HC Deb 19 October 1944 vol 403 cc2567-670

(1) Compensation for the compulsory purchase of an interest in land by a government department or a local or public authority within the meaning of the Acquisition of Land (Assessment of Compensation) Act, 1919, compensation to be estimated in connection with such a purchase for damage sustained by reason of the severing of land the subject thereof from other land held therewith or otherwise injuriously affecting such other land, and compensation under Section sixty-eight of the Lands Clauses Consolidation Act, 1845, in respect of land injuriously affected by the execution of works on land acquired by such a department or authority, shall, except in the case of compensation assessed on the basis specified in rule (5) of the rules set out in Section two of the said Act, be assessed subject to the rule following, that is to say—

The value of any interest in land purchased pursuant to a notice to treat served at any time within the period of five years from the commencement of this Act, the amount of any damage sustained by reason of severance or other injurious affection compensation for which is to be estimated in connection with a purchase of an interest in land pursuant to such a notice, and the amount of any damage sustained by reason of other land being injuriously affected by the execution of works which either is sustained or the amount of which falls to be ascertained at any time within that period, shall be ascertained by reference to prices current at the thirty-first day of March, nineteen hundred and thirty-nine, on the assumption that the interest had at that date been subsisting as it was in fact subsisting at the time of service of the notice to treat, and that the land in which the interest subsisted, and any such other land, had been at that date in the state in which it in fact was at the time of service of the notice to treat.

(2) The rule set out in the preceding subsection shall, in its application to tenancies, to land capable of being redeveloped in combination with other land, and to dwelling-houses to which the Rent and Mortgage Interest (Restrictions) Acts, 1920 to 1925, apply, have effect subject to the provisions of the Schedule (Application of rule as to assessment of compensation) to this Act.

(3) Compensation for disturbance shall not in any case be assessed at any greater amount than that at which it would have fallen to be assessed if this Section had not been enacted.—[Mr. W. S. Morrison.]

Brought up, and read the First time.

12.33 p.m.

The Chancellor of the Exchequer (Sir John Anderson)

I beg to move, "That the Clause be read a Second time."

Before I proceed to the actual business, Major Milner, may I repeat the question that was put in the statement of my right hon. Friend the Lord President? Would you agree, if it were the general wish of the Committee, that it would be convenient, on the Second Reading of the first of the new Clauses, that there should be a Debate ranging generally over the field, because the other Clauses really link up with the first and it would be extremely difficult to deal adequately with any one of them without referring to the others?

The Chairman

I am obliged to the Chancellor for suggesting that that course should be taken and if the Committee agree I have no objection, but I hope this procedure will result in avoiding a repetition of the arguments advanced on the Second Reading of the first Clause on later stages of the Bill. With that understanding, I am quite agreeable to the suggestion.

Sir J. Anderson

I am very glad that the Committee has agreed to that procedure. The first of the new Clauses on the Paper is a Clause which appeared in the original Bill, but was withdrawn, dealing with the basis of compensation on the March, 1939, basis. It is a principle of our law, well-established and well-recognised, that when private property is taken compulsorily for a public purpose, or when its value is impaired by direct and specific interference on the part of some public authority, fair compensation should be paid, and I think I am right in saying that fair compensation is usually interpreted, according to our practice, as compensation based upon the current market value.

I know that many hon. Members are concerned lest, in this Bill, we should be violating a principle to which importance is attached, and, in my judgment, rightly attached. I, myself, would unhesitatingly support that principle. I hope, however, to be able to convince, at any rate a large proportion of Members of the Committee, that the acceptance, for this particular purpose in the particular circumstances in which we now find ourselves, of the March, 1939, standard as the general basis of compensation involves no violation of that principle. I am no lawyer, but I believe that there is a well-recognised legal maxim which runs Lex non cogit ad impossibilia, which means that the law does not compel the impossible. The reason why the 1939 standard is being adopted here is that there is, in fact—and this is a fact with which we must all reckon—under the disturbed conditions of war, no firm basis of current value on which one can rely.

Sir H. Williams

Is that true of the valuation department of the Inland Revenue?

Sir J. Anderson

My hon. Friend always has a vast store of red herrings.

Sir H. Williams

Why call a red herring something which the right hon. Gentleman's officials are doing every day, namely, placing a value on property for the purpose of Estate Duty?

Sir J. Anderson

I am sorry to have annoyed my hon. Friend because many of the things I am going to say before I sit down may cause annoyance, but I shall do my best, and let me explain to my hon. Friend that I used the term "red herring" because I thought the point he raised was wholly irrelevant to the issue. What the Estate Duty officials do is done under the law as it stands. They have to do their best to carry out the law, but, while I believe it would probably be out of order to go into the question in any detail, perhaps I might just say that, by reason of the grave practical difficulties of carrying out the law in that connection as it stands, extra statutory concessions, which I think will be found in the White Paper I circulated, have had to be made.

This 1939 standard which we are now discussing, operates in two directions. It operates to prevent a scaling down as well as a scaling up. That is a point which the Government have had very clearly in their minds. There are many properties in various parts of the country which, by reason of war conditions, have, for the time being, at any rate, so far as one can judge, deteriorated heavily in value. They have deteriorated, at any rate, by this test: that the owners would, as events have shown, in many cases have been very happy to be able to dispose of them to willing buyers at 1939 prices. As I have said, as a Government we would think it wrong that public authorities, coming in to take such property for public purposes under present conditions, should take advantage of the special conditions, often attended by great hardship to those concerned, arising out of the war, We have also taken the view that where, by reason of war conditions, circumstances have arisen in which it could be argued that the owner of a property could obtain more than the 1939 value for it, that is not conclusive to justify the payment by way of compensation of anything more than that 1939 value.

Another point about the 1939 value. A great many of the properties that will be affected by this Bill are properties that were taken right at the beginning of the war. That is not a fact that is generally appreciated, but what we do in this Bill will govern the terms upon which we finally deal with properties requisitioned for war purposes at the beginning of the war on which buildings have been erected although, technically, the land is still the property of some private owner. This Bill will govern the terms of compensation in those cases, and they are very numerous. It is quite clear that there could not, on any showing, be any case for paying more than the 1939 value for property taken in 1939. Is there an absolutely clear case for making a distinction between an owner whose property was taken at the beginning of the war, and an owner who was fortunate enough to be left in enjoyment of his property for two or three years after the beginning of the war? Actually, this March, 1939, value operates as if the war and the period of disturbed conditions following upon the war were a single point of time, and that is not, I suggest, either an illogical or unreasonable approach, and that is the general justification for the 1939 basis.

Sir Irving Albery (Gravesend)

May I ask the right hon. Gentleman a question? Surely, he will agree that if he took a property in 1939 and paid the owner cash for the property, that owner had the opportunity of re-investing that money in other similar property which the owner of a property bought two or three years later would not have

Sir J. Anderson

I would say on that, that if I took that man's property in 1939 and paid him cash, I would find it my duty, as Chancellor of the Exchequer, to urge him to lend that money back to me for purposes of the war and if he did that—which so many patriotic citizens did—it would not be worth any more to him to-day than at the time when the compensation was paid.

I do not want to be controversial in this matter, but I do want, before I pass from this particular Clause, to deal very briefly with a suggestion that has been made that we might—as we are providing in the later Clause dealing with the owner-occupier—have considered providing for some general scaling up of values in the case of the owner who is not an owner-occupier. I am bound to say that would, in practice, be very difficult indeed. I have already explained that there would have been no justification for anything of that kind in the case of the man whose property was taken at the beginning of the war and, obviously, there is great difficulty in differentiating between people in regard to the period in the war at which their property is taken. The scaling-up would have to be quite arbitrary. It would have operated very unequally in different cases. It would have had to be met not as in the case of the owner-occupier by reference to the particular circumstances of the individual occupier, but by reference to the property or the class of property. And really, if that were proposed seriously, I should, as Chancellor of the Exchequer, find it very difficult, and indeed impossible in present circumstances to justify such a course, having regard to the fact that the compensation would have to be paid by the community, and to a very large extent by members of the community whose property or income is of a nature which would rule out any such scaling-up. But while the Government adhere, and adhere firmly, to the 1939 standard as the general basis of compensation, they have recognised that there is a case for certain exceptions to that principle.

12.45 p.m.

In the Bill as introduced, as hon. Members will recall, provision was made for scaling-up in the case of certain classes of owner-occupiers, and the classes for whom provision was made in the Bill as introduced were two. They were the owner-occupiers of dwelling houses which are within the limits of the Rent Restrictions Acts and owner-occupiers of agricultural property. These cases were selected because it seemed to the Government that they were precisely the cases in which the strongest argument could be advanced on behalf of the owner-occupier. The interest of the occupier is something that can be distinguished from the interests of the owner as investor, and it is on that distinction that the second Clause on the Order Paper of yesterday, rests. It will be within the recollection of the Committee that the original Bill was criticised precisely on the ground that it made an arbitrary distinction, so it was suggested, between one class of owner-occupier and another, and my right hon. Friend the Member for Devonport (Mr. Hore-Belisha) addressed a very powerful plea to the House in the course of which he referred to "justice on a means test" and "one law for the rich and another for the poor," and he so moved the House and the Government that the matter was taken back for further consideration. I may say incidentally, that I think that there was a fundamental fallacy underlying the case he sought to put, but I will deal with that before I sit down.

The Government have made a very earnest endeavour to meet the case of owner-occupiers without distinction, of all classes of owner-occupiers, actual and potential. When it was a question of dealing with a limited class the problem was much easier than it has since become. When you are dealing with a small house-owner or the owner of agricultural land you could have, as in the original Bill, a proposal for a uniform scaling up all round, and it was therefore provided in the Bill that the percentage increase should be laid down by Treasury regulation, subject to the authority of this House. When we had to extend the scope of our provision to cover the further classes of owners of shops, cinemas and factories and what not, we had to adopt, we found on examination, a somewhat different course, and we have proceeded by way of a maximum, leaving the discretion to the appropriate authority to award a supplemental compensation, within the maximum, according to the circumstances of the applicant. That was quite inevitable, in my judgment, having regard to the great variety of circumstances with which one had to deal. It enormously adds to the complexity of the scheme, and it will add materially to the labours of the valuers and others who will be concerned. That is an important consideration, but we think that we have found a workable plan.

It may be asked, What is the justification for the particular maximum that has been fixed? Why have a maximum at all? We have fixed, as the Committee know, 30 per cent. The answer to that question is two-fold. In the first place, we thought it essential that there should be some maximum, some ceiling, if only as a guide to those who will have to undertake the very difficult task of assessing the compensation which is appropriate in any particular set of circumstances. Having accepted that principle, we arrived at a figure which, in our view, represented the maximum that could be adopted in present circumstances according to present indications, without involving the risk that it might eventually prove to be above the level to which post-war values will ultimately settle down. But there can be no absolute certainty in that regard, and we have therefore provided that the maximum percentage may be varied up or down, by order or regulation made with the express authority of the two Houses of Parliament. That provision will be found in the Clauses on the Paper.

Lieut.-Colonel Dower (Penrith)

Can that be done during the next five years? We want to be clear about the maximum.

Sir J. Anderson

The whole thing only lasts for five years, and that adjustment can be made at any time after the passing of this Bill. Before I pass from the Clause which I am now presenting to the Committee, there is one very important point with which I ought to deal.

Mr. A. Bevan (Ebbw Vale)

Before the right hon. Gentleman leaves the escalator Clause, may I ask if we are to understand that the local authorities will now be acquiring property with the uncertainty of whether the values of that property will be affected by an order, at the time to which the right hon. Gentleman referred?

Sir J. Anderson

That, I know, is a point, but there is always an inevitable uncertainty, when the local authority comes in to acquire property, as to what the valuer will ultimately award as the value of the property.

Mr. Bevan

The valuer would be normally working under directives which are calculable, but in this case the local authority will be working with a sword of Damocles over its head. It will not know whether an order will or will not be made at some time. I want it to be made clear, as this is the first time I have heard of this provision; and will the right hon. Gentleman realise that very odious comparisons are going to be drawn between an escalator Clause of that sort with regard to property, and refusal to incorporate a similar Clause in the social security plans.

Sir J. Anderson

There may be an additional element of uncertainty imparted by this provision into a situation already full of uncertainties so far as the local authorities are concerned from which we cannot escape. The justification for this Clause dealing with the interests of occupiers is that you are dealing in one way with the interests of the investors from the point of view of the income-producing value of the property, but when you come to the occupier you have a separate interest, and the public are concerned to see that it is made not too difficult for those who own property in which they live, or in which they carry on their business, and earn their livelihood to re-establish themselves. That is the justification for this particular provision.

Let me come to the special provision, to which I said I thought it would be necessary to refer before I pass from this Clause. Hon. Members will have noticed that there is a special provision in the Clause dealing with the case of the owner-occupier whose property has suffered war damage before notice to treat was served by the local authority and who has been awarded by the War Damage Commission what is called the cost-of-works payment, that is to say, whose claim to a cost of works payment has been accepted. The effect of the Clause on the Paper is that that person who has a property which may have been wholly destroyed but which is potentially repaired property because it has attached to it an accepted cost-of-works claim should be treated for the purposes of this Bill precisely as if he had had his property expropriated without having previously suffered war damage. That is a principle which is quite unchallengeable. You could not defend, in the circumstancees, treating the man who has a destroyed or damaged property with a right to a cost-of-works payment differently under this Bill from the man whose property has been un- touched by the war. We are only dealing with the owner-occupier.

Lieut.-Colonel Dower

The other fellow loses.

Commander Agnew (Camborne)

Will the Bill then be an added misfortune to him?

Sir J. Anderson

In so far as it may be a misfortune to any owner-occupier to have his property taken by a public authority in the interests of the community, that misfortune will be suffered equally by the man who has had war damage, and the man who has not.

Major Lloyd (Renfrew, East)

Can my right hon. Friend make plain to Members like myself who have not been in the least convinced as to why all these things, so necessary for the owner-occupier, might not also apply to others?

Sir J. Anderson

I have done my very best to make the distinction absolutely clear. In the case of the owner-occupier there is a separate interest to the occupier which the public are concerned to see protected as far as it is practicable to protect it. That is the reason for the distinction, which, in my judgment, is in the public interest.

Mr. Bellenger (Bassetlaw)

As a matter of machinery—and probably this will convince some of those who are not yet satisfied with my right hon. Friend's explanation—is not the cost-of-works payment provisional and cannot that even be converted into a value payment by the War Damage Commission at any time?

Sir J. Anderson

I am afraid I should not really be in Order in going into that matter.

The Chairman

The hon. Member should permit the right hon. Gentleman to make his speech.

Sir J. Anderson

I would be willing to deal with that point if in Order, but I do not know whether I would be in Order or not.

Mr. Bevan

We are now having a very wide discussion. We have not had a Second Reading discussion at all in the House, but we are having it now and we must have a wide reference.

Sir J. Anderson

I am in the hands of the Chairman, and I am very anxious to be orderly. I have some doubt as to whether a discussion of what is not in the Bill at all, but is in the War Damage Act

Mr. Bellenger

The right hon. Gentleman introduced this subject.

Sir J. Anderson

I introduced it only so far as it was specific to the Bill. Perhaps I may be permitted to say that, under the War Damage Act, where a cost-of-works claim would have been admitted, but where, for any reason whatsoever, it is not found possible to reinstate the building on its site or to repair the building that was damaged, the cost-of-works payment has to be converted into a value payment. That is the position, and I thank the hon. Gentleman for having enabled me to make it clear.

1.0 p.m.

I have dealt here with the main provisions that are before the Committee. It will have been noticed that there is a Clause dealing with machinery, a Clause which provides that the authority concerned may conclude an arrangement with the person affected, subject to an appeal to the official arbitrator on the question of value and on the question of what is reasonable compensation to be paid apart from the 1939 standard, and there is an appeal on a point of law to the county court.

Mr. Woodburn


Sir J. Anderson

The hon. Gentleman must wait a moment and not be impatient. I am afraid I have been trying to go ahead too quickly, because I have omitted to deal with one Clause which is of great importance and represents a second departure—there are only two in the Bill—from the principle of the 1939 standard. We have thought it right, in a separate Clause on the Paper, a Clause which was foreshadowed in the statement made by my right hon. Friend the Deputy Prime Minister last Friday, to make special provision for the case where the property with which the public authority is dealing, or part of it, was not in existence at all in March, 1939, and we have made provision to cover the case where improvements have been made in a property—whether an agricultural property or one consisting of non-agricultural buildings—under war conditions for war purposes. Where such improvements have been made, then the compensation paid according to the 1939 standard can be scaled up in this way: the valuer has to calculate what portion of the 1939 value—because the whole property is first valued on 1939 terms—is attributable to the improvements, and then there may be awarded such addition to that proportion as may be thought reasonable in all the circumstances, and in that case there is no ceiling fixed because the circumstances may be expected to vary very widely.

Mr. Mauningham-Buller (Daventry)

Does that Clause include improvements effected after the end of the war with Germany and the service of a notice to treat, if there is any such period?

Sir J. Anderson

It includes any improvements effected up to the time of the notice to treat for public purposes as defined—[An HON. MEMBER: "Only for public purposes."]—Yes, there is that limitation here.

I have, I think, dealt with the substance of the Clauses on the Paper, but I would venture, in case there are some hon. Members, as I suspect there may be, who are not convinced wholly by what I have said that this is a fair and reasonable Bill, to address to such hon. Members certain observations of a rather more general character. I think it may fairly be contended that when a person enjoys private property—and I am all for that, I am no revolutionary—he enjoys it subject to all the hazards to which it may be subjected, the hazards of fire, tempest, flood, and war, and that is, in fact, the position. That is, and always has been, the general position under our law. Where a property is taken by the direct interference of a public authority, there is a claim of right to compensation, but where a property suffers damage for any of the reasons I have indicated, under the ordinary law, the loss rests where it falls. I think that those who are concerned as to the treatment which property owners are having extended to them at the present time, would do well to take a broad view. In this war, for the first time in our history, this Government have been enabled by this Parliament to make a provision which, if it does not recognise a complete claim to compensation for war damage—because the claim that it recognises is limited by the specific terms of the War Damage Acts, and, of course, there is the element of a contribution equivalent to the estimated cost of giving insurance in certain cases—it does, at any rate, go a very long way indeed to meet cases of hardship. I venture to think that, taking those provisions for dealing with war damage and the provisions in this Act together, property owners as a class have no real reason to contend that they are being unfairly dealt with.

I hope that I may have succeeded in what I had to say in convincing the Committee as a whole that the provisions of these Clauses do give fair and reasonable consideration to the interests of the property owners. They have been enlarged in scope and made more liberal by the action of the House. The House of Commons has made a very material contribution to the Bill, if it emerges in the form in which it is now proposed that it should be amended, and I trust the general view will be that in the result we have, on the whole, been successful.

Mr. Hore-Belisha (Devonport)

The purpose of this discussion is to see that justice is done impartially to all sections of His Majesty's subjects. My right hon. Friend has made, as he always does, a skilful and balanced speech characterised by only one notable omission—the omission to expose the fallacies of which he said I had been guilty.

Sir J. Anderson

May I interrupt my right hon. Friend? He should not take advantage of the fact that I did not seek to rub it in. I thought it would be apparent to the Committee, as a whole, that, in the final remarks I had to make about the position of the person who has suffered war damage, I had exposed the complete fallacy of the case he sought to make to the House on a previous occasion for complete restitution for the sufferer from war damage. I apologise to my right hon. Friend.

Mr. Hore-Belisha

Naturally I accept my right hon. Friend's apology, although I cannot agree that he has rectified the omission as, indeed, I hope to show. I shall endeavour to follow the sequence of argument, if my recollection serves me, pursued by my right hon. Friend. He began by saying that His Majesty's Government had no intention of departing from the principle which had been laid down as part of our code of compensation. I made a note of my right hon. Friend's remarks but they seem to have become mislaid; however, I can remember them.

My right hon. Friend said that His Majesty's Government had no desire to depart from the code which had become well-established in regard to compensation. He said that it was a firm canon of that code that if the public interest required that the property of a citizen should be taken, compensation should be based on fair market value. So solicitous, indeed, has the State been to sustain that principle, that it has provided that in cases where there is no general demand or market for land being used for a particular purpose, the principle to be followed shall be one of re-instatement. This is part of the well-accepted code of compensation and it has, as my right hon. Friend implies, great social significance. By Clauses such as this you create a bias either in favour of private ownership or against it. Hitherto, we have been solicitous to encourage both the owner-occupier and the investor. Between the two wars no less than 2,000,000 persons became owner-occupiers. Many of them are to be affected by this Bill.

Mr. A. Bevan

The building societies helped them with loans.

