts are taken by the Ministry of Health. At any rate the Ministry take a proportion of such surpluses. The point, therefore, is that by not permitting the War Damage Contribution to be charged to the housing revenue account there may arise an artificial surplus, which the Ministry of Health take away. It can only arise if, as the result of not permitting the War Damage Contribution to be charged to the housing revenue account, there is a surplus when otherwise there would be a deficiency. Housing authorities feel that the surplus should not be taken away from them when it is really an artificial surplus, and if the housing revenue account were dealt with in the same way as the educational account, there would be no surplus, and no part of the surplus could be taken away. It is a rather complicated point, but I hope I have made it clear.
    The Chancellor of the Exchequer (Sir Kingsley Wood): I am indebted to the two hon. Members who have put the matter forward. I cannot pretend that I can make a complete statement to-day. The Amendment obviously could not be incorporated in the Bill, and I take it that the object is really to bring the matter before the Committee in order that I might make a statement on it. The suggestion to enable local authorities to charge War Damage Contributions on municipal housing property to the housing revenue account is made, I think, under the mistaken impression that such a charge would result in increasing the subsidy payable by the Exchequer in certain cases. If that is so, it is not the case. That impression is mistaken. It is true that Section 82 of the War Damage Act provides that contributions should all be treated for all purposes as outgoings of a capital nature, and it is obvious that such outgoings cannot properly be charged to a revenue account. It may be suggested that if local authorities were to borrow, as they would be entitled to do, to finance these contributions, the loan

    839
    charges could then properly be charged to the Housing Revenue Account. But this might result in the raising of rents by local authorities which could not finance their contributions without borrowing, and that would produce an anomalous position in relation to private landlords, who are precluded by the Rent Restriction Act from passing on their contributions to their tenants. Municipal houses are excluded from rent restriction for reasons quite unconnected with the present question, and it would be unreasonable that this exclusion should place local authorities as landlords in a specially favourable position in comparison with private landlords, and their tenants in a specially unfavourable position in comparison with that of tenants of private landlords.
    The two hon. Members suggested that the Board of Education provided a precedent that they might quote in favour of their proposition. The Board of Education recognise for grants War Damage Contributions in respect of school buildings, and Section 41 of the Act enables grants to be made in respect of highway contributions, but those are both cases in which capital expenditure by a local authority normally attracts percentage grants and cannot therefore be regarded as analogous to housing grants. The matter is somewhat complicated and difficult to explain, but I have endeavoured to give a reply on what we could surmise of the intention of the Amendment. I should like to examine the hon. Members' statements carefully with a view to seeing whether there is more that I can profitably say; and I will communicate with both of them.
    Mr. Silkin: The right hon. Gentleman appreciates, firstly, that this is not designed to increase the subsidy and, secondly, that charging the contributions to revenue account would not have the effect of putting local authorities at an advantage as against the private landlord but at a disadvantage.
    Sir K. Wood: I will look into it again.
    Amendment, by leave, withdrawn.
    Sir Herbert Williams: I beg to move, in page 13, line 35, at the end, to insert:
    840
    "19. Certain fixtures and fittings to be deemed land and not goods for purposes of principal Act.
    Any fixtures or fittings which are situate in or upon or are attached to any contributory property and are treated as part of such contributory property for the purpose of the net assessment or net annual value (as the case may be) on which the contribution in respect of such contributory property is calculated in pursuance of the provisions of section nineteen of the principal Act shall be included in the definition of the expression 'land in section ninety-five.'"
    This is a rather curious matter. I was asked to put the Amendment down by friends who are interested in blocks of flats and offices. I understand that frequently in such premises there is a certain amount of furniture which is for the communal use of the people in the buildings, which is taken into account in settling the Schedule A assessment. Therefore, for the purpose of Income Tax, these chattels are deemed to be land, but for the purpose of the War Damage Act they are not. The War Damage Contribution is based on the Schedule A assessment, so that they pay on that, and they are brought in a second time under the business scheme and are called chattels. I am told that flats and offices are equipped with fixtures and fittings and furniture in entrance halls and on staircases, trade lifts for the delivery of goods, refrigerators, electric cooking stoves and fires. I mention those things by way of example. They are deemed to be in the Schedule A category for Income Tax and attract the 2s. in the £. They are also deemed to be chattels and attract another contribution under Part I. This is unfair, it seems to me. As they are already dealt with for Income Tax under Schedule A they ought to be included for the purpose of the Act under Part I.
    The Attorney-General (Sir Donald Somervell): My hon. Friend is quite right. There are cases in which the use of furniture and fittings which are not-really part of the house may be reflected in the Schedule A valuation. The actual proposal would be impracticable. For one thing, there may be considerable doubt as to whether a particular article of furniture is included or not. It may be that it has been based on a rent which reflects that there will be certain fittings available, and it would be a difficult position if the Board of Trade always had to be quite certain that a fixture had not become land, and vice versa. What has

    841
    happened in certain cases, by inadvertence or for mutual convenience, is that instead of having a separate Schedule D assessment in respect of profits derived from the use of furniture, there has been one assessment. It is not as black as it may look, because the result of that is that the person gets a repairs allowance on the total figure, the allowance, of course, being directed to land. If there were a proper assessment under Schedule D, he would get no such allowance. So that to some extent what the man loses on the swings in having to make a War Damage Contribution in respect of movable furniture he gets back on the roundabouts because he gets a repairs allowance.
    I saw some figures which were worked out showing that in a case in which there was a definite sum which might reasonably be attributed to furniture the man would not have been better off in the end if he had had a separate Schedule D assessment. In a good many cases of blocks of flats and hotels the assessments in force in September are capable of being reopened and are being reopened, When a case is reopened under that procedure the Revenue are prepared to consider this point and get it put right. If in the case of blocks of flats or hotels it can be shown that the combined tax and contribution charges have been substantially increased by including net profit from letting fixtures and fittings in the Schedule A assessment, the Revenue will be prepared to look into it and see whether it can be put on a proper basis. I hope that my hon. Friend realises the impracticability of the methods he has suggested and will withdraw his Amendment.
    Sir H. Williams: I realise that administratively there are difficulties, but it is hard on the people paying twice. Although the Attorney-General has rightly told us that where Schedule A assessment is reopened this matter can be adjusted, the trouble is that the Chancellor will not permit an assessment to be reopened for the specific purpose of dealing with war damage matters. It is only if by chance an assessment is reopened for some other reason that this matter can be taken into account. The Attorney-General realises that there is a measure of injustice, and as it might be cleared up administratively if the
    842
    Chancellor would permit assessments to be reopened on this ground alone, the matter would be cleared up. I shall be glad to know whether the Attorney-General will consider this and let us know if he can solve the problem on those lines.
    The Attorney-General: I do not think that my hon. Friend quite followed what I said. Let me make a correction. I was wrong in using the word "hotels." We are dealing with blocks of flats and offices, and that is the only category in which we are prepared to consider this problem. The Inland Revenue will be prepared to revise any case of blocks of flats or offices in which it is shown that the combined tax and contribution charges have been substantially increased by including net profits from letting of furniture and fittings in Schedule A assessments.
    Sir H. Williams: In the light of that statement, I beg to ask leave to withdraw the Amendment. I have no personal knowledge of this matter, but those who are interested will examine the Attorney-General's statement, and if necessary I will raise it on the Report stage.
    Amendment, by leave, withdrawn.
    Sir K. Wood: I beg to move, in page 14, line 19, to leave out "and any such order as to costs," and to insert:
    "and may tax or settle the amount of any costs to be paid under any such order or direct in what manner they are to be taxed, and any such order."
    The Second Schedule to the Act gives power to the referee to make orders as to cost on an appeal, but no provision has been made as to how the amount of costs ordered to be paid is to be determined. This Amendment rectifies the omission and gives the option to the referee either to tax costs item by item or award a lump sum for costs, or to direct the costs to be taxed by a taxing master.
    Amendment agreed to.
    Schedule, as amended, agreed to.

    SECOND SCHEDULE.— (Amendments as to Ultimate Incidence of Contributions under Part I of the Principal Act.)
    Mr. Bellenger: I beg to move in page 15, line 28, to leave out paragraphs 4, 5 and 6, and to insert:

    843
    "4. Section twenty-five of the principal Act shall apply to all contributory properties irrespective of value or use."
    Sir H. Williams: On a point of Order. May I ask whether it is proposed to take the general Debate on mortgagors and mortgagees on this Amendment?
    The Chairman: I do not understand what the hon. Gentleman means by "the general Debate." What we are debating are the various Amendments which are called from time to time.
    Sir H. Williams: Last night before Progress was reported I raised the question whether it might not be convenient to debate only one of these Amendments and, if it was desired to divide on any of them, to do so without further Debate.
    The Chairman: I shall be only too ready to agree, 3 the Committee wish, to take the Amendments without discussion. We must debate this Amendment and see what happens.
    Sir K. Wood: I support the suggestion for one Debate, otherwise we shall be repeating many of the arguments on the various Amendments. That would not prevent anyone, if he wishes, pressing his Amendment to a Division. From my point of view it would be convenient to make one reply on all the matters at issue on these Amendments.
    Mr. Silkin: I suggest that it would be to the general convenience of the Committee if we discussed these Amendments together. On the other hand, they raise separate points. The first Amendment, for instance, asks for 100 per cent., the next for 75 per cent. and another for 50 per cent. If we could discuss all these in one Debate, we could then have Divisions if necessary on any of the Amendments.
    Mr. Bellenger: Section 25, with which this Amendment deals, deals with the whole question of the passing-on of part of the War Damage Contribution, and the following Amendments also deal with the same subject.
    The Chairman: There is no need for hon. Members to go on debating this question of Order. This is the first Amendment relating to this matter, and it is obviously a broad one. It must be left
    844
    to the Chair to decide on the scope of the discussion. I have no desire to restrict the Debate unduly. The Chancellor has said that the arguments on this Amendment will apply to the other Amendments, and it may be that hon. Members will not want, and I hope they will not want, these arguments repeated.
    Mr. Bellenger: In moving this Amendment which stands in the name of my hon. Friend the Member for North Battersea (Mr. Douglas) I desire to say that to a large extent, or to a certain extent, the case has been dealt with on the Second Reading of this Bill and on the principal Act when that was under discussion. I have no doubt that most hon. Members are familiar with the arguments which Members in all parts of the Committee wish to put to the Chancellor, and we hope that we shall receive a different reply to that which was given on previous occasions. This is the most vital controversial principle in this Bill, and we desire that it should receive substantial consideration and that we should be given some improvement. Section 25 of the principal Act has admitted that in certain cases direct contributors, who may be and often are mortgagors, can pass on to the mortgagee a proportion of their War Damage Contribution. These isolated cases are those in which the mortgagor has one property on the mortgage deed which he acquired by borrowing money from a mortgagee, or which he converted and the money which went to the cost of that conversion was obtained by mortgage. That very limited class can pass on part of the War Damage Contribution. We say, therefore, that the principle of apportioning War Damage Contribution between the mortgagee and the mortgagor has been admitted in the principal Act, and we are asking for this principle to be extended to other classes.
    The Committee may be aware, as the Chancellor certainly is, of an anomaly which arises under this Section 25 whereby the individual whom the Chancellor wished to protect, and has indeed protected, namely, the single householder who acquired his house by borrowing money, is prejudiced if he happens to have bought another property at the same time and more than one property was then included in the mortgage deed. Small properties are often put up in pairs as semi-detached houses. When the builder or his successor in title is asked to

