HC Deb 05 August 1943 vol 391 cc2554-77
Mr. Craven-Ellis (Southampton)

I propose to take up the time of the House for a brief period to refer to the difficulties and anomalies under the War Damage Act. It was on 26th March, 1941, that the Act was passed. The conditions which prevailed at the time when the Bill was brought into this House were such that I believe the significance of the Measure was not fully appreciated. We had, a few months before, won the Battle of Britain, and this country was under persistent bombing, and under these conditions it was not unreasonable that this House should not fully appreciate the significance of this Measure. I represent a constituency which, unfortunately, has been very severely bombed, and incidentally I have lost my London house under these conditions, so that I know something about the matter. Hon. Members who represent similar constituencies will confirm the position I have outlined and that very great hardship has been imposed. At the time of the heavy blitzing of my constituency it was a question of constant contact with people who had suffered damage. Therefore when these claims came in such large numbers it was inevitable that there would be some confusion. I fully realise the difficulties the War Damage Commission has been up against. An entirely new organisation had to be set up. In spite of the difficulties with which I and so many others have come in contact, I feel that the War War Damage Commission has rendered a very great service. I suppose that right up to the end of this business there will be some people who will find one or other reason for being somewhat critical, but one is justified in saying that the Commission has done a really good job. At the same time we must have some regard to the effect of the war damage contribution, which is contributed almost entirely by the property owners themselves, on our post-war housing position.

I have during the last few weeks asked many Questions regarding housing, and there will be a good many more to follow. I am endeavouring to impress upon the Government the necessity for an entirely different outlook on post-war housing. War damage contribution is one of the causes which will handicap post-war housing. Was it really fair that this Measure should put a burden upon a particular section of the community when they already had other heavy burdens not shared by other members of the community, and in addition, their property was restricted in so far as rentals were concerned, the property owner being in the position that he could not raise his rent to meet increased cost of management and repairs, both of which are directly connected with the war?

The treatment of property owners has created a definite amount of lack of con- fidence. If there is lack of confidence in any particular direction, it always reacts sooner or later. I will tell my hon. Friend what I believe to be adequate grounds for some alterations which he has the power to make and thereby restore confidence in property. It is not the property owner alone whom we need to consider; there are several things to consider. There are 47,000,000 people in this country who have to live in homes. There are several millions who through war damage are not now adequately housed. I want to remove all the handicaps that are likely to stand in the way when the war is over of finding these people adequate accommodation. This Act has been in operation now for three years, and three contributions to the compensation fund have fallen due, and there are still two further contributions. Therefore, over this period the Government must be fully aware of the anomalies and hardships it is surprising that they have not themselves come forward with some proposals for minimising, if not entirely eliminating, these anomalies and hardships.

Mr. Assheton

I would remind my hon. Friend and the House that we did bring in an amending Bill early this year.

Mr. Craven-Ellis

I think I shall be able to show that the amending Measure does not deal with the hard core of hardship. I am inclined to think that the amending Measure to which my hon. Friend refers gave greater concessions to that section of the community who can better afford to shoulder these heavy burdens than most of the people for whom I am now speaking. I feel that the Government might have gone very much further when they were bringing forward their amending Bill.

Let me mention one or two anomalies. Take the case of two identical houses both costing the same money—absolutely identical in every respect. One of them is occupied by the owner-occupier, he being a gentleman who is purchasing his house, it may be, through a Building Society or an insurance company. When occupying that house—and I am quoting from actual figures—his assessment is £24 per annum and his amount of war damage contribution for the five years amounts to £12. The gentleman who is occupying the adjoining house, which is absolutely identical, and is paying an economic rent, is assessed at £40 This house is the property of an investor and therefore the investor has to pay war damage contribution to the amount of £20 for the five years. The owner-occupier, who is paying the £12, gets precisely the same amount of insurance cover as the investor who is paying £20. The hon. Gentleman the Financial Secretary probably will reply that one is assessed on the hypothetical rent. I put this to the House, every one of these owner-occupier houses are illegally assessed and if the hon. Gentleman will deal with that point, I would like him to show the House of Commons, if he can, that I have made an incorrect statement. These people who have the handling of property know that when you come to rate assessment the houses are assessed on what an hypothetical tenant would pay. Is it any different when it comes to be assessed for Income Tax purposes under Schedule A? There is no difference and therefore one assessment is right and the other is wrong. They cannot both be right and they cannot both be wrong. I would like the hon. Gentleman to say, if he can, which is the correct assessment.

