HC Deb 08 May 1950 vol 475 cc39-67

Order for Second Reading read.

3.35 p.m.

The Minister of State (Mr. Younger)

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

The purpose of this Bill is to create a Foreign Compensation Commission, which is to be a semi-judicial corporate body. The need for such a body will arise when a lump sum is paid to His Majesty's Government by a foreign government following an agreement for compensation for British interests in that foreign country as a result of a variety of measures including, in many instances, the nationalisation of industries in that country. When such a situation arises the Foreign Compensation Commission, if this House approves of it being set up, will receive and will determine the claims to a share in the lump sums which have been paid by the foreign government.

The immediate need for a body of this kind arises on account of agreements which have been reached between His Majesty's Government and, on the one hand, Yugoslavia, and, in the second case, Czechoslovakia. The agreements with Yugoslavia were made in two parts in December, 1948, and December, 1949, and the Anglo-Czechoslovak agreement was made in September, 1949. It is proposed, in addition, that this Commission should be available to be used on future occasions if similar agreements are made with other countries.

The House will appreciate that the problem is not a new one. There have been negotiations and agreements of this kind before and awards of lump sums which have had to be distributed. I think I should, therefore, explain why it is that, although we have managed to deal with this question in the past without a Commission of this kind, we now think it appropriate to put these proposals before the House. I should perhaps make it clear, too—it may help to limit the discussion as we go on—that with one very minor exception the Bill relates solely to the method of determining claims and distributing money once the lump sum has been agreed and, with that one exception, it does not affect in any way either the negotiations with Yugoslavia and Czechoslovakia or any other negotiations which might occur.

In the past claims have been dealt with broadly in three different ways. One was by setting up a Mixed Claims Commission which adjudicated on each claim between the claimants and the foreign government concerned. In a formal sense that was quite a suitable arrangement, but it has proved very slow in operation. In many cases the claimants have gone for years without receiving their money. What has, factually, perhaps been more important is that it has not usually been found very agreeable to the foreign government and, therefore, it has become more and more difficult to get foreign governments to agree to the use of the Mixed Claims Commission procedure. In fact, the countries with whom we have had to deal in this matter since the end of the last war have in all cases, I think, refused to accept the procedure.

The second way in which this has been dealt with in the past has been by an agreement between His Majesty's Government and what I might call the debtor government as a result of which the lump sum for all the British claims is agreed. That leaves the Government here to deal with the splitting up of the lump sum among the individual claimants. This procedure also involves the Government in making, at the moment the negotiations are entered upon, a preliminary estimate of what the approximate total of the claim is likely to be, because unless some estimate is made it is very difficult to enter any effective negotiations with the government concerned. An estimate has been made by the Government, negotiations have been entered into, and there has been in the end a bargain. That is what has happened in the two cases which I have particularly mentioned of Yugoslavia and Czechoslovakia. The division has been done under the authority of the Secretary of State and in his discretion.

Mr. Eric Fletcher (Islington, East)

Would my hon. Friend say what the estimate was?

Mr. Younger

I do not know to what my hon. Friend is referring. An estimate has to be made in the case of each separate negotiation. Some preliminary inquiry—it cannot be more than that—has to be made to discover approximately what is likely to be the amount of compensation which the Government think they should claim from the foreign governments. At that stage it can only be rough.

When the separate claims have been numerous and large in the past the Secretary of State has appointed either an individual legal expert to advise him on the distribution of the money, or in some cases a committee, usually under a qualified legal chairman, has given advice; but the distribution itself has been the decision of the Secretary of State. There is a third way, which has not, I think, now very much practical relevance, but I should, perhaps, mention it, and that is the possibility of direct negotiation with the government concerned on each separate claim; but as the House will realise, at any rate where the claims are numerous, that is very rarely a practical procedure.

The intention is that a Foreign Compensation Commission should be set up under this Bill. It would take the place of the independent expert or committee who, in former cases, advised the Secretary of State. We think it right to make this change, not because of any lack of power on the part of the Secretary of State—in the past he has had ample powers to do this—nor, on the whole, because bad results were achieved by that method. The reason why we think we should now have the Commission is rather, in the first place, that there are under these agreements very large sums involved; they have to be split up among a very large number of claimants; there are difficult and complicated questions to be decided in the distribution.

Also there is the possibility—I put it no higher—that there will be other agreements of this kind. There are two or three countries with which we may hope before long to have agreements of this kind. Therefore, it seems to us in these circumstances that it is really more appropriate that what is essentially a judicial function of assessing claims and the shares of each different claimant should be performed now by a standing body, a judicial body, which should not merely advise the Secretary of State but actually take the decision and actually distribute the money.

What the Commission is designed to do is set out in very general terms in the text of the Bill. That will be found in Clause 2, as regards its functions under the Anglo-Yugoslav and the Anglo-Czechoslovak Agreements, and under Clause 3 as regards functions which it is intended it should perform as a result of any future negotiations and any future agreements. The details of how it will have to apply that agreement, the nature of the law which it will have to operate in each case, will have to be laid down by Orders in Council, a separate Order in Council being made as a result of each separate agreement.

I expect most hon. Members will have seen Command Paper 7942 which was issued with the Bill and which explains in some detail why this procedure has to be adopted. The Command Paper has attached to it as annexes drafts which are not final drafts, but, I may say, semifinal drafts, of the Orders in Council which it is proposed to issue in the Yugoslav and Czechoslovak cases. I think that hon. Members who look at those drafts and see how complicated they are, how detailed the provisions, and have noted the respects in which these two Orders in Council differ from each other, will appreciate that really there is no other way of dealing with the detailed instructions to be given to this Commission except to make a separate Order in Council on each separate occasion.