    845
    sell one of the houses he often says, "You must take the two if you want to buy the one." We then get the position,—a case has happened in my own constituency, and I put it to the Chancellor—that a man who wishes to buy one house to live in has at the same time to buy the semi-detached house next door, which is occupied by somebody else. If he borrows the money for the acquisition of those two houses and they are both included on the one deed, he is prohibited from passing on to the mortgagee any proportion of his War Damage Contribution. That is an anomaly which ought to be put right, whatever the Chancellor is going to say about the Amendment.
    There is another anomaly to which I would draw attention before coming to the vital principle of the Amendment. Under this Section there is a limit even to the very small class of mortgagors who can pass on a proportion of their contribution. That limit arises upon the assessable value. In the case of any property over £150 assessable value even in that limited protected class the mortgagor cannot pass on a proportion of the War Damage Contribution, except in the case of agricultural property, where the figure is £500. I suggest that the Chancellor should remove the £150 limit altogether.
    Now we come to the vital principle with which the Amendment deals. The argument was developed on Second Reading, and the Attorney-General replied to the Debate. As far as I understood his arguments, they were mainly these: You must not interfere with a transaction which has taken place in normal circumstances; in other words, you must not affect the sanctity of contract principle. The Attorney-General did not admit that this abnormal circumstance, damage by enemy air-raid action, should affect the mortgagee who has lent a fixed amount of capital for a fixed rate of interest and who expects nothing more and nothing less. Shylock himself asked for his pound of flesh and for nothing more and for nothing less, but the judge told him that he could not get his pound of flesh if at the same time he took some blood with it. I am suggesting seriously that what we are doing is to enthrone moneylending, currency, over money's worth, which means human effort, human endeavour and production, and I say that is a wrong principle on which to proceed.
    846
    With his other arguments the Attorney-General gave as an illustration that when the premises are insured against fire the mortgagee is not asked to bear the cost of the fire insurance premium. The mortgagor is expected to pay the fire insurance, so that if the house is burned down, the mortgagee will be protected and will be able to recover his capital. But the fire insurance covenant is a part of the mortgage deed; it was envisaged at the time the bond was settled, whereas the War Damage Contribution was never foreseen by either mortgagee or mortgagor. The Prime Minister has assured us that in these abnormal times the burden is not to lie where it falls but is to be spread equitably over the whole of the community. The mortgagee is a part of the community, and I am saying, and I hope that other hon. Members will support me, that the mortgagee is one of those persons to whom the Prime Minister referred when he said that the serious burden caused by enemy air-raid action should be spread over all classes in the country and not left as a burden upon one particular class.
    I believe that in another place, the argument of the widow's mite was advanced; it was said that the widow who had only a small sum of money, which she had been advised to invest in a mortgage, would be heavily penalised. I am afraid that argument will not hold much water, because these widows who are so conveniently brought in to substantiate arguments against our case are relatively few in number and represent only a small amount of capital in relation to the capital value of mortgages in general; and, further, widows usually invest their money in the houses themselves and not in mortgages. We know that in this matter we are dealing with very powerful financial interests and that it is they that are behind the Chancellor in refusing our suggestion.
    I do not want to go over the whole of the ground which I and other hon. Members traversed on the Second Reading. I have no doubt that many hon. Members will have a point of view to put which, while coinciding mainly with the point of view which I am now putting, will perhaps differ in some of the concrete examples. I want to put a particular point to the Chancellor of the Exchequer and the Attorney-General. If the mortgagor

    847
    does not keep up his payments of interest, the mortgagee has the right to foreclose. Of course, he has to go to court for an order, but in certain circumstances he can foreclose and come into possession of the property, which had already been conveyed to him on a lease when the mortgage deed was entered into. The mortgagee then has to pay War Damage Contribution in order to protect his capital invested in the mortgage. In certain circumstances, the mortgagee will have to pay the War Damage Contribution or possibly lose his capital.
    The mortgagee relies not only on the real property security but on the personal bond of the mortgagor. What is this personal bond worth to-day, in many cases? What was the personal bond worth before the War Damage Act was passed last year? There was no compulsory insurance. There may have been many voluntary insurance schemes, and if the mortgagor did not wish to enter into such a scheme, he did not need to do so. Therefore, the mortgagee, whose only interest was the real property itself, stood to lose the whole of his capital, if the premises in question were blitzed and the mortgagor was unable to implement his personal bond. The War Damage Act has protected not only the holders of real property but the financial interests behind them. Even if we are not prepared to admit that finance is a partner with the holders of equities in property, it has a very substantial fiduciary interest in making sure that the property—which means the capital—is fully covered, and therefore, we say it should bear the proper share of the War Damage Contribution.
    Mortgagees held out inducements to mortgagors to borrow money in order that buildings should be put up for the very lowest rented class of tenants. The Housing Acts of 1933 and 1936 offered special inducements to local authorities which would persuade housing associations and housing trusts to put up hereditaments mainly for the working classes. Those associations, of which there are many in this country, did a good job of work by building houses at low rents. They are forbidden to increase those rents, in spite of the abnormal, circumstances, and are now being forced to bear a heavy contribution, running into many thousands of pounds and jeopardising
    848
    their own solvency. There are many Amendments on the Order Paper dealing with those cases. I cannot imagine it is good policy for the Government to induce builders in whatever form, to put up houses for the working classes at low rents and then to throw on them a burden which they are not able to meet and which will, perhaps, force many of them, if the war lasts long enough, to go into bankruptcy. I cannot believe that that was the intention of the Government, and I hope that this argument alone will induce my right hon. Friend to see our point of view.
    We are told that War Damage Contribution is a capital charge. That is all right in theory, but in practice many individuals, societies and companies are so mortgaged to-day that they cannot borrow any further capital. Indeed, if they wanted to, I am not at all sure that the Chancellor of the Exchequer would permit them to do so. I believe that he has given instructions to the banks to go very carefully in lending money for the acquisition of real estate. Money is now directed into the channels where the Chancellor wants it, namely, into war production. I know that building societies and banks have been prohibited from lending large sums of money for the acquisition of properties. Building has now almost ceased. War Damage Contribution has to be found out of income. It cannot be found out of capital. Rents have been controlled since the end of the last war, and rightly so. I am not advocating that rents should be put up in order to ease the burden of War Damage Contribution, but if rents are controlled, and then an unforeseen burden is thrown on those who receive them, there will be bankruptcy and insolvency far and wide. A very difficult position will be created. I do not know whether there is any way out of the position at the present moment, by the mortgagor passing on some of his burden, perhaps illegally. I do not think any have tried to do so yet, but facilities are given to the dishonest man to try and pass it on, even though he is prohibited from doing so by the Act.
    I have given a few additional examples to those which I gave when I spoke on the Second Reading. I feel that there is support in all quarters of the House for the contention advanced in this Amendment. The mortgagee and house property

    849
    business has now assumed such proportions, whether considered from the angle of the building societies, the property investment companies, housing trusts or banks, and there are millions of people who own some share of the home in which they live, even though it may be only a very small share. If you stop these people from being thrifty and from putting more of their savings into their homes, you attack the foundations of our present order and of the reconstructed order which we want to see after the war. I would reiterate something of what I said on the previous occasion. In the homes of the people is the soundest and solidest sheet anchor for good citizenship, and anything which attacks that solid principle of our national life will be dangerous for the State and for the community. Because I believe that, I have moved the Amendment.
    Lieut.-Colonel Sir Cuthbert Headlam: I do not propose to detain the Committee for more than a few minutes, but I should like to do my utmost to induce the Chancellor to reconsider his decision on this question of the liability of the mortgagee. I gather that his present decision is based on his desire to preserve the sanctity of contract, and probably to maintain the idea that investment in mortgages is a sound form of investment which should be encouraged. I do not think that I or any sane man could fail to sympathise with him in this desire, but in the case of war damage it seems to me that this question of upsetting a contract does not arise. A new and exceptional condition has been created by the war, and the decision of the Government was to meet this new condition by exceptional measures. This measure amounts to a levy on capital, and that falls, of course, at any rate at first, upon holders of property and then upon the whole community. It weighs heaviest on small property owners and upon those who have invested their money in the ordinary shares of a property company. I do not fancy that people who are not associated with property companies realise what tremendous damage they have had to face as a result of the war. It is not only the fact that their property has been destroyed, but that as a result of the blitzing of towns it has been extraordinarily difficult to let what remains. Consequently, their incomes are enormously reduced,
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    and this is the time when they are expected to pay—and naturally in their own interests it is right that they should have to pay—their contribution to the War Damage Fund.
    It seems to me that it is quite impossible to deny the fact that all persons who lend money on property for other than a short term have a direct interest in the property, and this fact indeed is recognised, partially at any rate, in the Act of 1941. It seems to me, therefore, both illogical and unreasonable to bring into the scheme some long-term lenders and not others. I notice that the Chancellor, in his Second Reading speech, besides saying that he saw little difference between a mortgage and an ordinary debt, said that another reason which made him determine to maintain his attitude was that it was impracticable to draw up any simple formula for the mortgagee's contribution which could reasonably be applied to the various types of commercial mortgage, including floating charges, debenture capital and so forth. I appreciate that there may be some such difficulty, although I do not believe that any administrative difficulties are so great that they cannot be surmounted with a little good will. At the same time, there is a distinction between a long-term mortgage and a short one, and I should have thought that it might have been possible without any great difficulty to differentiate between the two. A lender lends his money on the security of the property, and in practice if the property is lost by enemy action or otherwise the lender will lose his money. The War Damage Act protects him against such loss caused by enemy action, and it seems to me only fair and just that mortgagees should come into the picture and take their share of the liability which is imposed upon the mortgagor. I do not propose to go any further into the matter to-day, because I know there are many other hon. Members who wish to speak. I do, however, associate myself very strongly with the speech just made by the hon. Member for Bassetlaw (Mr. Bellenger), and I hope that the Chancellor will see his way to come to the assistance of the mortgagor in this particular case.
    Sir Frank Sanderson: I rise to oppose the principle which has been enunciated by my hon. Friend the Member for Bassetlaw (Mr. Bellenger). I did so on