There is another point I would like to bring to the notice of the House. I raised this matter in October, 1941, in a Question. It refers to a property owner who has suffered damage to his property to the extent of just over £20,000. This only forms a small part of the whole of the properties belonging to this individual. That £20,000 is owing by the State to this individual and there is no argument. That is definitely the position. The property owner over a period of five years will pay war damage contribution to an extent of just over £17,000. Therefore under the War Damage Act the State has a claim upon that property belonging to this individual of £17,000 and the individual property owner has a claim against the State for £20,000. In this case we would say, in business, "I owe you £20,000, and you owe me £17,000. I will pay you the difference." That is what we do in business. But not the Government. They say, "Yes, I admit that I owe you £20,000, but that does not matter; you owe me £17,000, and I must insist upon your paying it." The property owner has no means of insisting that the Government should pay the £20,000 which they owe him. As I have said, this Act was passed at a very strange time, when we were under a great deal of stress and strain and when some of the significances of it were probably not appreciated. But now we know from actual experience what is the position. I submit to the Financial Secretary that the time has come when such anomalies as these should not be permitted. May I refer to a reply which the Chancellor of the Exchequer gave to me in answer to a Question in October, 1941, asking whether one claim could be set against the other? He said:

The collection of instalments of contributions on damaged property in respect of which a value payment is likely to be made is to be suspended. That means that compensation which is payable on damaged property is suspended.

Mr. Bellenger (Bassetlaw)

And so are contributions.

Mr. Craven-Ellis

Contributions are suspended on a particular block of property which has been damaged, but they are not suspended on the whole of other properties which come into the group. The Chancellor went on to say: …and the amount of the value of payment, if it is eventually made, will be reduced by so much of the instalments as has not been made. Here, in black and white, is evidence that property owners' claims for war damage may not, in fact, be paid. Therefore, I would like the Financial Secretary to be more definite on that point. I will read the appropriate words of the Chancellor again, so that there will be no doubt: …if it is eventually made…

Mr. Assheton

Will my hon. Friend allow me to intervene, to explain the difficulty? What my right hon. Friend the Chancellor undoubtedly meant was, if a value payment was made as opposed to a cost-of-works payment.

Mr. Craven-Ellis

I am dealing with value payments, not cost-of-works payments.

The next point I want to put forward is the case of the owner of property which has been completely destroyed and which has been valued at £750. The man has a mortgage of £500, and the property is subject to a ground rent of £6. What is the position of this man, a working man? His house is blitzed, and the amount agreed upon for payment is £750. This man is called upon by the lender of the money to him to pay his interest on that money, as well as the ground rent of go. It is true that the Financial Secretary may say that the man can get relief under the War Emergency Powers Act. But what is the position under this Act? Unless the man is insolvent, there is no relief. To get any relief from a situation which has arisen out of enemy action, the man has to be insolvent. The fair way of treating a case of that kind would be to find the £500 part payment of the total loss so that he may repay the mortgagee. That is not unreasonable.

The next anomaly I would like to refer to concerns low-rented houses. The Housing (Financial Provisions) Act, 1933, was passed so that abnormal advances might be made to people who own property. The loans which had to be made by building societies were to total 90 per cent. of the value, the societies retaining the full risk of the 70 per cent. Between 70 and 90 per cent. the risk was shared, one-third each, between the building society, the Government and the local authority. As a result of that Act private enterprise came forward and built many thousands of houses at very low rentals. In spite of the fact that the period of capital repayment was an extended period over that normally expected by the building societies, the management and operation of such properties resulted in a revenue deficiency. The people who built houses under this Act were, as a rule, substantial people and, therefore, could afford to face, in normal conditions but not in war-time, a revenue deficiency. But during the war these people, who have generously responded to the appeals to provide houses for the working classes at very low rents, have had imposed upon them war damage contributions, which has made their deficiency infinitely greater. That will not encourage private enterprise to proceed with much building when the war is over.

I could quote many other anomalies, but I think I have said sufficient to convict the House that this Act has created a very great hardship. If we can forget for a moment the sad loss of life and injury, it seems to me that we have some consolation in the bombing of our cities. London has had removed by enemy bombs properties which should have been removed many years ago. But why impose this responsibility on the property owners? The Prime Minister himself in 1940, said in this House that damage by enemy action stood on a different footing from any other kind of loss or damage and that the nation undertook to be responsible against assault from the outside. That statement has never been implemented, although it is clear that the Prime Minister fully appreciated the country's responsibility. Something has happened which has caused a change to be made which will be very detrimental to our housing programme when the war is over. As I have said, there may be some consolation in the blitzing of our cities. I say that because, quite apart from the £200,000,000 which has to be provided by the property owners, plus the £200,000,000 which the Government will contribute—and which should have been contributed pound for pound instead of waiting for the property owners to find the first £200—the cost of replacing and rebuilding our cities might well be used as a foundation for restoring and reviving general industry not only in our towns but in the blitzed towns of Europe.

