§ Order for Second Reading read.
§ 11.5 a.m.
§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
I beg to move, "That the Bill be now read a Second time."
As the House is aware, the War Damage Acts of 1941 and 1943, passed during the war years, set up a War Damage Commission. One of the principal duties of that body was, when war damage to property occurred, first to assess the category under the Acts into which the damage fell, and, secondly, to assess the payment due thereon by way of compensation. Under Sections 7 and 10 of the 1943 Act, the Commission was charged with certain duties, one of which was that they were required to assess four values in respect of any war damage that occurred to property. These values were, first, the value the property would have with the damage made good; secondly, the value the property would have as a site with the damage left untouched; thirdly, the value of the property immediately before the war damage occurred; and, fourthly, the value of the property in its state after the war damage had occurred. The Commission was required under Section 7 of the 1943 Act to look at the first two of these values in order to ascertain whether the damage attracted a cost of works payment, or a value payment, that is which of the two would be appropriate under the Act. So far as the other two values were concerned, they were required under Section 10 of the 1943 Act to compute the amount of the value payment to be made.
All these valuations have to be made on the basis of the values which obtained in March, 1939. This involves a good deal of technical and specialised knowledge. It was foreseen that owners who had suffered war damage might feel aggrieved by the amount which had been apportioned to them, or, alternatively, object to the category they had been put into, so the Act very properly set up a right of appeal, and set up, too, the machinery whereby those appeals could be heard. Subsection (2) of Section 32 of the 1943 Act provided that any aggrieved owner might appeal to the panel of 1611 referees appointed under Part I of the Finance (1909–10) Act, 1910. That panel was chosen because at the time the Acts went through, it was thought that it would be a convenient body to which to refer appeals of this kind. It was thought, too, that as that panel was in existence it would be wrong to try to set up another, to do what was then expected to be much the same kind of work.
However, actual experience has shown that that panel is not the best body to adjudicate in this way, for reasons which I shall explain. It is estimated that approximately 200,000 claims are likely to be made. At any rate that number of payments will fall to be made, though how many of them will go to appeal, it is of course impossible to say. Actually we have every hope that very few of them will, but undoubtedly some will go to appeal. The overwhelming majority of the properties that have been damaged have been in the large towns and cities, and a considerable proportion of the damage done has been in the centre of those towns and cities, where the value of the land is such as to require very specialised knowledge. Practically every member of the panel in the urban areas who is skilled in this class of work, is already engaged as a professional adviser to local owners who have suffered damage, and although owing to the numbers of surveyors and valuers of this kind in big towns and cities some would be available, it is still thought inadvisable to employ them. For, though they might not be acting for a particular owner, it is more than likely that they would be acting for another. It would be unfair, therefore, to ask them to adjudicate on appeals when they might be professionally engaged by the owner of a similar property adjacent to that under review.
There are other members of this panel, of course, who are skilled in agricultural valuations and in mineral valuations, but the difficulty of bringing them into the towns to take the place of referees who live in the urban areas is that they are not, by the nature of things, as skilled as their professional brethren in the towns are in this class of work. They may know all there is to know about the countryside and the minerals under it, but they may not be skilled or expert in the values in the towns and the big cities. 1612 Another weakness of the present system is that the referees appointed under the Finance Act, 1910, act independently. No provision is made therein—and very naturally so, because the conditions we are now visualising had not then been thought of—for the referees to consult with each other or for the cases to be taken in any particular order. The Government have come to the conclusion that as a result one might very well get, under the present system, these surveyors and valuers, sitting as referees, coming to decisions which would not match, and that the procedure, the approach and the treatment of these appeals should, if we can do it, be co-ordinated, so that some sort of uniformity of treatment may obtain.
For these reasons, without affecting the rights of appeal of any owner under the Acts, it has been felt essential that a new tribunal should be set up to take the place of the panel of referees mentioned in the Acts, and the Bill now before the House provides that a panel, consisting partly of barristers of seven years standing and upwards, and partly of valuers should be set up. They will all be appointed by the Lord Chancellor and they will act under the general direction of a legal president. The appointment of a legal president and legal members of a tribunal of this kind is, we frankly admit, a new departure, but the legal problems which war damage has brought are also in themselves novel. Therefore, it is essential that we should treat the problem in a novel way. I commend this Bill to the House because for the reasons given the' setting-up of this tribunal is essential if this work is to be done properly, uniformly and efficiently.
It is not mentioned in the Bill, but it is the intention that those appointed should be full-time members in order to get men who are completely unprejudiced and uninterested when they are dealing with the claims which will come before them on appeal. The Lord Chancellor, as and when the work begins to fall off, will reduce the number of those who have been appointed on a full-time basis, and it may be that towards the end some of them will only be on a part-time basis, while others will cease to function altogether. There is no suggestion that the present jurisdiction of the courts should be superseded in any way. Although 1613 lawyers will be able to assist tribunals in interpreting the very complicated questions involved, and although valuers, with their expert knowledge, will be able to assist in valuations, the tribunals will work within a narrow field, and no attempt will be made to supersede the courts on questions of law, should an owner decide that that is his final and only remedy.