Mr. Hore-Belisha

Certainly, in some cases. The building society movement has been considered a reputable movement. I call the attention of my right hon. Friend to this. His intentions may be pure and upright, but the hon. Member for Ebbw Vale (Mr. A. Bevan) has another intention which he has disclosed by that interruption—he feels satisfied that his particular bias is forwarded by these Clauses, and I agree with him. I say that hitherto private property has been encouraged. The natural desire of men to own their own houses has been fostered. That is the social system under which we live. The contrary case can be argued, but we have in fact stimulated private ownership and made it a legitimate aim of a man's life. We have protected private property. We have appealed to the citizens to be thrifty, and the poorest citizens who have been able to respond to that appeal have invested money in property and some of them live or partially live on the rents. That is beyond dispute. There is no logical distinction between an owner-occupier and an investor. We are dealing here with the acquisition of property, and this code will be followed in the future, not only in regard to this Bill, but in regard to other forms of State acquisition, and it is for that reason I am appealing to the Committee to be vigilant.

[...].15 p.m.

The next point taken by my right hon. Friend was this. He said in general terms, "I do not desire to abrogate the code of compensation but the conditions of the war are peculiar. When you are dealing with land, there is no market value because there has been disturbance, there has been damage, there has been displacement." Accordingly you must, if you are to take some of this property, apply the same standard which applied at the time when there was last dealing in property, and the standard of March, 1939, has been taken. When the Government came to insert that principle in the former Clauses of the Bill—Clauses 45 and 46, which have been withdrawn—they saw at once, that they were not comprehensive, that they would do injustice to a large number of people, and they therefore proceeded to consider what exceptions they could make to this principle.

They decided to make two exceptions. These were, first, the owner of a house which fell within the scope of the rent restriction limits, that is to say a low-rated house, and, second, the agricultural occupier. The purpose of the Amendments which were on the Paper before the Clauses were withdrawn was to assert that you should not stop there, that you should not make exceptions solely in respect of these two classes of persons, and that there were others who had a claim to be compensated in accordance with the principles of the former code, which is only qualified because of the difficulty of the absence of a market in war conditions. Therefore, the Clauses were withdrawn in order to be widened. When the old Clauses were still in the Bill and contained the exceptions mentioned, what was the actual provision in Clause 46? It was that in these two cases there should be a prescribed increase by way of an addition paid to the compensation, not of 30 per cent., but an increase that would meet the change in economic conditions. The Government desired, frankly, as the Chancellor has said this afternoon, to compensate these people fully. They did not mention 30 per cent.; they mentioned a prescribed percentage, and said that in determining that percentage regard should be had to economic conditions.

Then the Government withdrew the Clauses and came back to the House with this mysterious figure of 30 per cent. It is a limiting percentage. It is true that a Conservative Government of the future could come to the House and increase it and that a Labour Government could decrease it, but there is some purpose in this 30 per cent. It is a restriction upon the desire to do complete justice, because if you wish to do complete justice, you will provide frankly for an increase related to the change in economic conditions. That is what the Uthwatt Report recommended. In this Bill we have not Uthwatt; we have 30 per cent. of Uthwatt, or some vulgar fraction of Uthwatt. The Uthwatt Committee referring to the proposal made in their interim report that the March, 1939, value is the appropriate value to be taken, say that they wish to recall that our recommendation referred to a standard of value and not to prices. When we come to this Clause we find that: The value of any interest in land purchased pursuant to a notice to treat served at any time within the period of five years from the commencement of this Act, shall be ascertained, by reference to prices current at the thirty-first day March, 1939.

Lieut.-Colonel Dower

It has now been changed.

Mr. Hore-Belisha

I quite agree; that is my point. I ask my right hon. Friend the Minister of Town and Country Planning if he can give my hon. Friends and myself a satisfactory assurance. We have an Amendment on the Order Paper suggesting that after the words "thirty- nine" there should be added the words: increased by such sum as the Treasury shall determine to be equal to the amount by which having regard to the economic conditions"— those last words are the words of the Uthwatt Report, and of Clause 46, which was withdrawn— affecting the interest in such land the value thereof has increased since that date. If my right hon. Friend can give me that assurance then I think he would have a satisfactory Clause subject to some other observations which I wish to make relating to certain other "fallacies"—and I would like that word to be in inverted commas—which I have in mind. I want to ask him whether he will accept that, because if he does not then he is deliberately penalising a vast class of ordinary people who are occupiers or owners of property. Is it desired to abrogate the compensation code to please my hon. Friend the Member for Ebbw Vale and his party, or is it desired to maintain, as the Chancellor suggested, the principle that a man is to be compensated at a fair market value when his property is taken from him? That is the first point I put to my right hon. Friend.

Still following the sequence of the speech made by the Chancellor of the Exchequer, I now come to the interlocking of the War Damage Act with this Bill. I want to show what a grave injustice is done by this Bill to persons having a claim under the War Damage Act. I mentioned a case to the House the other day, and my right hon. Friend referred to it this afternoon. I have since had a letter from the Chancellor relating to the case and I wish to read the relevant parts of it to the Committee, because they put the matter in his language and not mine. The case which I gave was not an isolated case, and I did not give it to the House in order to stir pity on behalf of one particular person. I would like to explain to the Committee that under the Plymouth Plan 63,000 persons are to be disturbed. The sites on which they live are to be acquired. This is not a Bill which affects just one or two people; it affects thousands throughout the country. Of the 63,000 who are to be disturbed in Plymouth, 40,000 will have to go outside the area. Further, 40,000 of these 63,000 happen to be constituents of mine, so I know the kind of case of which I am speaking, and I can assure my right hon. Friend that this has great social consequences.

Mr. Lipson (Cheltenham)

Can my right hon. Friend say how many own their own property?

Mr. Hore-Belisha

I cannot say, but many hundreds. At any rate, it is property that is being acquired. That is my point. There is to be the disturbance of 63,000 people, many of whom own their own property. Some own a few houses from which they draw rents. The case I gave the other day is typical. It was the case of a woman who owned a house, which happened to consist of a shop frontage on the ground floor and 11 rooms. She was doing business in the shop, and she was I gather letting rooms. She was drawing a perfectly legitimate income. Her house was damaged, not destroyed, and she asked if she could have it repaired. This is the answer of my right hon. Friend the Chancellor, who wrote to me subsequently about the case—and I am most indebted to him and acknowledge the trouble which he takes, not only with great matters but with small. I am not making a rhetorical point; I merely am making the point because it affects so many people. My right hon. Friend wrote: I am informed that the property is not a total loss'"— which is what I alleged— as defined in the War Damage Act, and in the ordinary course Mrs. W. could, therefore, claim a cost-of-works payment for the repair of the property when she could carry out the work; that a licence to execute the repairs was sought and that this was refused on the grounds that the premises were scheduled for redevelopment under a new town planning scheme. So it is admitted that she was entitled to a cost-of-works payment. She is not allowed to repair her property, because she comes prospectively under a scheme and, in particular, under that part of a scheme in which the Government themselves are interested. That is to say, the Admiralty are purchasing the area in which she lives for an extension of the dockyard. That is not her fault. This woman is, therefore, deprived of her cost-of-works payment because of the Government's action. This would apply similarly all over the country wherever there is a town planning scheme. This woman, who, unfortunately, has lost her husband, says: "I have to pay 20S. a week rent now. I was making money before. For all the years I am waiting for payment I shall not be getting any money." The Chancellor writes in his letter to me: I regret that it is not possible for me to give any indication of the date when acquisition of property by the Admiralty will be carried through, but as you know, under the War Damage Act, the effect of Notice to Treat will be to convert the cost-of-works payment into a value payment, which will then become payable at the date when the Government decide that value payments may be made. My right hon. Friend goes on to say—I want to put the Committee in the possession of all the relevant facts. The Commission is, however, able in the case of an owner occupier, to make an advance against a war damage payment in cases where the person entitled was living in the damaged house… That means that if the woman gets an advance, as no doubt she will, she will be dribbling away her capital. Why does the Government want to come to the House with a Clause which does injustice of that kind? It cannot be defended, and I appeal to the House of Commons to see that justice is done in this case as in others.

The Minister of Town and Country Planning (Mr. W. S. Morrison)

I do not want to interrupt my right hon. Friend, but I fail to see how this Clause affects the hardship he mentions.

The Chairman

In any event I do not think we ought to go into individual cases, unless they have special reference to this Clause.

1.30 p.m.

Mr. Hore-Belisha

My case is that, if the Clause is what it should be, she would be no worse off under this Bill than under the War Damage Act and that the Clause in effect deprives her of something which she would get under the War Damage Act. You must relate the two, otherwise you do injustice to a large number of people.

Mr. John Dugdale (West Bromwich)

Does she own the land as well as the buildings?

Mr. Hore-Belisha

I cannot say that but I believe she does. The facts are as I have given them, and they are adequate to prove my case. There has been a movement in favour of small private ownership going on for many years and the hon. Member behind me still thinks we are living in the age of Queen Victoria. I should like to correct one misapprehension. I said in my previous speech that this woman was directed by the War Damage Commission to public assistance. She was not directed by the Commission but by the local war damage officer. However, that is a small thing. I say that this Clause should provide that the 1939 payment will be uplifted by a sum which takes account of the changed economic conditions and, if that were granted, this kind of anomaly would no longer exist.

The Chancellor of the Exchequer said the Government could not agree to put a person who had lost a house in a better position than a person who had not lost a house and that, when the acquisition of property was made under the Bill, the treatment should be the same whether there had been a war damage claim or not. My answer is, firstly, that the War Damage payment is a payment for which the claimant has insured and he or she should not be deprived of it by this Bill. My second answer is that a person who has not lost his property has remained in possession of it all this time, whereas this woman has been deprived of shelter and has had to seek it elsewhere out of her own pocket.

The final point made by the Chancellor was that a distinction could properly be made between an owner-occupier and an investor in property. Such a distinction is completely unknown to the code of compensation. The right hon. Gentleman began his speech by stating categorically that there was no desire to abandon the principles upon which compensation had hitherto been paid in this country. How can you justify, except for the purpose of conciliating a certain number of persons, a distinction of that kind, and how dangerous it will be to institute it. You are introducing this Bill at a time when there is a great housing shortage.

Private enterprise builds nearly three times as many houses as public enterprise. If you are going to say to people who are thinking of buying houses or building them for others, "Be careful, the State may come along and take your property, or your investment, at an artificial value," it cannot encourage house-building. It is bound to have an injurious effect on it. The right hon. Gentleman does not realise, perhaps, the extent to which the Compensation proposals of the Bill have caused alarm and discontent among a section of the community which we ought to be encouraging, a section of the community which is careful, which invests money, which sustains the stability of the State. That is the section that you are hitting and, if you want to hit them, come down and say what it is you want to do, but do not pretend that this is the historic compensation code modified only because of the exigencies of war. Everyone would accept the 1939 valuation for land where there is no market in land, but you must uplift the 1939 value when you are dealing with the assessable part of the property, namely, the cost of bricks and mortar and labour. You have no moral right to take people's property in that way.

The right hon. Gentleman ought to accept the Amendment which relates the compensation to the economic conditions. He ought to leave out the 30 per cent. You cannot tilt the scales of justice 30 degrees and claim to be performing an act of equity. He ought to relate the war damage code with this code so that no one entitled to a cost-of-works payment under that Act is deprived of it, and he ought to abolish the artificial distinction between the owner-occupier and the investor. I make these recommendations in sincere good faith and in appreciation of the right hon. Gentleman's conduct of the Bill. I commiserate with him that he is having this code thrust upon him, which has far wider repercussions than the immediate Measure with which he is concerned. Both he and the Under-Secretary have commended themselves to the good will of the House. The Under-Secretary has made a very good and well-deserved reputation in the course of the proceedings on the Bill. The right hon. Gentleman had a good reputation before. I make the recommendation in good faith because I believe you will render the Bill unpopular if you leave these Clauses as they are. You will create a feeling against planning, you will provoke, indeed, resentment against it. People will feel that they are more planned against than planning. They will not like planning, and therefore you will stimulate reaction in that particular. You will also, I think, do infinite harm to the basis of our society and to a class of citizens whom you have hitherto wished to encourage.

Mr. A. Bevan

The right hon. Gentleman has made a very excellent debating speech and no one can doubt that he has spent a great deal of time in its preparation. There were certain phrases in it which he hoped would be repeated from Conservative platforms throughout the country. They were very specially polished. What I shall say will be extempore, and therefore will not scintil- late as his speech did. But I think he has proved far 100 much in the statement that he has made. It is true that, when a community decides to take certain action, individuals are bound to be injured by it. There is no way in which you can assert the communal claim over the individual claim and still leave the individual in the position he was in before. The right hon. Gentleman was making a charge against us which we accept. We have always insisted that communal values are superior to individual values and that, if society is to act in a particular way, it must push aside, ruthlessly if necessary, individual and private claims. Therefore, the right hon. Gentleman was taking up a wholly untenable position in arguing that, as the result of this Measure, certain individuals are bound to suffer. We know they are bound to suffer. If it can be shown that more individuals suffer by the Bill than are benefited by it, it is a bad Bill, but if it can be shown that more individuals benefit than suffer, those who suffer must endure their suffering. It is true that owners of property will not receive, under some portions of the Bill, full compensation for the property taken over if they have acquired it since 1939, but it has been our contention all along that the Government should have made their intentions clear long ago, that we should not have been put in this muddle and that we should not be enforced to give concessions to persons who have in fact been using the uncertainty for speculating purposes.

The distinction that the Government make between ownership and usufruct is a very just principle which marks out for recognition that large class of owner-occupiers which the right hon. Gentleman was so eloquently pleading for. It produces a new principle in the code of compensation which establishes their entitlement to special treatment, because they are usually poor people, who suffer more than the well-to-do from the interventions of the State against their property, and who have acquired their property largely to use it for their personal and private purposes. It would, therefore, seem to me to be perfectly just and logical that people who have acquired property in that way, for their personal enjoyment, should be secured in their possession of it and compensated if they are deprived of it. That seems to us to be as far as anyone should go in this matter. When the right hon. Gentleman pleads so eloquently for building societies, to which building societies was he referring—those established at the opening of the century in order to assist poor folk to acquire houses, or those vast agglomerations of parasitical capital now existing under the same title? If we are to investigate the claims of the building societies, they would come out very badly. Very large numbers of people are described as owner-occupiers when, in fact, their houses are owned by the building societies. They will have a legal title to their use, but they will be paying for many years before the houses actually become their property. One of the most evil influences now at work in the State is that certain building societies are tempting persons to take out policies, and to buy houses, which are "dream houses" and may never eventuate at all. Large sums are being accumulated by building societies in this way, and I am astonished at the right hon. Gentleman pushing this Trojan horse into the discussion. He talks eloquently about owner-occupiers and used figures about Devonport—63,000 people are going to be disturbed, 40,000 inside his own constituency. But when he is asked how many are owner-occupiers, his figures come down to hundreds.

We are very familiar on this side with the widow and the orphan, who are always brought forward on these occasions by hon. Members opposite. The right hon. Gentleman said it would be an extremely unjust thing to take property from people and not give them the full valuation that they would secure in the open market. There is no open market at present for this sort of property and his references were irrelevant to the matter under consideration. It is known that, in the blitzed cities, land is going to be acquired for development purposes. Unfortunately, you cannot increase the amount of land. It is a fixed quantity. It is known that the community is going to enter the market as a buyer of that land. A number of people will get together and acquire land, knowing very well that the land and certain properties on it will appreciate in value as a consequence of the needs of the community. My right hon. Friend says that they are in full enjoyment of their pro- perty and that, if it is worth to-day 30s. where it was worth ô1 in 1939, they are entitled to it, and that, if they do not get it, an injustice will be done.

1.45 p.m.

A small business man is taken into the Forces. He is ruined. His business is closed down and there is no compensation for him. All these eloquent pleas are made for injuries done to property, but what about the monstrous injuries done to persons by the war? Who is to compensate the little man for the loss of his business when he comes back, perhaps mutilated from the war? What does my right hon. Friend suggest? It is that when that man comes home after being five years away, after his life has been ruined and his body mutilated, and the plans he has made for his family and children completely wrecked, he should be mulcted in paying higher rates and taxes to compensate the harpies who have been speculating in land while he was away.

Mr. Hore-Belisha

The hon. Member wants to take his house away?

Mr. Bevan

Lots of them will not have houses. What my right hon. Friend is suggesting is that the House of Commons should plot behind the soldier's back, so that when he comes home from abroad he will have to pay higher rates and taxes—

Mr. Hore-Belisha

But these are soldiers' houses.

Mr. Bevan

There will be a lot more soldiers coming home who will not have houses. I thought that my right hon. Friend was qualifying for the leadership of the Conservative Party which may become vacant at any time.

I want to come to what I consider to be a nice little plot. We have been having discussions in the last weeks based upon the principle that we ought not to have two Bills, one of which included the compensation Clauses in this Bill. The Prime Minister suggested that we ought to have the compensation Clauses in a new Bill, but he lost on this occasion and the House of Commons won. What have we now? If the compensation Clauses had been postponed for a subsequent Bill, they would have been subject to all the processes of Parliamentary procedure on a Bill. If, however, we accept these new Clauses, an Order can be made after the Bill has been passed into law with the positive approval of both Houses, which can make the 30 per cent. anything at all. It will not be a Bill and it will not be subject to amendment. One of the new Clauses states: Provision may be made by an order made by the Treasury and approved by a resolution of each House of Parliament for substituting, in view of any circumstances arising since the passing of this Act, for any reference in the Section of this Act (Supplement to compensation in case of owner-occupiers) to thirty per cent. a reference to such higher or lower percentage as may be specified in the Order, either generally or as respects any particular provision of that Section. I am not able on the spur of the moment to construe the actual meaning of the words, and I am not sure whether the Order would be limited to varying the 30 per cent. for the particular classes of property referred to, or whether the Order could not under the general Act, vary the class of properties to which the 30 per cent. would be applied.

Let us take the first case and assume that the Order would be of a narrow kind. Why is it needed? It can only be needed to raise the 30 per cent. to some higher figure, because the 30 per cent. is the maximum and the local authorities need not pay it. We know that they have to pay the 1939 valuation. That battle has been won by my right hon. Friend, although, on his logic, I see no reason why, if the current values are below the 1939 values, the 1939 value should be paid.

The 30 per cent. is only to be added to the 1939 valuation if the local authority considers that hardship would be done if it were not paid. It can pay any figure between the 1939 value and the 1939 value plus 30 per cent. Therefore, this order will not be necessary to reduce the 30 per cent, because obviously the fraction would depend on the circumstances at that time. The power is, therefore, necessary in order to increase the 30 per cent. to some higher figure. It looks to me as if we are witnessing a piece of sleight of hand. All we are really doing is to give power to the Government to do in an order what we wanted them to do in this Bill. When the Bill is passed, the Conservative Party, if they come back after the Election, or if they are still there in the course of the next five years, can at any time slip an order through the House of Commons which makes this 30 per cent. any figure they like.

That seems to me to be a grave departure from the understanding which I thought we had reached. I thought we had reached the position where it was generally approved in the House that the principles of land compensation should be determined, and incorporated in the Bill, not that we should be asked to give powers which would allow the Government to reconsider the whole matter and bring it up in the foam of an order later on. I know that it may be said that the order will refer only to the actual provisions of these new Clauses where the new Clauses make for an increase in compensation over the 1939 valuation. I am not certain whether they are so limited. These Clauses are very wide, and I can see no words which would make it impossible for the Government to alter the whole basis of valuation for all properties taken. My right hon. Friend shakes his head, and I am glad if my suspicions are unjustified, because it would be a shabby thing to lead us to suppose we were dealing with compensation in its entirety here and, at the same time, we were clothing the Government with power to alter the whole basis of it later on by an order which we should not have a chance of amending.

If it be that it has the narrower interpretation, I see no justification for it. There is no reason, if the Government wanted to alter the basis of compensation, why they should not do it by a Bill. If the circumstances became such that grave hardship would be inflicted upon the owner-occupiers, we could rely upon the champion of small property, in the person of my right hon. Friend the Member for Devonport (Mr. Hore-Belisha), coming to the House and pleading for a Bill in order to relieve their distress. There is no reason why there should be given these powers to make orders of this sort. They are very unusual powers. The House has conferred upon the Government on many occasions powers to make orders, but I know of no powers to make orders which vary substantially the text of a Bill on a matter of principle such as that which has preoccupied the House for the last fortnight.

This is not a small matter. It is the whole subject which has been dividing us—how much public money is to be paid to persons whose property is needed by the community. Yet by something approaching sleight of hand this Sub-section has been put in. I know the Chancellor of the Exchequer is not an experienced Parliamentarian, otherwise he would not have mentioned it at all; he would have just slipped it in. It means that in a year or two's time we may find all this discussion resurrected, but not in a way in which we can deal with it adequately but by an order which will not be subject to Amendment by the House. I hope that the Government will take that Sub-section out. If they do not, I propose to put in a manuscript Amendment to remove it.

The Parliamentary Secretary to the Ministry of Town and Country Planning (Mr. Henry Strauss)

I do not know whether the hon. Member has it in mind that the provision which he is criticising had its counterpart in Clause 46 as originally drawn, so that it is not some complete novelty.

Mr. Bevan

That does not affect the situation a bit, because we had not got to the point of agreeing to Clause 46. It was withdrawn. I hope that I shall have the support of those hon. Members on the other side who have protested, often successfully, more than once against legislation by order, and that they will assist me on this occasion to deprive the Government of powers which would enable large sums of public money to be paid to private persons merely by the instrument of an order. We on this side of the Committee have made all the concessions we ought to make to the other side on this Bill. If further concessions are demanded by the Government and are given, I shall vote against the Bill on Third Reading.