What I want to say now will not, I think, be out of Order. When the War Damage Commission have agreed as to the amount of the cost of the replacement and give a certificate showing the amount to which a person is entitled, that certificate ought to be financed by the joint stock banks. I myself hold a certificate for damage done to my furniture when I lost my own home, and I really think that could be brought into the general financial arrangements and so save any further burden being put upon the taxpayers of the country. I submit that, having regard to the present military situation, while fully conscious that we may have to suffer to some extent further serious bombing, the Government will be justified in suspending any further payments under the War Damage Act, as they have power to do under Section 22, or reducing the two remaining annual payments. I hope the proposal will have due and favourable consideration.

Captain Gammans (Hornsey)

I am glad my hon. Friend has brought this question forward. We are dealing under the Act with vast sums of money, and its operations affect many millions of people. It will give an opportunity for the Financial Secretary to the Treasury to hear the views of property owners on the operation of the Act and an opportunity which I hope he will take of giving some indication as to how the Government propose to operate the Act in future.

We are dealing with a very large section of the population. It is a popular cry to talk about rapacious landlords and land speculators, but I have no concern with them. I am concerned with the many millions. I think 5,000,000 people have put their life's savings into houses and have saved money by hard work and initiative. They represent a class of people whom we used to regard—I am not sure whether we do now—as the very best type of citizen, but in these days of almost universal social services I am wondering whether thrift and self-sacrifice are still regarded as virtues. It is certain that these people are almost completely un-organised, and there is a danger that they may fall between the two stools of large business on the one side and organised labour on the other. The same thing very largely applies not merely to people who own their own houses but to those who have invested in property companies. This is not a speculative form of investment and never has been. Those who have put their money into property or property companies have not done so for the sake of high and fluctuating dividends. I feel that I am right in suggesting that most property owners have a very real sense of grievance against the War Damage Act. To start with, most of them consider that in the passing of the War Damage Act there was a direct contravention of a pledge given by the Prime Minister three years ago. He talked about spreading the burden so that we all stood together and went on to use the words my hon. Friend has read, and added: The nation undertakes the task of defending the lives and property of its subjects and taxpayers against assaults from without. If those two statements meant anything at all, they meant that war damage was to be a charge on the community as a whole and was not to be restricted as it is now to one section of the population. What has in fact happened? Under the War Damage Act the first £200,000,000 worth of damage is entirely paid by the property owners, and only if there is over £200,000,000 worth does the Treasury come into it at all. No-one knows what the final figure is going to be. We were told last November, in answer to a Question, that the amount actually disbursed by the War Damage Commission up to date was in the neighbourhood of £100,000,000, but that did not take into account the contingent liability, which cannot be met to-day because of the shortage of men and materials. The first question I want to ask my hon. Friend is whether he can give us any idea of what are the outstanding liabilities. He will probably say he cannot, for security reasons, but for the life of me I cannot see what security factor is involved in giving us a figure of that sort.

Another grievance that property owners have is that the mortgagee makes no contribution, with one exception. This was brought up when the Act was amended last year, but the grievance remains, and time has done nothing to lessen it. Most property owners feel that the mortgagee has as much interest in the fate of the property as they have themselves, and it is no good saying that this was not envisaged when the mortgage was made out. Of course it was not, because then bombing was not envisaged at all. It is equally true that in the vast majority of cases the mortgagee would not recover a penny of his mortgage money unless he did it out of the value of the house itself. This fact is accepted by implication, because under the Act in the case of a value payment the mortgagee has to be paid off before the owner gets a cent of his money.

Another grievance that property owners have is the rate of interest on value payments. The owner is entitled to 2½ per cent., but he does not get a penny till after the war. In the majority of cases people who have mortgages are paying between 4½ and 5½ per cent. The second question therefore I should like to ask is whether there is any means whereby that interest can be paid while the war is on. Meagre as it may be it would certainly go some way to help people who have to meet interest charges.

There are two other directions in which the Financial Secretary could give some idea of what help is possible. The first is in regard to the contribution generally. Property owners meet the first £200,000,000, and the Treasury meets the second. We do not know what the final figure will be, but if the Treasury would say now that whatever the final figure is they will meet half of it, that would do something to help. Supposing the final figure of war damage is £320,000,000, property owners will bear £200,000,000 and the Treasury £120,000,000. Could they not halve it and each pay £160,000,000? Another direction in which there is considerable concern is in regard to value payments as opposed to cost-of-work payments. I had an answer to a Question to-day which I imagine most Members have not seen. It goes part of the way to deal with the point to which I was going to refer. This is the answer: The test of total loss for the purpose of the War Damage Act, 1943, is not a physical but an economic test, and it is likely that many houses of good quality will qualify for a cost of works payment even if they are physically totally destroyed. If I understand that correctly, it means that the Government have appreciated what was before a very glaring anomaly. There are two houses side by side, one badly knocked about but not completely destroyed. It had a cost-of-works payment, which means that the owner virtually has a house to live in. The man next door has his house blown to smithereens and is given a value payment, the value being based upon the value in March, 1939, when values of property were very much depressed. That £700 or whatever the value payment was would not go far towards the rebuilding of the house. That would mean that one man would be in an infinitely better position than his neighbour. Therefore I am hoping that the answer to my Question means that the War Damage Commission are going to adopt a sensible course and try to give people back a house, because that is in fact what they want.