If this Bill is approved by the House, and when it has received the Royal Assent, we should hope to be able to make those two Orders in Council, of which drafts are attached to the Command Paper, at once, and we should hope that the Commission that is proposed might begin work as early as August this year. We think that the work under these two agreements will occupy it very fully for at least 18 months or two years; and even after that it will certainly have a considerable amount of residuary work to do, because under the two agreements compensation is paid by instalments. We have not actually received all of it, and shall not receive all of it for some time to come; it therefore, cannot, obviously, be distributed for some time to come.

The amount due under the agreements from Yugoslavia is £4,500,000 and the instalments of that are not due to be completed until 1957, although they are starting now. The amount due from Czechoslovakia is £8,000,000, and that is payable by instalments which go on for a number of years starting from September this year. Once the claims have been established—that may be a matter of 18 months or so, one cannot tell—the Commission may under Article IV of the proposed draft Order in Council make an interim payment, but the final payment, as I say, in the nature of things cannot be made until the whole of the sums have been received from the foreign governments, and that will be some years hence.

I should like now to call attention to the function proposed to this Commission in respect of future agreements. Should any future agreement be made, it would perform the same function as it is intended that it should perform in the Czechoslovak and Yugoslav cases; but in addition, it is thought that this commission would be an appropriate instrument whereby the Government might make the preliminary estimates, to which I referred, at the moment of entering negotiations. I do not think that needs any further elaboration, with the one exception to which I referred earlier in my general statement, that the Commission will have nothing to do with the negotiations with the foreign State: it will merely be concerned with the distribution after the agreement has been reached. This function of making an estimate will, of course, have some effect on the negotiations since it will influence the Government in determining how much they ought to claim.

Mr. E. Fletcher

Will my hon. Friend now tell us what estimates were made in both the case of Czechoslovakia and the case of Yugoslavia of the total claims?

Mr. Younger

I do not think that on this Bill I ought to enter into matters with which the Bill really is not concerned—the precise amounts which were put forward when negotiations started. In point of fact, I have not those figures with me, and I could not tell my hon. Friend offhand, but, of course, an estimate had to be made and it was made by Departmental machinery. The only change that will be made by this Bill is that instead of its being made through Departmental machinery it will be made through the machinery of the proposed Commission.

The composition of the Commission is set out broadly in Clause 1. The chairman, it is intended, should be a person of high legal standing, and is to be appointed by the Lord Chancellor, and other members are also appointed. The number it is necessary to appoint will be subject to the amount of work with which the Commission may from time to time have to deal, and will be decided by the Secretary of State with the consent of the Treasury. The size of the Commission can be varied from time to time, and it is not thought that any difficulty will arise to prevent us ensuring that this Commission is always of an appropriate size. Even supposing at some future date there should be no work for the Commission at all, there would, I think, be no difficulty in keeping it in being by the appointment of an honorary commissioner who would have, for the time being, neither salary nor functions.

The precise numbers who will be needed immediately are not yet settled, but as we wish to proceed, if possible, with the claims under these two agreements simultaneously, the probability is that we shall wish to appoint a sufficient number of members to the Commission to enable it to sit simultaneously in two chambers. There will probably be a whole-time chairman presiding over one and a whole-time deputy-chairman over the other, both of them men of legal standing. They would have at least two other commissioners sitting with them.

It is provided in the draft Orders in Council that in these two cases at least the claims should be determined by a body consisting of not less than three commissioners. They will also, of course, need office staff to assist them in receiving the claims and in ensuring that the claims are made in accordance with the prescribed procedure, to conduct correspondence, and so on. I do not think I need go any further into the composition of the body, nor into any details as to its procedure. Anything that I might say would, of course, be wholly provisional.

Mr. Julian Amery (Preston, North)

Will it be open to the different claimants to be represented by counsel?

Mr. Paget (Northampton)

Yes.

Mr. Younger

That does not appear, I think, in the Bill itself.

Mr. Paget

Yes.

Mr. Younger

Generally speaking, the position is that, under Clause 4 the procedure is to be laid down by the Commission and approved by the Lord Chancellor. I am coming to the question of Parliamentary control in a moment, but the rules of procedure are to be laid down by the Commission and approved by the Lord Chancellor in the first instance.

The cost of this Commission is set out in Clause 7, and explained in paragraph 7 of the White Paper. The initial cost of setting up this Commission and of handling the early stages of any series of claims must inevitably be provided by Parliament, but as will be seen from the Financial Memorandum, where the matter is made quite clear, the intention is that the cost of the determination of claims and the distribution of the compensation should be recovered out of the sums paid by the foreign government in respect of the claims under each agreement.

On the other hand, the cost of the work of estimating the approximate totals at the beginning of negotiations, if they should arise on subsequent occasions, will in any event have to fall on public funds, and it has not been thought right that that should fall also upon the sum which is eventually awarded as compensation. In point of fact, as I have already said, that type of estimate has had to be done in the past, and has been done at the expense of the Departments, and in the case of large claims has very often involved the recruitment of extra staff. Therefore, I do not think that in that respect there will be any very substantial amount added to the cost to the public purse in setting up this Commission.

I said that I would refer to Parliamentary control, and hon. Members will have observed that under Clause 8 all the Orders in Council made under the Bill will come before the House and will be subject to annulment through the negative resolution procedure. Equally, the procedural rules, once they have been approved by the Lord Chancellor, will also be liable to that procedure. The accounts of the Commission are dealt with in Clause 6. They will be certified by the Comptroller and Auditor-General, and will also be laid before Parliament. Finally, the Commission will report annually to the Secretary of State, and copies of the report will be laid before Parliament. I think hon. Members will therefore appreciate that the House will have a very full control of the way in which this Commission will operate in these agreements, or under any future agreements which may be made.