    851
    the Second Reading of the Bill, and today I do not propose to advance again the arguments which I then put forward. I rise because I am most anxious to put what I regard as a new view, and if that view is accepted by my hon. Friend, I am sure he would then see his way to withdraw his opposition to-day. In the early part of his speech he said that the Prime Minister had stated that the loss should be borne by the community as a whole. May I take the words of the Prime Minister? He promised that the damage suffered by enemy action would not be allowed to remain where it fell but would be borne by the whole community. Surely that is provided for in the Bill, which provides that after the first £200,000,000 of damage has been sustained the Government will be responsible for the second £200,000,000. Afterwards on any damage in excess of the £400,000,000 the Treasury will pay half the additional over and above that figure. I think that that puts the position in rather a different light, in view of the Prime Minister's statement, which in fact has been borne out by this Bill and by every action that my right hon. Friend the Chancellor of the Exchequer has taken during the course of the Debate.
    There is another point that I might just mention in passing before I come to my main point. My hon. Friend stated that he knew that there were powerful financial interests behind this opposition. I am not here to say whether that be true or not, but I would like to say that, so far as I personally am concerned, I have no financial interest in it. I have never given a mortgage, nor have I ever taken one, and I have not been approached by any financial interest. I speak from a purely independent standpoint.
    The point I wish to raise, and which I now come to, is this: In practice, it would not be possible to do what my hon. Friend desires. Indeed the very Amendment which is on the Paper in itself condemns what my hon. Friend has in view. The Clause to which I refer states:
    "the expression 'mortgage' means any charge, lien, floating charge, debenture, debenture stock or like security on any property (including in that expression floating assets) for securing money or money's worth, other than a security, which can be discharged upon less than three months' notice".
    Take just one extract from the "Financial News," which I should say was supporting
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    my hon. Friend's Amendment. I can take their own words to oppose it. This extract says:
    "In the case of a property company, the contribution is in effect paid by the ordinary shareholder. The debenture holder goes free, although his interest in the property is real. Even if the Amendment were agreed to, he would still come off better than the ordinary shareholder."
    I maintain that you cannot really separate a mortgagee from a debenture holder. Therefore, for all practical purposes both come under the same category. A mortgagor is in the same position as an ordinary shareholder in a company. He owns the whole of the equity of the property or business. The mortgagee is in the same position as the debenture holder in a limited company. He holds a charge upon the whole of the properties of the company and usually also upon the floating assets. One might therefore argue—indeed, one should argue if my hon. Friend is right—that debenture holders in all limited liability companies should contribute towards the cost of war insurance in the same way.
    In other words, the point I wish to make is that for all practical purposes a mortgage, whether it be a single mortgage on a property or whether it be a mortgage company that issues debentures and ordinary shares, both of these cases are parallel with the ordinary great industrial concerns that issues debentures which are secured upon the properties of the company. Indeed, if they had not the properties on which to secure the debenture no company would be able to issue a debenture. What takes place? The debenture holder secures his fixed rate of interest, nothing more. The ordinary shareholder holds the equity of the business. If the business is successful the ordinary shareholder comes off well. That applies equally to a mortgagor. On the other hand, if the business is unsuccessful, the ordinary shareholder derives no benefit upon his investment. That is parallel with the case of a company which owns property, whether a company owns property only or whether it owns property, plus machinery, plus business. So I maintain that no argument has been advanced which could really substantiate the argument which has been put forward, and for those reasons I oppose the Amendment which is before the Committee.
    Captain Gammans: I do not know that I can add very much to the arguments which have been put forward by my hon. Friend the Member for Bassetlaw (Mr. Bellenger) and my hon. and gallant Friend the member for North Newcastle (Sir C. Headlam). But I make no apology for bringing forward this question, because my feeling is that it is the one serious criticism against a Bill which is otherwise a very brave and courageous measure to meet the abnormal circumstances in which we find ourselves. I hope that I can impress the Chancellor with the strength of feeling which I think exists throughout the country on this one point. I have read the remarks of the Chancellor and the Attorney-General upon the Second Reading, and I gather that they both feel that the relationship between a mortgagee and a mortgagor is only that of an ordinary borrower and lender. My view, and I believe it is the view of many people throughout the country, is that in these abnormal circumstances the only real criterion which can be applied is this: Has the mortgagee any interest whatsoever in what happens to the property on which he has lent his money? If he has any interest, it is only equitable that he should bear a part of this contribution. May I put it in this way? Suppose this Act were taken off the Statute Book to-morrow morning. I wonder who would be on the Chancellor's doorstep first to ask for it to be re-enacted, the mortgagees or the mortgagors?
    Supposing this Act were not on the Statute Book, would I be right in saying that in connection with the property which has been badly destroyed and upon which a mortgage exists at least 90 per cent. of the mortgagees would in fact lose every penny they have put into that property? In other words, I contend that the mortgagee is very definitely an interested party. I know that the argument has been used that he does not pay any of the fire insurance. That was dealt with very fully and, if I may say so, very ably, by the hon. Member for Bassetlaw, and I do not propose to refer to it. We also have another argument put forward, that if the mortgagees were called upon to bear some share of this contribution, it would give such a shock, as it were, to their nervous systems that property-owning businesses after the war would
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    not be able to obtain money as they were able to do before the war.
    Sir F. Sanderson: Would my hon. and gallant Friend agree that a debenture holder in a public company would be in precisely the same position and that therefore if my right hon. Friend were to consent to my hon. Friend's suggestion he would also have to make it compulsory on debenture holders also to pay a contribution? If the mortgagee had to pay a contribution in regard to mortgages taken out in the future, the mortgagee would take this liability into consideration and ask an appropriate or equivalent increased rate of interest. In regard to existing mortgages, the mortgagee could, and in many instances would, call in the mortgage, or alternatively come to agreement with the mortgagor to increase the rate of interest to compensate him for the insurance to be paid.
    Captain Gammans: I think the position is exactly the same except that in one sense you may argue that the ordinary mortgagee may conceivably have some remedy in a personal covenant to recover his money, but a debenture holder has none. If the property is destroyed, he has no chance of recovering the money he has invested in that company. As I was remarking, we have had the argument that it would give this shock to the mortgagee interests, and therefore in the long run it would not be an advantage to property owners to pass on some part of this charge to the mortgagees. I fail to be impressed by that argument. It seems to me that it is an argument that you can use as a boomerang. In other words, if building and property owning generally is put at the grave disadvantage it appears to be at, you might find that people who would normally come forward after the war to put up houses will be just as disinclined to do so as we are told mortgagees will be to-day if they are called upon to bear some of this cost. In other words, my own opinion is, that taking the long view, the only sound thing, as well as the only equitable thing, to do is to spread the risk over as many people who are interested in the property as possible. May I deal with the point made by the hon. Member for Ealing (Sir F. Sanderson)? I understood that his point was that the proposers of this Amendment might be prepared to withdraw if the Treasury would provide the second £200,000,000.
    Sir F. Sanderson: That was not my point. The point I was endeavouring to make was that my hon. Friend who moved the Amendment thought that there was really no limit to the amount to which my right hon. Friend the Chancellor must be prepared to go to meet his case, if he was going to be equitable and just. Therefore, he may realise that he has no alternative but to withdraw his Amendment.
    Captain Gammans: I do not know whether the hon. Member for Bassetlaw (Mr. Bellenger) is impressed by that argument, but I confess that I am not impressed by it. If the contribution had been pound for pound from the beginning, I might be prepared to withdraw my Amendment; but I hope, at any rate, that we have not yet reached the first £200,000,000 worth of war damage from air raids. I was struck by the argument that this is an ordinary transaction between lender and borrower. If so, why make any exemption at all? Why make an exemption in respect of property of less value than £250 in cases where the money was specifically lent to build or to buy the house? Could anything be more unfair than an exemption granted on the question of purchase? I do not think it matters whether the money was lent to buy the house, to finance a business, or to spend at the races: the only question is, Has the mortgagee any interest in what has happened to it? I hope I have been able to impress the Chancellor with the strength of the feeling which exists throughout the country. He cannot have failed to notice that, both on the Second Reading and to-day, this point has been strongly urged from all parts of the House. I do not know whether there is any difficulty in collecting from the mortgagees. I cannot see that there is. It will simply be the case that the mortgage interest is subject to a deduction of 2s. in the £. I do not press the actual words of the Amendment in my name; if the Chancellor appreciates the principle upon which I and others feel so strongly, he may be able to meet this very important point.
    Mr. Hely-Hutchinson: I think we should try to draw a distinction in our minds between equity and soundness. We want, first, to consider whether the Amendment proposed is equitable or not, and, secondly, whether it is sound
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    or not. On the question of equity, it has been generally admitted, in spite of what was said by my hon. and gallant Friend the Member for Hornsey (Captain Gammans), that there is, in fact, a dividing line on grounds of equity between those who borrow for the purpose of building or buying homes to live in themselves, and those who do so for other purposes—for example, in order to make an income or a capital profit. It is possible to exaggerate the analogy a little further. Surely, there is a difference in equity between someone who mortgages a house in order to own and live in it, and someone who mortgages the house he owns for the purpose of buying a pearl necklace for his wife, or, it may be, for a lady who is not his wife. Surely, between those extreme examples there is a difference in equity. It is not possible to disregard the purpose of the borrower, when considering the question of equity. I think that public opinion has generally accepted the very rough attempt to draw the line just above the small owner, to the value of £150 a year. Above that value, roughly speaking, the transactions come into the category of what might be called commercial borrowing and commercial lending, transactions between people who are engaged in the business for profit.
    Once one gets above the level where equity governs, and into the field of commercial borrowing, it becomes a question of whether what is proposed by the Amendment is sound or not. Here I would join issue with my hon. and gallant Friend the Member for North Newcastle (Sir C. Headlam) and my hon. and gallant Friend the Member for Hornsey on the question of soundness. Those of us who desire that things should be left as they are do not do so because of any abstract principle of the sanctity of contract. In point of fact—and I speak from practical experience of this, as a director both of an insurance company which lends a lot of money on mortgage and of a bank which has a certain amount of mortgage transactions, and in other capacities where I have to deal daily with mortgagors and mortgagees—one is continually having to amend a contract because of the borrower's circumstances. There is never any objection by a lender to amending a borrower's contract when the borrower is in difficulties. But what we seek to avoid is any possibility that the form of a contract which has been such a valuable

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    servant to many forms of industry for so long should be interfered with in order to relieve the present difficulties of some borrowers. Particular borrowers can always meet their lenders, and in 99 cases out of 100 get their contracts adjusted on equitable grounds of pure reason. But this business of borrowing and lending on mortgage has been a very valuable servant to the borrowing and lending community for over 200 years, and we do not want to see that form of contract upset. It is not a question of seeing that every contract made in that form is maintained, but of not upsetting the general form.
    Here I speak also from the point of view of a director of investing companies which have substantial investments in the equity of large property companies. From that point of view, although the ordinary shares of those property companies are suffering at the present time, and although their sufferings are partly due to the additional load placed upon them by the War Damage Contribution, we do not, as investors in the equity, wish to see destroyed a form of covenant which is the very basis of our prosperity in peace-time. I could give figures which would reinforce what the hon. and gallant Member for North Newcastle has said about the importance of this whole thing to the property companies, but I think those figures would probably lead the Committee to a conclusion different from that which Members were invited to draw by the hon. and gallant Member for North Newcastle. An ordinary structure for a large property company might be £9,000,000 book value of property, of which they would be borrowing £6,000,000, and the remaining £3,000,000 might be represented by the equity capital. As a general rule that £9,000,000 of property may be earning 6 per cent. net, and on £6,000,000 of borrowed money the property company has to pay only 3¾ or 4 per cent. It is simple mathematics to show that 6 per cent. on £9,000,000, which is £540,000, less 4 per cent. on £6,000,000, which is £240,000, leaves £300,000 for the £3,000,000 equity capital, which is 10 per cent. thereon. That form of borrowing cheap money on mortgage has been the basis of the property companies' success for quite a period of years. I know of a particular company—and all the companies are
    858
    comparable, though they differ in detail—which for years in peace-time was paying 11 per cent. on its ordinary shares owing to the fact that it was borrowing £6,000,000 at an average rate of 4 per cent. or 3¾ per cent. To-day that company is paying nothing on its ordinary shares, and, very roughly, what has brought that about is that there has been a fall in net rentals of £263,000 a year and an increased charge owing to the War Damage Act of £70,000 a year, a total of £333,000 a year, and the 11 per cent. dividend used to take £275,000.
    It is clear that the major reason why that company is not paying a dividend now is not on account of War Damage Contribution, which is merely a contributory cause, but because of the falling-off of rents. It would not be proper to say at this time whether the net rentals are improving again, because that might possibly be an indication to the enemy whether particular towns were filling up or not, but if it should be the case that a large part of that loss in net revenue which took place in 1940 has now been restored, does that alter the situation with regard to the equity of whether the mortgagee should make a contribution? It might be that, without any question of this War Damage Contribution, this company might get back to the position where it could pay 11 per cent. on its equity capital. Meanwhile still the mortgagees would go on getting only their 3¾ and 4 per cent. The company might own property in a town in which there had been considerable destruction of property and there might be a great shortage of housing, office and shop space in that town after the war, and a considerable increase in rentals. The company, with the improving rentals it would get after the war, might be in a position to pay 16 per cent. or 18 per cent. on its ordinary shares. Is it desired or proper to suggest that in those circumstances the amount of interest that it pays to the holders of mortgage debentures should be increased? I do not think that the Movers of this Amendment contemplate that that should be done by the equity holders, who are suffering very much from the present situation.
    I speak on this matter without any direct money interest of my own, but as touching it from many angles, as a Director and as a Trustee, from the point