There is a small point under Part II of the Act, with regard to chattels. Here an anomaly has arisen in that people who had the good fortune lo be paid for total loss of furniture early on are in an immeasurably better position than the wretched people who are being paid now, because meanwhile the cost of furniture either new or second hand has gone up probably anything up to 100 per cent., and what a family gets now will perhaps only furnish about half the house.

I believe this question of fair dealing to the property owner covers not merely common justice to a worthy section of the community. It really strikes at the whole basis of the Government's post-war housing programme. I remember that when we were discussing war damage 18 months ago the Chancellor of the Exchequer got very worried about the woes and miseries of mortgagees and said that if anything was done to destroy the value of a mortgage, mortgagees would not come forward when the war was over and lend money on property. I do not know whether that was true or not, but I am sure there is a very real danger of house building and properly ownership receiving such a shock that people will not be prepared to put their money into it when the war is over. The Minister of Health has told us that in the vast rebuilding programme after the war tie expects private enterprise to play a very large part, and on the basis of pre-war figures that means that private enterprise will build three out of every four houses. This is the question that worries me, in view of this differential legislation against property. The properly owner bears all the direct and indirect taxation, and he has this imposition of war damage and Rent Restrictions Acts and other things. Because of that differentiation against the property owner, will people be prepared to come forward and put their money in property? No other section of the community is expected to do what the property owner is expected to do, and that is to bear highly increased charges out of a pre-war income. I do not want to tell the House a lot of piteous tales about the woes of property owners, but I venture to suggest that there is hardly a Member who does not know of terribly sad cases of people who are at their wits end to pay the War Damage Contribution and the other additional expenditure which arises out of the war.

My feeling is that two things will inevitably happen. One is that much property, which would otherwise have had many years of useful life before it, will become slums when the war is over simply because the wretched owner has not the money to restore it. The other thing that I am afraid will happen is that people will be reluctant to put their money into property. I wish the Chancellor were here to-day, because I would like to ask him this question. Suppose a young man in the Forces came to him and said, "After the war it was my ambition to save money and buy a house. Would you frankly advise me, legislation being what it is, to put my money into buying a house?" If I personally were asked that question and I were honest in my reply, I should say, "No, I cannot advise you to do so with all this differential legislation about such as this virtual capital levy which we have under the War Damage Act. I cannot advise you to put your money into buying property. My advice to you is to sit down until the local authority builds you, a house, and lets it to you at an uneconomic rent." I hope I am not exaggerating, but I believe that if the viewpoint gets about that the ownership of property and the building of houses is no longer a desirable virtue, financial, social, or in any other way, it will have a serious effect on the whole Government policy after the war. For that reason, and because I believe that the small house-owner has a genuine grievance, I hope that my hon. Friend the Financial Secretary will be able to say something which will suggest in what way this burden can be lessened.

Mr. Belienger (Bassetlaw)

Most of the arguments that have been put forward by my two hon. Friends opposite have been before the House on previous occasions when the War Damage Acts were under discussion. In those days, particularly When the first Act was introduced, we were in an experimental stage, and the time has now arrived when the Treasury ought to have had a good deal of experience to enable them to say whether and how long they are going to continue this grievous burden on the owners of property. There are many anomalies and certain injustices which we could ventilate to-day if we felt inclined, but this is the occasion when various hon. Members wish to speak on their own subjects, and I will, therefore, confine my remarks to one point. Under the War Damage Act there are two classes of payments. One is the cost-of-works payment, which is for the purpose of putting damaged houses into a state of repair so that they can be occupied; the other is the value payment, which is to compensate the owner of a property if it has been entirely destroyed or so destroyed that it is not worth rebuilding.

What is happening with regard to the cost-of-works payment? Because of the control that the Ministry of Works exercises over building labour and partly because of the Treasury itself, there is …100 limit above which owners of property cannot go without a licence to put their houses in order. There is a continual agitation, and there will be an increasing agitation as time goes on, for more housing accommodation. On numerous occasions recently the Minister has been pressed to build more houses in the country. The situation is just as urgent, perhaps even more so, in many towns, but very little is being done to meet it. If the Treasury in consultation with the other Departments would give More facilities for putting the cost-of-works payment into operation so that houses can be put into a habitable state, the property, much of which is owned by small owners, have their whole capital and life-savings invested in one or two houses, would be able to resume earning capacity from which the Treasury would benefit under Schedule A assessments. There are thousands of properties which could be put in a state of repair and which would enable the Treasury to get their taxes under Schedule A assessment which they are not getting at the present moment. For that reason alone, as a matter of self-interest from the point of view of the Treasury they should speed up the procedure of getting houses repaired on the cost-of-works basis.