At this stage, in commending the general principle of this Commission to the House, I do not think that I need go into any further details. I would emphasise that we have thought it right to put this Bill forward now because, although the Secretary of State has handled claims of this kind satisfactorily in the past on his own authority, and in most cases with the advice of independent persons, we nevertheless feel that the size of the claims, the complexity of the issues, and the probability that there will be a series of agreements of this kind, suggest that the time has come to set up a permanent semi-judicial body which will not merely advise but will actually take the decisions.

I think it is appropriate that this should be, so far as possible, a judicial rather than an executive decision. The method will probably not involve any more expense—certainly not much more expense—than has been involved under the old procedure, and is indeed likely, according to my information, to cost less than the Mixed Claims Commission used on previous occasions. We have got a Bill which gives what we consider a very full measure of Parliamentary control, and I therefore ask the House to approve it and to give it a Second Reading.

3.57 p.m.

Mr. R. A. Butler (Saffron Walden)

I think it might be for the convenience of the House if I attempt first of all to satisfy hon. Members opposite who have not been able to obtain certain information from the spokesman of the Foreign Office. They can always come to us for information if they are not satisfied by His Majesty's Ministers. I, therefore, propose to open my remarks by giving them some of the answers which the Minister was unable to provide. The Anglo-Czechoslovak agreement, which was concluded in September, 1949, provided, so I am informed, for the payment to this country over a period of 10 years of a global sum amounting to £8 million for compensation in respect of British property expropriated by various nationalisation decrees.

Then I am informed that two agreements have been negotiated with Yugoslavia, the first in December, 1948, in which the global compensation figure to be paid by Yugoslavia is £4½ million, which is, as I understand it, to be the first instalment. If the Minister of State thinks I am wrong, perhaps he will correct me. The second, dated 26th December, 1949, obliges Yugoslavia to pay the balance of compensation at the rate of £506,000 per annum over a period of eight years. I do not, of course, know whether the meagre sources at my command are correct. If not, perhaps the Government could correct me.

Mr. Younger

There is one point on which I think perhaps I might fairly correct the right hon. Gentleman. The question my hon. Friend asked me was not what were the sums which had actually been paid under these agreements, but what was the original estimate made by His Majesty's Government when negotiations were entered upon. That was the figure I was not able to provide. I do not know whether the right hon. Gentleman is able to provide it.

Mr. Butler

I was coming to that point, but I was first giving the essential facts which form the basis of our calculations on this Bill. In regard to the estimate, it would be very valuable for us to have from the Government some exact figure.

Mr. E. Fletcher

The right hon. Gentleman, who a moment ago made such boastful remarks about the information he would be able to give in answer to the question I put, is now apparently quite unable to substantiate his pretence. I was asking for information as to what was the estimate, to which the Minister referred, of the claims which were liable to arise against these countries.

Mr. Butler

I think it would be impossible for me to give those details to the hon. Gentleman. I am not in possession of the inner mind of the Government, but I have tried to give the only figures at my disposal in rising to make a short contribution on this Bill. I think that if I did not make the best use of the only figures at my disposal, I should not be able to make a very valuable contribution to this Debate. However, we are left completely dissatisfied by the reply of the Minister of State, who cannot yet give us the estimate for which the hon. Member has asked. With the slight help—I agree less than the hon. Member for Islington, East (Mr. E. Fletcher), could have hoped for—I have been able to give, perhaps the Minister, at a later date, can give us the other figure.

This occasion is a very notable one because the Foreign Office come very rarely to the House to legislate, and, if I may say so, I think that the manner of presentation of this Bill is quite first-class. First of all, we have a very lengthy Memorandum on the Foreign Compensation Bill, and then we have two draft Orders in Council, showing us the type of order which will result from the passage of this Bill. If anyone desires to go into this matter in great detail—a category in which I do not necessarily include myself—the Bill has been presented with the utmost clarity. If one were to read this Memorandum in great detail, one would be very well-informed indeed on the subject matter before the House for discussion this afternoon. I have only one or two observations to make since we do not propose to have a "snap" Division on this matter. In that respect I am not referring to any other discussion which we may have this afternoon, but to this particular Measure.

The first point that arises is that it is quite obviously preferable that a Commission of this sort should be set up instead of the rather ad hoc procedure used previously by the Secretary of State for Foreign Affairs. No doubt, the previous machinery was tolerably effective, but this is a much better way of empowering the Executive to avoid the necessity of fulfilling quasi-judical functions. Relating to the machinery of the Commission, I notice that there is a sentence in the Memorandum which says: The provisions with regard to it are such that no expenditure will be involved, on salaries or on other purposes, if there is no work for it to do, or in excess of that appropriate for the work it has to do at any particular time. These seem to be general observations, which, if applied to the administration as a whole, would be extremely satisfactory, because they seem to sum up the whole defect of the present conduct of administration by hon. and right hon. Gentlemen opposite at the present time. If they could evolve a body which is a paragon in this respect and which, when it has no work to do, subsides and completely disappears and is no cost to the taxpayer at all but which, on the other hand, always has the appropriate staff to do exactly what it is asked to do—then the right hon. Gentleman could preen himself on coming to the House and recommending a piece of machinery without precedent either in the sphere of public administration or in that sphere in which the Attorney-General is more accustomed, the higher ranges of legal practice and administration.