Major Thorneycroft (Stafford)

The hon. Member for Ebbw Vale (Mr. A. Bevan) spent the latter portion of his remarks dealing with the possibility that, at some stage, in certain circumstances, the 30 per cent. level will be raised. He seemed to think that if a Conservative Government were in power, owner-occupiers of property would be more generously treated than they would be if he were in control of the situation. I concede the point at once. I think that that is certainly true. I really do not feel, however, that the provision that at some later date, when an order is put through the House, we can raise, or presumably lower, the level, is a serious criticism of the Clauses in their present form. The hon. Member criticised them because he thought they might in some future circumstances prove too generous. The right hon. Gentleman the Member for Devon-port (Mr. Hore-Belisha), on the other hand, delivered a substantial argument criticising the Clauses because they were not generous enough. I always find great difficulty in talking about the questions of compensation. They are extremely controversial and the application of the principles is very complex, but I do not believe there is such a wide divergence of opinion in the Committee as is sometimes supposed to exist.

Two main lines of criticism are made. Some of my hon. Friends on this side are concerned because they fear that these Clauses do less than justice to the individual. That is a proper approach to the matter, and it is right that the Clauses should be scrutinised on those grounds. There are some hon. Members, on the other hand, who think that these Clauses are too extravagant in the expenditure of public money, and it is right that the Clauses should be examined on those grounds too. Those two types of criticisms are not contradictory but complementary, because good planning could undoubtedly be stultified either by injustice to the individual or by wild extravagance with public money.

2.0 p.m.

The first thing we ought to be clear about is the sort of principles to be applied in considering this question of compensation. The first principle which we ought to establish is that where a man has had the roof over his head taken away, whether of his home or his shop, it should be the job of the Government to help him to reconstitute himself at the earliest opportunity, and not because some of them were poor men, as the hon. Member for Ebbw Vale suggested. The hon. Member has too much of the means test mentality. It does not matter one bit whether they are rich or poor, or whether they are living in houses or shops. We should reconstitute them at the earliest possible opportunity. The second principle is that the man who owns property should be compensated for it at a fair market value, if a market exists. I think that is a perfectly good, sound Conservative principle. The third principle is that where the market is purely artificial, particularly if it be a sellers' market created by artificial conditions, it is the responsibility of the Government to see that the prices created by the sellers' market should not be used to exploit the public, whose funds are, in fact, being used. The fourth and last principle is one which should appeal to the right hon. Member for Devonport. The principle is that the Conservative Party is a national party or it is nothing, and that we should not be prepared to extend generosity of treatment to one section of the community which we are not prepared to extend to other sections. If one accepts those principles, I would like to apply them very shortly to the provisions of the Clauses.

Let me take the case, first, of the occupier. The suggestions put forward by the Government in the original Clauses, despite what the Chancellor of the Exchequer said this morning, were wholly indefensible. One cannot divide people up according to whether they own small houses or big houses, or are in shops, factories or businesses. We cannot have horizontal and vertical divisions and dispense justice to one lot and not to another. I welcome the fact that the Government have abandoned that suggestion.

Mr. A. Bevan

It is a principle which has been incorporated in legislation for many years, for example under the rent law. Here we are doing just the same thing.

Major Thorneycroft

I heard the argument addressed to the Committee on that point, and I have dealt with it as the Chancellor advanced it. He felt very thankful that he did not have to advance it seriously in defence of a proposition before the Committee. The proposal before us now is that all occupiers, irrespective of their incomes, or the size or type of their properties, should be given this special treatment. The only criticism of the Government's proposal is that there is a 30 per cent. limit on the 1939 value. The right hon. Member for Devonport said that that was 30 per cent. of justice, or something of that kind. Suppose we did abolish the 30 per cent. altogether. We should, in fact, be inviting the Treasury to sign a blank cheque to pay for all increases in building costs over and above the 1939 value. Such action would tend more than anything else to drive up building costs in this country. Everybody who has studied the housing problem will agree that by some means or other we have to depress present building costs. I admit that to do so may mean very ruthless action, perhaps against price rings in some branches of industry and perhaps against restrictive practices in some trade unions; but if that has to be done, let us at least set a target before us. Let us do all in our power to bring these matters down to the 30 per cent. level.' If we fail, there is provision for putting that 30 per cent. rather higher.

Let me leave the occupier now and say something about the owner; he is sometimes called the investor. The right hon. Member for Devonport said, "Why not treat the investor—or the owner-investor—and the owner-occupier the same? "Whatever else we do, we cannot do that. The whole principle of dealing with the occupier is that we are trying to reconstitute him in a similar sort of property to that out of which he has been driven, while the principle of dealing with the investor is to pay him a fair price for his investment. No Government can take the responsibility of saying that investors in bricks and mortar will be put into a position immediately after this war in which they can have the same investment in bricks and mortar again. With the shortage of bricks, materials and labour that would be a fantastic operation. It would be like putting a quart into a pint pot.

The next thing that is said is: "Even though we cannot treat them the same way, how do you justify the 1939 standard? "The answer to that is another question: "What is a fair standard?" I have heard any number of suggestions put forward. Some people have taken the market value. It is true there is a market value for each individual bit of property, but it is entirely artificial. It is a market that has been created very largely by war conditions. Taking the country as a whole, we have a classical example, I suppose, of a seller's market. I would say that if market values in the country were applied to each individual bit of property in general a grave injustice would be done to those who are subscribing the money, and, in particular cases we should be doing gross injustice to people to whom we should be paying much too little. The real hardship to a man whose property has been taken away is that he loses rent. He has been drawing 15s. a week, say, from the cottage down the road, and he loses it. The only real way to put him back into the same position would be to give him sufficient money to invest to produce 15s. a week, but that would be a novel departure in compensation practice. No Government should take the responsibility of compensating on the basis of income. It would mean that each individual case would have to be treated on some entirely different principle.

Finally—and this is my last point—some hon. Members say that it should be related to the value of the £. If there were some spectacular devaluation, and we were paying these people on the 1939 price, they would be very severely affected. I do not believe that we can take a particular type of property and try to safeguard it against the dangers of inflation.

Mr. A. Bevan

That is precisely what this Clause will do, if the escalator provision is retained, as has already been pointed out.

Major Thorneycroft

Yes, I have the hon. Gentleman's point. I may be a little incoherent, but he is about six minutes behind. I am not now dealing with the position of the owner-occupier, but have for some time been talking about the owner-investor. Perhaps I might resume my argument.

Some hon. Members would relate it to the value of the £. I feel that we shall constantly be faced with a problem very similar to this. We are to be asked to pass legislation which envisages payment of a sum of public money in the future, and we shall be asked at the same time: "Is that money going to be enough at the date when it is paid?" We are to be invited to introduce some sliding scale so that all these payments, be they insurance benefits or compensation for property, shall be related to the value of the £. I would ask some of my hon. Friends who ask that property payments should be related in that way to remember that in a week's time we shall be discussing social insurance. It is perfectly logical to say that in both cases there should be a sliding-scale adjustment, but it is not logical to argue that one or the other should have an adjustment. That was what I meant when I said at the beginning of my speech that we cannot deal more generously with one section of the community than with another.

I hope that hon. Members opposite will support me in my argument on this point and will remember it on a future occasion. I can at least say of myself that I am being entirely consistent. I have put forward a good Tory principle: that if adjustments have to be made they ought to be made all round and not applied to individual cases. For those reasons I believe that the Government were right in taking the 1939 level as the only stable market they could find. I believe they were right to give special and entirely separate treatment to the particular class of owner-occupiers. For those reasons I support the Clauses that have been put forward. It is true that some of my hon. Friends have put forward similar proposals, but I am sure I will carry with me the whole of the Conservative party when I say that that does not necessarily mean that the Government's proposals are right. I think that, on their merits and for the reasons I have put forward, they are a fair solution of what is admittedly an extremely difficult problem, and for those reasons I hope that they will be accepted by the Committee.

2.15 p.m.

Sir Richard Acland (Barnstaple)

This Debate, and the peculiar way in which it comes about, rather surprisingly raise the whole issue of compensation as a matter of principle. I am very glad it does so, because there is no principle on which it is more important to get our ideas straightened out at this time. It is my view—which a lot of people share—that the world is passing through a period of crisis as great as the crisis between the feudal and the individualist age in our own country 300 years ago. This necessarily means, as I see it, that all sorts of ideas and principles which were necessary, and which were regarded as sacrosanct, in the age which is passing away will be found to be unnecessary and anything but sacrosanct in the world that is coming. I would offer one fundamental principle of the age that is coming, and I would be grateful if there is any hon. Member in this House who will get up and deny it. The important principle which is coming is that life is more important than property. If there is any hon. Member opposite who will dare to get up and deny that quite simple statement let us have it, and if anybody thinks that property is more important than life let him say so. Otherwise, let us accept the principle that life is more important than property and let us see where we go from there.

Sir Edward Gri—— (Altrincham)

Is the hon. Baronet referring to national property?

Sir R. Acland

I am referring to any sort of property at all.

Sir E. Gri——

What are our young men laying down their lives for in Holland at the present moment?

Sir R. Acland

They are laying down their lives that they may have life and have it abundantly.

Sir E. Grigg

They are laying down their lives for a heritage of culture and freedom which is our national property.

Sir R. Acland

If the hon. Member would give me a little time I could find the passage in which his argument was contradicted 2,000 years ago. Could we go on from the fact that only one hon. Member has argued that property comes before life? Let us note that hon. Members opposite are deeply concerned that absolute justice shall be done to property. Note the words they use: "Full restitution," "Full market price," and all the rest. If there is a war a great many people get hurt, and hurt very badly indeed, and it seems that hon. Members opposite are terribly concerned that we should have a war in which the property owners do not get hurt at all. And of course they marshal all their arguments round the case of the small property owner. It is not a great secret that behind the small property owner, behind the petticoats of this widow who has invested her life's savings in the house next door, there stand the big owners of great blocks of urban and agricultural land, land speculators and all the rest. This demand for absolute justice, complete 100 per cent. restitution for property, compares curiously with the way in which this House treats life. If people lose eyes or arms or a leg in this war—

Mr. Manningham-Buller

On a point of Order. In a discussion on these new Clauses is it really proper that we should discuss how this House treats life?

The Deputy-Chairman (My. Charles Williams)

This question of life quite obviously might be used for illustration, but it really cannot form a basis for the discussion of this particular Clause, or we should be led far away from the Clause.

Sir R. Acland

Rather than address to you an argument on the point of Order, Mr. Williams, that might take me four or five minutes, perhaps I might devote just two minutes to the point about life. I will do whichever you wish. When people lose their eyes, arms or legs we give them 50s. a week. When people lose their jobs because the community has no use for them we give them various sums, varying from time to time, about 20s. a week or a little less. The right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha), speaking of one of his constituents, said she might well say "I have to pay 20S. a week rent now; I was making money before the war." I sympathise with the lady, but there are others who could say, "I have to live on widow's pension now. My husband was making money before the war." I submit that we face a fantastic inconsistency in the way we are prepared to treat life and the way in which we are preparing to treat property. I suggest that the reason for this ever increasing inconsistency, for these modifications and illogical adjustments which the Chancellor and progressive conservatives try to make, is that we are past the moment in history in which old principles have to be rejected and new principles accepted.

I will present the principle of the new age rather sharply and bluntly to the Committee, not because any hon. Member opposite will agree with me but so that they may not mistake what I mean. It is this: Property as such has no right whatever. A suit of clothes, a bicycle, a motor car, a title deed, a share certifi- cate or a wireless set, simply considered as such, has no rights whatever. It is individuals who have rights, and some of these rights relate, of course, to different kinds of property. The right of the individual to his clothes and furniture, his lawn mower and such things are in my view absolute. But different kinds of individuals can have very different rights in relation to different kinds of property. I know that the principle is not accepted in Parliament to-day, but I make the suggestion that it may be accepted in this country in the future and it may be applied, the right hon. Gentleman the Member for Devonport suggested, not only to the acquisition of land but to the acquisition of all kinds of property which are needed by the community. As a matter of fact hon. Members opposite in their arguments have gone a certain way towards a subconscious acceptance of the very principle I am enunciating, as will be seen if those arguments are examined. This was particularly clear in the speech we heard today from the right hon. Member for Devonport.

When hon. Members opposite are trying to extract from the Government greater concessions, they never build up their case in relation to an item of property considered as an item of property. They always support their case by asking the House to consider an individual citizen considered as an individual citizen. They then describe the circumstances of the individual; and it is extraordinary how often the individual is a poor widow, and how often she has spent her life savings and has invested in a little property. And then we are told what has happened to her property, and how much less money she is to get now than she would have got if something else had not happened. When hon. Members opposite argue in this way I can entirely agree with them because, if they are talking about the small property owner, the little individual who through genuine self-sacrifice and saving has got together a little property, then I will come all the way with Conservative Members in the determination to do justice to these little people. The only step I cannot take with them is the next step which very often, without mentioning it, they invite the House and the Chancellor of the Exchequer to take. Because the next step in their argument is to take all these rights which they have so carefully accumulated round this individual, and to transfer them on to the property considered as such; then to pretend that this item of property—almost necessarily a small item of property—has got those rights attached to it regardless of the circumstances of the individual. The next stage in the argument is to assert, as if it were a matter which could not be challenged, that if some other individual owns an item of property 1,000 times or 10,000 times larger than the one with which they have been dealing, then the same rights must apply to that infinitely larger estate, but automatically multiplied by 1,000 or 10,000, as the case May be. It is that step in their argument that I challenge.

Mr. Henderson Stewart (Fife, East)

Where would the hon. Baronet draw the line?

Sir R. Acland

Where is the line drawn when the means test is applied to a family?

Mr. Stewart

I ask the hon. Baronet where would he draw the line? [An HON. MEMBER: "On the scaffold."]

Sir R. Acland

I should be very happy to show my hon. Friend the notes which I have rather hastily prepared for this speech. He would then find that that was the exact point to which I was coming. I will deal with it briefly, but, if the hon. Member wants it, there is literature published by an organisation to which I belong which gives much more detail. When the community is acquiring property which is needed for the purposes of the community I suggest quite seriously that the subject of compensation has to be dealt with on the basis of hardship. And as we move forward, as I hope we shall, into an economic structure of society quite different from that under which we suffer now, I would like to drop the word "compensation" and put in its place the words "transitional hardship allowance." Then we should know a little better what we are dealing with.

When we come to the smaller investor and saver and the little owner-occupier, then to avoid the complications of endless inquiries in numerous small cases we might as a rough and ready rule draw the line at about £1,000 capital value. When that kind of case is reached the transitional. hardship allowance should be at the rate of 100 per cent. In the case of medium owners of property, say those who own between £1,000 and £25,000 worth of property, I think the automatic 100 per cent. should be departed from, and a means test definitely applied. And if one of those owners is in fact an elderly gentleman with no power of earning any income, then again as much as 100 per cent., or 95 per cent., might be given. If it was a young man or woman fully capable of earning an income, and owning £10,000 worth of property which the State required, then I would think some such compensation as about 50 per cent., 25 per cent. or even 10 per cent. of what they were receiving before would be quite enough; and good justice.

Coming to the case of the biggest owners of all, I suggest it is high time we accepted the principle that their property can be taken by the community as and when it is wanted and something like an income of £1,000 a year for life, with nothing for their children, is the absolute maximum compensation that should ever be paid in any case.

2.30 p.m.

Viscountess Astor (Plymouth, Sutton)

Would they have anywhere to live, besides the £1,000?

Sir R. Acland

The overwhelming majority of people in this country have to find somewhere to live with an income of very much less than £1,000 a year. If £1,000 is too little to pay to the greatest owner of property in this land, will hon. Members justify the payment of 50s. a week to a soldier who has lost his eyes? It should be remembered, when we are judging this thing in terms of human life and hardship, that there is much less hardship involved when the richest man in this country goes down from his present income to £1,000, or even £500, a year than when a working man loses his job and goes from £4 a week to the 20S. or whatever it is of the means test and unemployment assistance. In the one case there may be a drop of £25,000 a year, and in the other case it may be only a matter of a couple of pounds a week that is given up. Looking at the thing in terms of property, it may be said that my proposal is grossly unfair, but looking at it in terms of life, the loss of £2 a week to the man who is unemployed is far greater in terms of human suffering than the loss the other man would sustain. This House may—and, of course, will—reject the kind of things that I am saying, and the spirit in which I am saying them, but I believe most earnestly that there are some four or five million men fighting, and a very large number of people working for this country, who are going to accept this kind of proposition at no very distant date.

Mr. Manningham-Buller (Daventry)

The hon. Member for Barnstaple (Sir R. Acland) will forgive me, I am sure, if I do not follow him through the wide and vague questions that he has raised. They seem to me to be far remote from the Clauses of this Bill. At the same time I would like to thank him for making it so patently clear how far he has travelled from the Liberal point of view of having regard to individual rights and individual interests and the interests not only of the small man but of the middle man, and of every section of the community. I hope, with the hon. and gallant Member for Stafford (Major Thorneycroft), that we can consider this problem free from the desire to gain election capital, free from all desire to preach party propaganda, with the common desire to arrive at a satisfactory solution of what I think everyone will agree to be a most difficult problem. No one, I think, on either side of the Committee, wishes to see local authorities held up to ransom, or to see any avoidable injustice inflicted on any private individual. We all desire to see that the speculator, the man who is trying to make a profit out of war by investment in land, is not assured of his profit by any proposal in any Act of Parliament.

I was sorry to hear the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) deliver an ultimatum this morning, to the effect that if any Member proposed an Amendment and it was accepted by the Government he would vote against the Third Reading. I do not know whether the hon. Member for Ebbw Vale (Mr. Bevan) was present at that time, but he suggested making an Amendment which apparently would incur the right hon. Gentleman's displeasure. There appears to me to be one serious defect in this Clause. Let us make no mistake about it: the speculator is not covered by this Clause, as I see it. I do not know of any instances—indeed, I do not think there are any—but the man who has bought a house in a blitzed town, say, for £600, when its 1939 value was £2,000, is not caught by this Clause. He may have made his profit and got out, but what will be the position of one who still holds that property? If he has had the wisdom to go and live in that house, what will he get? He will get the 1939 value, plus 30 per cent., perhaps, as an owner-occupier. A house worth £2,000 in 1939 is bought by him for £600 now. If my mathematics are right, his profit will be not less than £1,400, and it may be £2,000. There is nothing, as I see it, in this Clause which will hit that individual; and I think we are all agreed that that is the one type of individual we want to hit. If, on the other hand, he does not take the step of going into occupation of this house that he has bought on speculation, he is assured of a profit of £1,400, the difference between the price at which he bought the house and the price at which it will be acquired by the local authority.

That is my first complaint against these new Clauses—they do not achieve the object on which I think we are all agreed: that people should not be allowed, by investment in land, to make a profit out of war. I hope that the Government, in the short time at their disposal, will think over this matter again, so as to catch these few—I think there are only a few—individuals. It is a question of fact in each case whether property bought since 1939 is bought for occupation, for investment, or for speculation. There can be no difficulty in deciding that a house bought for £2,000 in 1939 was, when it was subsequently bought for £600, bought for speculation. I would suggest that, in the case of property bought at the 1939 value, there should be no addition to the purchase price unless the owner can satisfy the tribunal—and the onus should be upon him to do so—that the house was bought by him either to live in or for investment, and not for speculation.

I desire to come to the actual contents of the Clause. We were told by the Chancellor that we must go back to the 1939 value, because there is no actual market value now. In all seriousness, I ask, how can he say that the valuations effected for Death Duty purposes are in any way correct? I would like to see these Clauses contain a provision that if the Death Duty valuation is higher than the 1939 valuation, and people have had to pay Death Duty on it, that should be the figure fixed for the property acquired. It seemed to me that the whole of what the Chancellor said proceeded on the assumption that, for eight years after the appointed day, there would be no market value for any land in this country. I cannot believe that that is right. Market values may go up, they may drop very considerably after the war—who can tell? Why should local authorities be compelled to pay more than the market value if, for instance, the market value has fallen very considerably since 1938? It seems to me that we should get back as soon as possible to actual market value. This House has recognied that principle in an Act passed so recently as 1941, the Agriculture (Miscellaneous War Provisions) Act, whereby a standard of compensation was laid down for payment if the Minister of Agriculture acquired land. If the Committee will allow me, I will remind them of what the Subsection says: In determining the amount of compensation to be given for any land acquired compulsorily under this Section, the value of that land shall be taken to be the price which a willing seller would, at the date of the notice to treat, have been likely to obtain in the open market for the land if it had remained in the condition in which it was at the time when possession was taken by the Minister or the Committee, as the case may be, and such reduction, if any, shall be made in the compensation as is necessary in order to off-set any appreciation in the value of the land which is directly or indirectly ascribable to the war. It seems to me that that really sets out the principles which we are all trying to achieve. What will be the position of a farmer if these new Clauses are passed? He will, indeed, be fortunate if his land is acquired by the Minister of Agriculture, because then he will get its actual market value less any increase due to the war. If it is acquired by a local authority, it will go back to 1939 prices, with a possible maximum addition of 30 per cent.