When we come to value payments in cases where a house has been entirely destroyed or is not worth rebuilding, the owner who has his money sunk into the property is suspended in mid-air. He has the burden of debt hanging round his neck like a millstone if he is mortgaged. It is true that under the Defence of the Realm Act and certain other Acts he cannot be proceeded against by his mortgagee by way of foreclosure or pressure to make him pay unless he is a substantial man and has other assets. In most cases the value payment has not yet been fixed by the War Damage Commission and he will only be able to draw that money at some date that may be far hence. Why not in these cases fix the value payment and pay him out sufficient to enable him to remove the mortgage so that he can clear himself of the debt with which he is burdened and keep the balance in hand until the end of the war so that he does not have the opportunity of spending it in riotous living? What public interest is against that suggestion? It will only mean the transfer of the money from one pocket to another. There will not be any danger of inflation ] about it and, if anything, it will make more liquid the assets of insurance companies, banks, and building societies which have lent large sums on properties. The time has arrived for the Chancellor to consider these and other matters arising out of the War Damage Acts.

There is the question of the War Damage Contribution which has been argued by my two hon. Friends opposite. The 2s. in the £ per annum for five years is now becoming to many small property owners an intolerable burden. It is an extra tax on that class of persons. If a property owner had put his money into war savings or railways or something like that he would have been far better off, but because he put it into houses and in many cases a house in which he meant to live himself, he is penalised. I ask the Financial Secretary not to give us some conventional answer such as the Chancellor of the Exchequer has given on previous occasions when we have put similar arguments. It has been stated previously, but I have no hesitation in repeating it, that to-day we are dealing with a class of person whose morale we want to keep up. They are the home owners, not the property owners, of this country, they are the basis of family, and communal happiness in this country, and I think more consideration should be paid to them now that we can see a little bit of daylight in the matter of bombing—at least we hope so—and, perhaps, can see the end of the war a little more clearly than two or three years ago. I think the time is ripe for the Treasury to reconsider these matters and on a future occasion to let the House have an opportunity of debating them at greater length. Finally, I should like to pay a tribute to the War Damage Commission, because from my own experience cost-of-works payments are now being made very expeditiously. There was criticism a year or two ago that claims were not being met promptly, but in the case of claims which I have dealt with I have had payment within a fortnight on an average, and I think that ought to be said in compliment to the working of the War Damage Commission under its very excellent management.

Dr. Russell Thomas (Southampton)

I should like to say how grateful I am to my colleague the senior Member for Southampton (Mr. Craven-Ellis) and the hon. and gallant Member for Hornsey (Captain Gammans) for bringing this matter to the notice of the House to-day. I agree with the hon. Member for Basset-law (Mr. Bellenger) that the War Damage Act was brought into being at a time when we were all undergoing considerable stress, but I think the time has now arrived when we could examine into many of the anomalies, inequities and injustices which we find existing under the Act. I am whole-heartedly behind previous speakers who have pointed out that property owners in this country are very often small men. As my hon. Friend has said, a man owns the house in which he lives, he may buy the house next door out of his savings, and he looks forward in that way to getting some benefit out of his thrift in his old age, but such a man is definitely saddled now with very heavy burdens. Not only has he to pay his taxes but he has to pay war damage contribution over a period of five years. That ought to be borne in mind. The War Damage Amendment Act was passed with the intention of repairing a considerable number of properties which would not normally have been repaired under the original Act. I refer to the cost-of-works payments made towards them under the amending Measure. Unfortunately, owing to the restrictions which were imposed, it has been quite impossible to put many of these properties into repair. As my hon. Friend has pointed out, the Minister of Health is considering housing now and post-war housing, but this work cannot be taken in hand on account of the restriction limiting the cost of the work which could be undertaken £100 without licence. It would be interesting to hear from the Financial Secretary how many of the properties which we thought would be put into order after the amending Act had been passed have actually been dealt with.

Again, I cannot emphasise too much that the position of mortgagees and mortgagors should also be looked into. I think it is right to say that a payment under the War Damage Act is actually an ex gratia payment. The senior Member for Southampton did suggest that a balance should be struck between the War Damage Commission and a person in regard to cost-of-works payments due and war damage contribution payable. This is clearly quite a businesslike way of dealing with the matter and should be considered. I think the methods of the Commission in that regard should be looked into, and that a cost-of-works payment should be regarded by His Majesty's Government more as the present right of the citizen who has suffered; and if, too, the licence can be widened so that the payments may be used to put the properties in order it will be a very good thing from the housing point of view.