I hope, therefore, that we may have a little more detail from whoever replies to this Debate—perhaps the distinguished Attorney-General will be replying himself or the Under-Secretary—as to what exactly the future scope of the work of this Commission is going to be. It is fairly clear that the Commission is dealing with two main subjects, namely, the transactions arising between the Yugoslav and Czechoslovak Governments respectively and ourselves. It is also clear that if this Commission is to be in being in the future in this miraculous sort of way, in which at one moment it is fully staffed and ready, and at any other moment it has completely disappeared at no cost to the Exchequer, we should like to know whether it will deal with comparatively minor transactions.

So far as I know, after reading every particular of this Memorandum, one point is not quite clear. Will it deal only with major agreements, such as the Czechoslovak and Yugoslav agreements, or with minor agreements and minor transactions as well? If that be the case, I should like a little further explanation as to how it will always be possible to have competent people available at any time, including the necessary secretariat and their staff to deal with a particular matter which may be raised ad hoc, as it were, and very often without much warning. If the Attorney-General could explain that, we could have a gap in our knowledge filled, and, no doubt, a satisfactory explanation can be given.

I should like to ask about the association of the other Commonwealth Governments. I understand that they have agreed in principle to the Foreign Compensation Bill and that they have been consulted about the draft Foreign Compensation (Yugoslavia) Order in Council. Does that mean that they have been consulted about both these Orders in Council? That is not specifically mentioned. Does it mean that in general the Commonwealth Governments are in agreement, and that they will, so to speak, cease their membership or association in other ways with the constitution of the Commission in the future?

On the question of expenses, on page 4 the covering Memorandum says that in future the expenses will "fall on the Exchequer." That coincides with the Financial Memorandum on the outside of the Bill itself. As I understand it, the immediate expense will be retrieved from the Government in question with whom we are negotiating, and it is only the future expenses that will fall on the Exchequer. The Memorandum states: The Commission will in this case be doing work which has formerly been done by Government Departments and for which probably they would have to engage a special temporary staff. In fact, there is not much difference in the expenses to the taxpayer, between the existing machinery and the practice in which we engage a temporary staff and an ad hoc lawyer, and the future activities of the Commission in which we engage, through the Lord Chancellor, an ad hoc chairman and an ad hoc staff to deal with particular matters. If that is the case, there is not such a striking difference between existing practice and the future constitution of the Commission, and we should like to know, in regard to the future, what all the fuss is about.

I think that one can say that for the existing Czechoslovak and Yugoslav agreements the Commission does provide a quasi-judicial body to deal with difficult and teasing subjects, but in the future it seems that the Foreign Office is going back to the machinery and practice which is not very dissimilar from that which prevails today. I do not know whether a satisfactory answer can be given to that, but all that we can say, in accepting the passage of this Bill, is that it has been well presented for our consideration, and anyone who desires to become an expert on this subject in this House has an easy and clear opportunity of becoming one. I have not attempted in anything I have said to fall into that category, and I hope that we may allow the Bill to have a reasonable passage.

4.8 p.m.

Mr. Eric Fletcher (Islington, East)

I think that the whole House would wish to associate itself with the remarks of the right hon. Member for Saffron Walden (Mr. R. A. Butler), who said that although the Foreign Office are not often in the habit of coming to this House and presenting Measures of legislation for its consideration, yet when they do, they are in the habit of presenting Bills prepared in a very workmanlike manner. This is one of those Bills. I think that the whole House is indebted to those responsible for the method of presentation of this Bill, the documentation with which it has been presented, and for the fact that in addition to having the Bill ready for our consideration, we also have, which is an admirable practice, the Orders in Council which it is proposed to bring into operation when the Bill has been passed into law. That fact certainly makes it very much easier for those interested in the subject to consider the matter and make a few intelligent observations about it.

It was, no doubt, a great relief to the Government to learn that the Opposition are not proposing to divide the House, and I have no doubt that the Government will be equally delighted to know there is no risk of any back bench opposition or revolt against the Measure. That does not relieve us, however, from the duty of trying to examine the Bill in some detail before it passes into law. I should like, in the first place, to invite the Government to give us a little more information about the realities of the Czechoslovak and Yugoslav claims before this Debate closes. The Minister informed us that it was the duty of the Foreign Office to form some estimate of the total British claims against Yugoslavia and Czechoslovakia, respectively before the negotiations were entered into, certainly before they were consummated, which led to the signature of the two agreements which were the prelude to the Bill.

Quite obviously, it must be a matter of interest to a great many people to know what is the Government's estimate of the total British claims against the Czechoslovak Government. I propose to confine my remarks to the negotiations and operations with Czechoslovakia, because I have no doubt that other Members will wish to deal with Yugoslavia. All we have so far learned is that the Czechoslovak Government have agreed, following negotiations with the British Government, to make payment by instalments over a period of years of £8 million in respect of British claims arising out of certain measures of nationalisation in Czechoslovakia.

The first question which therefore arises is this. Before that figure of £8 million was agreed upon, what was the estimate, to which the Minister of State has referred, that was reached by the Government's advisers of the total British claims against the Czechoslovak Government? The incidental question which arises is: What was the estimate arrived at by the British Government's advisers of the total British claims against the Yugoslav Government, which claims were, as a result of negotiations, compromised by an agreement with the Yugoslav Government to pay a sum of £4½ million.

I do not think anyone will doubt the wisdom of the British Government having reached an agreement of this kind with the Czechoslovak and Yugoslav Governments. I think we shall find that the total British claims against the Czechoslovak Government, whatever the official estimate may be, are very much in excess of £8 million. I do not know how much they are in excess of that amount, whether it is £10 million, £50 million or even more, but obviously all those interested in such claims must be concerned to have some idea as soon as possible of the approximate percentage by which their claims will be scaled down, if they are admitted, before they participate in the division over a period of years of this £8 million.