Mr. Woodburn

With regard to the hon. Member's reference to the other Act of Parliament, if no costs attributable to the war are to be taken into account, will not that rule out giving these people an extra 30 per cent. attributable to the fall in money?

Mr. Manningham-Buller

I should say not. One point that I desire to make is with regard to the 30 per cent. How can it be said that an individual can establish a right to a 30 per cent. increase if there is no market value? My second point I can state quite shortly. Why should we have a limit of an additional 30 per cent.? It can only be put there for the purpose of doing less than justice. It would apply only where an individual can. make out a case for receiving 31 per cent. or more. He does not get what ex-hypothesi would be justice. The hon. and gallant Member for Stafford has put forward the argument, which I think is completely illogical, that we must have 30 per cent.; because if not it will not peg building costs. We are now discussing compensation, not building costs—what the man will receive, not what it will cost to build. If we want to peg building costs there are various methods of doing that, and one way is to increase the production of bricks for the rate of wage. I am not in favour of reducing the rate of wage—I do not want to go into that—but to peg compensation to an individual will, in my view, have no effect on building costs. That 30 per cent. is quite arbitrary. There is no limit placed on increases under the War Damage Act, and it seems to me wrong that there should be a limit here.

I will not pursue the point raised by the hon. Member for Ebbw Vale as to the effect of Orders in Council. He says that what we are trying to do is to place tremendous burdens, in the way of rates, on the backs of those who are now serving their country overseas and who come back disabled. I would say to him that that is a complete misrepresentation of the position. We are not trying to do that. I do not think anyone is. What we are trying to achieve is that the man who is overseas or disabled to-day, the man who may have a business in this country, or who has a home in this country, should not suffer injustice while he is serving his country overseas.

2.45 p.m.

Now I come to the chief issue—the treatment of the owner-investor, as distinct from the occupier. I agree with the hon. and gallant Member for Stafford that we cannot really say that we can give replacement value to both. I have yet to hear anyone ask for that. I can see the argument about "the roof over the head," but I say that, if we are going to adhere to the orthodox standard in paying actual value, we must do our best to decide the actual value at the time of acquisition. That is the important point, and there should be power in these Clauses to relate the 1939 price paid to any owner-investor to the actual value, at the time of acquisition, so far as it can be determined. The argument in that case is not the same as for the owner-occupier, but one really cannot draw a distinction between the two. There are hundreds of thousands of owner-investors throughout the country. Why should injustice be inflicted upon them? For years, people have been encouraged to put savings into property and to build houses to let. Let us consider what reaction our course of conduct is likely to have if we pass this Clause in its present form. Let us compare the position of a man who invested his money here in property and the man who sent his money overseas. Does the Chancellor pay him the 1939 price or 100 per cent. of the actual value? What cause is there for doing less than justice to the owner-investor?

I want to say a word about agriculture. I hope due regard will be had to the change in general values which has occurred since 1939, and that this Amendment will be extended to include improvements effected otherwise than by Government licence. I see no reason why you should only get this supplement if you made your improvements in consequence of the directions of the War Agricultural Committee. The Chancellor said that property owners, as a class, had no reason to claim that they have been unfairly treated. I venture to say that that is an inaccurate statement. We had the analogy of the War Damage Act. In the last war people could insure against loss, but the War Damage Act stopped them doing that. I ask the Chancellor to state whether there is any precedent at all for treating one large section of the community with patent injustice.

Mr. Woodburn

I think the Committee will agree on one point in regard to these Clauses—that their purpose is to try to prevent injustice. As I gather the argument of the hon. Member who has just spoken, it was that the Clauses perpetuate injustices and do not do justice to certain types of property-owner. The argument, generally, to-day, can be reduced to a very simple proposition. The Chancellor of the Exchequer has made a distinction between the owner of property who occupies it because he lives or works there, and the investor, who buys property for the purpose of speculation or investment. I cannot, for the life of me, see how anybody can argue that a person who invests or speculates has to take no risk. We are told that one of the principles of the system of investment and speculation is that a person who takes risks is entitled to payment because of those risks, but my hon. Friends who are arguing against the proposition in this Clause want to eliminate risks from certain types of investor and guarantee that, in all cases and in all conditions, whatever happens, and even if the world comes to an end, their property will be inviolate and undisturbed and they will achieve its full value when they want to sell it. That seems to me to be a proposition that is quite untenable. I know ordinary people, without much money, who have been persuaded to put their savings into investments. Just after the last, war there was a great spate of investment trusts, which sprang up and which guaranteed a rate of percentage that looked attractive and certainly attracted a great deal of money. The property of these people to-day is only worth about half, in terms of cash, what it was worth then.

Six H. Williams

Was not the first of these trusts run by an eminent member of the Labour Party?

Mr. Woodburn

That does not make it good or bad, necessarily. I am not claiming that, on this side of the Committee, we have a bunch of angels, and that the rest of the people are rogues. I am not proceeding on that argument at all. The persons I was referring to, whose property had already depreciated by 50 per cent. before the war, have, during the war and up to the present, suffered further depreciation because of the conditions of war and the fall in the value of money, and their wealth has decreased, perhaps, by another 20 or 25 per cent. Nobody has come forward with a proposition that, because these persons invested through investment trusts, their property is to retain its full value after the war as if no war had taken place.

Sir John Mellor (Tamworth)

The hon. Member has mentioned investment trusts. Would he mention two or three by name?

Mr. Woodburn

I think the Chancellor referred to "red herrings."

The Deputy-Chairman (Mr. Charles Williams)

I think that is rather outside the scope of the Debate.

Mr. Erskine-Hill (Edinburgh, North)

Surely, there is no question of the property of the investment trusts being compulsorily acquired? That is the difference between the two.

Mr. Woodburn

I was coming to that point. The question is not one of the property being compulsorily acquired; the question is what is its value when it is acquired, and its value to-day, compared with pre-war. The value of these other investments has remained the same, but the real value has steadily declined, and, owing to the conditions of war and the fall in the value of money, these people have lost perhaps another 30 per cent. Nobody can advance a proposition that the possessors of real property, in the sense of land and buildings, are to be guaranteed that their property is never to decrease in value. [HON. MEMBERS: "No."]But that is the argument. On the other hand, you must argue that the property of people who have invested vicariously in property or stocks and shares and other property must never increase.

Mr. Colegate (The Wrekin)

Is the hon. Member referring to equity or investments?

Mr. Woodburn

If a person becomes an investor—

The Deputy-Chairman

I do not think that either equity or investments are dealt with in this Clause.

Mr. Woodburn

There is an analogy there, Mr. Williams. We are talking about the way in which people are being properly compensated in this Bill when the community takes over their land. I suggest that property before the war, in the form of money, has not changed now except from the consequences of the war. In the case of most of the property which is going to be dealt with here it cannot be replaced at the price paid for it before the war. There has been a fall in the value of money, and, if a person who has a shop or a house and wishes to reinstate himself and cannot do it out of the money value of 1939, these Clauses agree that that should go up to an approximate ceiling of 30 per cent. more, in order to enable that person to begin life again, in that area or in another area, without severe loss. But the person who is an investor, the person who bought property for the sake of investment and drawing the interest, always takes the risk that something will go wrong with his property. There are circumstances of war, and other circumstances, such as an act of God, and many other things which he cannot guard against, and, if he is an investor, he takes the luck of the draw whether the property will yield a dividend, as slum property, 50 or 60 years afterwards. There are people drawing rent from property to-day that has repaid itself several times over.

Mr. David Eccles (Chippenham)

Does the hon. Member think that an act of God and an Act of Parliament are the same thing?

Mr. Woodburn

I will say this—that an act of war is just about as little controllable as an act of God.

Viscountess Astor


Mr. Woodburn

I do not know whether the Noble Lady claims that she can control war. Can she?

Viscountess Astor


Mr. Woodburn

So far as I am concerned, I feel equally impotent when either war or thunder comes, but the point is that war has come and the only argument to-day is whether those who own and control the type of property which is known as investments are to be absolved from any consequences of the war. I respectfully suggest that we cannot agree to that in the face of the sufferings of our people from the war. Men have been called up for the Army, and have lost their little businesses and their livelihoods, which have been built up, perhaps, over 20 years and at great sacrifices, and nobody can possibly compensate these people for what they have lost. But, to-day, we are being asked that these investment property-owners should have the full real value of their property restored to them in the event of replanning. In spite of all that has happened to them, other people, when they come back from the war, will have to make further sacrifices to indemnify these property owners against any loss suffered as a result of the war. I suggest that that cannot be justified, and that, indeed, owners of property for investment are extremely fortunate in that, in spite of the results of the war, they are going to have property at all. Two or three years ago everybody in this House was ready to place all his property in the pool to fight this war for our existence. Now, there are people who want to profiteer out of the war at the expense of their fellows.

Sir H. Williams

Why should one owner of a house get 30 per cent. more than the owner of a house next door?

Mr. Woodburn

There is a very good reason for that, and the Chancellor explained it, but the fact of the matter is that we have to enable people to carry on their lives and their work in this country.

3.0 p.m.

It is not from the point of view of giving these people an advantage, but in the general interests of the community that you must, as far as possible, if you are changing the plan of your country, restore the working life of the country without injury to the people you are displacing. But where a person has merely a money interest in property, if he gets back the money he put in, he has no right to claim more. It is argued that persons with invested money should get their money back in the form of appreciated money. In other words, everybody else is to be paid in depreciated money, but that they should receive appreciated money.

Some hon. Members would argue that shopkeepers should be reinstated in positions no less favourable than before. Everyone has sympathy with that, but it is impossible and impracticable. But there is no case for the person who puts money into a gamble and because that gamble does not—[An HON. MEMBER: "Why a gamble?"]Property investment, like any other investment, is a gamble, and the only difference is that our friends who have been concerned with it have known it to be a very satisfactory gamble in the years that have passed. But I say they have no right, any more than other people, to have their money appreciated. Nobody who put their savings into War Loan will get an appreciation on those savings, because of the fall in value of money, and if you are to say that the man who invested in property is to have a privilege over the man who invested in War Loan, then you are arguing a proposition which cannot be held to be tenable.

Lieut.-Colonel Dower

Surely, the point is that if you invest your money in War Loan you are not forced to sell out at a certain time. In this case it is a compulsory sale. That is the difference.

Mr. Woodburn

The point is that the person who invests in property takes the risk that his property will be cleared away at any time in slum clearance. [HON MEMBERS: "No, no."]

Mr. Henderson Stewart

Had the property been destroyed, he would have got far more for it than under this scheme.

Mr. Woodburn

I am afraid the hon. Member has not read the Clauses, because the Chancellor said that he would get the same. [HON. MEMBERS: "No."]In any case, I do not want to detain the Committee too long. If I have made a mistake, I am willing to give way.

There is another proposition. If this argument is agreed to, that everybody is to be compensated for the fall in the value of money, then the Government will have to face this argument when the social security scheme comes in. Are they going to tie social security to the fluctuations in the value of money? Are the Government going to consider all the Services that are at present being paid by them—the pensions paid to civil servants and others and give them full compensation for the fall in the value of money? You cannot select one privileged section of the community in this way and say to them "You, of all people in the country, are going to have no loss at all through the war." Finally, the people coming back from the war will resent it very greatly if their sacrifices are simply to be the prelude to further sacrifices in order to indemnify people who have taken neither the risks nor the dangers which they have gone through. I should feel ashamed if I were going to benefit from a tragedy which had overtaken my fellow men.

I would like to ask the Minister about a point which somebody else raised, and on which I am not clear myself. I gathered from the Chancellor of the Exchequer that if a man's house is destroyed, he is entitled to a cost-of-works payment, but that if his property is scheduled for planning, he loses that right and gets only the right to a value payment. Is he paid under the War Damage Act, or transferred to compensation under the present Act? If he is compensated under the present Act, does he get the cost of putting him back in his building again, or the value of 1939, plus up to 30 per cent.? That is a point on which I am not clear and shall be grateful if the Minister will explain it. During the Debate on this Bill everybody here has tried to be fair and just, and if the hon. Member for Daventry (Mr. Manningham-Buller) wants to introduce a Clause that is going to catch his particular speculator who bought a house for £600, and sold it for £2,000, I am sure the Committee will look favourably upon it. But I am certain you cannot devise a Bill which catches everybody who "diddles" anybody else. That is a human impossibility, but that is no argument against a Bill which does its best to be just to people by giving an increase of 30 per cent. which is the estimated extra cost of building after the war.

Mr. Keeling (Twickenham)

Would the hon. Member deal with the following. point? A London street has two sides to it. One side is destroyed by a bomb; the other side is acquired by a local authority under this Bill. The owner-occupier on the side destroyed by a bomb will, if the house is not too old, get a cost-of-works payment—the full cost of replacing that house. The owner-occupier on the other side, however, whose house is acquired under this Bill will, at most, get the 1939 value plus 30 per cent., i.e., less than the cost of replacement. How can the hon. Member justify that?

Mr. Woodburn

I will leave that to the Minister. As far as I understand it, the 30 per cent. is an estimate of what the extra cost of replacement will be when building costs settle down after the war.

Sir H. Williams

I am very fond of the hon. Gentleman who has just sat down. We have been close colleagues for a long time on the Committee on National Ex- penditure and I know what an objective view he takes of life. Therefore, I am frankly surprised at the speech he has just made which naturally exposed him to the interruption from my hon. Friend the Member for Twickenham (Mr. Keeling). A question was put to my hon. Friend, who is a legislator, but he passes the buck on to the Minister. That is a complete abdication of responsibility. We are making laws here, not obeying Ministers. After all, they are described as "His Majesty's servants" when summoned to a Cabinet meeting. We are here to formulate Acts of Parliament, not to obey the dictates of Ministers.

The Chancellor of the Exchequer interrupted me earlier to-day—I am sorry he is not present—and made a statement which was not up to his standard. I put to him a simple proposition and he introduced some long Latin words which finished up with impossibilia, and tried to say that it was impossible to establish the value of a property taken over by a local authority. I say I am sorry he is not here because I am going to be rather rude. I think that was a most dishonest statement and, in order to establish its dishonesty, I said that his servants were every day valuing property for the purpose of Estate Duty. He then referred me to a document which I have not seen, in which there is a list of extra-statutory concessions. He implied to this Committee—again, I say, dishonestly—that—

The Chairman (Major Milner)

The hon. Gentleman must not make such an imputation against any hon. Member. He must withdraw it.

Sir H. Williams

I apologise; perhaps I was a bit hard on the right hon. Gentleman, but he replied, with considerable inaccuracy, that if I had only read this document, which was put in the Vote Office only to-day, I should see it was, as a matter of fact, to meet the difficulty of valuing property that these concessions were thought necessary. The document has twenty pages. I looked through it. It starts off with Income Tax, Excess Profits Tax, and it deals with the illegal arrangements which the Treasury made to overcome the incompetence of their legislation. That is the truth. All these things are illegal. They are the extra-statutory conditions made by the Inland Revenue, and every one of them is illegal. The right hon. Gentleman drew attention to the illegality with respect to assessment for Estate Duty. It says:

"Valuation of House Owned and Occupied by Deceased. The general rule of valuation of property for purposes of Estate Duty is to take the market value at the date of death. It will show how incredible and inaccurate the Chancellor of the Exchequer was when he was seeking to mislead the House by his inaccurate statement.

The Chairman

It is the long established practice of this House that no imputation or reflection on the bona fides of any hon. Member should be made, and I must ask the hon. Member to withdraw his remark.

Sir H. Williams

I withdraw my remark on the bona fides of the Chancellor of the Exchequer, and I will refer in future only to his incompetence. The pre-war value can be ascertained only in so far as it can be realised by a sale with vacant possession. It is a very narrow class. It is the only exception that the Treasury have found it necessary to make in overcoming their difficulties in establishing the current market value. On the basis of that the Chancellor brought in that long word, which means that it cannot be done. The Chancellor says it cannot be done, and he said it in Latin because he thinks it is more impressive as he represents a university constituency. I often wonder about these amateur politicians, and, after all, the right hon. Gentleman is not a very competent politician. What was he? A civil servant and a Governor in India who was said to spend most of his time—

Mr. W. J. Brown (Rugby)

Is it in Order, Mr. Deputy-Chairman, to compare civil servants unfavourably with politicians?

The Chairman

I must deprecate these personal animadversions—they are not relevant to the Debate and not in good taste.

Sir H. Williams

. The Chancellor of the Exchequer ought to be here. He has been trying to "bulldoze" the Commons into passing into law a rotten Bill. Where is he? He led off in the Debate to-day. What is the effect of his speech? Why did he go upstairs yesterday and try to "bulldoze" the Conservative Members? Let him come and face the music. Some people think they can treat the House of Commons with disrespect.

Mr. Montague (Islington, West)

The hon. Gentleman is not always here.

Sir H. Williams

I am not a Minister, and when a Minister is in charge of Bills, he ought to be here.

Mr. Montague

All the time?

3.15 p.m.

Sir H. Williams

A substantial amount of the time. A little hard hitting does not do any harm. The Prime Minister is a strong advocate of it. He has said things in this House which would have thoroughly paralysed many of your predecessors, Major Milner. My hon. Friends behind do not seem to understand this. I own two houses, one of which I used to live in. Nobody would buy it from me. It has suffered a certain amount of war damage, but I am glad to say it has not been destroyed. If the local authority—and I mention this by way of example—decides to take it over because I am no longer living in it, I get the 1939 value, and if by chance I were living in it, I should get 1939, plus whatever the percentage is. Is it an immoral thing to invest in houses? What was the major charge made by hon. Members behind me round about 1925 and 1926? It was, "Look at these capitalists. They are only building houses to sell, and not to let." The effect of the Rent Restriction Acts was to discourage people from owning houses. Is it an immoral thing to build a house in order that somebody else can live in it? Is that the charge? Towards the end of the period of two years unsubsidised private enterprise was building four times as many houses as the local authorities were building under subsidies.

Mr. Craven-Ellis (Southampton)

And better.

Sir H. Williams

And better, naturally. They were building them to let. I am not an investor in houses, but is it an improper and unusual thing? An investor is a man who has money invested in something. Suppose the State came along and took away his trousers; does he expect only to get one leg back? The thing is monstrous. Somebody comes along and assesses my property, and all I ask is to be given back an equal amount of property somewhere else. Is that immoral? If I invest in a security for a period which runs out in 1965 I know what my contract is, but the State comes along and interferes with the contract. I am the owner of a house in perpetuity, if it is a freehold house. The late Mr. Goschen reduced the interest on Consols to 2½ per cent., but the price of Consols has varied all over the place and has been as low as 40, and as high as 112. That was a contract in perpetuity for the payment for each £100 worth of stock of 50s. per annum.

What is the permanent contract with regard to your freehold house? You own the land and the building on it, and it is yours for all time unless you conflict with the law with regard to insanitary property and the rest of it. If someone comes and takes it way from you, surely you are entitled to have the equivalent somewhere else. If someone takes from me a three-storey house, I am not being fairly dealt with if I get only a two-storey house in its place. This is a simple claim for justice. If we go round our constituencies, we find large numbers of people with a moderate competence, who have worked hard and saved a bit of money and have put it in what they regard as the safest thing—bricks and mortar. I, personally, have never been attracted to that kind of investment for the small sums that I have to invest, but a great many people have been so attracted. They have very often bought, say, a pair of houses or possibly a block of four and when they retire they live in one and let the others. There is nothing anti-social in that, and most of them look after them reasonably well.

We are not dealing with rich people but with a great mass of people of moderate means. It is now said that if the local authority decides to build a road and knocks one down on one side of the street—this is the very point put by the hon. Member for Twickenham (Mr. Keeling)—and the other side is not affected, that the one man shall, if he sells his house, get the current market value; the other man who has his house taken away from him shall get only two-thirds or three-quarters of its real exchange value measured in commodities.

Much of this Bill, of course, will affect bomb-damaged areas. The War Damage Act was not a good but a bad Act and I protested time and time again against the proposal in it to discriminate between value payment and cost-of-works payment, because I thought it was unjust. If a man has his house wrecked by the failure of the State to protect it—the only reason why you have Governments is for defence, not for education or social security; it is physical defence which is the fundamental reason for the State—the soldier and the policeman. If the State fails in its contract to protect you, the State ought to compensate. They would not do that. There was a vague declaration made by the present Lord Chancellor when he was Chancellor of the Exchequer, I think, that when the war was over people would be compensated so far as they could be. Ceaseless pressure from many of us, starting long before the war in 1937, about a War Damage Act resulted in our getting, in 1941, an Act which was bad in many respects—so bad that it had to be amended 18 months later in order to extend the cost-of-works claims to a large number of cases which originally were value payments.

