§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Buchan-Hepburn.]
§ 6.19 p.m.
§ Mr. Hutchinson (Ilford)
I desire to call attention to an aspect of the War Damage Insurance, Private Chattels Scheme, which seems to me to involve a considerable hardship upon persons whose goods are insured under this scheme. The House may recollect that under the terms of the scheme a limitation in point of value is imposed upon any single article insured under a policy of insurance in which a number of different articles are comprised. There is a limitation of 5 per cent. of the total value of all the articles insured under the policy or a sum of £50, whichever is the greater.
The effect of this limitation can be very shortly stated. Take the case of a person who owns household furniture of the value of £500 to, let us say, £1,000. It may well be that amongst the articles of household furniture is some article, such as a piano, which is an article of considerable value, no doubt costing considerably more than 5 per cent. of the total value of the goods which are insured under the policy, or more than £50, which is the maximum that he is entitled to recover if the sum is less than 375 5 per cent. of the total sum insured. Suppose that this unfortunate person loses the whole of the articles which are insured under this policy. There are many people who have had that misfortune, particularly in recent months. The result of the limitation is that in respect of the most valuable article which he possesses, he is not able to recover anything like the original cost of the article, and certainly nothing like the value of its replacement at the present time. Let me take another case to illustrate this point. Take the case of a person who owns a number of articles, not a complete outfit, of household furniture, but including an article of considerable value: it may be a wireless set or a fur coat. There are many persons who own articles insured under a policy 'including a fur coat. If those articles are destroyed the owner is restricted, whatever the value of the articles, unless it is very considerable, to a maximum of £50 in respect of the sum which he can recover under the War Damage Acts.
Last July I asked my right hon. Friend the President of the Board of Trade a Question about this matter, I invited him to reconsider this limitation and to substitute for it a limitation of a rather different kind, under which the owner of the articles insured would have been required, at the time when he took out the policy, to have an agreed valuation of the articles insured under the policy. My right hon. Friend was not willing to agree to that—if he had been, of course, I should not have been raising the matter to-night. In the course of his reply, he gave reasons Why it was considered that this limitation was a reasonable one. One of the things he said was:The purpose of the limitation is to guard the State and the public from having to pay large sums of money to people who lose works of art and valuable objects as a result of enemy action. The better course is to place these objects in a safe place, which is not difficult to do. The purpose of this scheme is to reimburse people of moderate means for the loss of essential articles, and not of highly-priced articles."—[OFFICIAL REPORT, 18th July, 1944; Vol. 402, C. 17–18.]It is all very well to say that these objects ought to be placed in a place of safety. But is every owner of a grand piano expected to remove it from his house and put it in a furniture depository? Is every lady who owns a fur coat expected to put 376 it away in a place of safety and then to go to my right hon. Friend and ask for coupons for something to take its place? I venture to think that, When the Minister gave me that reply, he did not really appreciate the sort of hardship which arises from this limitation. I think he had in mind the question of works of art and articles of special value. This limitation does not, technically, apply to works of art, which no doubt ought to be placed in a safe place. There is another Clause, I think it is Clause 4, which imposes a limitation in respect of works of art and articles of special value, including furs. So that when the Minister gave me that reply, I venture to think that he really misconceived the grounds upon which I was asking for an amendment of the scheme.
There is a further matter to which I desire to refer. This limitation does, in fact, recognise that a person who has insured a number of articles under a single policy may possess articles which will far exceed that which he will be entitled to recover under the conditions of this limitation, and, therefore, there is an exception in respect of motor cars, invalid carriages and yachts. If you happen to be the fortunate possessor of a yacht or an invalid carriage, you will be entitled to recover the value if it is destroyed by a flying bomb; but, if you happen to be the unfortunate owner of a grand piano or a radiogram wireless set than is worth more than £50, and the articles Which you insure do not exceed in value £1,000, you will not get more than £50 for your radio set or your grand piano, although you would have got the full value of an invalid carriage or a yacht or a motor car if you had happened to possess one. That really is a limitation which is not logical at all. If you are going to pay out on motor cars, invalid carriages and yachts, there is no reason why you should not pay on grand pianos, radiograms and ladies' fur coats as well.