Everyone will agree that it was a very prudent matter on the part of the Government to arrange that the Czechoslovak and the Yugoslav Governments should pay global sums to the British Government, and that the British claimants should then have the not easy but relatively simple task of stating their claims before a quasi-judicial Commis- sion now being set up by the Bill. All these British claimants have been concerned since 1945 to know what their chances are of recovering money for their property, shares, mineral rights, industries and land that were the subject matter of a series of nationalisation decrees in Czechoslovakia.

It is very important that the House should realise that these nationalisation measures in Czechoslovakia, out of which these British claims arise, were not measures passed since the Czechoslovak coup in February, 1948, but were measures of nationalisation on a very large scale that were enacted by the Coalition Government which was in office in Prague after the termination of hostilities with the Hitler regime. These measures of nationalisation, as my hon. Friend the Member for Wycombe (Mr. Haire), who is particularly interested in this matter, will remember so well, were enacted with the consent of all political parties in those days—the Communists, the Social Democrats, the Radicals, the Centre Party and the others—and were a deliberate part of the policy of that great country.

Mr. Speaker

This is all very interesting, but what has it to do with the Bill?

Mr. Fletcher

I appreciate your guidance, Mr. Speaker, and hope to keep myself strictly to the terms of the Bill. The point I was trying to make was that the British claimants, as a result of the Czechoslovak measures of nationalisation, who are now to get compensation out of this sum of £8 million, have hitherto had to rely upon negotiations in Czechoslovakia. They have had to take proceedings in Czechoslovakia. They have been subject to a great many difficulties in trying to establish the validity of their claims and their expenses as British nationals. They have been subject to all kinds of difficulties in the Czechoslovak courts, and they are all very grateful that instead of having to negotiate in future as individual companies or individual British subjects, they can now make their claims before this Commission to participate in this sum of £8 million.

I am anxious to put one or two points to the Attorney-General with regard to the details of the Order in Council, because one of the most important things that this House has to concern itself with is that no British subject who has any claim against the Czechoslovak Government will be shut out by the provisions of this Bill. It is general knowledge that among those who will participate in this sum of £8 million are a small number of large companies such as J. and P. Coats, Ltd., Borax, Ever Ready, Lever Bros., and Imperial Chemical Industries, all of whom had large assets and interests in Czechoslovakia, which were subject to these nationalisation decrees, and who will, therefore, be able to stake very large claims.

I am not so much concerned with those who can look after themselves, but I am concerned about those individual British subjects living in humble circumstances who have also been affected and prejudiced by these nationalisation measures in Czechoslovakia and Yugoslavia. They are very anxious to find out what they are going to get out of their claims. They will not be pleased to learn that it will be 18 months or so before their claims are fully dealt with. I have a letter here from one such claimant, and I rise to take part in this Debate because I am anxious to know if her claim is covered by this Bill.

It will be noticed that the proposed Order in Council in respect of Czechoslovakia, as I read it, states under paragraph 7 that certain persons shall be qualified to make application to the Commission for the purpose of establishing claims under this Order. The first potential claimant is His Majesty's Government, and it looks to me as if His Majesty's Government may well put in a very sizeable claim, which possibly will swallow up a great deal of this £8 million. Then the Clause deals with certain individuals who were citizens of the United Kingdom and Colonies on 28th September, 1949. Next there are some words in the Order which are irrelevant, because they refer to British protected persons.

The specific question I wish to ask my right hon. and learned Friend is—are those words in paragraph 7 (b) of the proposed Order sufficiently wide to cover all British subjects? I ask that for this purpose. Before we pass this Bill it is important that the House should know how this agreement is being operated in Czechoslovakia. Recently I received a letter from a British lady who is now living in Austria. She had a very modest number of shares in four Czechoslovak companies, which were nationalised, through her lawyer in Prague she has been asking the Czechoslovak Government to give her compensation for the nationalisation in Czechoslovakia of her property. The Czechoslovak Government have refused to do so on the ground that they entered into this agreement with His Majesty's Government, dated 28th September, 1949, and that she, being a British subject, must, therefore, make her claim here in England to participate in this £8 million. This lady, whose name I will give if it is wanted, and who is over 70 years of age, is living in reduced circumstances and in great difficulty in Vienna. Naturally she is anxious, for she is dependent upon the compensation which she may hope to get out of this fund which is to be administered by this Bill.

If British claims are going to be refused compensation because of this agreement with the British Government, it seems pretty certain that they are eligible for participation in the fund It is also very desirable that the machinery which is being devised by this Bill should enable humble people of modest means, such as the lady to whom I have referred, to have some facilities for getting their claims recognised and dealt with, as well as the large companies with large claims and ample means. I hope we shall find—and I apologise if I am trespassing on the time of the House—that this quasi-judicial tribunal which is being set up, as to the composition of which we have heard very little, will, in the rules which are going to be framed by the Lord Chancellor subject to the approval of the House, devise machinery which makes it as simple as possible for persons of this kind to establish their claims.

There is one other point to which I should like to refer. It arises out of paragraph 17 of the draft Order in Council which is provisionally entitled "Foreign Compensation (Czechoslovak) Order in Council, 1950." It is there provided—if I may paraphrase—that no claimant to participate in this fund shall be prejudiced by the fact that the property in respect of which compensation is being claimed was taken away, not by the nationalisation decrees of 1945 but by the German occupation under Hitler, in 1938. This section is of great importance because it will apply to a great many claims.