Here, under this Bill, we propose to take away from masses of people the concession given them in the amending Act. I do not know to what extent it will affect my constituency. Fortunately, though we have had more bombs than many other places, we have no great area of devastation. We have not been damaged by fire as much as other places, and it may be that the number of cases in my constituency will be small. I hope it will be, but here people, who are entitled at this moment and before this Bill is passed, to have a new house built where the old one was if the Croydon Corporation or some other corporation comes along and drives a road through their site, will not get a house equivalent to what they lost; they will get only two-thirds of a house. Can anyone say that is justice? Of course it is the grossest of injustice. [Interruption.] I know that the Noble Lady always likes to interrupt—

Viscountess Astor

I have not interrupted.

Sir H. Williams

The Noble Lady—

Viscountess Astor

There is a certain type of man who wants to get publicity, and the best way to do it is to say. "The Noble Lady always interrupts." I have not interrupted.

Sir H. Williams

I have never known anyone attract more publicity per minute during her presence in this House than the Noble Lady. I have sometimes seen her interrupt before she reaches her seat. At any rate the Noble Lady is fortunate that the principles of the Town and Country Planning Act were not applied, say, 40 or 50 years ago to the ground rents of New York City. Let us be realist.

Viscountess Astor

Yes, let us be realist.

Sir H. Williams

Let us face the injustice, that it is entirely a matter of chance whether a man gets a house back or does not get it back. He has a valid claim under the War Damage Act, but when the Town and Country Planning Bill becomes law, and a local authority makes a certain change, it will take away from him, without the slightest doubt, 75 per cent. of the compensation to which he is entitled. Will anyone say that is equitable? If my right hon. Friend the Minister and I both own houses and, if for convenience, we exchange houses, and then his engine comes along and wipes out both, we shall get three-quarters of the compensation we would have been given if we had swopped over a day earlier. This is incapable of defence on any logical basis; it can only be defended on the basis that one lot of Members of the Cabinet do not agree with another lot, and the Chancellor of the Exchequer, who belongs to no political party—and that is in Order, Major Milner—who describes himself as "National" purely on the basis that he has no party principles—

Mr. Sloan (Ayrshire, South)

That is Tory.

Sir H. Williams:—has

been sent by the people who have two party principles but cannot agree with the instruction "For goodness' sake try to keep the boys in order"—and that is the basis to which Parliament is now degraded.

Sir George Schuster (Walsall)

I am afraid I cannot treat the Committee to the same high standard of jollity as the hon. Member for South Croydon (Sir H. Williams). I would like, in the first instance, to make one personal observation. I happen to be chairman of a certain number of multiple shop companies, and I understand multiple shop companies have been mentioned in this Debate. I would like to make it clear, as I have always made it clear to my own companies, that when I speak in this House I speak as the National Liberal Member for Walsall and not for any companies. I hope the Committee will hear what I have to say in that spirit.

I have no doubt that many of us have been reflecting in the course of this Debate on how we can advance in a constructive way the objects of the Bill. I certainly do not want to make anything but a constructive contribution. I myself think that the Prime Minister was right in the advice he gave to the House, but I would go on to say that it does not necessarily follow that the House has been wrong. I believe there has been definite gain in the attempts which have been made to work out actual Clauses. I certainly feel that I have learned a great deal from the Debate to-day. But nevertheless the point of view I want to put is that, so far as I judge the position, this honest attempt made by the House to find a fair way forward has, up to the present, failed. Personally I did not express any opinion against the recommittal of the Bill. I feel it is of value that we should discuss these Clauses, and I retain an open mind. I have not yet had time to assess the significance of the new Clauses about the rights of appeal. There are many points which may be elucidated in the course of this Debate but subject to those reservations, I must make it clear that, as far as I understand the Clauses, they seem to me to offend against certain principles of justice for which I think it right to stand up.

I would like to say something else about my general attitude to this matter. I do not think anyone in this Committee would accuse me of having taken a reactionary line on any matter of policy that has come up during the past years. I take a forward view on the present matter and I submit that there are two purposes we should have in mind: First, the advancement of the interests of the community; secondly, and it is equally important, doing justice to individuals. I feel that the proposals now before us fail in both those purposes. So far as the interests of the community are concerned—and here I speak for hon. Members who sit with me—we desire to see a comprehensive Measure. We agree with the principles of the Uthwatt Report which perhaps I may quote: If planning is a necessity and an advantage to the community, as is undoubtedly the case, a means must be found for removing the conflict between public and private interests. I fully accept that. I also desire to see a comprehensive Measure which, once and for all, will prevent values created by the community accruing as profits to private individuals. I myself would have liked to see the Government take a very much bolder line—either adopt a comprehensive scheme like the Uthwatt proposal, or else be even more drastic and schedule defined urban areas throughout the country in which the whole of the property. would be at once acquired by the State. I think the time has come when we ought to face that, and one of my reasons for being most unwilling to support a compromise now is that this Measure achieves nothing of the kind.

3.30 p.m.

there is another purpose which we may legitimately have in mind, and which I am sure is in our minds, namely, the prevention of speculative profits being made out of war conditions. I am prepared to take the view that after September, 1939, every individual in the country was under notice that if he purchased land he might have it taken from him on the basis of 1939 prices. [HON. MEMBERS "No."]Hon. Members may disagree with me. But I am entitled to my view, and I say that I am definitely prepared to accept that everybody in this country was under notice that if he purchased land after that date he might have it taken from him on the basis of 1939 prices—prices and not value. Therefore, I should be prepared to see a Measure which ensured that anybody purchasing land after that date should get no more than what he paid for it, or no more than the 1939 basis, whichever was the lower. But that is not in this Bill. Therefore, a speculator—and there are some, although I do not think there are quite so many speculators as some Members seem to think—

Viscountess Astor

Far too many.

Sir G. Schuster

A speculator who has bought land after March, 1939, may get not only its 1939 price back, but 30 per cent. on top of that. It would, therefore, be possible to earn large profits out of compensation granted under this Bill, and I say that that is wrong. That is another of my objections to this Bill. But, subject to some provision against making speculative profits out of war conditions (which provision I hold to be justified because notice was given) I submit it is a fundamental principle of justice that when the State requires to take over a commodity in the national interest it should pay to the owner, whether he is rich or poor, compensation on the basis of fair value. That is a fundamental principle, and I think this Committee will be doing a dis-service to the long and historic traditions of our country if it does not take that principle seriously. I am glad to see opposite my right hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) who, I understand, said some hard words about the National Liberal Party this morning. I put it to him that the time has come when those who call themselves Liberals should stand up for the great Liberal principles of justice and personal liberty, and not always be thinking of how they can get their heads in front of members of the Labour Party in the race for so-called advance.

The principle of fair compensation has been long recognised. I have not the time to examine the whole position, but I want to put certain points to the Committee, some of which have not been put before. In the first place, I say these proposals stand condemned on their own terms, since they discriminate between two classes of owners. If the 1939 value or price plus 30 per cent. is fair for one class of people, then the value without the 30 per cent. is too little. If, on the other hand, the value without the 30 per cent. added is fair we then, through this Clause, propose to pay certain people 30 per cent. too much. One set of prices must be wrong. On that simple elementary ground, this Bill stands condemned.

Secondly, the proposals stand condemned by another standard, by the Government's own practice in compulsorily taking property under the Defence Regulations. I think it is true to say that property of all kinds which has been requisitioned during the war has been paid for, in compensation, on the basis of the market value at the time. [An HON. MEMBER: "No."]Well, I ask the Government to refute this. I know that in my own case I was asked to sell a motor-car to the Government, and I got for it a very much higher price than I should have thought it was possible to realise. I should be glad to be proved wrong. If this is just I do not want to help in defeating this Measure, but it is my belief that throughout the war compensation for property compulsorily acquired under the Defence Regulations has been paid for on the basis of current market values.

I must also put a third point to the Committee. The proposals stand condemned by comparison with certain other important Government plans and schemes. The basis of this scheme, as I understand it, is that nobody should get more than the value, or rather the price, in March, 1939–subject only to the special concession to owner-occupiers. To get any more appears to be regarded as profiting out of war. But under an agreement which has been made with the shipping companies an arrangement has been made that in the event of loss of a ship—and the shipping companies have had a good time in this war, not like many owners of house property, who have suffered greatly—they not only get the pre-war insurance value, but they are entitled to an additional payment to compensate for the higher cost of shipbuilding. If the Government have accepted that in the case of shipping companies, why stand on this principle now and say that it is profiteering to give a man the replacement cost of his property?

Lastly, and most important of all, the proposals stand condemned by comparison with what is being done by owners who do not happen to be affected by any town planning scheme. The vast majority of property owners are being left free at present to buy and sell properties and make profits as they please. We have not introduced any general Measure to stop profiteering out of dealings in property. Why then, select one particular class of people, who are probably deserving but, anyhow, are a small class, to be subjected to a special burden?

My hon. Friend the Member for East Stirling (Mr. Woodburn) put before the Committee an eloquent plea that property owners should be prepared to accept sacrifices. I fully agree, but let the sacrifices be fairly distributed in a taxation Measure, not under a town planning scheme. It is not just distribution of burdens to say that the owners or occupiers of a particular form of house property ought to be singled out to bear a special loss or burden because of the war.

Mr. Woodburn

Will my hon. Friend distinguish between investors? There is the property owner who lives in his property, but he is only one type of investor.

Sir G. Schuster

I can answer that quite categorically. If one accepts the principle—as I do—that in our present state of society, where it is not a crime to own property, the State may come along and say to any individual, "I want your property," I do not object, but I do say that if the State does that then it should pay fair compensation, whatever the class of property may be. It does not matter if it is an investment on which I draw dividends or a house from which I derive occupational value. That too is a kind of dividend. I have spoken so far of the discrimination that exists under these Clauses. I would further say that the additional 30 per cent, is likely to prove in many cases totally inadequate. Here I come nearer to the ground of the hon. Member opposite when I say that I am, in considering this matter, as far as my personal feelings go, chiefly concerned with people who own and have the occupation of their property. I would put it to hon. Members opposite that they may find some of the things that may be said from their side in this Debate extremely embarrassing. They may find hundreds of small people in their own districts, owners of small workshops or single shops, who will say, "You stood up in the House of Commons and said you would limit our compensation to the pre-war price plus 30 per cent. But that is gross injustice. We cannot get another place to carry on our work for anything like that. We may have to pay two and a half times what we are going to get." What are hon. Members going to say in reply? I put it to them seriously that these provisions are going to lead to such a mass of hard cases in the future that any Government that bears any responsibility for them will be very sorry to acknowledge its connection.

I want to know why this figure of 30 per cent. has been fixed. I hope it is not improper to quote this but a certain statement was reported to me by an hon. Member who had attended some of the private discussions with the Minister—and may I here interject my own opinion that this kind of discussion by private conversations, hastily convened, is extremely unsatisfactory. I was told that the Government took the view that, looking ahead something like two years after the war, the extra cost of building ought to settle down to round about 30 per cent. above pre-war, and that they consider it extremely important to put that figure into the Bill in order to put a lid on possible rises in building costs. If that is the reason, I put it to Ministers that, if they think they are going to keep prices down merely by mentioning a figure in the Bill, they are making a most profound mistake. What is the reason for building costs going up? All these things can, if necessary, be controlled by the Government. Many of us remember that day—how often it has been recalled—when, after Dunkirk, the Deputy Prime Minister came down here and told us we should all be conscripted and every form of property would be conscripted to meet the national need in war. I have always felt that that was the right thing, and I still wish he had done it. If he had done it, should we have had the present rise in prices? We could have kept every price controlled and there would have been no question of free markets or rising prices. But the Government allowed these things to go on and prices have risen. Now we are told, They have risen so much that you cannot expect to get it all and you have to rely on us to see that we get it down to 30 per cent.

3.45 p.m.

But dare we rely an such prophecies? It is all very well for Government experts to make these calculations of what prices ought to be. It is a fascinating occupation and if their calculations go wrong they can shrug their shoulders. They do not lose their jobs, nor do Ministers. But when these unfortunate people are turned out of the places where they have made their living, and have not the money with which to buy another place, their whole livelihood goes. These are the people to whom measures of this kind mean so much. I wish hon. Mem- bers who sit with the right hon. Baronet the Member for South-West Bethnal Green would sometimes reflect on the great Liberal writings of the past and recall how Lord Acton said that the man who had a stake in the country was not the man of great property who would merely suffer personal inconvenience if the Government made mistakes but the man whose livelihood depended on public affairs being managed rightly and who might starve if the Government followed bad causes. I am concerned with those people. I am deeply apprehensive that provisions are not going to meet their need and that it will be necessary to bring them back for revision—unless we are to pin all our faith on the appeal Clause—which surely is an unsatisfactory basis to rely on. Let us turn to another argument.

It is said that a man who puts £100 into War Loan gets no chance of appreciation in the value of his investment when the purchasing power of money goes down. Why, therefore, should house owners get anything? I find it difficult to deal with that argument, because it seems to me to show such a complete failure to appreciate realities or the facts of life. The man who buys £100 of War Loan definitely invests in pounds. He knows that his claim is to get paid back a hundred pounds and pending that to draw interest in pounds upon it. But a man who buys a house does something quite different. He buys not pounds but land and bricks and mortar. He knows that he is taking certain chances. There are many adverse chances. For example, a certain type of house which commanded a good price before the war may be absolutely unmarketable after the war because people will not be able to get servants to run it. A man who puts his money into that kind of house suffers a loss if he wants to sell it. Others may have bought saleable houses, and their value may go up if the purchasing power of money goes down. But they retain their houses. They are not making a profit. As to those affected by this Bill, these people did not want to sell their houses in 1939 and they do not want to sell them now. They bought their house and they want to keep it. Anyone who tries to protect their position by ensuring that they can get enough to buy an equivalent house is not claiming that they are entitled to make profits.

This question of different types of investment and of the course of the value of money is a fascinating subject. My hon. Friend should trace the story of the pound from the days when Offa, King of Mercia, first made the silver penny of which 240 went to the pound. Since then, 240 pennies have always made a pound and that has had a steady continuous history for 800 years. But it has been continuous history of the value of the pound going down. In Domesday Book the proper rental for 100 acres of land was one pound. At the time of William the Conqueror you could buy to gallons of beer for sixpence. Hon. Members might like to go back to those days. This process has been happening all this time, and that is the reason why certain people prefer to put their money into bricks and mortar. And I want to put it to my hon. Friend that a man who puts his money into instruments of production or bricks and mortar should be regarded as one who has been ready to take the chance of these things being useful to society. He accordingly is really a much better servant of society than a man who will not take any risks but prefers to, take a mortgage on production giving him a fixed money claim and a fixed rate of interest.

I suggest to my hon. Friend that he should read a most fascinating book by A. E. Feaveryear, a civil servant, on the history of the pound, in which he will find it stated that there appears to be some principle deep down in human nature, or in the system that man has devised for satisfying his wants by producing goods for a market that he who will not take the risk of putting his money into the instruments of production but chooses to sit in idleness living on fixed interest drawn from a mortgage, on production shall in the long run be deprived of this wealth which he lends. We ought not to turn round from that comparison and accuse property owners of improperly making a profit out of war or out of the course of time.

Before I close I want to make a suggestion. I am not a politician and I try to look at these things in a commonsense, practical way. Can we find no way forward? I can see that the Government want to present this Bill. I can see too that the local authorities must know where they are. But I cannot be satisfied about these compensation provisions. The discussion on these provisions is a matter of the most wide and vital significance, and I suggest that it ought to be taken out of the political atmosphere and put into the judicial atmosphere. I do not think we shall get it settled properly on the basis of argument, between political parties. Would it not be possible to say, "We will proceed with this Bill, and we will treat these compensation Clauses as settling the value of the houses so far as the local authorities are concerned and as fixing the limits of what they have to pay. Then we will introduce a Clause saying that we do not regard the Clauses as fixing what the individual is entitled to receive by way of compensation, and that the difference between the basis in the Bill and what may ultimately be decided after full impartial judicial inquiry shall be borne by the central Exchequer"? I believe that by such means we could find a way of going forward. As to a judicial inquiry, a suggestion comes readily to mind. I would like to recommend that the question of what is a fair basis of compensation in connection with this Bill should be remitted again to the committee presided, over by Mr. Justice Uthwatt, in whom I have complete confidence.

Finally, I want again to make my position clear. I propose to listen carefully to the further discussion and elucidation of these Clauses, but if my interpretation of them remains the same as it is now, I shall feel bound, in duty to my conscience, to vote against them.

Sir P. Harris

I do not quarrel with the tenor and temper of the speech of my hon. Friend who always appeals to one's intelligence and reason. His tone and temper were very different from those of my hon. Friend the Member for Southampton (Dr. R. Thomas). My quarrel with his speech was that it opposed the recommital of the Bill. This is an urgent question and this Bill, with these Clauses, has been awaited for a long time. It is long overdue and has been pressed for, not only by this House, but by local authorities all over the country, particularly in the blitzed areas. Therefore, I took great exception to his suggestion that we should refuse to recommit the Bill in order to see if we can come to a reasonable compromise on the compensation Clauses. We cannot touch the land question without rousing passions, on the one side with those who are suspicious of the owners of land, and, on the other, with those who feel a special responsibility for owners of land.

Sir G. Schuster

It is not a question of defending the interests of owners of land, but of defending the principles of justice.

Sir P. Harris

I did not say it was. I said that it was a question that always rouses passions, although I do not think it would be possible to arouse the passions of my hon. Friend. The Debates on this Bill have given ample evidence that there is suspicion on the one side and on the other. Land is always a difficult issue. It is common knowledge that there has been division in the Cabinet, and the Prime Minister had to come to the House before he went to Moscow to make a special appeal to the House to agree to let the Bill go through without the compensation Clauses. I took the view, as did a great many other Members on both sides, that it would be a grave blunder in a Bill of this character, the working of which mainly depend on finance, to let it go through without the compensation Clauses. Therefore we pressed the Government to take another line and to see whether by discussions we could come to some agreement to restore the financial Clauses. As the result of that discussion, these very complicated Clauses, full of words, sections and paragraphs, have been produced. Frankly, I have not been able to master all their implications, but I have a rough idea of their meaning. I am not in love with these proposals, but they seem to me to be a reasonable compromise. They will reconcile conflicting interests, and they will, above all, enable the local authorities, particularly those in the blitzed areas which have been enduring so much suffering, to get on with their plans with a reasonable knowledge of what they will cost. That is why I am prepared to support the Government if they proceed with these proposals.

My hon. Friend the Member for Walsall (Sir G. Schuster) made the ingenious proposal that the Bill should go through and that the compensation Clauses should be referred to Mr. Justice Uthwatt's Committee. This is the very issue that was referred to that Committee four years ago. We have had their report before us for three years, and if there is any blame for delay, it cannot be laid at the door of my hon Friends in the Labour Party, or of those who were critical of more generous terms to owners of property, but it must be put at the door of the Government themselves. My hon. Friend assures us that he has complete confidence in the ability and integrity of Mr. Justice Uthwatt, who is learned in the law relating to land. The Committee over which he presided warned the nation and Parliament three years ago that compensation was a matter which would create difficulties unless a solution could be found for the question of development value. The Committee also said: In theory, compensation and betterment should balance each other. They recommended that a global sum should be paid for all development rights on land outside built up areas.

4.0 P.m.

So far as I can understand, that report has been more or less thrown overboard. The Government have had a long time to study the question and they have published a White Paper putting forward alternative proposals, but they are not ready to produce a comprehensive land system. When we discussed the Second Reading, I made it quite clear that I thought the compensation provisions of the Bill in their original form were far from satisfactory. We ought not, in fairness to the local authorities, on whom we have put the responsibility of rebuilding their areas, to part with this Bill without making some reasonable proposals for the financing of their responsibility. I do not think it is right to put the responsibility upon another Committee, which would mean more delay, another long inquiry lasting for months and finding ourselves in exactly the same position afterwards. It is a very serious responsibility, if we are not prepared to support the Clauses, complicated as they are, or to put forward Amendments. So far as I am concerned, I am prepared to support the Government.

Mr. Silkin (Peckham)

Almost every hon. Member who has spoken prefaced his observations with an appeal in the name of justice for his point of view to be supported. I propose to do the same. Justice is a somewhat elusive thing, rather like truth, and it is not always found on the side of the person who is claiming it. The Government have found some difficulty in deciding what is justice. Their first attempt to do justice was to lay it down in emphatic terms, not once but over and over again, that all land and buildings required for public purposes would be acquired at prices not exceeding those prevailing in 1939.

Mr. Henderson Stewart

May I point out with great respect that the hon. Member has not completed the story by recalling that Lord Reith added that it would be subject to full recognition of changes in economic conditions when the time came?

Mr. Silkin

I referred to speeches, which I heard over and over again, that land required for the public purposes would be acquired at prices not exceeding those of 1939. I remember when the Minister of Town and Country Planning gave a specific pledge at the meeting of the Housing and Town Planning Conference. I think I have told the House of Commons before that it was my privilege to propose a vote of thanks to him. I thanked him most sincerely. There was no dubiety whatsoever about it at that time. That was about a year ago, and then the Government thought about it again. They said that they could not justify the 1939 value as a ceiling but they would adopt it as a standard. Some of us were not prepared to quarrel with that, although there had been no doubt whatever about the pledge.