There is another question to which I should like to have an answer. Many persons are leaseholders, and if the property is damaged, I believe it is competent for them under the Landlord and Tenant Act to disclaim conditionally. If they do so, they are not liable in the meantime to pay, say, ground rent, but as soon as a cost-of-works payment is offered, if the tenant desires to keep on, then he becomes liable for the ground rent again, yet on account of the restrictions in regard to rebuilding, it is frequently impossible to make use of the cost-of-works payment for repairing the property. He would still be liable to pay his ground rent, although nothing had been done to the property, and no money has been paid him, and that seems to be most inequitable. I mentioned the mortgagor and the mortgagee, and it does seem to me that, with 2½ per cent. interest mounting up on the post-war payments, some advances could be made. As one of my hon. Friends rightly said the mortgagor is still liable to pay the building society, or whoever it may be, if he has other means, and he may have just sufficient means not to be in the category of those who can claim relief. In those cases the Government should consider making some payment now, because, as I have before pointed out, they can very well safeguard the money by insisting that the mortgagee, unless he has some very definite use for it, must reinvest it in War Savings Certificates or National War Bonds.

There are one or two other questions I should like to ask the Financial Secretary to the Treasury. There is one point upon which I have never been quite clear and have never had answers in the past. Before the war there were a large number of properties in this country which were rapidly going downhill, and some, in fact, had been condemned by the local authorities. We remember how local authorities were clearing away all kinds of dilapidated properties, or properties which they, at any rate, considered dilapidated, but which would be very valuable at the present time for housing the population. In Sheffield, in which I was interested at the time, I remember seeing street after street in which houses had been pulled down and the bricks left on the site—the corporation often only paying site value—and many more houses which had been scheduled to come down. I should like to know whether war damage contribution is demanded from the owners of those properties which have been already condemned. Again, we have war damage contribution being levied upon houses which are rapidly going downhill, which had not been condemned before the war but are rapidly getting into the category which I have described. Is His Majesty's Government claiming war damage contribution in respect of these houses which at the end of the war will probably be automatically condemned by the local authorities? If so, it all seems very inequitable. I feel the time has arrived when we should look into all these matters.

Another point which I have brought up before and must raise again concerns the Schedule A contributions. I want to make my point in this way. We all know that the war damage contribution was based on the Schedule A assessment in 1939, and very often that is most inequitable now. Schedule A valuation was fixed rather high in many cases and since then has been lowered, but nevertheless war damage contribution is still based on the high assessment of 1939. That seems to be very unfair, especially when, perhaps, the property has been damaged.

Mr. Deputy-Speaker (Mr. Charles Williams)

Order. The hon. Member is getting perilously near to the point of discussing new legislation, so we had better leave this point.

Dr. Thomas

I thank you, Mr. Williams. I did not think I should have got quite as far as I have done. There is one further point in connection with Schedule A assessment about which I should like to have an answer from the Financial Secretary. Supposing a property should be damaged next door to another property which has been demolished.—This is quite a different question, Mr. Deputy-Speaker, and need not worry you, because I believe I am in Order. Suppose there is a reduction in the assessment on the portion of the property which is damaged? If there is a reduction in the Schedule "A" assessment, is the war damage contribution lowered accordingly? I should be glad if the Financial Secretary would clear up that point. I believe this Debate will have served a very useful purpose in showing the Government and the Chancellor of the Exchequer that many of us are still very deeply perturbed about the inequalities and injustices which still remain under these Acts. I hold that His Majesty's Government ought to take these matters in hand and put them right so that the small and thrifty property owners are not pressed upon too much. If the morale of that class of people is depressed too far, when the war is over they will feel hopeless, and I need not describe in detail to the Financial Secretary what deplorable results may then ensue.

The Financial Secretary to the Treasury (Mr. Assheton)

It is only by leave of the House that I can speak a second time. If the House is agreeable to that course, I will try to answer some of the numerous conundrums that have been put to me from all sides of the House. I should like to say in the first instance that I am in agreement with the hon. Member who last spoke that this has been a useful Debate. I think we are all conscious of the fact that there are a large number of property owners in this country to whom these matters are of vital interest, and I was very glad to hear what my hon. Friend the Member for Bassetlaw (Mr. Bellenger) said on the subject of property owners in general. I am very conscious myself of the burdens upon property owners, being one of them, and I know exactly what one feels like at this time of the year when one receives demands for war damage contribution. There was a time before the war when one suffered only from Income Tax demands and demands for rates, but now there is this additional burden, which is very heavy.