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    of view of insurance companies, which lend money on mortgage and from the much less affected point of view of the short-term lenders, the banks and others, who do not have to make new contracts if they do not want to, and therefore would not accept real property as part of their security if it carried this proposed disadvantage; and also from the point of view of the investment trusts which invest moneys in the equity of property companies. "From all these viewpoints we invite my right hon. Friend the Chancellor to leave this question alone. It is a question of sound business policy. It is a question of what is the best business. From the point of view of the investor, and as representing investors in the equities of the property companies, we would very much prefer that the management of these property companies should occupy their minds with other activities than a political agitation which can only serve in the long run to destroy the very basis of the prosperity of the companies which they are managing.
    Mr. Shakespeare: I have not intervened in these Debates before because I was not able to do so, but I am very sorry that when I do so I should have to differ from one who was my old Chief when he was Minister of Health. My hon. Friend the Member for Hastings (Mr. Hely-Hutchinson) has justified the present position on the broad grounds that it would upset a form of service which has been of very great advantage in general housing development. That is true, but as far as I can see, no one wants to upset it, neither the hon. and gallant Member for Hornsey (Captain Gammans), the hon. Member for Basset-law (Mr. Bellenger) nor the hon. and gallant Member for North Newcastle-on-Tyne (Sir C. Headlam). All that they ask is that, in providing against an unknown risk which is something altogether different from the ordinary risks that may fall in peace-time, but a risk which falls upon rich and poor alike, there should be no form of property, investment or finance which should be put into a privileged position. That is the position without a shadow of doubt. It does not matter whether rich people invest in equities, debentures or mortgages, the fact remains that companies which carry on with borrowed money are having a bad time
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    now. The whole of the burden of providing for the security of the money advanced by the mortgagee falls on the equity and not on the mortgagor. It really does not comfort a particular company to know that at some unspecified date in the post-war period they will earn 18 per cent. The point is that here and now this burden has fallen upon them. These housing companies, particularly the Voluntary Housing Associations who use this form of mortgage, find it very difficult to keep up their contributions.
    I realise the difficulty of the Chancellor of the Exchequer. It is difficult to distinguish between the different forms of lending in respect of the different propertie's. He has been rather ingenious in Section 25 of the Act in making a distinction there. The principle is admitted in that Clause that, in so far as building societies lend money in respect of certain classes of mortgage, they should pay a proportion of the contribution accofding to a sliding scale. All we ask is for an extension of that principle. We are putting a liability upon building and other societies, which is not shared by insurance companies. Why should we put one in a more favourable position than the other? I think the Committee will agree that there are certain institutions, like banks, which do not make a general principle of investing in property. If I want to borrow money from my bank, I may have to put down some security, some collateral, but it is not the business of a bank normally to invest in property. It is the business of a bank to accommodate clients in finance, and no one would wish to increase the liability of the banks. But there are agencies which normally and habitually advance money on the security of a mortgage or of debenture shares in a company, all of which is in the nature of an investment. It should be possible for the Chancellor to find some method whereby, if such advances do take the form of investment in property, then, at least the man who is mortgagor or the man who is lending the money should bear his share of the burden that falls on every one, rich or poor alike.
    I cannot understand the basis on which this Bill is drawn up. It does not matter whether a man puts his house against a loan and gives a pearl necklace to his wife. The point is that he

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    invests his money in a house. For what purpose he requires money seems to me to be immaterial. Under the Amendment the mortgagee, instead of getting 5 per cent., would get 4½ per cent. In other words, he would receive one-tenth less as his contribution for the general security of the property concerned. I think a holder in equity would be very lucky if, after the war, he thought he would get back nine-tenths of the value of what he had lost. I hope the Chancellor will realise that there is great feeling in the Committee and outside, and that he will be able to do something to meet it.
    Mr. Silverman: I hope the Chancellor has been impressed, not merely by the arguments which have been addressed to him now and in the Second Reading Debate, but by the fact that those arguments have been addressed to him from all quarters of the Committee by Members who, on other matters, do not act in common and who differ fundamentally very often upon their approach to social questions of this kind. I suggest to him that there has been virtual unanimity in this Debate. There have been two exceptions in this Debate, and, I think, only one in the Second Reading Debate.
    Sir K. Wood: Opinions have been about equal.
    Mr. Silverman: It was said last time that they were about equal, but when we counted up, it was found that they were far from being equal.
    Sir K. Wood: It does not matter.
    Mr. Silverman: No, perhaps it does not, but it is important that the Chancellor should bear in mind that this cannot be said to be a sectional appeal. It has come from all quarters and from varied interests. What is really at stake is a general principle. My right hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) and the hon. Member for Hastings (Mr. Hely-Hutchinson) both disclaimed any financial interest in this matter, and we accept what they say, but when they both said so I was forcibly reminded—I hope they will not mind—of an epigram by the late Humbert Wolfe. He once wrote:
    "You cannot hope to bribe or twist,
    Thank God, the British journalist,
    But seeing what the man will do,
    Unbribed, there's no occasion to."
    862
    I could not help thinking of that when they rose in order to give effect to a principle that really is indefensible. What is the purpose of the Act? It is to see that losses caused to property-owners by enemy action shall not be borne by the property on which the bomb falls but shall be equitably shared among all those people who have common interests and who should share that burden. That is the purpose of the Act. An hon. Member opposite said it was most important that you should not alter the mortgage contract but you cannot help altering it. It has been altered by the war, by this peril The question is not whether you shall or shall not write a new term into the mortgage deed. You must write a new term into the mortgage deed. You are writing it into the mortgage deed whether the Amendment is passed or rejected. The question is what the new term is to be. It is nonsense to say that you can leave the mortgage contract where it was. You could have done so if there had been no war, but here there enters into the substance of the contract something which neither the money-lender nor the borrower contemplated, something which they cannot control. The State has thought it right to legislate for that and legislate for it we must. It is for us to say that whatever new term we write into the mortgage, it shall be fair and equitable, ensuring a reasonably shared burden.
    In order to examine whether, without this Amendment, the burden is equitably shared, let us see what is the position of the two parties under the Act. The hon. Member opposite raised the question of who would complain most, if there were no Bill. Let us see who would complain most. What is the position of the mortgagees under the Act, whose positions would be effected by this Amendment? If the property upon the security of which he lends his money disappears as a result of enemy action, a money-lender loses, nothing whatever. He is entitled to the whole of the debt acknowledged to be due by the Commission so far as his mortgage claim extends. It is true that he has to wait for that money until after the war, but, in the meantime, the borrower is bound by law to pay every penny of the contractual interest even though the War Damage Commission only pays to the borrower 2½ per cent. The money-lender, therefore, is fully and completely secured both as to the return of his capital and as

    863
    to the payment in the meantime of every penny to which he is entitled under the letter of the mortgage deed. For that security what does he pay under the Act.
    The answer is that he pays nothing. How can anybody seriously argue that that is equitably sharing a burden? There is a situation in which, on the one side, a person is entirely secure and cannot lose in any circumstances, and pays for that complete security not one penny, whereas, on the other side, a man who pays the whole of the contribution gets a partial security long deferred and has to pay in the meantime every penny to the moneylender to whom he is bound by the original contract. It really does not bear examination. The Attorney-General, in replying to this kind of argument in the Second Reading Debate, said that the Bill would admit that principle wherever the money had been lent for the purpose of buying or building the property affected.
    The Attorney-General: I would point out that I went on to say words to this effect—in circumstances similar to a building society mortgage, where it could be said that there was an analogy with the-position of landlord and tenant.
    Mr. Silverman: I accept that. I was only attempting to state briefly the spirit of the argument to which the Attorney-General lent his support. That argument attempted to draw a distinction between money borrowed generally for the purposes of the building upon which it was borrowed, and money borrowed upon the security of a building for extraneous commercial purposes. I think the Attorney-General will agree that that is a fair statement of the argument. In order to illustrate the matter, the Attorney-General said that a man who lends his money upon the security of a building accepts a lower rate of interest than he might get if he had no security. He said it was fantastic to argue, in those circumstances, that the man ought to be called upon to bear a share of this contribution. The Attorney-General said that that argument is fantastic, and if he says so, perhaps it is, but all I can say is that what seems to him to be fantastic is to me the plainest of common sense, and indeed, since we are bandying words, I should have thought it was his argument
    864
    and not ours that was fantastic. Once it is admitted that the moneylender has himself so highly valued the security which he gets as to be willing to forfeit a share of the return in order to get that security, surely it is established that he has an interest in the property for which he is willing to pay good hard money and to accept a lower rate of interest in order to obtain the security based upon that property. How, then, can it be argued that he has no interest in the property? His interest in the property is precisely measurable; he has valued it himself, and has paid for it according to his assessment. Certainly, he is interested in it, and if he is interested in it, he ought equitably to bear his fair share of the cost of preserving the value of that security against the acts of the King's enemies. That is all that is contended.
    Were it not for the big financial interests involved, the insurance companies and the banks, this Amendment would not be resisted. It cannot be resisted in equity, and it would not in fact be resisted but for the power of these great financial organisations. This is a Bill, as it stands, to make the world safe for moneylenders. They are the only people who are fully secured under the Bill. They are the only people who will pay no share of the cost of insuring their security. It is not right that a great social Measure of this kind should be not merely marred but, as far as these matters are covered, destroyed in the public mind as an equitable Measure by its tender regard for institutions that are better able to look after themselves than are those for whose interests we are contending in this Amendment. If there had been advanced good, sound and equitable reasons why these particular mortgagees alone should escape any share of the common burden, we would not be pressing this Amendment upon the Government. But I say that no one who has listened to the two Debates on this matter, the Second Reading Debate and the Debate on the present Amendment, can think for one moment that any sound case for this favourable discrimination has been or can be made, and I hope it is not too late for the Government to look at this matter again with a view either to accepting one or other of the Amendments—I would prefer the one that raises the general principle—or, if they think that the

    865
    Amendments do not effectively deal with the matter, finding some other machinery for carrying out what I think is the universal opinion of the Committee.
    Lieutenant Butcher: I want to reinforce the arguments that have been used in this Debate, and to say how unusual it is that on a matter of this kind the arguments should come from every quarter of the Committee. As the hon. Member for Nelson and Colne (Mr. Silverman) has said, there is a widespread desire to remedy an injustice which is apparent and inherent in the Bill as it now stands. This is not an insurance scheme. If it were an insurance scheme, the owner of property would have the right to decide whether or not he should come into it. This Bill imposes obligations on every owner of property in however remote or safe an area of the country the property may be. There is no choice and no opportunity for the property owner to elect whether or not he will come into the scheme. But there is this point, that wherever and in however dangerous a position may be the property on which the money has been advanced, the property is guaranteed against war damage for the benefit of the moneylender who has lent money on it without his making a penny contribution to the scheme. My hon. Friend the Member for Hastings (Mr. Hely-Hutchinson) concluded his remarks by saying that the matter should be left as it is. There are many people in remote parts of England who would not come into this scheme unless the Government compelled them to do so. The purpose of the scheme is to spread the burden as far as possible and as fairly as possible, and the sole test is whether a person has a definable interest in the property of which he may suffer some loss. I do not believe the Chancellor intends to accept the Amendment, but unless he does so, it will go out that of all the people who are interested in the property only the moneylenders can get benefits for which they do not pay.
    Sir K. Wood: Let me say in reply to the observations which have been made that I hope the Committee will dismiss from its mind any question here of sinister vested interests. Indeed this is the first time this notion has been imported into our discussions. If we were to look into the question we should, I suppose, find
    866
    that the large section who might be particularly interested in this Amendment are proprietors of great blocks of flats who have felt the considerable weight of the contributions which have to be paid under this Measure, coming on top of the very considerable losses which they have sustained by loss of rents. I am very sorry for them, but I am glad to observe, without giving any secrets away to the enemy, that the loss in regard to rents is now rapidly disappearing. Therefore, if one wishes to go into the motives, or into the question of where vested interests stand, much can be said on both sides. And let us not prejudice the position by using a word to which some people object. A stigma seems to be attached to the word "moneylender," which my hon. and gallant Friend the Member for Holland-with-Boston (Lieutenant Butcher) used of the mortgagee.
    Lieutenant Butcher: The Chancellor will be aware that on a previous occasion we got a little tangled up with the words "mortgagee" and "mortgagor." I was trying this time to keep myself neat and square.
    Sir K. Wood: My suggestion is that my hon. and gallant Friend should use the words "borrower" and "lender." The word "moneylender" has that little touch which excites prejudice. Let us put these two matters on one side and endeavour to deal with the case on its merits. It is a case for which much can be said from both points of view. This is, of course, not the first time we have had to deal with this problem. The House has already debated it and come to a decision. That decision was taken when the first Measure was brought before the House. That Measure was the subject of very careful consideration. Points of view were put by both sides, both in this House and in another place. Therefore, as I say, we are not considering this matter for the first time. What we are really being asked to do now is to upset a decision which was arrived at by both Houses before the principal Act was put on the Statute Book. It would have very serious consequences, quite apart from the merits of the proposal, if we reversed that decision at this stage. The House of Commons has power to take a step of that kind, but first, it must have regard to the previous decision, and whether there is a considerable amount of