Then the Government decided that it was necessary to make certain exceptions, in the interests of justice, to certain classes of owner-occupier only, the owner-occupier of a dwelling house or of agricultural land who came within the provisions of the Rent Restrictions Acts. Now the Government have thought again, and they have finally descended upon what they regard as justice, namely, that there must be special treatment not only for the owner-occupier but for a much extended definition of "owner-occupier." This expression, as the hon. Member for Walsall (Sir G. Schuster) will be interested to hear, now covers the multiple stores. They are now owner-occupiers, without any limit whatsoever of rent. There really must be an end to the extension of the definition of justice. Hon. Members have talked of justice for one section of people, the property owners; but we have to consider justice to the local authorities. Who is the local authority? Who will pay? The community will pay. While there are few property owners there are many members of the community, and if we try to do justice we must do it to the community as well as to the property-owners.

With that background, let us consider the main objection to the proposals now before the Committee. They can be said to fall into two classes. It is first asked: "Why do you distinguish between the owner of property who is also its occupier and the owner who is not the occupier? Why do you propose two different methods of assessing compensation?" Those are perfectly proper questions, to which my right hon. Friend will have to address himself. I can tell the Committee. In order to do justice it is essential not that we should treat everybody alike but that we should treat everybody fairly. The conditions of the two classes of property owners are not similar and therefore they have to be dealt with differently. I hope to satisfy the Committee that the method of treating the owner of property who is not an occupier is fair. If I can establish that, I shall have made the case for the new Clause in the Bill. Let me say in passing that I do not wish to associate myself with those who attack a person because he happens to have invested his money in buildings. It is perfectly legitimate for anyone in this country to invest his money as he pleases. I should not wish to differentiate against anybody however he invested his money so long as he invested it properly. In my approach to this matter there is no desire to take punitive action, or to discriminate against any particular section of the community, merely because they have invested their money in any particular way.

The right hon. Member for Devonport (Mr. Hore-Belisha), who has made himself the principal exponent of the case of the owner of land, is unfortunately not here, but I think he rested his case, and I think other hon. Members have done so, on the type of person, usually a widow, who owns six houses or the like, in one of which she lives, and the other five of which she lets for rent. The point he makes is that a local authority comes along and acquires the six houses, and pays for the one on the preferential basis of 30 per cent. and pays for the others on the 1939 price, and he wants to know why this discrimination should be made. I submit to the Committee that in the vast majority of cases, and especially when a case is being made in the interests of the small owner, those five houses will be rent restricted. The owner will be obtaining the same rent in respect of those five houses as she obtained in 1939. On the other hand, the cost of repairs will have substantially increased. Therefore, her net income for those five houses will be less than in 1939. What, then, is the value of these houses based upon rent—and that, after all, is the only interest she has in those houses, that she is receiving rent in respect of them? In what way will she suffer if she receives the 1939 value for those houses? They cannot possibly have gone up in value if the value is based upon the income she derives from them. It may be said that there is an expectation that the Rent Restrictions Acts will be modified, and she may get a larger income in due course.

Sir G. Schuster

If the hon. Member will allow me to intervene, may I say that I think he is misleading the Committee? It is quite possible that the capital value of those houses may have gone up even though actual rental receipts are less. This may happen because the general level of interest rates has gone down. A great many securities have appreciated during the war although they are paying no higher dividends because the expectation of interest on capital is lower. In this case, too, the person concerned is suffering a temporary inconvenience by reason of the Rent Restrictions Acts, but it does not necessarily mean that that will last for ever.

Mr. Silkin

The hon. Member is objecting to my point of view, which he says is misleading the Committee. That is the last thing I wish to do. I hope I have put the case quite fairly. It is for the Committee to judge. But even if the interest rates vary, there is no guarantee as to what interest rates will be in the future.

Sir G. Schuster

I certainly did not mean to accuse the hon. Member of intentionally misleading the Committee, but I did feel that he was presenting a false picture. He was arguing that because the net receipts in rents had gone down the capital value of the property had gone down. I was pointing out that that was not necessarily the case.

4.15 P.m.

Mr. Silkin

I cannot do better than put the strongest case that has been made. I deliberately chose the case most strongly put in the course of this discussion, and I am trying to meet that. I would say to the Committee that the value of those houses must be based upon the income that is being received, and the estimate as to whether that income will be a permanent one or not can only be based on those facts. As to the Rent Restrictions Acts, it is exceedingly probable that those Acts will remain in force during the lifetime of most of us in this Committee. As to any possibility of increased rents I do not wish to anticipate what the Departmental Committee will recommend, but I shall be very surprised if they recommend anything more than merely putting the owner back in the position he occupied in 1939 by reference to the increase in the cost of repairs. Therefore, I submit to the Committee that the value of those houses about which the strongest case has been made cannot be higher than the 1939 value, and that therefore in the vast majority of cases, in particular in the cases upon which so much stress is laid, no injustice has been done. Indeed, in some cases it may be that the injustice is the other way round in paying the 1939 value.

Let us take the other case of the owner of property whose rents have gone up during the war. I want to ask the Committee whether they would seriously suggest that because rents have gone up during the war the owner of property should be compensated in respect of that increase of rent? We all know where rents have increased. One has only to look at the advertisements in "The Times" to see that rents have increased more particularly in the safe areas, to which people have evacated, and those increased rents are being demanded and paid directly as the result of the war. No one, I would submit, would suggest for one moment that in respect of those increases of rent, which are highly artificial, and which may disappear as soon as conditions are normal again, compensation should be paid. Therefore I submit once more to the Committee that the 1939 value is fair and equitable for the person who is receiving rent, and that this Committee ought not to complain.

The other substantial point that has been made is that the 30 per cent. increase is not sufficient. The Bill does in fact in the new Clauses provide that if it should turn out to be justified an increase can be made. The hon. Member for Walsall appeared to have forgotten that.

Sir G. Schuster

I said I had not had time to appreciate how it worked.

Mr. Silkin

I have no doubt that if it is found necessary to increase the 30 per cent. the Government of the day will have no hesitation in coming forward, but do hon. Members suggest there should be no ceiling at all, that there should be an indefinite increase, an unspecified increase, on the 1939 prices, and that it should be left to the free operation of the law of supply and demand? Just consider for one moment what is to happen. In those areas which have been extensively bombed, where a large amount of property has been destroyed, prices will increase very much more in proportion to pre-war values than in other places. I would submit to this Committee that it would be a most dangerous principle to provide compensation ad lib, without any ceiling, without any limit, for those persons who will have to reinstate themselves in the particular area in which they are. Therefore, I submit there can be no quarrel with the principle of fixing a ceiling.

Mr. Keeling

If the hon. Member does not want a ceiling payment for the house taken by the local authority why does he think it right, if he does think it right, that there should be no ceiling for the house which earns a cost-of-works payment because it has been destroyed by a bomb?

Mr. Silkin

I am not discussing the War Damage Act. I do not wish to be diverted from the argument I am putting forward, and which I hope I am putting as fairly as I can, into a discussion of that Act. I have endeavoured to argue that it would be unfortunate at this particular time, when prices are fluid and when the opportunities of increasing prices are very great, owing to war circumstances, not to fix a ceiling. If it is conceded that there ought to be a ceiling, the question arises: Is 30 per cent. right? It is very difficult for anybody to say what conditions will be after the war. My hon. Friend the Member for Walsall does not accept the findings of the civil servant who made an investigation and formed a judgment on the matter. I would be interested to know whether my hon. Friend has himself made any estimate.

If we are to fix a ceiling, obviously we must apply our minds to what that ceiling is to be. The best estimate at present is that building costs will be about 30 per cent. above pre-war at the time when these provisions will operate. It is no good hon. Members comparing prices today, in the abnormal conditions that exist, with what they will be after the war. In some areas prices are very high, especially in areas to which evacuation has taken place, areas which are regarded as safe: in other areas they are not so high. But when the war is over, and conditions become normal, it is certain that there will be a readjustment of prices. I cannot conceive that it will be a normal thing for anyone to have to pay two and a half times as much for his property as was paid in 1939. I submit that there is some advantage in fixing a ceiling based on what is regarded as a reasonable increase in building costs. While my hon. Friend may say that that is not going to dictate what building costs will be, I submit that it will have an Important influence on building costs. If the Government lay it down that a 30 per cent. increase on 1939 building costs is reasonable, and compensation is based upon that figure, it is bound to influence the customers of the builders. When they come along and want their buildings reinstated, they are not going to pay much more than 30 per cent. without a struggle. I think the very fact that the Government are fixing a 30 per cent. increase on the 1939 price will tend to stabilise building costs.

There are other factors which increase costs. One of my hon. Friends suggested that it was a question of the number of bricks that were laid: it is also a question of the Purchase Tax on the building materials, and other factors of that sort. To a certain extent the Government have it in their own hands as to what building costs will be, by the operation of the Purchase Tax. But in case, in the assessment of what the cost will be at the time, these provisions prove to be wrong, the Government have, very wisely, committed themselves to think again, either up or down; and I have no doubt that this House will be reasonable, and will give them the opportunity to do so.

Mr. Bevan

The Government can always think again. There is no reason why they should include in the Bill a provision to enable them to think again—unless the Government require permission to think.

Mr. Silkin

While the Government may think again without making any provision in the Bill, this provision enables them to act on their thinking by an Order, which is much simpler than doing it by legislation. I have found myself in the unusual position of defending my right hon. Friend's Clauses but, in one respect, these Clauses are open to serious criticism. There, I think, I shall have the agreement of the whole Committee. My right hon. Friend has made no provision for dealing with the speculator: the man who has gone around the blitzed towns and exploited the victims of bombing, buying up their properties cheaply, and who is ready to receive 1939 prices. That man ought not to receive more than the price he has paid. I believe that, so far, my right hon. Friend is with me: his trouble is to find out how that excellent principle can be incorporated in the Bill. I have done my best to help him. I have an Amendment on the Paper, which may or may not be adequate, and I do not want to argue it. But I think there is a simple test of a speculator: a person who has bought property since 1939 for the purpose of resale. There may be an argument as to whether it was bought for the purpose of resale, and it may be necessary to try to get at the person's intention. But that would not be new to my right hon. Friend, who knows that in law it is constantly necessary to find out what a person's intentions are, and, if that persons' intentions are not what they ought to be, the person is punished. If that were left to an arbitrator to find out, in the light of the relevant facts, then a man who has gone round buying cottages, for instance, and who I have no doubt has already sold some of them at a handsome profit, would be a speculator.

Having done my best for my right hon. Friend, I want to tell him now, as I said at the beginning, that we on this side are not entirely satisfied with these Clauses. In our view, the Government have been constantly giving more and more away. To us it has been a rake's progress. But I hope that this will stop now, and that my right hon. Friend will stand firm and give away nothing more. I think that the provisions in this new Clause can be justified. If he stands firm, I am certain that even now, at this late hour, he will have a Bill which will be workable and will be in the interests of very large numbers of the people of this country.

Mr. Petherick (Penryn and Falmouth)

I do not think that any hon. Member who holds the views about these Clauses which I hold can possibly have any objection to make against the tone and moderation of my hon. Friend the Member for Peckham (Mr. Silkin) in the course of his various interjections during the passage of this Bill. He is willing, I understand, to accept the Amendments which are now put down on behalf of the Government, but he is unwilling to go any further in what he called a rake's progress. He seems quite reconciled to the Government going thus far and no further, and appears to have established a spirit of "mariage à la mode" so far as the thing has gone. My right hon. Friend the Chancellor of the Exchequer, in his opening speech to-day, was, I thought, convincing so far as he went, and he certainly convinced me on certain points; but I was already convinced on this point, and so I do not think that, for one humble hon. Member of the House at least, it was worth waiting for. On the greater point of the unoccupying owner, I am afraid the Chancellor left me utterly and completely unconvinced.

4.30 p.m.

I have not bothered the House more than once before in the long passage of this Bill, and so may I just say something about the rights of property, of which we have heard a great deal during these discussions? I believe that the rights of property, and the respect for them, lie deep down in the human heart, and that they respond to some curious primeval urge bound up with the instinct of self-preservation. A man used to have a stone hatchet with which to protect himself, and he built himself a small house or lived in a cave, which he looked upon as his own, in order to protect himself, it may be, from evilly-disposed neighbours. The acquisition of property of all kinds is a perfectly natural thing, and the whole of civilisation has been built up upon it. It does not apply only to property in land, but to all forms of property. Even in the Soviet Union, by rigidly removing the right to own any property, they lost a very large part of the very valuable incentive without which no body of persons can be successful, and they had to re-introduce the right to own a certain amount of property, even on the collective farms, in order that that instinct might be encouraged for the benefit of the State in general.

It seems to me that, far from discouraging ownership of property by attacks upon it, we ought to do everything possible to encourage it. I should like to see the day when the head of every household would be in the position of owning his own house and the land upon which it stands. There is nothing which tends to greater stability than that. It has been quite rightly said that the broad public interest has got to over-ride, at any given moment, the rights of the individual. That is perfectly right, but what is the public interest? The public interest, in the opinion of a great many of us, lies in the collective rights of a collection of individuals who form themselves together for mutual protection and mutual benefit. The State is not, as some have it, a soulless machine fed on human fodder, as you feed a coal-burning machine. It is a collection of individuals, and it seems to me that, to strike at the roots of property or persons in any section of that body of individuals is to strike at the whole, because it is undermining the confidence without which no body of human beings gathered together can exist. I think we are doing it in this Bill, in certain respects.

Viscountess Astor

Are we striking at the roots in the town planning of blitzed areas?

Mr. Petherick

The Noble Lady has been very restless to-day. Since the destruction of the "Cliveden Clause" the other day, I do not think she has been quite herself. It seems to me that one of the public interests is the protection which the State affords to all parts of the community, including those who own houses and land in one of the many different forms in which they can be held, and I believe that an offence, such as is being committed in this Bill, against one part of the citizens is an offence against the whole. It has been said by the Chancellor of the Exchequer that all property is subject to hazard. Of course it is, everybody knows that, and particularly in war time, when people may own investments which may be affected by the war, and some may go up and others go down. In passing a Bill which goes so much further than any previous Act of Parliament in infringing the rights of property, we are establishing a very dangerous precedent for the future, because there may be many similar Bills brought before Parliament.

The hon. Member for Ebbw Vale (Mr. Bevan), in an eloquent speech, made what I thought was, from his point of view, a rather unfortunate admission. He pointed, quite rightly, to the unfortunate case of the soldier, sailor or airman who was dispossessed of his business a a result of the war and to the fact that that man got no compensation at all. But what does my hon. Friend, and those who think with him, propose to do? Not only will he be taking his business away, but taking his house away and giving him only a good deal less—

Mr. A. Bevan

My hon. Friend is mistaking the whole point. Suppose a man who had lost his business has returned from the war and has no property—just the normal case. Is he expected, in addition to the loss of his property, to pay exorbitant compensation to a person who has been racketeering while he has been away?

Mr. Petherick

The hon. Member is making a great assumption that many of these people who come back from the war do not own any houses. There, are large numbers who own them, either in their own right or in that of their families. The position is perfectly indefensible, and the whole contribution which the nation will have to pay to property owners is nothing to the man who has that part of his capital taken away from him. The right hon. Member for Devonport (Mr. Hore-Belisha) put the case admirably, and I do not wish to do more than underline what he said in regard to building costs. It is an arbitrary figure, and I am informed that the increase in build- ing costs in at least one part of the country is not 30 per cent., but runs out at 105 per cent.

I am concerned with the extremely hard case of the non-occupying-owner, who is having a form of discriminatory capital levy upon his property, because that it what it is. I utterly fail to see any substantial difference between the case of the owner-occupier and the non-occupying-owner, except in one respect. The one substantial difference is that the owner-occupiers are probably very much more numerous and are likely to make a political row if their case is not met. It is not a question of justice; it is simply a question of political strategy between those who own houses and occupy them, and the relatively small political strength of those who own houses, but do not live in them and look upon them as investments. Under the Bill the non-occupying-owner receives only the 1939 value.

Take the case of a non-occupying owner who, in 1939, had a house worth £2,000. It is not damaged in any way, and he does not live in it himself. Under the Bill he is going to get only £2,000 and nothing more than that. He has disposed of his house. He is told he may rebuild elsewhere if he likes—and if he can. On the Government's own admission, it is going to cost not £2,000 to rebuild but, if you add something like 30 per cent., which is the minimum in some cases, it will cost £2,600 to rebuild. Supposing a man has not the money, what is he to do? All he can do is to reinvest, and lose what he ought to have had and what is, in fact, the present value of his house. That is indefensible. When the right hon. Gentleman the Chancellor of the Exchequer mobilised his securities for sale in America in order to help to pay for the war he accepted the present market value. He took the value at which a willing buyer and a willing seller exchange their securities. Therefore there is a difference. There is a real market and there is an artificial market, I agree. It is an artificial market and it is a seller's market, but surely we have some idea of what the market is at the present time, because the Government say, in the case of the owner-occupier, they axe going to pay the pre-war value, plus 30 per cent. That is equivalent to assessing the market value also for the non-occupying owner.

We come to this position. There is no difference, other than a political difference, between the two classes of owner. The non-occupying owner should receive something equivalent to replacement value. I appreciate the difficulty of assessing value to some extent at the present time. I would, therefore, have some difficulty in accepting the 1939 value, but on top of that value, there ought to be added an amount equivalent to the cost of labour and materials which he would need to enable him to build his house elsewhere. That is a reasonable suggestion to put to the Government, and I hope that between now and next week they will consider that proposal.

I would utter a note of warning with regard to these proposals. I believe that the case of the non-occupying owner is so strong that, unless it is met in some form before the Bill becomes an Act, the whole of the planning of towns, and particularly blitzed towns, in the future will be gravely jeopardised. In every area, and certainly in the blitzed areas, there are a large number of non-occupying owners. A number of them will sit on local authorities. I do not mind whether it is right or wrong, but it is human nature, and these people will bring political pressure against tile local authority if their case is not met. There is a grave risk that if substantial justice is not done to these people, the whole future of planning, which is important, particularly in the case of these heavily-damaged areas, will be gravely jeopardised. I ask the Government to reconsider the whole matter, particularly in relation to the non-occupying owner, and I hope that between now and next week, they will be in a position to come to the House with a more satisfactory proposal in order that substantial—one cannot expect more than substantial—justice can be done.

4.45 P.m.

Mr. Molson (The High Peak)

My hon. Friend the Member for Penryn and Falmouth (Mr. Petherick) has approached this matter with that frankness and fairness with which he always conducts controversy. He says, that while he is opposed to these Clauses, he recognises the difficulty with which the Government are faced, because there is not, in fact, a free market for land at the present time_ He said he was prepared to consider some other basis, provided that it appeared to him to be a fair basis. I accept that and I think the whole Committee—except the hon. Member for South Croydon (Sir H. Williams)—accepts what the Chancellor of the Exchequer said this morning, that he would have liked to have paid the full fair price for the land and houses that were required.

The question with which the Government were confronted was: What is a full and fair price at the present time? Conditions are now so completely dominated by war conditions that in some parts of the country values have gone up quite disproportionately compared with what they were before the war, and in other parts of the country they have fallen. If this land were acquired in evacuation areas, and in places to which the population has flown in time of danger, in parts of the country where new ordnance factories have been built—

Mr. Levy (Elland)

My hon. Friend stated that in some parts of the country values have risen, and in other parts. that they have fallen. I would ask him to tell me the parts where values have fallen.

Mr. Molson

I should have thought that, obviously, the parts where they have fallen are some of the evacuated towns that have been so devastated on the South-East coasts.

Mr. Levy

On the contrary.

Mr. Molson

We were told by the Government that prices had fallen when the whole question came up for discussion whether it was to be a ceiling or a standard.

Sir Robert Tasker (Holborn)

If there is such a difficulty in determining the value, how does the district valuer value for probate in the case of death?

Mr. Molson

That is exactly the point which was raised this morning and I was coming to it. If the owner of land desires to have the probate values taken throughout the country, as the basis upon which compensation will be paid, it will be an extremely precarious and uncertain standard and it will not be of advantage to those whose land is acquired. I return to the position in which the Government found themselves when they were obliged to produce a new basis of compensation. When the country became involved in war and populations were moved about the country, development taking place in some parts, and evacuation taking place in other parts, it would, obviously, have been a mere matter of chance as to what the basis of compensation would have been when land was compulsorily acquired. I believe that injustice would have been done, if a basis had not been taken which was dependent on prices which existed before the war.

That seems to me to be an equitable justification for the 1939 value. The most important argument that has been advanced is that an allowance should be made in respect of the depreciation in the value of sterling.. But the depreciation of sterling is only the converse of the statement that prices have risen. I think it would be most unreasonable and unfair of the Government, and especially of the Chancellor of the Exchequer, if, when he has not, in all respects, full and complete control of prices, he undertook in the case of any particular class in the community to guarantee them against an increase in prices.