Many people who will claim are not in a position to prove that they were directly expropriated by the Czechoslovak nationalisation decrees. Some of them are persons whose property was wrongfully taken from them when Hitler marched into Sudeten Czechoslovakia in 1938 and 1939. Their title was expunged from the records and replaced by the fictitious title of a Hitler nominee. When the Czechoslovak decrees took effect in 1945 the people whose properties were nationalised in form though not in reality were the German persons or companies who had been in occupation and enjoyment of the property since 1938.

It is essential that this House should assert that British subjects and companies who were enjoying property in Czechoslovakia in 1938, which property was taken away as a result of the Hitler occupation, should not be prejudiced in any way if they are unable to prove that their property was the subject of direct and immediate appropriation by the Czechoslovak nationalisation decrees. One of the difficulties that would have arisen if claims by British subjects and companies had been left for adjudication in the Czechoslovak courts was the proving of matters of this kind.

Now that we are going to set up this Commission to deal with the matter in England, and bearing in mind the obvious difficulty that British claimants will have in adducing evidence of property in 1938, 1945, or even today, I hope that such claimants will not be prejudiced by any inability due to circumstances beyond their control. I hope that the rules which will be prescribed by the Lord Chancellor and submitted to this House for approval will be framed in such a way as to permit claimants who have reasonable proof of suffering damage through nationalisation to have their claims adjudicated. I apologise for having taken up the time of the House on matters of detail, but this is the only opportunity one will have to speak on the Bill before the rules are made. I have put my point of view and I venture to hope that my remarks will be of assistance.

4.35 p.m.

Mr. William Teeling (Brighton, Pavilion)

It was rather amusing to note how the Minister, when bringing the Bill before the House, kept off the subject of the actual amount of money involved and the amount that has been claimed. For well over a year I have been asking questions on this very subject and always getting evasive replies from the Foreign Office. The Foreign Secretary really summed it up when he said that it was true we were not getting anything like as much on our claim as the United States were getting, and that the reason was that a very considerable amount of Yugoslav gold was held in the United States.

The sum that we are about to get is £4 million, of which, I gather, £400,000 has already been paid. It is obvious that from the Yugoslav point of view we shall not get a very large sum. I hope that at some time soon it will be possible for the Foreign Office—I cannot see why it should not be possible—to let the public know how many claims there have been and how much money has been involved in those claims. That information would at least help the banks and smaller people of the kind referred to by the hon. Member for Islington, East (Mr. E. Fletcher), to work out for themselves what was likely to be the proportion of that amount that their clients would get. It is a very worrying matter to the smaller people. The I.C.I. and persons of that kind can stand the costs involved, but it is not so easy for the lesser people.

There is the question of the expense involved to the Commission. Those expenses are to be drawn to a large extent from the money which has been received up to the moment from the two countries concerned. I hope that there is nothing retrospective in view, and that we have not forgotten that the negotiations for the agreement were carried on for well over a year, presumably at considerable expense, at Claridge's Hotel—or it may have been at Park Street—when the Yugoslav representatives remained over here for an unconscionable time. I hope that those expenses will not be brought into the sums which the Commission are going to draw.

In a case with which I have been concerned, and of which the Foreign Office are aware, of a constituent of mine, much money has already been expended by the lady's solicitors and others who have been working for her in Yugoslavia and elsewhere, with the object of making good her claim. It is not a very easy case because of the international problems involved and the number of other people who are interested in the matter. On more than one occasion it has been necessary for the lawyers to say to the Foreign Office: "Surely to goodness you can take what we tell you to be the actual facts. We have gone to considerable expense to find them out through our Embassies and people employed by them, yet the Overseas Trade Department are saying that they will now have to look into the matter through their own lawyers and officers." Let us hope that these departments will not start all over again with the object of satisfying themselves by inquiries in Yugoslavia. Let us hope that they will take the findings and the discoveries made by reputable firms in this country. After all, £4 million is not very much, and therefore as little as possible ought to be used in expenses.

There is another little worry. It appears that practically nothing is to happen in regard to these people for 18 months or two years. As the hon. Member for Islington, East, has pointed out, the position is very worrying for many people. It is now well over a year since the agreement was made. The first instalment was paid last November by Yugoslavia. So far as I know, every detail in the case with which I have been concerned is now known to the Foreign Office. Why must we go on waiting for so long? If there is some reason why that should be so, cannot something be done in the way of paying instalments to those who really need it?

Furthermore, there is a Clause under which the Commission is empowered to invest the sum. I take it that at the moment that refers to the £400,000 which has already been paid. Can the Attorney-General assure us that the interest on the invested £400,000 will go to the claimants later on? That would at least be something. It was also stated in another place that when the final closing down of the Commission's work with regard to Yugoslavia and other places takes place, if any sums are left over they will be swallowed up by the Exchequer. Why should that be? I do not know what the sums are likely to be, but surely they could be divided among the remaining claimants who have already proved their cases.

I should like to ask on what basis we shall go to work with regard to the value of the property. Will it be on a 1939 basis? Will it be on the basis of the value of Yugoslav money? Or will it be on the basis of the date when nationalisation took place? The Bill seems mostly to deal with property nationalised or in some other way taken over by the Yugoslav or Czechoslovak Governments, but war damage may also be involved. There will be the problem of mills or factories which were considerably damaged by the Germans during the occupation of Yugoslavia. When such property was nationalised its value was obviously considerably less after the damage which had been done during the war. On what basis will that be determined?

I particularly refer to this because the Bill points out that anybody who claims must guarantee to give up his claim afterwards. If he gets any compensation he must not claim again and must give up any forms and documents he has which would ensure such a claim. This may operate in other parts of the world later on. War damage compensation paid by Japan in the Philippines may be dealt with in this manner. If a claim for war damage is met, can we be assured that the payment will not just go to the Foreign Government so that our clients over here get nothing out of it? If that is not the case, how is that war damage payment to be regarded in relation to the value of the property? I hope that the Attorney-General will let us know what is to be the basis.