    867
    opinion to support such a course. We have only to look round the Committee to-day to judge the measure of that. [Interruption.] My hon. Friend draws attention to the hour of the day; but I myself have not had an opportunity to avail myself of it. This Debate has been going on for some time, and here we are a nice little happy party—and no more than that. It does not look to me as if the masses of the country are up in revolution about this proposal.
    I do not for a moment desire to minimise the arguments which have been advanced against the Government's proposal by my hon. Friends, who always speak with great force and persuasion, but we have to have, not only an overwhelming case, but a case which is backed up by a very large body of opinion—larger than has been exhibited to-day—before we can reverse a decision of this kind. What was the decision taken? In a typically British way we arrived at a compromise on this proposal, although, no doubt, it can be attacked upon strictly logical grounds. The compromise which we reached, as the Committee is well aware, was that we would make special provision for cases excepted by the House. There was a special kind of relationship between landlord and tenant, and for that we made special provision. The compromise was accepted, and, as is set out in the Section of the principal Act, no contributions are made by the mortgagee.
    Mr. Bellenger: Would the Chancellor of the Exchequer amplify his statement about the compromise in cases analogous to landlords and tenants?
    Sir K. Wood: I do not want to interrupt my argument to deal with that. I would refer my hon. Friend to the Section of the Act, with which I think most Members are fully familiar. The arrangement was come to after the most careful consideration, yet it is that arrangement which we are now asked to upset. There were very good grounds for that decision. I do not think that sufficient ground for altering that decision has been given by anything said in the course of this Debate.
    Since the principal Act was passed the position of the persons who have to pay contributions has been very much improved by the decision of the Government
    868
    and the course of events which have taken place since the first Bill was introduced. A considerable contribution is exacted from those who have to make it. But so far as concerns the bearing of the burdens, there has been great improvement since the House came to its decision on the last occasion, and that must obviously be borne in mind in our consideration of the matter to-day. It is true, as has been indicated by some hon. Members, that if a house is completely destroyed the mortgagee comes in and takes the whole amount of the money that is due to him. He has paid no contribution towards it, and therefore he receives great advantages under the Measure. It is entirely overlooked however that, owing to the provisions of the Bill and the money which has been found by compensation, the person who has borrowed the money is relieved entirely from the covenant into which he has entered and the obligation which he has incurred, which would follow him for the rest of his life if it were not otherwise met. And you must have regard in all these cases to the fact that, apart altogether from the question of the mortgaged property, there is a personal covenant entered into which in a very large number of cases is of considerable value. I do not think there will be very many who, with the choice of mortgages available to-day, would themselves lend money or advise other people to lend money to people with shaky reputations or about whose honesty there was doubt.
    One of my hon. Friends instanced the position of some of these large property-owners and the important and proper part that they play in lending money for the purchase of houses and matters of that sort. There is another section of the community whom I do not want to see prevented from assisting us in our housing efforts in the future. I think it is the experience of almost all of us—it was certainly mine in days gone by in my professional capacity—that one of the best things in the country was the number of people, not with large fortunes, who were prepared to lend sums of £300, £400 or £500 on property and to regard it as a first-class investment. One has often been asked to advise as to the choice of investments for such sums, and again and again it has been said, "This is one of the safest investments you could make. It is true you are not getting a big sum by

    869
    way of interest. You could get more if you liked to take a measure of risk, but if you lend your money in this way at a smaller rate of interest you are sure of getting it and it is one of the best and safest securities you can have." I submit we should not do anything to make people look askance at that kind of investment. If you begin to interfere and make arrangements of that kind impossible, you will be doing a great deal of mischief. We shall want all the assistance we can get in dealing with the housing problem after the war, and I believe that in this way a very useful contribution can continue to be made by those investors who have helped us so much in the past. Therefore, I will do nothing which might disturb or interfere with that valuable type of investment.
    The difficulties are also illustrated by the Amendments that appear on the Paper. All sorts of suggestions have been made in order to overcome them. One of my hon. Friends seeks some kind of remedy in an arbitrary contribution to be made by the mortgagee, which he fixes at 2s. in the £1. Other of my hon. Friends have, I suppose, apprehended the difficulties which arise from bank overdrafts and commercial mortgages and they in their turn have put down varying Amendments, all in an endeavour to meet an extremely difficult situation. If we attempted to put upon the Statute Book the Amendment that we are debating, it would throw into chaos many commercial transactions. When the Act was in another place Amendments were moved designed to meet the difficulty, which it was found impossible to accept. If we accepted this Amendment or any of the others on the Paper a difficult position would be created with regard to debenture holders covering in their security some measure of real property. I can visualise a large gold-mining company with a head office in the City of London. The contribution they would have to make in respect of that building under the War Damage scheme would be hardly of any account for such a large company. If, however, this proposal were followed to its logical conclusion, there would have to be a fractional deduction in the case of every one of the people concerned with debentures. Clearly it would be impossible to follow out, in practice, a proposal of this kind.
    Mr. Selley: All that would be required would be to take the Schedule A on the property itself.
    Sir K. Wood: My hon. Friend does not follow me. I am pointing out how impossible it would be to obtain the contributions where the building was covered by debentures. I will look at some of the suggestions that have been made. I do not think it is possible to distinguish housing associations from others. I think that the House came to a reasonable decision on the last occasion. It is a compromise and I would advise the Committee to adhere to it. It has been illustrated, again and again, that that decision is a reasonable compromise, and the solution of many of the difficulties that confront us in dealing with this matter.
    Sir H. Williams: The Chancellor of the Exchequer has almost converted me against him. On this matter I have differed with many of my property-owning friends, but now the Chancellor says, "Look at this man. He is a mortgagee and is therefore a valuable creature. We must cosset him and be careful with him, or otherwise he will not come forward in future and lend money on mortgage." If you lend £400 on mortgage you are safe, but if you use the £400 to buy the other end of the house, the equity end, you have to carry the whole burden. There is a house worth £800. If you buy the back end the Chancellor comes to your aid and you must not pay one penny. If you buy the other end you are like Barnum's elephant, you have to carry the whole lot. My King Charles's head is that this problem will never be solved until we provide compensation for loss of rent and the rates of contribution should run for a sufficient number of years to meet all charges. The burden is very oppressive on some mortgagors. Take the case of a house with a Schedule A value of £100. The income runs out roughly the same as Schedule A. There is £60 mortgage interest to be paid to the mortgagor, who pays 5s. in the £ contribution on his income. He is paying only 2s. in the £ on the £100, but his income is only £40. On that he has to make a contribution of £10, which is 5s. in the £. The Chancellor, by way of Income Tax, takes any £10, so that these people are bearing a burden, where the mortgage is 60 per cent. of the total, of 15s. in the £. If the mortgage is 70 per cent. there

    871
    is only 1s. 6d. in the £ left out of the whole income. It really is, therefore, a very oppressive burden. It is not 2s. in the £, but anything from 3s. to 8s. according to the proportion which the mortgage interest bears to the Schedule A valuation. That is an aspect of the problem to which the Chancellor has not yet devoted sufficient attention.
    I am satisfied that until a change is made in some direction or another, this agitation will continue. I have tried to explain to my property-owning friends that mortgages have to be divided into two categories. There are those which are associated with the purchase of a house and those advanced for reasons which have nothing to do with the purchase of a house. I do not go so far as the hon. Member for Nelson and Colne (Mr. Silverman) who suggested that big financial interests were behind the Chancellor in preventing him from doing what is desired. I think that it is the desire to preserve the sanctity of contracts that is fundamental in the Chancellor's mind. It is no good attacking the banks and insurance companies and calling them great financial interests. They are trustees and we have to bear that in mind. My hon. Friend the Member for Hastings (Mr. Hely-Hutchinson) is the director of an insurance company in which I have insured my life. He does not take a narrow selfish view of the affairs of his company as a director, but he acts as a trustee of the thousands of people whose capital is with the company. There is no narrow selfish point of view in these concerns, and it weakens our case to say that there is.
    Mr. Silverman: I did not suggest that anyone was taking a narrow or selfish view. I did assert, and I repeat, that even if the great institutions are acting in a trustee capacity and are as altruistic as my hon. Friend suggests, this Amendment would not be resisted but for their influence.
    Sir H. Willlams: The phrase used was "big financial interests," and we know its implications—that they are necessarily dirty dogs who must have no consideration. We all indulge in that kind of prejudice. It goes down splendidly when we are addressing our constituents on enthusiastic occasions. There was a proposed new Clause on the Paper in my name
    872
    which was not called because it was thought that the Amendment in the name of the hon. Member for the Abbey Division of Westminster (Sir H. Webbe) which follows this would cover the point. The idea was that where the purchase of the property and the mortgage were transactions which took place at the same time and where they were definitely associated, the mortgagee should pay part of the contribution. We have the case of the housing associations. The proposal which I tabled affected the First National Housing Trust, which has large estates in Croydon and many other parts of the country. The Chancellor of the Exchequer actually cut the first sod of an estate in Birmingham undertaken by the Trust, and, therefore, he is interested in seeing that the great estates which he helped to develop when Parliamentary Secretary to the Ministry of Health, are not oppressively treated. When they raised the money they did not raise a separate mortgage on each house but raised a collective mortgage upon the lot, and therefore they do not get the advantage of the compromise.
    They do not get the advantage of the compromise because Lord Kennet, when he was Minister of Health, with the support of the present Chancellor of the Exchequer, then Parliamentary Secretary to the Ministry of Health, passed through Parliament a very valuable housing Bill whereby people who in the ordinary way could have got mortgages up to 60 per cent. could raise a mortgage up to 90 per cent. The State came to their aid in order to encourage masses of people to buy their houses. As a result of that useful Housing Act a large number of additional houses were constructed, but the people concerned with their construction, entirely as a result of the form of the Housing Act, 1932, not through any malice on their part, not through any ill-will but merely because they were complying with one useful Act of Parliament, are now condemned under the War Damage Act. Having regard to my declarations in the past, I cannot go so far as to support the Amendment before the Committee, but I hope nevertheless that consideration will be given, if not to-day, at any rate before the Report stage, to proposals for abating an injustice which manifestly now exists.
    Mr. Craven-Ellis: I have followed this Debate closely and I

    873
    am satisfied that those Members who put their names to these several Amendments had just occasion for doing so. The Chancellor has endeavoured to push this Amendment on one side, because Parliament has already passed the War Damage Act. I do not want the Financial Secretary to the Treasury to be too severe with me regarding the observations I am going to make, but at the time that Measure was passing through this House I think I am right in saying that he made an observation to the effect that it was a make-shift Measure. If those were not his exact words the words he used had that meaning, and I would say that it was a correct expression, because Parliament was doing something it had never done before and something which was deliberately contrary to the undertaking which the Prime Minister himself had given to the House. Long before the War Damage Act was introduced the Prime Minister made a statement at that Box to the effect that the State would be responsible for damage incurred through enemy action. That undertaking has never been implemented. We have had an experimental period and we have found that there are faults in this original Act, and I say there is justification for accepting one or other of these Amendments, or a compromise based on the whole of them.
    I want to say that I am opposed strongly to the mortgagee making any contribution. But the position is not normal. The very fact that Parliament has put the War Damage Act on the Statute Book has created an abnormal situation, and if the Government choose to deal with this very serious matter in this way I feel justified in supporting these Amendments, although in principle I am against the mortgagee making any contribution. It has been asked, "But what

    Division No. 11.]

    AYES.

    Beamish, Rear-Admiral T. P.

    Culverwell, C. T.

    Horsbrugh, Florence

    Beattie, F.

    Davies, Major Sir G. F. (Yeovil)

    Hughes, R. M.

    Blair, Sir R.

    De Chair, Capt. S. S.

    Hume, Sir G. H.

    Bower, Norman (Harrow)

    Denman, Hon. R. D.

    James, Wing-Comdr. A. W. H.

    Bracken, Rt. Hon. B.

    Denville, Alfred

    Jeffreys, Gen. Sir G. D.

    Brocklebank, Sir C. E. R.