My hon. and gallant Friend the Member for Stafford (Major Thorneycroft) brought out a point which I think is worth repeating. The Government have been asked by hon. Gentlemen opposite, and by the hon. Member for Berwick-on-Tweed (Sir W. Beveridge) in his report, to undertake, under, the unemployment insurance scheme, that they will guarantee to all people benefiting from it the full subsistence level. The attitude of the Government has been that they cannot bind themselves in the future to incur whatever expenditure may be necessary in order to meet any rise in prices which may take place. We all know that it is their general policy to try to keep down the cost of living, and they have been very successful in doing so up to the present. In the Chancellor's Budget speech this year, however, he gave warning to the country that if certain developments continued, it would not be possible for him to hold the cost of living stable. For him to undertake to guarantee the interests of some particular class in the community against the consequence of a rise in prices, would, in my submission, be most unfair to the taxpayers as a whole.

The argument was advanced by the hon. Member for Walsall (Sir G. Schuster) that there is, in fact, no logical parallel between the case of the compulsory acquisition of land, and other obligations into which the Government may enter. I venture to think that the cases are, logically, strictly parallel. If the Treasury issues bonds and undertakes to pay £3 10s. in respect of every £100 lent to them and if subsequently prices rise, it means that the £3 10s. which the Treasury pays out in respect of that loan does in fact decrease in value in goods and services, but that is the contract into which the Treasury has entered. In the case of the compulsory acquisition of land, it is not a contract but a quasi-contract. What happens there is that in the exercise of the general jurisdiction of the State, the State says that it will take over compulsorily some of the property of individuals, that it return for doing so it will pay compensation. I say it is fair and reasonable that if 1939 is the last date upon which it was possible fairly and equitably to assess the value of land throughout the country, then it is fair and reasonable to pay the number of pounds which that property was worth in the year in respect of which the assessment was made.

Sir Harold Webbe (Westminster, Abbey)

Is it not the essence of a contract that there shall be two willing parties to that contract? An arrangement of this kind, entered into by force majeure on the part of one party, cannot in any sense be regarded as a contract.

Mr. Molson

It was of course for that reason that I said "quasi-contract."

Mr. Turton (Thirsk and Malton)

Since the hon. Member used the word "quasi-contract" he had better keep to what that means. I hope he will use a different argument.

An Hon. Member

Give us a definition.

Mr. Molson

I do not wish to become involved in a dispute of law or jurisprudence but I would say that the difference between a quasi-contract and a contract is that, in the case of the former, consent which is deemed to have existed does not actually exist. I will proceed to the next point. It has been argued that there 'is some injustice in the special treat- ment that is accorded to the o[...]cupier. In both cases, the compensation in respect of the property is the same, and whether or not the compensation payable is equitable, as I think, or inequitable, as some hon. Members think, in both cases it is the same. But it is surely proper and reasonable to give some compensation to the individual in his personal capacity, because he has been evicted from his home or his shop or his factory. I should have thought—

Sir John Mellor (Tamworth)

Without necessarily disagreeing with the point the hon. Gentleman is making, may I ask if there is not provision already in the Bill for compensation for disturbance?

Mr. Molson

It is an entirely different kind of compensation for disturbance. It is genuine disturbance as, indeed, there has been during this Debate. If the hon. Member is referring to what took place on the Committee stage, that was actually the cost of the removal of the individual, his furniture and so on.

Sir J. Mellor


The Deputy-Chairman

I think this is another point which does not come into these Clauses and has already been dealt with.

Mr. Molson

The point of the compensation is surely this, that where the State ejects a man from either his home or his workshop, it is right and proper that, as far as possible, the State shall give him compensation which will enable him to rehabilitate himself elsewhere. That seems to me the justification for this special additional compensation which is payable.

Sir J. Mellor

May I refer my hon. Friend to Clause 27 (5), in which it is stated that a local planning authority—

The Deputy-Chairman

That is exactly what I was ruling out of Order just now. We cannot deal with that now.

Sir J. Mellor

Further to that point of Order, Mr. Williams, is it not in Order, during a discussion on a new Clause, to refer to the contents of the Bill?

The Deputy-Chairman

In passing, possibly, but it is certainly not in Order to have a detailed argument on Clauses which have been passed.

Sir J. Mellor

On that point of Order, I was merely quoting a very brief passage from Clause 27, a Clause which has already been accepted by the Committee. Am I not in Order in quoting it?

The Deputy-Chairman

If it has already been accepted by the Committee, the Committee know it.

Mr. Molson

My hon. Friends and I felt that it was unfair that this special compensation should be confined only to the occupiers of small residential property and agricultural property. So we put down an Amendment which would have the effect of giving the same compensation to those who are occupiers of property of any kind. That seems fair and equitable to all classes and types of occupier, and I suggest that this new Clause the Government have now brought before the Committee also deals fairly and equitably with the position of the occupier. I would like to associate myself with my hon. Friend the Member for Daventry (Mr. Manningham-Buller) and the hon. Member for Peckham (Mr. Silkin), who asked the Government to consider whether it would not be possible for them to include a special provision in this Clause which would have the effect of catching the speculator whom, however much we may differ about some of the provisions in this Clause, we all desire to see deprived of any unfair advantage.

5.0 p.m.

Mr. Moelwyn Hughes (Carmarthen)

I was delighted to hear the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha) say earlier in the Debate that we were not getting, in these provisions, a sufficiently high percentage of Uthwatt. I take it that from his remarks he desires that much greater recourse should be had to the recommendations of that Committee. If he looks at the recommendations of that Committee he will find therein a complete answer to the case he sought to make on the question of the values that should be paid by the community for the acquisition of property. The Committee may remember that the Uthwatt Committee were asked, as a matter of urgency, to make an interim Report on certain topics. They were asked to advise what steps should be taken before the end of the war to prevent the work of reconstruction thereafter being prejudiced. That was early in 1941. The Committee reported with considerable speed in April of that year, 3½ years ago. This is what they said: We think it imperative that it should now be made clear that no inflation of property values which would increase the cost of reconstruction to the public purse would be allowed. Hon. Members opposite appear to be amazed. [HON. MEMBERS: "Not at all."]The Uthwatt Committee went further, and said: We assume that as a general principle the Government are not prepared to allow any person, whether a speculator or not, to obtain at the expense of the public, and out of his landed property, any financial gain by reason of war conditions or post-war reconstruction.

Earl Winterton (Horsham and Worthing)

The hon. and learned Member will, of course, appreciate that when the Report was published it was not anticipated that the war would last so long, and that if that principle was applied generally—for instance, to wages—t would put him and his party in a rather unfortunate position.

Mr. Hughes

If the Noble Lord will cast his mind back he will see that the prospect in 1941 was either a quick finish to the war, with us out of it, or a longer war than we look like having now. As I have said, the Uthwatt Committee reported that no person, whether a speculator or not, ought to obtain at the expense of the public, and out of his landed property, any financial gain.

Mr. Pickthorn (Cambridge University)

We are still not astonished.

Mr. Messer (Tottentham, South)

Nothing astonishes the hon. Member.

Mr. Hughes

On the basis of those findings the Uthwatt Committee recommended as follows: We recommend that the Government should now announce as a general principle that compensation ultimately payable in respect of the public acquisition of land, or of the public control of land, will not exceed the standard of pre-war value.

Mr. Pickthorn

On a point of Order. Is it more in Order, Mr. Williams, to read from the Uthwatt Report, than it is to read from an earlier Clause in the Bill?

The Deputy-Chairman

So far as the Report refers to the question of compensation it is in Order.

Sir J. Mellor

Further to that point of Order. The passage which I was propos- ing to read just now, Mr. Williams, when you stopped me, referred to compensation for disturbance. Was I not in Order?

The Deputy-Chairman

No, the hon. Member was not in Order in going into that point.

Mr. Hughes

I well understand that reference to these proposals, made in 1941, is not welcome to the property protectors on the opposite side of the Committee. The recommendation the Uthwatt Committee made was that compensation should be based on 1939 prices—

Mr. Hore-Belisha

"Value" not "prices." My hon. and learned Friend began this reference to myself and now he is quoting from the Uthwatt Report. Would he mind quoting accurately? What the Committee referred to was the standard of value, and not to prices, and, not only that, they reiterated, in their final Report, that they were speaking of value and not of prices, and pointed out that a change in the value of money had been taken into account under the War Damage Act and, presumably, should be taken into account in any planning Act.

Mr. Hughes

If only my right hon. Friend will contain himself he will find that I am coming to that point, and when I do, I will show him, from the terms of the Uthwatt Report itself, that it was dealing with prices. Let the right hon. Gentleman wait. The Uthwatt Committee, in suggesting that the Government should make such a statement, said: It will not prevent legitimate dealings in land in the ordinary course, and will give fair warning to persons who might be prone to seek in war conditions, or anticipated works of reconstruction, the opportunity for financial gain at the public expense. The Uthwatt Committee in 1941 saw exactly what is happening to-day on the Floor of the House-Members getting up asking for more and more money for property interests. They said that the one way to prevent it was to have a Government declaration that it should be the 1939 figure and nothing else. [HON. MEMBERS: "Values."]The document refers specifically to prices. Neither the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha) nor the hon. Member for The Wrekin (Mr. Cole-gate) nor the others who insist upon shouting about values, can have read par- agraph 13 of the Report of the Uthwatt Committee. It says: Our recommendations are directed not to a fixed price but to a maximum price. What happened in those days? Where were hon. Members then? The Government announced that they accepted the 1939 ceiling. There was not so much as a squeak from them, not a question, not a Motion on the Adjournment, not even a letter to "The Times." The 1939 ceiling was accepted.

Mr. Hore-Belisha

Will the hon. and learned Member read the sentence fully?

Mr. Hughes

I have read as far as the full stop. Then comes the time when we get near to having legislation to put it into effect, and the next thing we hear is,. "No, we cannot accept the 1939 ceiling, There are no more bombs. We look like getting to the end of the war. Building will be done at reasonable prices." There are differences inside the Government and we get a compromise. It is not a ceiling any more. It becomes a floor. In the meantime investment companies have been walking down the streets of London knocking at the doors house by house telling the old story. There may be snore bombs coming. The more bombs come the more people leave, and the more people leave the less the value of your property. If you sell it to-day you will be no worse off. If more people leave down will go the value again. And they have been buying them at a good deal less than the 1939 prices. The first step is that the 1939 ceiling has become a 1939 floor, thereby guaranteeing to these speculators and investors all the profit between the price at which they bought and the 1939 price.

5.15 p.m.

There is nothing in these Clauses to catch those speculators. Are hon. Members opposite prepared to abolish the floor and have the 1939 ceiling? Does anyone answer "Yes"? The third stage is arrived at when we get the Bill as presented to the House. As we had it at first, two exceptions were made to the 1939 floor, one in respect of owner-occupier houses, dwellings protected by the Rent Restriction Act, and the other in the case of agricultural land. We on this side have made the position clear from the commencement that, rent restriction limit or no, we were prepared to stand for the policy of homes for homes. Hon. Members have been talking about the deprivation of those who have been driven away from the places in which they live. Not one of them has offered the one concrete suggestion which would have met that case, that is, to give the local authorities the opportunity, instead of paying compensation, of giving them equivalent accommodation.

Mr. Manningham-Buller

That Amendment was moved from this side and it was strongly opposed from that side.

Mr. Hughes

The hon. Member's memory is bad. The Amendment that was moved was in respect of shops.

Mr. Manninghum-Buller

No, it was in respect of houses as well.

Mr. Hugges

Complaint is made again and again, because an exception has been made in respect of homes, and it is said there is something wrong with it, in that it does not go further. That was the only basis on which we were prepared to accept it, that it was a case of homes for homes. Agricultural land was an exception. It was given in the terms in which the Bill was brought before the House and it amounted to an additional 30 per cent. in any event—an additional value created not alone by the industry of the agricultural community, but by the guaranteed prices paid by the country as a whole for the products of the land. It was an additional value created as much by the act of the community as by the energy of the farmer.

Mr. A. Bevan

Through high prices and subsidies.

Mr. Hu—hes

Yes, through war conditions. I agree that the value of land has gone up, and that means so much mere for the owners of land.

Now that we come to these Clauses, what do we get? The owner-occupier—and I say with all respect to the Committee that every hon. Member who has talked about compensating the individual shopkeeper and the individual inhabitant of a dwelling house without, at the same time, telling the Committee and the world that for every £1 they will get £100 will go into the pockets of big property owners, has not been fair to the Committee or to the country. What does "owner-occupier" mean? When it appears in print in the papers, what will the ordinary man in the street imagine that "owner-occupier" means? The man who lives in a house that he has bought or a shopkeeper who lives in the shop that he runs. What does it mean in point of law? Who is the owner-occupier of Barclays Bank at the street. corner—[An HON. MEMBER: "Or the Co-op.?"]—a site which may have to be acquired and will cost as much as a street full of houses? Barclays Bank, Limited, is, in law, the owner-occupier of that site, and under the terms of these Clauses is entitled to some compensation exactly as we are going to pay it to the widow deprived of her house. But Barclays Bank do not need the 30 per cent. It is no good coming to the Treasury Box and asking the Committee, with tears in your eyes, to provide for the needs of the poor widow who has to build a house, when all the time, for every penny you give to the widow, you are going to give a pound to Barclays Bank. I wish that the right hon. Gentleman the Member for Devonport and the Parliamentary Secretary would talk more about Mother Barclays and less about the widow.

Mr. H. Strauss

I have not, in the whole course of this Debate, ever mentioned a widow.

Mr. Hughes

But the hon. Gentleman breathed words of sympathy for the speech of the right hon. Gentleman the Member for Devonport. What I am seeking to establish is that, from the inception of dealing with this point of compensation, all that has happened is that more and more money is to be paid to the owners of property. I am prepared to stand for it. I will pay the blackmail. I want to get the towns of this country properly planned and the houses properly built. We on these benches are prepared to stand for it. The whole purpose of my remarks is to let the country know that it is blackmail that we are paying. But let the country know, too, that the Government have gone to the limit and that there is not a penny more for property owners.

Mr. Erskine-Hill (Edinburgh, North)

The hon. and learned Member for Carmarthen (Mr. Moelwyn Hughes) is always amusing. He says that he wants homes for homes, but he cannot get them at 1939 prices. If he will give as much consideration to the Uthwatt Report as he suggests that he has, he will see the distinction between 1939 values and 1939 prices. The issues raised by these Clauses are much wider than those normally contained in a planning Bill. They are really the principles upon which land acquisition is to be governed for the next decade. For that reason it is of supreme importance that the Committee should consider carefully whether the principles laid down in this Bill are just and in accord with the traditions of this country. The people of this country have always preferred justice and fairness to anything like confiscation. They have always maintained that when you forcibly take away any property from somebody you should pay him, so far as you can, its value at the time you took it over.

My right hon. Friend the Chancellor of the Exchequer put the matter in words with which I do not cavil when he told the Committee what the principle was. He said it was intended to give just compensation at the time when property was taken over. I was waiting for some argument which could convince me that the Clauses of this Bill, which certainly do not achieve that object, had some reasonable answer to that principle so that one could be convinced that, after all, the thing did not matter so much. My right hon. Friend's first argument was that it was thought by the Government to be fair that the house that had been acquired in 1939 should be treated in the same way as a house acquired now. Surely that was entirely in contradiction of what he had said the principle was, because in 1939 it was possible to acquire other property at the value of the houses then, and, therefore, there would be no injustice done.

I believe that the country wants, above all, that we should be fair in this Bill. I do not think that these Clauses give effect to that wish. First of all, we have to relate the price that is paid to the economic conditions of the time. Anything less than that is unfair. Obviously, we must make a rule for everybody. This Bill will affect everybody interested, and I was sorry that the Government took the view that the only people whom we had to treat justly in this matter were the owner-occupiers. I made the strongest case I could at an earlier stage of the Com- mittee to protect the rights of the owner-occupier. If what the Government are now giving the owner-occupier is the true value—and they would be doing less than their duty if it were more than the true value—why should there be two values? The investor, be he small or large, who puts his money in property is entitled to have the true value back on the principle enunciated by the Chancellor. I strongly agree with my hon. Friend the Member for Daventry (Mr. Manningham-Buller) and others, including the right hon. Gentleman the Member for Wakefield (Mr. Greenwood), that there ought to be among these Clauses one which deals effectively with the war land speculators. I should like to hear from the Minister his reason for not putting such a Clause in, for it is the one thing that every Member of the Committee is anxious to see in the Bill.

Mr. A. Bevan

Has the hon. and learned Member no influence with the Government? Could he not have secured a Clause of that sort?

5.30 p.m.

Mr. Erskine-Hill

If I had any influence with the Government to get them to insert a Clause of this sort, I should exercise it to the full. I think the Committee will do me the justice of knowing that I have always taken the line that every pressure ought to be put on the Government to have a Clause in the Bill to deal with the land speculator during the war. In ordinary times, if one said that no man should take advantage of other people's misery it would have meant doing away with investment on the tote, and all kinds of perfectly legitimate speculations, but in war-time there is no excuse. I ask the Government to give their most earnest consideration, even at this stage, to whether a Clause cannot he put in the Bill saying that where land has been transferred since 1939 the onus is on the transferee to show cause why the price at which it should change hands should not be the price at which it is now proposed to be taken over, without any increment at all. There is no reason why such a Clause should not be there, and I ask the Government to consider the matter.

In a speech which rather shocked me, the right hon. Member for Wakefield said that he was not proposing to support the Third Reading if any concessions were made on the Clauses. I took that to be an insult to the Committee. It certainly is a most improper attitude for any responsible person to take at this stage. It is most unfortunate that he should have made that remark. I have since noticed the line of the speeches. On. the one side are hon. Gentlemen opposite who believe in nationalisation, who are anxious to seize what can be seized as cheaply as possible and are not watching the interests of the individual. On our side are the people who believe in full compensation. If the Debate has shown anything it is the wisdom of the Prime Minister in suggesting that greater consideration should have been given to them before these Clauses were put before us. I supported the Prime Minister when the question came up the other day, because I did not think it would delay the Bill at all. It could not delay the Bill if we got a promise from the Government that a new Bill would be laid before us between now and Christmas, because that Bill could be in operation quickly. It seems to me that the proper solution that we should get from the Government to-night is that they should withdraw these Clauses and promise to place before Parliament a new Bill before Christmas.

I want to make my position clear. There are three points that the Government ought to consider, all of them vital. The first is that we should accept, for the purpose of argument, the 1939 site value, but the price paid must be related to the changed economic conditions affecting the particular interests in the land that it is proposed to take over. The second is that, having dealt with the war speculator, no distinction should be made between the owner-occupier and the bonâ fide investor. The third point is that no-one's right to a cost-of-works payment shall be infringed by anything in the Bill. I ask the Government to give earnest consideration to those questions. The matter can be satisfactorily settled only by the Government agreeing to withdraw these Clauses as they now are and to give them the reconsideration which they deserve, which the Committee have a right to expect and which I think the country will expect.

Mr. W. S. Morrison

If I cannot add any light to the discussion of this complicated question by rising at this time, I hope I shall succeed in saying what I have to say without adding to the temperature or the heat. My hon. and learned Friend the Member for North Edinburgh (Mr. Erskine-Hill) confessed himself shocked by some observation which fell from a right hon. Member on the other side of the Committee. I have been so long with this subject that I am quite impervious to shocks of any kind when this matter is being discussed. Indeed, it is a most complicated and difficult question, hedged about not only with technical and legal difficulties but with political considerations of long standing which carry with them a certain amount of feeling. Our task in this Parliament is to arrive if we can at a solution of this very difficult question, so that we can prepare adequately for the transitional period of reconstruction that it will be the duty of the nation to undertake when hostilities cease. We must, in this Parliament if we can, make all the necessary preparations for that great time.

To clear up one difficulty, may I recall that there has been a great deal of quotation, and a little misquotation, of the Government's pledge with regard to this matter. Perhaps I had better read it out. It was made by my Noble Friend Lord Reith when he was Minister of Works and Buildings, on 17th July, 1941, and he made it in another place, in whose OFFICIAL REPORT it appears as follows: The Government much appreciate the contribution Mr. Justice Uthwatt's Committee make towards the solution of difficult problems. It is of great value. The Committee recommend that the compensation payable in public acquisition or control of land should not exceed sums based on the standard of values at March, 1939. The Government accept this principle, and legislation to give effect to it will be introduced in due course. The detailed application of the principle requires consideration. Adjustments may be needed to meet particular cases, and the principle must be open to review if circumstances arise which make its application inequitable. It is contemplated that the principle will remain in force for a limited period during which long-term policy for the reconstruction of town and country after the war is being settled.

Mr. A. Bevan

Is the Minister telling the House what the Government's position is? [HON. MEMBERS; "Was."]I think he will agree that that statement was superseded by the declaration of the Prime Minister in March of this year. Will he now read the declaration of the Prime Minister in his broadcast on this specific principle?

Mr. Morrison

No. I have not got that with me. This has been the policy laid down by the Government and made in another House of Parliament, and that is the position that really we are faced with to-day.

Mr. Bevan

Does the right hon. Gentleman ignore the Prime Minister's broadcasts?

Mr. Morrison

We can pass from that. I found no argument upon it. I merely recite it so that it may appear in the record of our Debates as a verbatim statement of what was acutally said on behalf of the Government. I pass to wider considerations which we have to discuss. The sacred name of Justice has been widely invoked on both sides of the Committee.