4.43 p.m.

Mr. Leslie Hale (Oldham, West)

I must apologise to the House quite sincerely for taking part in a Debate the whole of which I have not had the privilege of hearing. I have heard what I can from various points of the compass but, having other appointments outside, I had to leave the Chamber for a time and it may be that I shall commit the Parliamentary indecency of asking for information which has already been given.

I had the privilege of listening to the speech of my hon. Friend the Member for Islington, East (Mr. E. Fletcher) who appeared to me to raise two or three very important points. His first point concerned the question of the rules to be made by the Lord Chancellor. I spent part of my week-end examining the procedure of the Gas Arbitration Tribunal. That may not be strictly related to the subject which we are discussing now, but it was the instrument which provided that rules of procedure must be made by the Lord Chancellor. They are made as part of his duties under the ordinary process of the Supreme Court, and the sort of rules which he has to lay down are nothing to do with the kind of problems we are discussing now. He lays down rules that claims should be presented by a certain date, that five copies should be submitted to the tribunal for distribution among its members and so on, and that notices can be served by registered post, and a whole series of rules are thus provided.

I am referring to Clause 4, which provides for rules of procedure to be made by the Lord Chancellor. None of the Rules will deal with the very vital matter in which the House ought to be interested today and on which we ought to know something. The procedure of the draft Order is very difficult to master in the limited time now available to us. It refers to an appointed day. My hon. Friend the Member for Islington, East, raised a point of fundamental importance in that connection. We all know what has happened in Czechoslovakia over the last 10 years or so. Many examples of expropriation and confiscation took place long before the measures to which the Bill is directed. There may have been changes in ownership and title long before the appointed day, and changes which took place under force majeure. In these circumstances intending applicants ought to have some guidance as to what they have to establish and how they are to establish it.

There is also the point about valuation. I listened to the remarks of the hon. Member for Hove——

Mr. Teeling

Brighton, Pavilion.

Mr. Hale

I mean, the hon. Member for the Pavilion division of Brighton (Mr. Teeling). I am glad to hear that because it gives a much more popular air. I thought that I was clear on that point and that point only. I understood that the global sum was to be apportioned pro rata to the aggregate claim submitted, but that presents a substantial problem, because it means, presumably, that the whole apportionment must be delayed until one is satisfied that all the claims are submitted. One must obviously give an ample length of time for the submission of claims so that evidence and material relating to valuation can be collected. I apprehend that the procedure is something like that adopted under the Measure nationalising coal; the submission of collective claims for the ascertainment of the global sum available and then the allocation as between the collective claims of the whole of that sum. Of course, one cannot allocate on the basis of the claims submitted but only, finally, on the basis of the claims accepted. Therefore, presumably, one has to wait, even if there is a payment on account, until the finalisation of the total claims submitted before the matter can be dealt with.

I hoped that we should have some information as to what sort of agreements are being negotiated and as to how many countries, in the opinion of the Government, are likely to be the subject of negotiations at the moment, and also the extent of the interests involved. The House is entitled to that information because we are setting up what will be, virtually, a permanent Commission which will go on to deal with the agreements to be negotiated. Therefore, we have a right to be told the approximate size of the interests involved, the cost likely to be involved in setting up the Commission, how long it is likely to have to sit, what countries we are negotiating with now, and to what extent at the moment some favourable results have been achieved.

Subject to that, I am quite sure that, in general, we are all disposed to welcome the Bill, and, in general, we are very happy that this agreement has ben negotiated, but, of course, the extent of our happiness depends upon a piece of information which I understand that the House has not yet been able to have. It seems vital, and I had hoped that the Minister of State would be able to give it to us before the Debate closed. What is the amount of the claim that we made originally, and to what extent is it thought that the settlement now effected is a fair or reasonable settlement of that claim?

That information is also of vital importance from the point of view of persons who intend to submit claims. They are entitled to be told whether they are likely to get 5, 10 or 15 per cent. of their claim and so on. They are entitled to consider whether in all the circumstances it is worth going to the expense that would be involved. I know that when I had to advise many people on the question of making claims for development value under the Town and Country Planning Act in general I advised them that, on the whole, it would not be worth while making a claim unless they had a very substantial one. That is exceedingly convenient advice to give, and I am sure that from the point of view of my clients it proved to be most excellent advice. It may be that many people would not wish to embark on the rather long and complex process of a valuation and claim unless they could be given some information as to what the amount now available bears to the total amount of the damage caused by the confiscation. Subject to those questions we can all give this Bill a cordial welcome, but those questions are of some importance and should be answered.

4.50 p.m.

The Attorney-General

I shall try not to detain the House long in picking up the points which have been raised in the course of the short Debate we have had upon the Bill, but I should like at the outset to say how gratified we are to have heard the welcome which has been given to the Bill and the method of its presentation, both by the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) and also by those who have spoken from this side of the House.

The right hon. Gentleman asked, as did the hon. Member for Oldham, West (Mr. Leslie Hale), what was intended to be the future scope of this Commission after it had dealt with the distribution of the global sums which have been received or will be received under the agreements with Czechoslovakia and Yugoslavia. It may be that in the comparatively near future similar agreements will be negotiated with other countries providing for global sums to be paid in the settlement of claims arising out of the circumstances of the war and of the political and economic changes that have been taking place in these last five years. I do not think it would be appropriate for me to specify with much particularity what those amounts may be or what countries may be involved, but it will not require any great exercise of imagination on the part of the right hon. Gentleman or my hon. Friend to appreciate that in Eastern Europe, and indeed in Asia as well, there may be claims which might appropriately be made the subject of agreements with a view to a global settlement of the kind that has been secured with Czechoslovakia and Yugoslavia.