Despite that, I would remind hon. Members that it is not the War Damage Act which causes the hardship, but the war. The Act has done what it could to remove some of those hardships. I am certain that all owners of property are grateful to His Majesty's Government for introducing the War Damage Act, although I am aware that legislation of this kind is bound to be somewhat imperfect. At least, we have done our very best to deal with this most difficult subject. It was only in the earlier part of this year that we introduced an amending Bill, during the Second Reading of which my right hon. Friend the Chancellor of the Exchequer indicated that he thought that any good building which was damaged would probably be eligible for a cost-of-works payment. Since that Act was passed, the War Damage Commission have been making considerable progress with the classification of damaged property, and I understand that there is no reason at all to suppose that the expectation expressed by my right hon. Friend will be falsified. There is no doubt that the great majority of cases will be cost-of-works cases. In connection with that matter, I am obliged to my hon. and gallant Friend the Member for Hornsey (Captain Gammans) for having drawn the attention of the House to the answer which the Chancellor of the Exchequer gave to his Question to-day. As it was a written answer the Question did not obtain as much publicity as it might otherwise have done, so I am grateful to my hon. and gallant Friend for giving the House an opportunity of hearing the terms of the answer which the Chancellor of the Exchequer sent to him.

My hon. Friend the Senior Member for Southampton (Mr. Craven-Ellis), who spoke first in the Debate, congratulated, as did also other hon. Members, the War Damage Commission. I am glad they did so, because I think the work of the Commission has been done extremely well under difficult circumstances. I should like to think that in their congratulations my hon. Friends were also including the Inland Revenue staff, who had the difficult task of collecting the contributions. I must confess that of the two tasks theirs is, in some ways, the more difficult.

My hon. Friend went on to say that there were certain alterations still needed in the law, and he told the House, as he has told us on some occasions before, about the difficulties of Schedule A valuations. On the primary point which he made that the Schedule A basis involves anomalies, the answer is that that was fully recognised when the legislation was passed by this House, but we did not find any better means to deal with the situation, and therefore we were obliged to take the basis which seemed on the whole to the House to be the least unsatisfactory.

In matters of this kind we cannot unfortunately get perfection. We adopted what we thought was the least unsatisfactory solution. I still would be interested to hear from any Member of the House of any better solution of that problem. I quite agree that the contribution is not scientifically related to the value, or nicely calculated as between one individual and another, but it is better, on the whole, to adopt a well-known and tried system. On this basis it provides, by and large, a substantial and adequate contribution from property owners, and that is the section of the community who of course will receive the payment of compensation. My hon. Friend the Senior Member for Southampton passed on to other criticisms and criticised Schedule A assessments themselves. I do not think that in this connection there would be any advantage in my trying to deal with the whole question of Schedule A assessments. It is quite clear that an assessment which is made for one purpose and which has been adapted for use in another connection may present difficulties and have disadvantages. But, after all, this legislation was reviewed by Parliament only in the early part of this year, and the 1943 amending Act was passed by this House with very general assent.

Mr. craven-Ellis

This House does not always appreciate the significance of what it is passing. [Interruption.] That is a fact. I have had an example to-day when the hon. Lady the Parliamentary Secretary to the Ministry of Health made a reply in which she placed herself behind what this House had done. If this House had known at the time that the implementation or carrying out of that particular Clause of the Bill in question would operate as it has done, this House would never have allowed it to pass.

Mr. Assheton

I am afraid that I cannot accept that argument, because the House had the advantage of hearing from the hon. Member himself his views on the matter, and it cannot be said that the House was in any ignorance as to the effect of its legislation. My hon. Friend then went on to raise this question of setting off claims against contributions and referred to an answer which my right hon. Friend the Chancellor had given in the sense that in value payment cases collection of the contribution charged on the damaged property is suspended and that the amount due would be ultimately recovered by a reduction of the value payment in accordance with the provisions of the Act. He went on to say that where a cost-of-works payment is appropriate the law allows deferment in collection so long as the property is unfit by reason of damage. I was not able quite to understand my hon. Friend's point, because when the Chancellor was making his statement it would appear that my right hon. Friend was referring to value payments and cost-of-work payments. I will to-morrow read in Hansard what my hon. Friend did say, and if I have anything to add to that point, I will let him know.

My hon. Friend referred, and so did my hon. and gallant Friend the Member for Hornsey, to the Prime Minister's pledge. The Prime Minister made a pledge on this subject; at any rate, he spoke in debate in this House. These were the words he used on 21st November, 1940: I feel that because one man's home is smashed, that should be no special misfortune to him and that all whose homes are not broken up should stand in with him as long as the need may last; and even if all the homes of the country be levelled then we shall still be found standing together to build them up again after the fighting is over."—[OFFICIAL REPORT, 21st November, 1940; col. 24, Vol. 367.] I suggest to hon. Members that the principles enunciated in those words are in fact fulfilled by the legislation which this House has passed.

Captain Gammans

Will my hon. Friend read out what the Prime Minister said on 5th September?