My hon. Friend the Member for Day-entry (Mr. Manningham-Buller) even went so far as to ask me the ingenious question whether there was any precedent for an act of injustice to a particular class. The question was one of that convenient type which assumes its own answer, and assumes from the question itself that this was injustice. We have had all sorts of talk of justice. My hon. Friend the Member for Walsall (Sir G. Schuster), who I regret is not present, shook a minatory finger at me, and seemed to think we were declining from some cold high peak of National Liberal justice.

Sir H. Williams

Liberal National.

Mr. Morrison

Is it? I want to ask my hon. Friends on this side of the Committee who have invoked justice how they propose a more just solution of this difficulty than the one before us. I listened to my hon. Friend the Member for Walsall. What emerged from his argument was current market value, because he lamented that whereas he was given the current market value for his motor car some other criterion was applied to land. The point that the Committee must ask themselves is, Would current market value be justice? There is no sanctity in current market value if it means injustice. If current market value means injustice we must not adopt it. I think I can convince the Committee that in this distorted, disturbed market of to-day to apply the current market value would be to commit the gravest injustice to many people by paying some much too little and others much too much, depending not upon the value of their land for peaceful use and development, but to some extent upon the war—on whether or not they were in a place selected by the enemy as a target or not. Is that justice? I look around at the Kentish towns whose ordeal has been so long, an ordeal not only by fire from the enemy but also arising from the Government restrictions imposed upon those areas, resulting in a loss of trade and a sharp and calamitous decline in values.

Mr. Loftus (Lowestoft)

Suffolk as well.

Mr. Morrison

Many places in the country. On the other hand I can look over wider stretches of the country which are safe areas—

Mr. MacLaren (Burslem)

The Lake District.

Mr. Morrison

—where through no inherent or permanent value in the land itself, but purely owing to the temporary accident of war, values have soared. So. when I submit, and I hope I submit cheerfully, to being lectured about justice and injustice, I ask myself who is proposing the more just solution. I contend that the solution in the Government's Clauses is by far the most just.. I contend that to allow this matter to slide on to the market values at the present time would be permanently to rivet upon all the dangerous areas the hardship they have suffered, that not only must they ensure the assaults of the enemy and the restrictions of Government Departments, but must receive less for their land if it is compulsorily acquired. If the land in safe areas is acquired at current market values more will be paid for it than would be the case within a few years after the war, for those areas that have escaped the enemy and have a high current market value are to be made by Act, of Parliament the recipients of more money than the areas which have suffered. I do not think that is justice.

5.45 P.m.

Sir H. Williams

I agree with everything my right hon. Friend has said up to a point. That is no reason why one owner of a house in Sussex or Kent should get 30 per cent. added to the 1939 value, and the man next door should get only the 1939 value. Why should one be treated differently from the other?

Mr. Morrison

Surely my hon. Friend does not think I am shrinking from that argument in its right place. I am at present concerned to make this point, which I hope is by now clear. I do not want to elaborate it. Those who have lectured us on justice and have put up as a more just solution the current market value—and there is nothing else as a standard to work on if this be rejected—are suggesting that the Government should, in fact, adopt a standard far less just, far more pregnant with hardship and with undue reward in the case of other people, than the 1939 standard of prices which was adopted as our basis. So that is the position here. We say, "Let us as far as we can obliterate these temporary circumstances, so far as anyone can obliterate the effects of war on a nation. But let us, so far as we can, go back to the period when land values in an open market were settled relatively to each other, to what may be considered just according to the permanent factors which fix the relative value of parcels of land in different parts of the country, the peace-time standard which cannot operate fairly in war, and in distorted, false, temporary war conditions." So much for the standard and so much for current values.

Sir R. Tasker

Is it just to fix the level of 1939 as a ceiling, and then for the Treasury to take present day values on every probate going through the Death Duties Office?

Mr. Morrison

I will deal with that also because it has been put before in the Debate. My right hon. Friend the Member for Devonport (Mr. Hore-Belisha), I think, agreed with me that justice should be the aim. I hope I have by this time convinced him that current market value would not be justice, but injustice. He asked one question. He said that according to existing law if we cannot give current market value, the replacement value ought to and should be given. That is true, but in a limited sense. It is the law that if, in fact, the land or building has no commercial value, that is to say it is perhaps a church, and the market for churches is not what one might call a good one, and it should be acquired, under present law a replacement basis must be adopted. But in any other case if there is a market the current market value must be applied. The trouble here is not that there is no current market but that there is a current market which is a false and a distorted one. It is not the absence of any market—no one can say that—but the presence of a market which is false and unjust. That is our problem.

Mr. Hore-Belisha

That does not cover buildings; it covers land. What about the cost of buildings?

Mr. Morrison

That is another question. There never has been in our law a provision that the cost of putting up buildings must be considered in dealing with compensation. Then we come to the question of the 30 per cent. My right hon. Friend described it as a restriction on the possibility of justice, or words to that effect. The question why we have put in this figure as a maximum has been widely raised in the Committee. The answer I would like to suggest—in addition to what my right hon. Friend the Chancellor of the Exchequer said—is that in cases where this additional percentage is possible, we are giving an extremely wide discretion to the arbitrator. He can take into account all relevant circumstances, and form a common sense judgment on how much extra he should allow, taking everything into account. But the wider the discretion that is given to the arbitrator, the more he can look at all conceivable circumstances affecting the interest, the more we must place some fair maximum upon it; or else we leave him entirely at sea, with no direction at all from this House as to what he should do. And 30 per cent. is, according to our advice, the appropriate figure, having regard to the circumstances which will face the people affected by this Bill.

Mr. Hore-Belisha

The right hon. Gentleman did not put that in Clause 46.

Mr. Morrison

No, because, as my right hon. Friend, I thought, lucidly explained, when we were dealing with the limited class of beneficiaries covered by Clause 46, namely, owner-occupiers and occupiers of a certain class of land, it was easier to leave it at large in the Bill. But my right hon. Friend will recollect that the Clause in the old Bill was made effec- tive only by a Clause which did specify this.

Mr. Hore-Belisha

They had to have regard to general economic conditions.

Mr. Morrison:

I do not believe that those words were in the Bill: I think my right hon. Friend has got them out of some other Act.

Mr. Hore-Belisha

No, it is here, in the Sub-section defining "the prescribed percentage."

Mr. Morrison

Yes, this is the old Bill. Sub-section (4) of Clause 46 says: In this Section the expression 'the prescribed percentage' means, for the purposes of Sub-sections (2) and (3) of this Section respectively, such percentage as may be determined by the Treasury and prescribed by Order made by them as appropriate for the purposes of the operation of this Section as respects interests in land of the kinds mentioned in paragraphs (a) and (b) respectively of Sub-section (1) of this Section having regard to general economic conditions affecting land of those kinds respectively. The right hon. Gentleman makes that point, for what it is worth. He quotes accurately when he says "general economic conditions." The point I am making is that we have to choose, and the Committee must make up its mind as to which course it wishes to pursue. Either we limit the discretion of the arbitrator by a long, involved, and difficult code of circumstances he shall have in mind, so as to give him some guiding light, or we must give him wide discretion and fix a maximum, and then, if circumstances change, Parliament must alter the maximum. I suggest that in this era into which we are travelling general economic conditions are so difficult to forecast accurately in this wide class of case that we are considering now, and all the factors are so difficult accurately to foresee, that it is better to give the arbitrator, as a man of commonsense, the discretion, and to retain control—because Parliament must retain control—in the Bill by fixing a maximum, with power to alter it by Affirmative Resolution from time to time.

The right how Gentleman anticipated a point which has been frequently put, which is really not a matter for this Bill at all but concerns the War Damage Act. That is the fact that, under the structure of the War Damage Act, if a person is entitled to a cost-of-works payment, and if, for any reason, it becomes impossible for him to rebuild on that site, the cost-of-works pay- ment is transmuted into a value payment, which may be estimated under the provisions of the War Damage Act. Parliament passed that Act, and the logic of the position is apparently that, to get a cost-of-works payment, one must have a site and must be able to do the works. If, for any reason at an, that cannot be done there must be another basis of payment. That is what Parliament decided in the War Damage Act. My right hon. Friend complained about its operation. I can conceive that, in some cases, the value payment will be of less value than a cost-of-works payment; but in these Clauses we have treated the man who is entitled to a cost-of-works payment but whose house has been bombed or destroyed the same as if it had not been. We au putting him back to the position that existed before the bomb. The conversion to a value payment is not the effect of this Bill; that is the effect of a general power to purchase for public use. It is no criticism of this Bill to say that in some cases that effect is produced.

My hon. Friend the Member for Daventry mentioned a point which has appeared in the Debate again and again—the matter of the speculator. I think that on all sides of the Committee there is a general feeling that if we could catch the speculator, it would be a good thing. On that there is no disagreement at all. But a speculator is, in this sense, rather like an elephant—he is easier to recognise than to define. The difficulty is to find words which would catch the guilty man—if you call him so—and not at the same time inflict great injustice upon people who have engaged in a number of quite innocent transactions. However, that is a matter which will arise later, on an Amendment which is already down for the Committee stage. My hon. Friend the Member for Peckham says that he will move the Amendment, and we shall then see what we can do about it.

My hon. Friend the Member for South Croydon (Sir H. Williams) was rather severe on my right hon. Friend the Chancellor of the Exchequer about the valuations for probate, and he produced a document which was a list of extra-statutory practices. and, because he found only one reference to that subject, he thought that my right hon. Friend's argument about the difficulty of making accurate determinations for probate was vitiated. It was not vitiated at all

Sir H. Williams

The Chancellor based himself upon that document.

Mr. Morrison

He did nothing of the kind. He said, in general terms, that these valuers were finding it very difficult, with the slender material at their disposal, and that they had to make non-statutory allowances. But, quite apart from that, what has been happening is that there is room for a very wide difference of opinion between the valuers acting for both parties, and that they must make the best effort they can to interpret the terms of the Statute under which they work, so as not to do injustice. They will tell you that, in certain classes of property, it is extremely difficult to appeal to a market, and I think that is common knowledge.

6.0 p.m

Sir H. Williams

Will the Minister say why, having regard to this difficulty, they only found an extra-statutory practice in one particular case, because the Chancellor based himself upon it and I quoted a particular case?

Mr. Morrison

I am informed by my right hon. Friend that though this is the only one mentioned in all valuations they have to exercise their wise discretion between greatly separated valuations, and the fact remains that they try to do their best to carry out the law, but they find it very difficult, and that is why we are proposing for acquisition, which is quite a different business to probate, a standard of market which can be referred to as stable and does not give rise to these variations.

Sir H. Williams

Will my right hon. Friend tell me why he can apply the 30 per cent. to one half of house-owners and not to the other half?

Mr. Morrison

That is my next point. Before dealing with that point, however, I should like to say that I disagree with the hon. Member for South Croydon when he says that war damage is due to the failure of the State to protect its citizens. He took the line that we pay taxes, and ought then to expect people to fight for us, and save us from the horror of war. That is not the conception of the Government, and I do not believe it is the conception of the British people. It certainly is not common law. I believe that, when this country goes to war, every one of its citizens knows that he must share in the sufferings and tribulations of war. He does not expect a benevolent Government to be able to shield him from all trouble. In the whole history of human nature, and in the history of this nation in its wars, the contrary is the case.

The next point is the different treatment which is accorded to the owner-occupier and the investor. That is the point upon which my hon. Friend is so eager for information. Land is a very strange commodity in many ways. It differs from other commodities in several respects, and one can have all sorts of theories, economic and political, about it. It is possible to define quite easily two classes of people who own land. You can take what are called owner-occupiers in this Bill—and we have widened the term to include the constructive occupier, meaning the man with a right to resume possession. If I were ever fortunate enough to exchange houses with the hon. Member for South Croydon, I could still have the right to resume possession of my own, and still be, under this Bill, an owner-occupier. What do we mean by owner-occupier? We mean, in general, the man whose ownership of land is subsidiary, though necessary, to some other important purpose or use. He wants the land because he wants to live on it. He is putting the land to some use of another character. He wans to live on it, or he wants to have a workshop on it, or put his commercial buildings on it, or he wants to farm it. But, in any case, in such a man's case, his ownership of the land is subsidiary to some other service which he is rendering to the community or some other function which he is performing.

It is clear that, in that case, if you take his land, you disturb more than his possession of a valuable asset. You take away his home or his livelihood. That is quite true, whereas, on the other hand, in the case of the man who has been called the investor, he does not occupy land himself at all. The land, in his case, is subsidiary to no other major activity, such as in the case of the owner-occupier.

Sir H. Williams

It is bad use of land to build a house?

Mr. Morrison

No. If my hon. Friend will permit me I would say that I am convinced there is substance in this argument. The investor owns land, not in order to farm it or live on it, or to have a factory on it, but he owns it—I am not conducting a campaign against him—and what he has done, in fact, is to exchange possession of the land, and give up possession of the land, to another, and, in return, though he retains the fee simple, he obtains another right—the right of fixed money payments in the form of rent paid at regular periodic intervals. That is what the investor in land does, in fact. His tenant has an indefeasible right against him, as long as he pays the rent and observes the terms I of the lease, and suggest that he is in quite a different position to, and can be sharply distinguished from, the owner-occupier, who uses land for the purposes I have referred to.

Those are the main points that have been raised. I think that we have covered most of the matters that have been raised in this Debate. There was one small point made by the hon. Member for Walsall on which for a moment I could embark. I mention it only to clear up a misunderstanding. The hon. Member said that, with property requisitioned during the war, there was no question of standard, or trouble of that sort, but, in fact, that is not so. Property is requisitioned under the Defence of the Realm Act, and all that happens is that the Government take possession, and the rents proceed upon a low basis.

Mr. Petherick

Will my right hon. Friend allow me? I am sure he has a very fair and honest mind. Will he give me the answer to this question? What is the essential difference between an owner-occupier, owning and living in his own house, and a man who owns a house that is worth £50, which he lets, and lives in another house for which he pays £50 rent? I cannot see the difference.

Mr. Morrison

I suggest that the difference is that, in the first case, that of the man who owns a house and lives in it, if you are acquiring that house compulsorily, you take away from that man, not only a valuable asset, but his home, because his possession of the property is subsidiary to his desire and his requirement to use it as a dwelling. In the second case, if my hon. Friend is imagining a man who has let his house on a normal lease, he has surrendered possession to a tenant, who undertakes, in return, an obligation to pay periodic amounts as rent.

Sir H. Williams

In both cases, a home is destroyed. In these circumstances, I assume that the 30 per cent. will be given.

Mr. Morrison

If a man has security of tenure, you can compensate him for it if he loses it. We can deal with that when it arises.

Captain Sir William Brass (Clitheroe)

If Woolworths had a shop and it was taken over for a road widening, would Woolworth's be regarded as owner-occupiers?

Mr. Morrison

Yes, certainly. A Co-operative store would. be in exactly the same position.

Sir H. Webbe

Will the Minister explain this? He has said that an owner-investor has, in fact, exchanged his right of user of land for a right to receive rent. In other words, he does possess, at the time he is dispossessed, a right to receive rent. Will the Minister explain on what basis of normal English justice that man is to be compensated with something less than the right which he possesses before possession is taken?

Mr. Morrison

I think that if my hon. Friend reflects on that he will see that he is begging the question. I am not suggesting that this is a ground for treating anyone unfairly, but I am suggesting it is a ground for giving the owner-occupier something extra because he has this dominating interest in the possession of the property.

Mr. A. Bevan

Would the Minister say that Miss Barbara Hutton, who lives in Hollywood and is the principal shareholder in Woolworths, is in useful occupation of Woolworths in Oxford Street, London?

Mr. Morrison

The hon. Member is leading me very far away, and may I call his attention to the fact that this Bill, by its terms, is limited to England and Wales. Scotland does not come into it, far less Hollywood. The answer to the question is that a shareholder is not the person who owns the land, the company is the person.

Lieut.-Colonel Dower

This is an important point. In many cases these people who have left their houses have not left them as a business concern, but because they could not afford to live in them, and because they accept the money value they should not be treated differently.

Mr. Morrison

I am saying that the distinction between the two classes can be made and validly sustained. All that I can say to-night is that I hope that, as we have had this general discussion—and I am sure the Committee was wise in letting it roam over the whole question instead of being cribbed, cabined and confined to the one Clause formally under discussion—I have said enough to convince my hon. Friends on both sides of the Committee that, though they still may feel qualms about this or that point, here is a case that we ought to proceed to further investigation by giving the Clause a Second Reading, and symbolically a Second Reading to other Clauses which have been discussed with it. I know how difficult the problem is when approached for the first time. One of the tremendous difficulties is that it looks much easier than it is. It is very easy until you get down to the examination of, Where does justice lie? I hope that hon. Friends on both sides of the Committee will now see that there is a valid case for these Clauses and that they ought to support them and that, therefore, we may proceed to the Committee stage next week with the case on both sides fairly stated.

Mr. Manningham-Buller

May I ask my right hon. Friend to deal with one question that was raised and with which, in the course of his reply, he omitted to deal? It is a point of some importance. Why should a different standard be required for agricultural land under this new Clause from that applied in this House with regard to agricultural land in the Agricultural (Miscellaneous Provisions) Act?

Mr. Morrison

That is a matter we can answer when we get to the Clause. I heard my hon. Friend read out the provisions of that Act to which he referred, and I do not think that, on close examination, they will be found very different from one another in effect, though the words may be different.

Sir H. Williams

Before we divide, it ought to be made clear that the willingness to give this Clause a Second Reading now, does not signify in the slightest degree that the criticisms made will not be raised on Wednesday. We cannot amend until we have had a Second Reading, and a Second Reading must not be regarded as approval.

6.15 p.m.

Mr. Geoffrey Hutchinson (Ilford)

At this stage of the Debate it must have been made plain to my right hon. Friend that these Clauses have not met with a very favourable reception. I am sorry that that should be so because my right hon. and learned Friend has endeavoured to deal with this difficult matter in a manner which is fair and just to all the interests which are involved in this complex business. He has claimed that the proposals contained in these new Clauses represent substantial justice and he has challenged the Committee to suggest means whereby a greater measure of justice can be achieved. In the course of a very few minutes, let me endeavour to take up those two challenges and, if I can, supply an answer to both of them.

This Bill, admittedly, deals, and its purpose is to deal, with areas that have suffered extensive war damage. That is its principal purpose. These areas contain properties damaged in varying degrees by enemy action. They also contain properties which have not been damaged by enemy action but which will necessarily be acquired by the planning authorities in the course of their schemes for replanning their areas. Those properties which have been damaged by enemy action will receive, under the terms of the War Damage Act, if they have not been completely destroyed, a cost-of-works payment under which their owners will be entitled to reinstatement at the time the cost-of-works payment is made. No question of depreciation in the value of money will arise. Those properties which have been completely destroyed by the enemy will receive a value payment but—

The Chairman

The hon. and learned Member appears to be dealing with the War Damage Act. I have not heard any reference to the present Clause so far.

Mr. Hutchinson

I am endeavouring to deal with the point which the Minister made, that the Government's proposals do substantial justice to the owners of property in these war damaged areas. With respect, I should have thought that I was entitled to make some reference to the treatment of properties which have been damaged and will be compensated under the provisions of the War Damage Act. I was about to say that those owners of properties in these areas which have been completely destroyed by the enemy will receive a value payment based upon the standards of 1939, but they will also have the prospect of a proportional increased payment at a later date, when it becomes clear what the difference between the 1939 standard and prices at that later date are going to be.

So the owners of war damaged properties in these areas will obtain a substantial restitution on the price levels which prevail at the time when full compensation is made. 'Those owners of properties which have not been damaged but which will be acquired by the planning authorities in the course of their re-planning schemes, unless they are occupied by their owners, will receive only compensation based upon the 1939 standard. I invite my right hon. Friend to say whether he regards that as justice or not. Here are these two classes of property, in the same town, perhaps actually adjoining one another in the same street—one will receive 1939 standards, and one will receive 1939 standards together with something else which will compensate him for the difference in the value of money. Surely when my right hon. Friend claims that he has done justice, he ought to explain how a situation of that nature can be regarded as either just or equitable.

What I invite my right hon. Friend to do is this. We cannot separate this question of war-damaged properties from properties which are to be acquired by the planning authorities in the course of carrying out these schemes which have been rendered necessary by war damage. There are two sets of circumstances which are really inextricably involved with one another. The purpose of my intervention is to invite my right hon. Friend at a later stage to consider whether it is not practicable to apply to these problems of re-planning the same procedure which is already applied by the War Damage Act with regard to compensation for war damage. If that were done, I venture to suggest that it would meet the main objections which have been disclosed by this Debate.

I understand that it is considered that there are certain administrative difficulties in applying the procedure under the War Damage Act to compensation which is to be paid under this Bill. I believe that those difficulties have been very much over-stated, and that if my right hon. Friend will now examine them, it will be found that those administrative difficulties are less formidable than was at one time supposed. It might actually be very much more convenient to the local authorities if this question of compensation could be settled in the way which I have suggested.

Question, "That the Clause be read a Second time," put, and agreed to.


"That the Chairman do report Progress, and ask leave to sit again."—[Major Buchan-Hepburn.]

Committee report Progress; to sit again To-morrow.