    Duckworth, Arthur (Shrewsbury)

    Jennings, R.

    Burton, Col. H. W.

    Ede, J. C.

    Jowitt, Rt. Hon. Sir W. A.

    Cadogan, Major Sir E,

    Edmondson, Major Sir J.

    Kerr, Sir John Graham (Scottish U's)

    Campbell, Sir E. T.

    Elliot, Lt.-Col. Rt. Hon. W. E.

    Kimball, Major L.

    Cazalet, Major V. A. (Chippenham)

    Emmott, C. E. G. C.

    Leighton, Major B. E. P.

    Chapman, Sir S. (Edinburgh, S.)

    Etherton, Flight-Lieut. Raiph

    Linstead, H. N.

    Colegate, W. A.

    Grimston, R. V.

    Lipson, D. L.

    Cooke, J. D. (Hammersmith, S.)

    Hannon, Sir P. J. H.

    Little, Dr. J. (Down)

    Cripps, Rt. Hon. Sir Stafford

    Harris, Rt. Hon. Sir P. A.

    McCallum, Major D.

    Critchley, A.

    Heilgers, Major F. F. A.

    Makins, Brig.-Gen. Sir E.

    Crookshank, Capt. Rt. Hon. H. F. C.

    Hely-Hutchinson, M. R.

    Mayhew, Lt.-Col. J

    is the mortgagee's interest?" It has been said that he has merely lent money upon a definite security. His interest in the matter is more clearly identified. When money is borrowed on a property it is the natural and proper thing to insure that property against fire, and the mortgagee says, "I must have my name endorsed oh that policy as recognising that I have part ownership." I think that is so; and if that is correct, then it is right, having regard to this abnormal piece of legislation that we should expect the Government, who have failed to implement the Prime Minister's undertaking, to endeavour to bring about an equitable adjustment among the various interests. The imposition on property-owners to-day is very great, and, as I have told my property-owning friends, I blame them to a large extent for it, because there is no unity among them. If there were unity in the ranks of property-owners, this legislation would never be on the Statute Book, because it is such a piece of gross injustice. I said so yesterday and repeat it to-day. The Financial Secretary to the Treasury, in his cynical way, seemed to brush that on one side, but, after all, the property-owners of this country have a right to expect justice from this House. I hope that the Financial Secretary will report to the Chancellor that there are other Members in this Committee whom he has not heard who feel that some consideration should be given to these Amendments between now and the Report stage, in an endeavour to see whether even a small measure of justice cannot be given to the property-owning community.
    Question put, "That the words proposed to be left out stand part of the Schedule."
    The Committee divided: Ayes, 87; Noes, 53.

    Mellor, Sir J. S. P.

    Russell, Sir A. (Tynemouth)

    Thomas, J. P. L. (Hereford)

    Malson, Capt. A. H. E.

    Salt, E. W.

    Tomlinson, G.

    Morrison, Rt. Hon. W. S. (Cirencester)

    Sanderson, Sir F. B.

    Tufnell, Lieut.-Comdr. R. L.

    Nicholson, Captain G. (Farnham)

    Savory, Professor D. L.

    Ward, Col. Sir A. L. (Hull)

    Orr-Ewing, I. L.

    Scott, Donald (Wansbeck)

    Waterhouse, Capt. C.

    Palmer, G. E. H.

    Smith, Sir R. W. (Aberdeen)

    Wells, Sir S. Richard

    Peto, Major B. A. J.

    Somervell, Rt. Hon. Sir D. B.

    Westwood, J.

    Raikes, Flight-Lieut. H. V. A. M.

    Spearman, A. C. M.

    White, Sir Dymoke (Fareham)

    Rankin, Sir R.

    Storey, S.

    Williams, C. (Torquay)

    Reid, W. Allan (Derby)

    Strickland, Capt. W. F.

    Wood, Rt. Hon. Sir K. (W'lwich, W.)

    Rickards, G. W.

    Stuart, Lord C. Crichton- (Northwich)

    Young, A. S. L. (Partick)

    Robertson, D. (Streatham)

    Stuart, Rt. Hon. J. (Moray and Nairn)

    Robertson, Rt. Hn. Sir M. A. (M'ham)

    Summers, G. S.

    TELLERS FOR THE AYES.

    Royds, Admiral Sir P. M. R.

    Tate, Mavis C.

    Mr. Boulton and Mr. Pym.

    NOES.

    Adams, D. (Consett)

    Hardie, Agnes

    Shakespeare, G. H.

    Beaumont, Hubert (Batley)

    Henderson, T. (Tradeston)

    Silkin, L.

    Benson, G.

    Isaacs, G. A.

    Sloan, A.

    Bowles, F. G

    Jenkins, A. (Pontypool)

    Sorensen, R. W.

    Buchanan, G.

    Kirby, B. V.

    Stephen, C.

    Butcher, Lieut. H. W.

    Leslie, J. R.

    Strauss, G. R. (Lambeth, N.)

    Charleton, H. C.

    Lloyd, Major E. G. R. (Renfrew, E.)

    Summerskill, Dr. Edith

    Chater, D.

    McEntée, V. La T.

    Tasker, Sir R. I.

    Craven-Ellis, W.

    Mainwaring, W. H.

    Taylor, H. B. (Mansfield)

    Crooke, Sir J. Smedley

    Marlowe, Major A.

    Thomas, Dr. W. S. Russell (S'th'm'tn)

    Davidson, J. J. (Maryhill)

    Mathers, G.

    Viant, S. P.

    Davies, Clement (Montgomery)

    Maxton, J.

    Walkden, E. (Doncaster)

    Davies, S. O. (Merthyr)

    Medlicott, Colonel Frank

    White, H. Graham (Birkenhead, E.)

    Edwards, N. (Caerphilly)

    Montague, F.

    Wilson, C. H.

    Frankel, D.

    Oliver, G. H.

    Windsor, W.

    Gallacher, W.

    Pritt, D. N.

    Gammans, Capt. L. D.

    Reakes, G. L. (Wallasey)

    TELLERS FOR THE NOES.—

    Griffiths, G. A. (Hemsworth)

    Reed, Sir H. S. (Aylesbury)

    Mr. Bellinger and Mr. Silverman.

    Hall, W. G. (Colne Valley)

    Selley, H. R.

    Captain Gammans: I beg to move, in page 16, line 16, at the end, to insert:
    "Rights over against mortgages in cases to which Section twenty-five of principal Act does not apply.
    7. Where at the relevant date in any year in which an instalment of contribution is payable the interest of a direct or indirect contributor in respect of a contributory property is subject to a mortgage or mortgages, such case not being one in which Section twenty-five of the principal Act applies the following provisions shall have effect:—

    (a) The contributor shall in respect of his net liability for the instalment of contribution payable in the year in question be entitled to be indemnified by the mortgagee or mortgagees under the mortgage or mortgages in question to the extent of a rate in the pound upon the amount of the annual interest payable by the contributor to such mortgagee or mortgagees for that year, which rate in the pound shall be the instalment rate for the year in question unless than rate when applied to the amount of such interest would yield a sum exceeding one-half of the net liability of the contributor for the instalment of contribution payable in that year, in which case the rate in the pound shall be a rate which, when applied to the amount of such interest, would yield a sum not exceeding one-half of such net liability:

    Division No. 12.]

    AYES.

    Adams, D. (Consett)

    Bowles, F. G.

    Charleton, H. C.

    Beaumont, Hubert (Batley)

    Buchanan, G.

    Chater, D.

    Benson, G.

    Butcher, Lieut. H. W.

    Craven-Ellis, W.

    Provided that if there shall be more than one mortgagee entitled to receive interest for that year under any such mortgage the share of the indemnity to be borne by any one of such mortgagees in respect of that year shall bear the same proportion to the total amount of the indemnity in respect of that year as the amount of the interest payable to that mortgagee for that year bears to the total amount of the interest payable under the mortgage or mortgages for that year;
    (b) The expression 'mortgage' means any charge, lien, floating charge, debenture, debenture stock, or like security on any property (including in that expression floating assets) for securing money or money's worth, other than a security, which can be discharged upon less than three months' notice;
    The expression 'mortgagee' has a meaning corresponding to the meaning of the expression 'mortgage,' and the expression 'the instalment rate' means the rate in the pound at which in the year with respect to which the expression is used the instalment of contribution is levied in pursuance of the provisions of Sections twenty and twenty-two of this Act."
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 57; Noes, 90.

    Davidson, J. J. (Maryhill)

    Kirby, B. V.

    Southby, Comdr. Sir A. R. J.

    Davies, Clement (Montgomery)

    Leslie, J. R.

    Stephen, C.

    Davies, S. O. (Merthyr)

    Lloyd, Major E. G. R. (Renfrew, E.)

    Strauss, G. R. (Lambeth, N.)

    Duckworth, W. R. (Moss Side)

    McEntee, V. La T.

    Summerskill, Dr. Edith

    Edwards, N. (Caerphilly)

    McNeil, H.

    Tasker, Sir R. I.

    Frankel, D.

    Mainwaring, W. H.

    Taylor, H. B. (Mansfield)

    Gallacher, W.

    Marlowe, Major A.

    Thomas, Dr. W. S. Russell (S'th'm'tn)

    Groves, T. E.

    Mathers, G.

    Viant, S. P.

    Hall, W. G. (Colne Valley)

    Maxton, J.

    Walkden, E. (Doncaster)

    Hardie, Agnes

    Montague, F.

    White, H. (Derby, N. E.)

    Headlam, Lt-Col. Sir C. M.

    Pritt, D. N.

    White, H. Graham (Birkenhead, E.)

    Henderson, T. (Tradeston)

    Reakes, G. L. (Wallasey)

    Williams, Sir H. G. (Croydon, S.)

    Higgs, W. F.

    Selley, H. R.

    Wilson, C. H.

    Hughes, R. M.

    Silkin, L.

    Windsor, W.

    Isaacs, G. A.

    Silverman, S. S.

    Jenkins, A. (Pontypool)

    Sloan, A.

    TELLERS FOR THE AYES.—

    Kerr, Sir John Graham (Scottish U's)

    Sorensen, R. W.

    Captain Gammans and Mr. Bellender.

    NOES.

    Baxter, A. Beverley

    Grimston, R. V.

    Robertson, D. (Streatham)

    Beamish, Rear-Admiral T. P.

    Groves, T. E.

    Robertson, Rt. Hn. Sir M. A. (M'ham)

    Beattie, F.

    Hannon, Sir P. J. H.

    Ropner, Col. L.

    Blair, Sir R.

    Harris, Rt. Hon. Sir P. A.

    Royds, Admiral Sir P. M. R.

    Bower, Norman (Harrow)

    Hely-Hutchinson, M. R.

    Russell, Sir A. (Tynemouth)

    Bracken, Rt. Hon. B.

    Horsbrugh, Florence

    Salt, E. W.

    Broadbridge, Sir G. T.

    Hume, Sir G. H.

    Sanderson, Sir F. B.

    Brocklebank, Sir C. E. R.

    James, Wing-Comdr. A. W. H.

    Scott, Donald (Wansbeek)

    Browne, Captain A. C. (Belfast, W.)

    Jeffreys, General Sir G. D.

    Smith, Sir R. W. (Aberdeen)

    Burton, Col, H. W.

    Jennings, R.

    Spearman, A. C. M.

    Cadogan, Major Sir E.

    Keeling, E. H.

    Storey, S.

    Campbell, Sir E. T.

    Kimball, Major L.

    Strickland, Capt. W. F.

    Cazalet, Major V. A. (Chippenham)

    Leighton, Major B. E. P.

    Stuart, Lord C. Crichton- (Northwick)

    Challen, Flight-Lieut. C.

    Linstead, H. N.

    Stuart, Rt. Hon. J. (Moray and Nairn)

    Chapman, Sir S. (Edinburgh, S.)

    Lipson, D. L.

    Summers, G. S.

    Cluse, W. S.

    Little, Dr. J. (Down)

    Tate, Mavis C.

    Colegate, W. A.

    Lucas, Major Sir J. M.

    Thomas, J. P. L. (Hereford)

    Gripps, Rt. Hon. Sir Stafford

    Macdonald, Capt. P. (Isle of Wight)

    Tomlinson, G.