§ Mr. Hall
I have nearly finished, so perhaps the hon. and gallant Gentleman will wait. This Bill extends to Northern Ireland, but not to Scotland. We are told by the Secretary of State for Scotland, and the Lord Advocate, that it is not anticipated that any trouble of the kind we see arising in England will arise in Scotland. In Northern Ireland, we are informed by the authorities there, conditions similar to those in England and Wales may obtain. That is why provision has been made for members of the Bar of Northern Ireland to be appointed to the tribunals. This Bill has passed through another place, and I commend it to the House as a Measure necessary to deal with the War Damage appeals likely to arise.
§ 11.18 a.m.
§ Mr. Osbert Peake (Leeds, North)
We agree, on this side of the House, that this is a useful Measure. It does not raise any of the wider questions in regard to war damage; it merely alters, as the Financial Secretary pointed out, the nature of the tribunals for the hearing of appeals from the decisions of the War Damage Act. Without casting a reflection of any kind upon the panels of referees appointed under Part 1 of the Finance Act, 1910, I think it is important that the tribunals should consist of persons who are completely disinterested, who have no interest whatever, in other claims which may come before them. Therefore, we find ourselves in agreement with the main purpose of the Bill, although there may be points which we shall want to raise on the Committee stage, such as, for instance, the right of legal representation and so forth before an appeal tribunal.
§ 11.19 a.m.
§ Lieut.-Colonel Dower (Penrith and Cockermouth)
I would like to know 1614 whether the valuers who are to form part of the new tribunals will be prevented from undertaking any private work. The Financial Secretary said that the job was to be full-time, and that may be the answer.
§ Mr. Glenvil Hall
That is the answer. It is obviously essential that, if these valuers are to be above suspicion and completely unprejudiced, they must make the job a full-time one and, while doing it, must not engage in private practice of any kind.
§ Lieut.-Colonel Dower
Questions connected with valuation are highly complicated when consideration has to be given to the value of the property before the war, its value before damage and after damage, and its value when it is rebuilt. It is a matter which is far too complicated even for the most learned barristers, if they have not really efficient help. Therefore, I hope that the valuers to be appointed will be absolutely first-class men. At present, such men are inundated with work, and are now undoubtedly earning high fees. What inducement can be given to first-class men to undertake this work, if they are already adequately employed in other directions? I believe the Financial Secretary is wrong in suggesting, as I understood him to do, that the 200,000 value payments might go to appeal, but if, as I think is likely, there are as many as one out of five, you may have something like 40,000 appeals. Consider the specialist knowledge that will be required by the tribunals if they are to pay neither too little nor too much under the War Damage Act.
This Bill certainly gives a blank cheque to the Lord Chancellor. I am not saying that we should not give it to him, but I think we should realise the fact. He will have absolute power, as far as I can see, over appointments, remuneration, terms of service and the conduct of the appeal. I leave it to the lawyers to express their opinion of that, but let us realise that we are giving the Lord Chancellor this power, and that the only right of appeal from him is to the High Court on a point of law. No one can appeal on anything concerning the question of whether the compensation is adequate. The only appeal is on the ground of whether the case has not been conducted in accordance with the Acts. I hope we can read into this Bill a prospect that the Government now intend 1615 to face the question of value payments. There are many people, not big owners of property, who have had their homes destroyed and who have been without any compensation for four or five years. They have not even had the miserable 2 or 3 per cent. interest which they might have had—
§ Lieut.-Colonel Dower
Yes, and mortgage interest. They have been harshly treated, and I hope the Government will not say, as they have always said in answer to my questions up to now, that the reason why they have not faced this question was because there was nothing that the recipients of value payments could buy with their compensation. But the recipients want homes. They would use the value payments, which Parliament, in its wisdom, decided they should get, for the purpose of obtaining other homes. I give my whole-hearted support to the Second Reading of this Bill, which I am sure will receive endorsement from all sides of the House, and I express the hope, again, that the Government will tackle this question of payment of compensation for the unfortunate people who lost their homes during the war.
§ 11.26 a.m.
§ Mr. Douglas (Battersea, North)
This Bill proposes to do two things, the first of which is to alter the constitution of the body which appoints the panel of referees. Instead of the panel being appointed by the Lord Chief Justice, the Master of the Rolls, and the President of the Surveyors' Institution, it will be appointed by the Lord Chancellor. Secondly, the Bill proposes that there shall be eligible for appointment to the panel not merely valuers, but also lawyers. There is also a proposal, which is not part of the Bill, that those who are appointed to this panel should be full-time officers, and should not be engaged in any other kind of business. But that apparently is merely an administrative change. It is justified on the ground that it is essential that those who are engaged in adjudicating on this matter should be disinterested, and I entirely accept that view. But that, in itself, is not sufficient to ensure that their decisions will be right. In addition to 1616 being disinterested, they must also have a requisite degree of skill and knowledge in order to come to a correct conclusion, and in this particular case I say without hesitation that it will be no improvement in the tribunal that it should contain members of the legal profession.
