HC Deb 21 October 1946 vol 427 cc1321-5
The President of the Board of Trade (Sir Stafford Cripps)

As my right hon. Friend the Chancellor of the Exchequer announced on 15th October, all amounts in respect of private chattels claims, payment of which has been deferred, will be paid, together with accrued interest at 2½ per cent. less tax, as soon as possible in the next financial year. We aim at making these payments in July, 1947.

In addition, a supplementary payment will be made, in accordance with an assurance given in 1942 by the then Parliamentary Secretary to the Board of Trade. This will be made to people of modest resources, in respect of private chattels claims arising from incidents which occurred before the end of 1941 where the claim was not completely paid up by the end of that year. This period covers substantially those cases in which there is a marked disparity between the prices ruling at the date of loss and today. These supplementary payments will not, of course, bear interest, and no extra payment will be made in the case of claims of £25 or less, as these were not deferred.

The supplementary payments will be made at the time of the general payment next July in the case of deferred claims and as soon as possible thereafter in other cases, that is, in those cases where the claim has already been paid in full on grounds of undue hardship. In determining these supplementary payments for people of modest resources, it is neither desirable nor administratively practicable to adopt anything like a means test and we must, therefore, deal with them on broad lines. It has been decided that an increase should be allowed in all cases in which the amount of the assessment does not exceed what may be regarded as the value of the contents of a modest home. For this purpose, we begin by taking £350, which is the amount of the free cover given by the scheme to a married man with two children, and in cases up to this amount we propose to make a supplementary payment of 50 per cent., thus raising an assessment of £350 by £175 to £525. For assessments above £350 the percentage increase will be gradually reduced. This will be achieved by allowing a flat rate supplement of £175 on assessments between £350 and £702 10s., and thereafter by gradually decreasing the amount of the supplement until zero is reached at £1,200, above which limit there will be no increase.

Until the date of payment in July next, we shall continue to consider applications for advance payments on grounds of undue hardship, but, in view of the heavy pressure of work which will inevitably fall on my Department in making the necessary preparations for the forthcoming payments, I would appeal to all claimants to assist the Department by not applying for advances unless the money is really essential to tide them over the next few months. We have carefully considered whether interest can be allowed on advances which have already been made or which may be made hereafter in the private chattels cases before the date of the general payment. The War Damage Act makes no provision for such payment. Many hundreds of thousands of advances have been made, and the individual sums which would result from any concession would in nearly all cases be comparatively small. In view of the magnitude of the task involved in ascertaining those small sums, it would be quite impracticable on administrative grounds to undertake the work.

The question of interest on advances arises also in the case of the business scheme. Here, too, the War Damage Act makes no provision for such payment, and we are not prepared to reopen cases in which advances have already been made. But we propose to make a modification for special cases arising in future. No announcement can yet be made with regard to the eventual date of payment under the business scheme, in view of the general supply position, but there is some reason to apprehend that re-equipment might be held up in individual cases owing to hesitation to apply on the part of those concerned because they would forgo the considerable sums which might otherwise accrue by way of interest on their claims. The assessments involved are individually much larger than in the case of the private chattels scheme, though relatively few in number. The same administrative difficulties do not therefore arise. The Government are most anxious to encourage re-equipment of industry as soon as supplies are available and they have therefore decided that an allowance for interest will be made on advances under the business scheme in those cases in which the Board of Trade are satisfied that the replacement or repair of goods is expedient in the public interest and that the necessary premises, material and labour are available. This concession will apply subject to these conditions to all advances under the Business Scheme made as from today. Payment of the interest will, however, be deferred until the final payments are made. The necessary Treasury Regulations will be laid before Parliament in due course.

It is now 18 months since the last V-2 fell in this country, but claims are still coming in under both schemes. It has been decided, therefore, in order to finish off the work as soon as possible, that after the end of this year no claim will be considered unless the claimant can show that he has been prevented by circumstances not under his control from lodging his claim.

Mr. Alpass

May I ask the right hon. and learned Gentleman if the rate of interest of 2½ per cent. to which he has referred will be per annum; and also, seeing that a large number of the recipients under this arrangement will be persons who will ordinarily not be liable to Income Tax, whether in these cases the payment may be made without deduction of Income Tax?

Sir S. Cripps

As to the first part of the hon. Member's question, it is annual. As to the second part of his question, I will look into the matter.

Sir Ian Fraser

Can the right hon. Gentleman say whether, when all claims that are in and can be estimated are taken into account, there will be a surplus in this insurance fund, so that he may consider modifying the view that surplus payments are to be made only on grounds of hardship?

Sir S. Cripps

I cannot answer the first part of the question without notice. As regards the second part, this is not a question of surplus payment being made on grounds of hardship only. It is a question of it being made to people of modest means, but not to people of better means.

Lieut.-Commander Gurney Braithwaite

Would the right hon. and learned Gentleman clear up one point for me? It was rather difficult to follow his long statement, and I apologise for this question. With regard to the supplementary payments which the Government envisage, do I understand that the Government will allocate these on the data already in their possession, or whether claims should be lodged? If claims should be lodged, through what channels are they to go?

Sir S. Cripps

The payments will be allocated on the claims already in our possession.

Commander Maitland

Would the right hon. and learned Gentleman say what claims have already been paid out on account of hardship; and whether or not those people will be able to obtain the extra benefits about which he has told the House today, observing that those claimants who have already been paid, are in fact the hardest hit of all?

Sir S. Cripps

Provided the claims are over £25—we are not paying any supplement under that—they will be eligible for payment.

Sir Ian Fraser

In view of the fact that the payments were madepro rata into an insurance fund, is there any justification for paying out larger amounts to people with modest means? Would it not be equitable to pay out pro ratal

Sir S. Cripps

This is a bonus which is being paid by His Majesty's Government in accordance with the promise given by the Coalition Government in 1942.

Mr. Keeling

Do the words of the right hon. and learned Gentleman "after the end of this year'' mean the calendar year or the Government's financial year?

Sir S. Cripps

The end of the financial year.

Hon. Members: The financial year?

Sir S. Cripps

I said that they would be paid in July, 1947.

Mr. Keeling

But the last date for claims?

Sir S. Cripps

It is the end of the calendar year. I am much obliged to the hon. Gentleman.

Mr. Orbach

Will the right hon. Gentleman say whether in the term "private chattels" he includes fixtures and fittings which were insured in the same way by a small shopkeeper?

Sir S. Cripps

Shopkeepers would not come under the private chattels scheme but under the business scheme.

Mr. Orbach

But they were included in the private chattels scheme, under the free insurance—fixtures and fittings of a small shopkeeper.

Sir S. Cripps

If they were included in the scheme, they will come in it.

Mr. Grimston

Will the interest be assessed in the year in which it is paid or in the years in which it has fallen due?

Sir S. Cripps

It will be the whole period over which the sums have been awaiting payment, and the payment will be made in one lump when it is ascertained.

Mr. Grimston

But will it be assessed and taxed in one year or not?

Sir S. Cripps

I cannot answer that question.