    Critchley. A.

    Makins, Brig.-Gen. Sir E.

    Touche, G. C.

    Crookshank, Capt. Rt. Hon. H. F. C.

    Mayhew, Lt.-Col. J.

    Tufnell, Lieut.-Comdr. R. L.

    Culverwell, C. T.

    Mellor, Sir J. S. P.

    Ward, Col. Sir A. L. (Hull)

    De Chair, Capt. S. S.

    Molson, Capt. A. H. E.

    Wardlaw-Milne, Sir J. S.

    Denman, Hon. R. D.

    Morrison, Rt. Hon. W. S. (Cirencester)

    Waterhouse, Capt. C.

    Denville, Alfred

    Nicholson, Captain G. (Farnham)

    Wells, Sir S. Richard

    Duckworth, Arthur (Shrewsbury)

    Orr-Ewing, I. L.

    Westwood, J.

    Ede, J. C.

    Palmer, G. E. H.

    White, Sir Dymoke (Fareham)

    Edmondson, Major Sir J.

    Petherick, Major M.

    Wood, Rt. Hon. Sir K. (W'lwich, W.)

    Elliot, Lt.-Col. Rt. Hon. W. E.

    Peto, Major B. A. J.

    Young, A. S. L. (Partick)

    Emmott, C. E. G. C.

    Reed, Sir H. S. (Aylesbury)

    Etherton, Flight-Lieut. Ralph

    Reid, W. Allan (Derby)

    TELLERS FOR THE NOES.—

    Frankel, D.

    Rickards, G. W.

    Mr. Boulton and Mr. Pym.

    Mr. Frankel: On a point of Order. I have to inform you, Sir Dennis, that I have inadvertently voted in both Lobbies, first in the left, which from my point of view is the wrong, Lobby, and secondly in the right one. Therefore, my vote is recorded in both Lobbies, first with the "Noes" and then with the "Ayes." Can anything be done about it?
    The Chairman: I am afraid the hon. Member has done all that he can to remedy the matter. He has in fact cancelled his wrong vote, but only at the expense of, practically, not having voted at all. I am sorry, but I am afraid that in the circumstances, under our Rules of Procedure it is not possible to do anything more.
    Mr. Frankel: Thank you very much, Sir Dennis. I will do my best to remedy those Rules.
    Amendments made:
    In page 18, line 10, leave out:
    "The foregoing provisions of this paragraph and the provisions,"
    and insert:
    "The provisions of this Act and."
    In page 19, line 2, leave out:
    "or by paragraph 9 of this Schedule."—[Sir K. Wood.]
    Sir John Mellor: I beg to move, in page 19, line 5, at the end, to insert:
    "except in any case where the Commissioners of Inland Revenue have allowed the discharge of such liability to be deferred by reason of the fact that a payment in respect of expenditure on the making good of war damage to property has accrued or is accruing but has not been discharged."
    It is sought to insert this Amendment at the end of sub-paragraph 12, which provides:

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    "A right to indemnity conferred by Part I of, or the Fourth Schedule to, the principal Act or by paragraph 9 of this Schedule shall not be enforceable until the discharge of the liability in respect of which the right arises."
    The exception we seek to insert is:
    "except in any case where the Commissioners of Inland Revenue have allowed the discharge of such liability to be deferred by reason of the fact that a payment in respect of expenditure on the making good of war damage to property has accrued or is accruing but has not been discharged."
    The right to indemnity which is referred to in sub-paragraph 12 of the Second Schedule to the Bill is the right which arises under the principal Act that the ground landlord shall make a partial contribution to the contribution made by the direct contributor. In the Fourth Schedule to the principal Act there is a table which defines the appropriate proportions in which the contribution is ultimately to be divided between the direct contributor and the ground landlord or other parties bearing a similar relation to him. As matters would stand, were the Bill to proceed unamended so far as this sub-paragraph 12 is concerned, the direct contributor, whose contribution is deferred because there is accruing to him a war damage payment of some kind, as in those circumstances where there is a permitted set-off, would not obtain the due indemnity from the ground landlord according to the strict wording, although I do not think according to the intention of the Government. He would not be able to get this indemnity although he had in effect discharged his liability to the contribution, because what he is to receive will be subject to an appropriate set-off. I think that the matter will be corrected if the Chancellor can accept the words of the Amendment or some similar words so as to secure in effect that a set-off shall be equivalent to a discharge of the liability within the words of sub-paragraph 12.
    Sir K. Wood: This matter is a rather complicated one, as my hon. Friend pointed out. I would just say that I will bear in mind what he has said in any further consideration I give to this particular proposal. I would remind he Committee that sub-paragraph 12 of the Second Schedule which my hon. Friend desires to amend provides that an indemnity is not to be recoverable by a landlord, tenant or mortgagor, until the liability in respect of which the right to an indemnity arises has been discharged.
    880
    Consequently the direct contributor must have paid the Inland Revenue before he can recover his indemnity. My hon. Friend proposes that this condition shall not apply where under an administrative arrangement the Inland Revenue has allowed collection of the contribution to be deferred until the direct contributor has received from the War Damage Commission payment in respect of expenditure which he has incurred in repairing war damage. The deferment extends to contributions on the damaged property and the direct contributor's other properties up to the amount of the claim on the Commission.
    As we see it, the proposal before the Committee would operate in a way which probably my hon. Friend would not regard as satisfactory. Suppose that a person held long leases of 20 properties from 20 different landlords and the instalment due from him as a direct contribution on 1st July, 1942, in respect of all the properties amounts to £500 and that he will be entitled to recover from his landlords indemnities amounting in all to £200. If he has expended more than £500 in repairing war damage to one of the properties and has claimed that from the War Damage Commission, the Inland Revenue Department is prepared, if he so requests, to allow the collection of £500 for all the properties to be deferred until the Commission pays. But the effect of the Amendment would be that because a direct contributor's claim for making good the damage to a single property has not been met he would be allowed, before paying anything to the Inland Revenue, to recover his indemnities, both from the landlord of the damaged property and the 19 other landlords whose property has suffered no war damage. It would indeed be hard to satisfy those 19 that they should be excepted from the general rule by the fact that the lessee holds from another landlord a property which happens to have been damaged. That, as I understand, may be the effect of this Amendment. But perhaps my hon. Friend will allow me to consider what he has said, and I will confer with him if necessary.
    Sir J. Mellor: I am much obliged to my right hon Friend, and I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Schedule, as amended, agreed to.

    THIRD SCHEDULE.—(Amendments in Part II (Goods).)
    The Parliamentary Secretary to the Board of Trade (Captain Waterhouse): I beg to move, in page 20, line 5, at the end, to insert:
    "3. Conditions to secure application of early payments for replacement of essential goods.

    (1) Where the whole or any part of a payment in respect of the destruction of or damage to any goods is made on an earlier date than would be allowable under Sub-section (1) of Section sixty-one, and is so made by virtue of the Board of Trade being satisfied that the replacement or repair of the goods is expedient in the public interest, the Board may impose conditions requiring that the sum paid shall be applied in or towards the replacement or repair of the goods, or shall be so applied within such time as the Board may specify, and if any such condition is not complied with the sum paid shall be recoverable as money had and received to the use of His Majesty.

    (2) Nothing in this paragraph shall be taken to prejudice the power of the Board of Trade under Sub-section (3) of Section sixty-one to impose conditions restricting the manner of application of a payment."

    This Amendment is designed to set right an oversight in the drafting of the original Act. The original Act lays down that the Board of Trade may impose conditions restricting the manner in which the sum paid for destroyed business goods may be applied in the replacement or repair of such goods destroyed or damaged. It was thought that that gave us complete power to specify how any money we paid out should be expended. In fact, we are advised that we have not any such power. We can say how the money shall be expended if it is expended, but we cannot say that it must be expended. Suppose that a man lost a capstan lathe, and we decided that it was in the public interest that that capstan lathe should be replaced, and we gave him £500 to replace it. We could say, "You will spend that £500 on replacing that lathe, and you will paint it blue." If he painted it green, we could get the lathe back. On the other hand, if he did not buy a lathe, but spent the money on having a few months in Blackpool, we could not get our money back at all; we should just be left looking rather foolish. This Amendment is to give us power to say how any money provided by us for a specific purpose shall be spent.
    Amendment agreed to.
    Captain Strickland: I beg to move, in page 20, line 20, at the end, to add:
    "5. Payments for damage prior to scheme coming into force.
    Notwithstanding anything in Section sixty-eight of the War Damage Act, 1941, and subsequent regulations made under the provisions of that Section, payments shall be made to a person who suffered war damage to goods or private chattels prior to the date of the scheme coming into force on such terms as would have applied had the scheme been in force on that date."
    My reason for moving this. Amendment, which I think will appeal to the sense of the Committee, is that, according to my reading and the reading of a good many friends of mine, when the original Act was before the House it was the intention that those people who were unfortunate enough to lose their private goods and chattels prior to the passing of the Act should come under the same conditions as to compensation and as to premiums as those who suffered damage after the passing of the Act. The general feeling was that we were all in this together, and that we should share alike. Section 68 of the War Damage Act stated that—
    "The Board of Trade, acting in accordance with the regulations made by the Treasury, may make payments to persons in respect of … war damage occurring to goods which … if the scheme in question had then been in force would have been uninsurable …"
    It might almost seem that those words would cover the Amendment I am now moving, but a position has arisen which is contrary to the speech made by the Chancellor of the Exchequer on 17th December, 1940, when he said:
    "Out of evil good may come, and this Measure will not only enable us to do justice by securing that the burden shall be shared between those who suffer and those who are fortunate enough to escape damage to their property … It is another principle of this Measure … that all must stand together, so far as the rate of contributions is concerned."—[OFFICIAL REPORT, 17th Dec, 1940; cols. 1125–6, Vol. 367.]
    When the Board of Trade issued Notice 123, dated April, 1941, Section 1, headed "What the private chattels scheme is," said:
    "If you are a householder, there is free compensation, without payment of a premium."
    A further explanatory leaflet was issued, known as P.C.S.5, in Section 15 of which occurs the phrase:

    883
    "The War Damage Act also provides for those cases in which the damage occurred before the scheme came into force. You will be treated as if you had a policy under the scheme, and will receive the same compensation as you would have received in that case. A sum will be deducted from your compensation to cover any premium which you would have paid if the scheme had been in force."
    No mention was made, when the assessments were done on the pre-Act damage to furniture, of any deduction of a-premium where the amounts were assessed by the valuer. That went on right through the year, until January this year, when a further assessment was sent out, showing how much the original assessment was, how much had been paid on account, and the balance to be paid in future, when the war had finished. It was not until the Spring of this year that the first mention was made in official documents of the deduction of a premium which would be paid to the people who suffered damage prior to the passing of the Act. I put down a Question to the President of the Board of Trade on 28th April, and he replied:
    "My attention has been drawn to this case. For reasons of practical administration and for the advantage of many of the claimants, the very large number of claims outstanding, when the War Damage Act became law, have been assessed for compensation as if they were the subject of an insurance policy. No premium is levied where the loss is less than £100 or payment is made on hardship grounds. In other cases the premium is calculated on the actual loss only."—[OFFICIAL REPORT, 28th April 1940; col. 777, Vol. 379.]
    That means that a married man, living with his wife, may have suffered £300 damage to furniture prior to the Act coming into force, and another man, living in the same circumstances, may have suffered damage to his furniture to the same amount in the following month. One man is charged a premium, or is notified that a premium will be deducted from the £300, while the other has no such premium charge made. I am sure that it is not the desire of the Treasury that this distinction should be made. I am not particularly wedded to this Amendment. I would rather learn that there was a sense of the justice of the thing. If there has been administrative difficulty, I hope there will be some statement from the Treasury that they will meet this case in a just, generous and open way, so that people who suffered before the passing of the Act
    884
    may be treated in-exactly the same way as those who have suffered after the passing of the Act.
    Captain Waterhouse: I am glad that my hon. and gallant Friend was able to say that he did not attach great importance to the particular form of this Amendment. Although we cannot possibly accept the Amendment as dratted, for the reason which I will shortly explain, we can do something which will substantially meet the point that he has put so very clearly. If we were to accept this Amendment, it would mean, in these pre-Act claims, that we would have to investigate the amount of free cover to which each applicant was entitled. The Committee will remember that anyone is entitled to a certain amount of free cover for himself, a certain amount of extra free cover for his wife and a certain amount of extra free cover again for his children living with him at home. It would have been a very great administrative difficulty—in all these matters we are dealing with hundreds of thousands of cases—to have had to make such inquiries, and again there would have been the difficulty that a man might have exhausted his free cover but might not have realised the fact and probably would not have realised it. Were he unfortunate enough again to be bombed out of his house—because there are many cases where people are bombed out two, three, and even more times—he might well have expected that he would again be subject to a free cover and would have been extremely disappointed and aggrieved when subsequently he found that he was not covered at all for the second calamity. There are certain disadvantages in that, under free cover, the amount that one can get for any specific article destroyed, such as a motor car, piano or wireless set, is limited to £25, whereas under the policy as a whole it is £50 or 5 per cent. of the total amount insured, whichever is the larger, without any limit for a motor car.
    In all the circumstances the Board of Trade decided that it would be best to deduct this small premium—I know that my hon. and gallant Friend will agree with me that although it is an annoying premium, it is a very small one—when the payment came to be made, but subject to two very material provisos. The first is that when an immediate payment is made on the ground of hardship no