Mr. Assheton

I regret I have not got it with me. If my hon. and gallant Friend has it I will be very glad to read it. There is no doubt at all that the principles which the House had in mind have been faithfully carried out in this legislation. It seems to me that the arrangement is not one which is unfair. It seems to me a reasonable compromise between the interest of property owners on the one hand and general taxpayers on the other. Strictly speaking, it might have been argued by some people, I suppose, that it would be wrong to bring in the general taxpayer to bear a share of the cost of compensation for damage done to one specially selected class of property. One man may elect to invest his money in bricks and mortar; another may have invested it in something quite different, for example, some business which owing to the war has been concentrated or closed down, and he may have received no compensation at all. Therefore the fact that the taxpayer is contributing, and contributing very handsomely, to the property owners in this connection seems to me to be a complete justification and an implementation of the Prime Minister's pledge.

I was asked by my hon. Friend about the total cost of the damage. More than one Member raised that point. I cannot tell them what the total cost of damage is—it is not known—but it was announced some months ago by my right hon. Friend the Chancellor that £100,000,000 had already been paid out by the War Damage Commission, and the War Damage Commission pays out when repairs are done. If hon. Members care to walk up and down the country and see the damage which is not yet repaired, they will be able to form for themselves some sort of estimate. If the hon. and gallant Member for Hornsey, after thinking that over, comes to the conclusion that he is raising a question which is somewhat academic, I do not think that I shall feel disposed to disagree with him.

Mr. Craven-Ellis

This is an important point. We do not want to deceive the public more than they have been misled. The Financial Secretary said that the general taxpayer was contributing generously. In point of fact, the general taxpayer so far as war damage is concerned has not contributed a penny piece. In fact, the contribution for the property owners themselves has not yet reached its maximum. Until it has exceeded £200,000,000 the general taxpayer is not called on to make any contribution whatever.

Mr. Assheton

The House knows and the hon. Member knows well what the true position is, that property owners contribute £200,000,000 by five yearly instalments, and the Government, that is, the taxpayer, contributes the next £200,000,000, and thereafter they go fifty-fifty. I say that that is a handsome contribution by the taxpayer.

Mr. Craven-Ellis

But he has not paid anything yet. He has not been called upon to pay anything.

Mr. Assheton

I would point out that the War Damage Commission has already paid out a great deal more than it has received, and if that has not come out of the taxpayers' pocket, I do not know whose pocket it has come out of. The hon. and gallant Member for Hornsey raised once again the case of the mortgagor and the mortgagee. I do not think there is any real value in arguing all that out again. I know that there are arguments on both sides. The House went into it on more than one occasion and came to a decision. All that I can say is that that decision is one which has been made and which is being carried out. I did agree with the hon. and gallant Member for Hornsey when he said it was desirable to state in the House the hope that nothing will be done to put about the notion that it was not a desirable thing to build property and that it would not prove to be a useful and remunerative form of enterprise. I hope that in this country it will always be a useful and profitable thing to build houses for people to live in. I think that the people who criticise property owners often have not thought the thing out as carefully as they might have done.

The hon. Member for Bassetlaw (Mr. Bellenger) suggested that we were not getting on with repairs as quickly as we might. That is not a matter I can answer for, speaking on behalf of the War Damage Commission or the Board of Inland Revenue, but the hon. Member, of course, knows the great difficulties of labour and materials at the present time. I know that every one of my right hon. Friends in the Government are only too anxious to enable progress to be made as soon as these conditions are at all modified. I think I have dealt with most of the points raised. I am not quite certain—

Mr. Bellenger

Will the Financial Secretary say something about releasing some value payment where the owners of property have their property mortgaged?

Mr. Assheton

That is a point that has been raised before. I have no reason to give the hon. Member much encouragement. As he knows, there are two classes of payment, cost-of-works payment, in which case his suggestion would not be appropriate, and that is going to apply to the great majority of cases throughout the country; there are then the value payment cases, and as far as value payment is concerned they are not being made at the present time.

Mr. Bellenger

What is the reason?

Mr. Assheton

The reason is that it was considered desirable in accordance with the general policy of the Government that that money should not yet be placed in the hands of property owners and that it should be available for use in repairing and restoring property in the country, and if a considerable amount of value payments were made now, it is always possible that that money would not find its way to the purpose for which it was intended.

Mr. Silkin (Peckham)

Is there the same objection to the payment of interest? If property has been damaged and interest were received, it would help those concerned to pay their mortgages.

Mr. Assheton

I appreciate that point. It has, however, been considered by my right hon. Friend the Chancellor of the Exchequer, and the decision made stands. I am quite prepared to represent to him the view which my hon. Friends have put to me to-day. I am grateful to hon. Members who have raised these various points. If I have not dealt with them all fully I shall be glad to deal with them more fully on a later occasion. I will read the Debate to-morrow, and if I have left out any point I will write to the hon. Members concerned.