Let me make one further observation. When I asked my Question last July, I suggested that the right course for the Minister to take was to require the person who desired insurance for these valuable articles to lodge, with his application for a policy, an agreed valuation of the articles. Last July, I thought that was a reasonable thing to ask. A great many things have happened since then. During the 377 last few weeks—I think that I am not now giving away secrets or offending against security in saying this—as I climbed about the ruins of what was once part of my constituency, I certainly saw abundant evidence that a great many people are going to suffer under this limitation. I would ask the Minister, having regard to the losses from these flying bomb attacks, that these unfortunate people, whose homes are reduced to heaps of broken rubble and timber, should not now be expected to bear the additional hardship of not being able to recover the full value of some articles of special value which they happened to possess. I ask him to consider whether it might not be reasonable, having regard to the fact that we are approaching the time when there will not be much more damage, to reconsider the whole matter and not let the unfortunate people who have lost a grand piano, a radiogram or a fur coat, be in any worse position than the more fortunate possessor of a motor car, yacht or invalid carriage.
§ 6.30 p.m.
§ The Parliamentary Secretary to the Board of Trade (Captain Waterhouse)
My hon. and learned Friend has raised a very reasonable point in a most reasonable way, but his argument is open to a certain amount of criticism. He has looked on this particular scheme as if it were a pure measure of insurance but in fact it is not an ordinary insurance scheme at all. An ordinary insurance scheme is a self-balancing scheme, whether it is a State scheme or a commercial scheme. It is a scheme into which people pay in accordance with the expectation of loss; one in which the premiums balance the amount which will ultimately be drawn in claims. That is not so in this particular case.
When the Chancellor of the Exchequer introduced this Measure in 1941 we had no idea at all of the extent of the damage we would suffer. We just guessed a premium, and in fact the guess was not a very bad one. Although the premiums have gone some way to meet the damage, there is still, and there will remain, a margin which has to be found from the general taxpayers' pockets. Therefore, one can put some limitations on the amount of the claims which may be made on the scheme. It was made clear when the Bill was introduced that the com- 378 munity should collectively compensate sufferers, but not to the extent of replacing all the articles of value which they lost. It would be agreed—and I think my hon. and learned Friend would agree—that there must be a limit somewhere; that a very valuable picture or piece of furniture should not be replaced at the full market value. He has instanced pianos and wireless sets and has spoken of the damage in his own constituency in comparatively small houses there. Nobody realises this more fully than who have seen this damage, and nobody sympathises more than I do with those who have suffered from the damage, but I suggest there are comparatively few wireless sets in those houses which are even to-day worth £50. Many of the pianos in those houses, at the price at which one could buy a piano before the war, would not cost anything like £50 when new, and in a secondhand condition would, in ordinary circumstances, be worth materially less than £50. One has to realise that this Measure has been in operation for some 3½ years and I can tell the House that, although we have had certain complaints on this subject, they have been few. There has been no general complaint, and from that we can fairly deduce that there has been no general grievance, though that is not for a moment to say that there have not been individual cases of hardship.
§ Mr. Hutchinson
Will the hon. and gallant Gentleman forgive me a moment? If the cases are not large in number, may I renew my appeal to regard this limited number of cases with generosity?
§ Captain Waterhouse
No, my hon. and learned Friend has quite misunderstood me. I did not say that the cases were limited in number. What I said, or what I certainly meant to imply, was that those who have put in claims which included articles of more than £50 in value have realised the equity of the provision which we made in putting on this limitation, and have accepted that limitation. After all, Mr. Deputy-Speaker, let us be clear on this—that this Measure came before the House of Commons in its present form and was accepted by the House with these limitations in it, and there have been no new circumstances at all which can justify this particular claim now. My hon. and learned Friend's case was just as strong, and indeed a good deal 379 stronger, in 1940–1941 than it is in 1944 because, as he will agree, the damage in those days was far more serious, although perhaps no more extensive. There were far more houses demolished then with all their contents than have been demolished during the recent troubles, though probably the number superficially damaged may be almost as great now as it was then. Further, the Chancellor on 25th February, 1941, made this point very clear in his speech on the recommittal of the Bill in this House. He said:The only restriction I would make would be the obvious one, that the amount of cover should be limited in respect of such things as jewellery, antiques and specially valuable articles." [OFFICIAL REPORT, 25th February, 1941; Vol. 369, c. 396.]Therefore, from the very outset, it was felt, and as I have said, was generally accepted, that there should be a limitation on these values.