    885
    premium deduction is made at all, and the second, which is equally important, is that no premium deduction is made when the claim is under £100. These two provisions together can make us reasonably sure that no payments have already been made from which premiums have been deducted. We are therefore able to meet my hon. and gallant Friend in this way. The Board have decided that under their existing powers they will in future waive the deduction of premium on the first £300 of pre-Act claims, which will substantially meet the case.
    Captain Strickland: Do I understand that in future that will apply to where assessments have already been made?
    Captain Waterhouse: I will deal with that. Instructions will be issued that, in cases where the notice of deferred payment showing a deduction of premium has already been issued, such deductions are to be disregarded when the payment comes to be made after the war. If there are any cases in which the deduction has already been made from a cash payment, then we are prepared to refund, but we do not think that there are any such cases. I hope that my hon. and gallant Friend will feel that that provision substantially meets his case.
    Captain Strickland: I would like to thank my hon. and gallant Friend for the way in which he is meeting my suggestion. I know that it must present great administrative difficulties, and it is, as he says, a very small amount to deduct from the point of view of the Treasury, but it is a considerable amount to some of the people who have suffered this damage, and it gave them a feeling that they were being penalised by their misfortunes. I am sure that his announcement will be received throughout the country with wide approbation among these unfortunate people. I beg to ask the leave of the Committee to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Sir Patrick Hannon: I beg to move, in page 20, line 20, at the end, to add:
    "5. Payments for damage to goods pertaining to places of worship.
    (5) Where—

    (a) war damage has occurred to goods pertaining to a church, chapel or certified place of meeting for religious worship of any denomination, being goods in respect of which a policy has been issued under the business scheme; and

    886

    (b) a representative body of that denomination, whether central or not, has made application to the Board of Trade, either as respects that policy or as respects any class of policies comprising that policy, that any payment thereunder in respect of the goods should, in lieu of being made to the person insured, be made to a body of persons specified in the application,

    the Board of Trade may, if they think fit and after consultation with the person insured under the policy and any other persons appearing to the Board to be interested, give effect to the application.

    (2) Regulations of the Treasury under Section sixty-eight may provide for applying the provisions of sub-paragraph (1) of this paragraph to payments in respect of such goods as aforesaid made under that Section otherwise than under policies."
    The Amendment relates to the operations of the war damage business scheme as operated by the Board of Trade. In present circumstances the operation of the scheme is a contractual arrangement with the particular person who arranges the insurance on the part of the particular denomination or church or chapel. The Bishop of London's Committee, which embraces representatives of all the religious bodies of the country, has decided that this Amendment is necesary in view of the eventualities of our time. For example, evacuation has taken place in many districts, air raids have destroyed churches and chapels, and trustees are concerned about their insurances against war damage. This Amendment aims at releasing the Board of Trade from the obligation of dealing with the particular person who carries through the insurance policy and ensures payment to the representatives of the church or chapel affected by the insurance itself. I need not elaborate the matter, but, in the circumstances in which we live, people are often out of touch, and some of the persons possibly who have effected an insurance may be non-existent or untraceable. An insurance can be effected by a particular person on behalf of a particular church or chapel. In the Roman Catholic Church we have a diocesan committee whose responsibility is the maintenance and continuity of church or chapel arrangements. That body would be the proper one to receive the compensation if it was paid under the provisions of the principal Act operated by the Business. Committee of the Board of Trade. I understand that the Board of Trade is friendly to this Amendment being introduced into the existing legislation, and I

    887
    have received a friendly smile from no less a person than my right hon. Friend the Chancellor of the Exchequer.
    Mr. Denman: I think there is nothing I need add to the words of my hon. Friend the Member for Moseley (Sir P. Hannon) except to endorse what he said about this being an Amendment which is proof of the collaboration of all the main Christian bodies in this country. It is a very happy collaboration in considering the problems of physical reorganisation after the war, and this is an exceedingly useful product of that body. I had a letter to-day from the right hon. Gentleman the Member for Luton (Mr. Burgin) asking me to add his name on behalf of the Methodist Church, so it will be seen that the main Christian bodies are united in this request. The purpose of the Amendment has been clearly explained by the Mover, and I think it will be for the convenience not only of the Churches but, I hope, of the Board of Trade as well. The principle of a negotiation between a central body of State and a central body of the Churches is accepted in the first part of the War Damage Act, and I think that principle will be conveniently applied to the insurances under the business section of the same Act.
    Captain Waterhouse: An Amendment on these lines was first brought forward in another place by the Bishop of London when the original Bill was under consideration. At that time the Lord Chancellor, while expressing doubt as to whether or not that particular Amendment could be accepted, was most sympathetic to the general idea underlying it

    "Section three, subsection (6).

    The word 'immediately' shall be omitted.

    First Schedule, paragraph 5 (1) (6)."

    In page 21, line 16, at the end, insert:

    "Section nine, subsection (4).

    For 'immediately before the occurrence of the war damage' substitute 'at the date by reference to which the disposal of a value payment in respect of war damage thereto is under the preceding provisions of this section to be regulated.'

    First Schedule, paragraph 6."

    In line 20, at the end, insert:

    "Section twelve, subsection (2).

    For the words from 'if the mortgage' to 'share shall' substitute 'if the mortgagee receives the payment or share he shall be liable to account as if it had been paid in full, but if not it shall.'

    First Schedule, paragraph 8."

    and promised that on the first suitable subsequent date, if the matter was raised again, it would be most sympathetically considered. This, of course, is the first such occasion and, as the hon. Members who have moved and supported it have pointed out, it has been agreed by all the main bodies of the Churches in the country. There are adequate safeguards, we think, for the rights of the insurers. After all, it is up to the Board of Trade to see that those rights are properly safeguarded. If the parochial council of any particular Church have taken out an insurance policy and some other body; of that denomination thinks the payment should be made to the diocese or to themselves rather than to the insurers, the first thing the Board of Trade have to do is to consult with the insured.
    Sir P. Hannon: If they can be found.
    Captain Waterhouse: Yes, if they can be found. If they had been blown up it would be difficult to consult with them. But if they can be found consultation will take place with them, and it is also our duty to consult with any other persons who seem to us to be interested. We feel that these safeguards are sufficient and that the object of the Amendement is desirable, and, therefore, we are very glad to ask the Committee to accept it.
    Amendment agreed to.
    Schedule, as amended, agreed to.

    FOURTH SCHEDULE.—(Consequential Amendments.)
    Amendments made:
    In page 20, line 25, at the end, insert:
    In page 22, line 31, at the end, insert:

    "Section forty-four, subsection (3)(a).

    For the words from 'the depreciation in' to 'its value in' substitute 'that section shall have effect with the substitution for the reference in subsection (4) to the state in which the hereditament was immediately before the occurrence of the damage of a reference to.'

    First Schedule, paragraph 5(1 ((b)."

    In line 40, at the end, insert:

    "Section sixty-three

    In subsection (2) the words 'in relation to the goods' shall be omitted, and at the end of paragraph (b) of that subsection, insert 'or, where the conditions require the replacement or repair of the goods, whether within a specified time or not, that if goods have been acquired or repaired as aforesaid they would be on any premises.'

    Third Schedule, paragraph 3."

    In line 49, at the end, insert:

    "Section eighty, subsection (4).

    The word 'immediately' shall be omitted.

    First Schedule, paragraph 5 (1) (b).

    In page 24, line 20, at the end, insert:

    "Third Schedule, paragraph (2) (d).

    The words 'the subsistence of' shall be omitted.

    First Schedule, paragraph 8."

    —[Sir K. Wood.]

    Schedule, as amended, agreed to.
    Bill reported, with Amendments; as amended to be considered upon the next Sitting Day, and to be printed. [Bill 31.]

  EMERGENCY POWERS (DEFENCE) ACT, 1939.
  Motion made, and Question proposed,
  "That the Milk Marketing (Special Areas) (Scotland) (Charges) Order, 1942, dated 14th May, 1942, made by the Treasury under Section 2 of the Emergency Powers (Defence) Act, 1939, a copy of which was presented to this House on 19th May, be approved."—[Captain Crookshank.]
  Major McCallum: I must apologise to the House for taking up its time with what may be considered a matter of very small importance, but this is a matter of considerable importance to the part of Scotland which lies within my constituency, namely, the three islands to which this Order refers. Agricultural conditions in these islands have been steadily declining for a number of years, and I would like to say to the Government that the farmers there are deeply appreciative of this scheme having been extended to them as a result of representations which have been made. It is true that there has been a certain dilatoriness in the
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  scheme being brought into effect for these three islands, and I frankly admit that it is not only the authorities which are to blame for the delay. There was, among a very conservative set of farmers, definite opposition to bringing these three areas under the control of the Milk Marketing Board However, good sense has prevailed, and the scheme is now to include these three islands.
  I would like to refer to the Island of Coll, which is five or six hours' steaming away from the mainland and has a population of about 200 people. Not so long ago the number was about 1,000. The cheese-making industry on this island was fast disappearing. The inclusion of Coll in this scheme will be the beginning of a new lease of life for the farmers and inhabitants of this island. I am given to understand that this is only a war-time Measure, and while many of us know wartime Measures of control are not always welcome or acceptable, I can assure the Government, on behalf of the farmers, that this one is most decidedly welcome. We hope it will not only be a war-time Measure but a peace-time Measure, when that happy time comes again. The war may be over in two or three years' time and it is very difficult for farmers when they are more or less at the mercy of uncertainty, particularly in such an industry and in

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  such remote areas, if they do not know whether this is to be a permanent scheme or not. On behalf of my constituents, I hope that the scheme will be carried on after the war. I know that my right hon. Friend the Secretary of State for Scotland and many others in Scotland are firmly convinced that co-operative marketing is one of the principal conditions that will bring better times to our agricultural industry. We look upon this scheme as a small beginning. I know that in some parts of my constituency, inclusion in the Milk Marketing Board's scheme has brought a tremendous revival in agriculture. We look forward to these three islands also having a new lease of life as a result of the scheme. Other islands in my constituency and outside it on the West Coast of Scotland, and also certain
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  parts of the mainland, have rejected up to now all efforts to include them in the scheme, but I feel certain that when they see the beneficial results that come from inclusion, they also will be only too anxious to be included in the scheme. On behalf of the agricultural community of the islands, I heartily welcome the scheme.
  Question put, and agreed to.
  Resolved,
  "That the Milk Marketing (Special Areas) (Scotland) (Charges) Order, 1942, dated 14th May, 1942, made by the Treasury under Section 2 of the Emergency Powers (Defence) Act, 1939, a copy of which was presented to this House on 19th May, be approved."

  ADJOURNMENT.
  Resolved, "That this House do now adjourn.—[Mr. J. P. L. Thomas.]