Members of the legal profession have no experience of adjudicating on questions of valuation; their experience is of a totally different character, which does not qualify them to perform these duties. I have had the experience of sitting for a good many years on a tribunal which had to deal with matters of this kind, and on which most of the members had been members of one or other branches of the legal profession. I happen to be a member of that profession myself, and I am not saying this in any spirit of distrust of my colleagues. But they have not the training which is required for this particular job. They are qualified as barristers; they are only qualified to conduct the business of litigation.
It is a fundamental defect in the procedure, which is not altered or remedied by this Bill, that in matters of this kind disputes are settled by arbitration, and by a legal process. Valuation in its essence is not a legal process at all, and no satisfactory result will ever be obtained by trying to treat it as a legal process. Everybody who has had experience of arbitration in regard to questions of valuation knows perfectly well that what happens is that, on the one hand, the claimant brings some expert witnesses, and, on the other hand, the defendant brings some expert witnesses; and on either side they try to exaggerate the case which is put forward to its utmost. On the one side, they place the value as high as possible, and, on the other side, they place it as low as possible. The arbitrator, after hearing this evidence, has to come to a conclusion, and the arbitrator very wisely never gives any reason for the conclusion to which he comes, because it is impossible for him to do so.
You cannot arrive at the truth, in matters of this kind, by a process of litigation; and, therefore, I am sorry that this Bill rather tends to encourage that process, by the assumption that members of the legal profession are desirable people to put upon this tribunal. They are not. The question which it has got to decide is not a question of law. Questions of 1617 law are all subject to appeal to the ordinary courts, which are the proper bodies to deal with them. The subject with which this Bill has to deal is one of valuation. This fact has been discussed by the expert Committee on Compensation and Betterment, over which Mr. Justice Uthwatt presided, and they have made—although I do not agree with all their conclusions—some extremely sensible remarks about the question of valuation. They say that uniformity in valuation is necessary, and the machinery of valuation should be directed to secure this end. Nobody, I think, will dare to say that valuation by a process of arbitration ever secures uniformity of valuation. The Committee go on to say:We suggest that the valuations be made by the Valuation Office of the Inland Revenue Committee. The District Valuers are well qualified by their experience for the work and know the conditions of their districts, and they would, we believe, have the confidence of landlords and their professional advisers in undertaking these valuations.Then on the question of appeal—because this is what we are on at the moment—from the War Damage Commission, the Uthwatt Committee say:We think that there should be some right of reference by a dissatisfied claimant from the valuation made by a district valuer. It is clear to us that the reference should be treated as an administrative matter and dealt with on those lines by the higher officers of the Valuation Office, and that the introduction of a referee appointed from a panel would be wholly inappropriate.I believe these are wise observations, and investigations into this subject, made in other countries, where a great deal of thought has to be given to the problem of securing uniformity of valuation, show, without the slightest shadow of doubt, that it can never be obtained by any process of arbitration. It has got to be decided by means of professional valuers, who are continually and constantly engaged upon the work of valuation of a particular area, and who know all the circumstances connected with it. The only people who can be in that position are, in fact, the district valuers of the Inland Revenue, who have the inestimable advantage of having delivered to them, under Statute, particulars of every transaction in land which takes 1618 place, either by way of sale or lease, for more than 14 years; and who, therefore, have at their disposal information which is at the disposal of nobody else, and which will not be at the disposal of this tribunal, which it is intended to set up under this Bill. Therefore, I think that this matter ought to be considered further by the Treasury, if they really desire to secure justice and fair play.
§ 11.35 a.m.
§ Sir William Darling (Edinburgh, South)
As the Financial Secretary has indicated, this is not a Bill which applies to Scotland, although Scotland has been made, it seems, indirectly, to apply to the Bill. The Lord Privy Seal, some time ago, speaking, I take it, for the Government, said: "We have been excessively generous to Scotland." I suggest that this is an instance in which there has been no excessive generosity to Scotland. We in Scotland can adjust claims of this character under the existing arrangements, and consequently, this Bill will not apply to Scotland in that sense. From the Financial Memorandum, however, it is clear that this Bill will apply to Scotland in the sense that the general taxpayer will pay the expenses of this Commission. It says:…The remuneration and allowances of members of the panel, the remuneration of such officers and servants of the panel as may be appointed and other expenses of the panel shall be defrayed out of moneys provided by Parliament.…Scotland on this occasion is not being treated generously, because Scotland will have to provide its share of the expense of the panel. Will the Financial Secretary consider whether or not the cost of this panel should not be borne by the substantial accumulation of premiums which the Government received in connection with the War Damage Act? It would seem more appropriate that this sum should be directed to the cost of maintaining the tribunal, than that the general taxpayer should pay the cost, especially the taxpayers in Scotland, who are receiving no benefit whatever from the Commission.
§ Question put, and agreed to.
§ Bill accordingly read a Second time, and committed to a Standing Committee.