My hon. and learned Friend says that he thinks the trouble is nearly over, and that therefore it would not be unreasonable to make some concession. He has suggested that there should be an agreed schedule of valuation lodged with the policy. I agree that that might be administratively possible for future damage but, pray God, future damage in this country will be slight indeed. But would it be fair to do such a thing now? Would it be fair to say that for the few houses we hope and believe will be damaged in future, we are going to make a special concession, but are going to do nothing for all the cases which have already taken place? My hon. and learned Friend may say, no, that he would like his suggestion to be retrospective, but will he consider with me for a moment the administrative difficulties in such a provision? Many of the claims have been postponed for payment until after the war, but the claims have been settled and filed away. The claimant has been told how much he is to expect and he has agreed the sum. In due course he will receive a draft for that amount. In other cases, however, for special reasons, payment has already been made. Quite a number- of cases of special hardship have been proved and paid out of hand. Is it really suggested by my hon. and learned Friend that all these cases, both the ones paid out and the ones still to be paid, should be re-opened, that the 380 files should be examined again, that people should be invited to claim for any article which was destroyed three and a half years ago in the blitz of 1940 or 1941 which they now think was worth more than £50 at that time? I am quite certain that if my hon. and learned Friend will think about that for a moment or two he will realise that it would set our staff a task with which even they would have the very greatest difficulty in dealing.
§ Mr. Hutchinson
Surely a settled claim must show that certain articles have been scaled down to the particular limit of limitation. Surely there would be no administrative difficulty in reopening claims to that extent.
§ Captain Waterhouse
My case is not that the thing could not be done but that it would be an administrative task of great magnitude. If a case had been made out—which I submit has not been made out—that without this a great wrong would have been done to the subjects of this country, then clearly it would be possible to do it, but I submit that the task would be a great one. In equity it was well understood from the outset that no payments over £50 were to be expected. It was well understood that this was not an insurance scheme in the general sense but that the object of the scheme was merely to help those who had had damage inflicted upon them and to take the worst of the hardships away from His Majesty's subjects who suffered from the war.
There is, however, one small provision which may be of some little consolation to my hon. and learned Friend. He spoke of the difference in prices, and said that they had materially increased. It is true that anybody who tried to buy a piano now would have to pay a great deal more for it, and it is equally true that everybody who had lost a piano, and who tried to buy one now, would not succeed in doing so because there are not nearly enough to go round. But for those who lost these more valuable articles and any other articles there is a certain undertaking to scale up compensation, which, on the authority of His Majesty's Government, I gave in this House on 3rd June, 1942, when I stated that the Government had in mind the possibility or hardships arising to persons of modest resources and that if the price 381 level at the date of payment differed materially from that on which compensation was based, while it would not be right in the Government's view to call upon the general taxpayer to find money to pay for additional compensation for the replacement of articles which were not necessary for a reasonable standard of life, they would be prepared to consider, should post-war price levels and other circumstances require it, the adequacy of compensation in the case of the small man. Under this I did not at all envisage the re-examination of the value of individual articles, but I do envisage that if when a claim, settled for £300 in 1941, comes to be paid, prices—one does not know what they will be—are, say, 25 per cent. higher than they were then, in such circumstances, under this provision, a claimant would receive not £300 but £300 plus a sum which will make up to him for the decrease in the purchasing value of money.
§ Mr. Woodburn (Stirling and Clackmannan, Eastern)
The point which the right hon. and gallant Gentleman has just raised is an important one to people with small incomes. Does that also apply to the general insurance which is not covered by premium where, I think, we replace up to £120 for chattels in the ordinary 382 home? Is that to be scaled up to meet increased costs?
§ Captain Waterhouse
There is no differentiation between free insurance and premium insurance. This will cover both.
§ Mr. Hutchinson
Will the concession my right hon. and gallant Friend has now referred to apply to claims already settled?
§ Captain Waterhouse
No, it was clearly understood by those who have had claims settled that in taking advantage of that special provision they would forgo any chance there was of any scaling up. I submit that, although there is a hardship here, you cannot avoid hardships in war. There is no unfairness, because people understood for what they were insuring and what they were going to get. I very much hope that, with the explanation I have given my hon. and learned Friend, in spite of any regret that he may feel, will be reasonably satisfied.
Question put, and agreed to.
Adjourned accordingly at Fourteen Minutes before Seven o'Clock.