It is not intended that the Commission should deal with small, isolated, ad hoc claims that may arise. Indeed, hon. Members may have seen that in the Yugoslav agreement there is a specific exception in regard to one claim which was made the subject of individual settlement, and it may be that from time to time there will be individual claims dealt with in that way. This Commission is intended only to deal with the distribution of the comparatively large sums which may be received under agreements intended to dispose of a large number of claims at one time as part of the general settlement of claim and counter-claim between certain countries.

In that connection the right hon. Gentleman asked what part would be played by the other governments of Commonwealth countries. We negotiated the Yugoslav settlement on behalf not only of the United Kingdom but of the other Commonwealth Governments, and consequently that settlement applies to them as it does to us, and it is for that reason that representatives of the Commonwealth Governments will be enabled under this procedure to take part in the proceedings of the Commission. In the case of Czechoslovakia that was not so. Independent arrangements were made, and consequently the Commonwealth Governments are not interested in the proceedings of the Commission in distributing the amounts received from Czechoslovakia. Whether they will come in again in regard to any future case depends on the same principle, whether we are acting on our own account alone or negotiating as settlement on behalf of the Commonwealth as a whole.

The hon. Member for Islington, East (Mr. E. Fletcher), asked whether the House could be informed in greater detail of what he called the realities of the Yugoslav and Czech agreements. Mr. Deputy-Speaker, I apprehend that if I were to attempt to go into that matter in the same detail as my hon. Friend, you might say that I was out of order in that we are not now discussing the agreements by which these settlements were reached or the negotiations which preceded those agreements. This Bill deals with the events subsequent to the conclusion of those agreements and with the distribution of the amounts which have been received. It will be as far as I can properly go within the Rules if I say that we achieved the best settlement we could of the claims that existed and of the counter-claims that were made on the other side against us and in the circumstances that existed.

That settlement will certainy not be enough to provide anything like a dividend of 100 per cent. on the different claims that are made. The claims will certainly have to be considerably scaled down, and whilst it would be quite impossible for me to indicate any figure with any degree of confidence—and it would be misleading for me now to do so—I would certainly say that it would be most imprudent for anybody to expect under the Yugoslav agreement a dividend of more than, if as much as, 50 per cent. In the case of the Czechoslovak agreement I apprehend that the dividend will be a good deal lower even than that. I am sorry that I cannot give any more accurate guide to the eventual dividend that may be paid but it seemed to us, on the information we had in regard to claims that were made in the first instance, that a great many of them could not be sustained in the figures in which they were put forward. I might also give a warning that when I say not more than 50 per cent. or not more than 30 per cent., I am looking to the figure at which those claims may eventually be assessed, not to the figure which is put in in respect of them in the first instance which may, and as we think often has been, a figure much higher than it would be possible to justify as a legal debt or legal claim.

The effect of the Czechoslovak agreement is, of course, to provide compensation in respect of claims which, under the law of Czechoslovakia, have been extinguished or in respect of property which has been expropriated under that law without the payment of compensation. My hon. Friend the Member for Islington, East, put the case of a lady living in Austria who is a British subject and who has some small claim. The agreement is intended to cover those British subjects who are citizens of the United Kingdom and Colonies. Whilst in this case the other Commonwealth Governments have been free to negotiate, I do not know whether they have in fact negotiated similar settlements on behalf of their own citizens. We negotiated only on behalf of the citizens of the United Kingdom.

I hesitate to express any view about that specific case, not knowing more of the details than my hon. Friend gave to the House, but presumably that lady would fall within Article 7 (b) as being not only a British subject but one who was a citizen of the United Kingdom and Colonies. In that case her claim would rank. I can certainly assure my hon. Friend that whatever rules are promulgated under the Bill they will seek to provide a machinery which is as simple and informal as possible and which will be open equally to a small claimant as to the rich. Incidentally my hon. Friend referred to the fact that under Article 7 (a) of the Order in Council there is the possibility of claims against the fund by His Majesty's Government in the United Kingdom. We thought it right to keep that door open, but at present we do not apprehend that there will be any significant claim from the Government against the fund.

If I may say so, my hon. Friend the Member for Islington, East, with the perspicuity of the trained legal mind, correctly interpreted the intended effect of Article 17 of the draft Order in Council. Consequently I need not follow him further about that matter except again to say that we shall frame—and I follow the hon. Member for Oldham, West, on this point—the rules of procedure in such a way as to ensure that the procedure will be as simple as possible, consistent with the claims being properly authenticated and proved.

The hon. Member for Brighton, Pavilion (Mr. Teeling) asked whether the expenses which it is contemplated under the Bill will be deductible from the compensation funds would cover expenses incurred prior to the passage of the Bill in connection with the negotiation of the agreements. That would not be so. The Bill can cover only those expenses which are incurred by the Commission itself in dealing with the distribution of the global sums which have already been ascertained under the agreements.

I think the House may feel assured that the procedure will be most economical in comparison with that which has been followed hitherto. The practice of the mixed claims commissions that dealt with problems of this kind in the past was to deduct 5 per cent. from the amount allowed in respect of each claim. Five per cent. from the amount to be distributed under the two agreements which are involved would be over £500,000, and I think it is quite certain that the expenses of the Commission will be nothing like as much as that. Again, it is difficult to make an estimate, but I should expect that the expenses would be nearer one per cent. than five per cent., and consequently the procedure will effect a very considerable saving.

So far as concerns the question of delay, to which the hon. Member also referred, my hon. Friend the Member for Oldham, West, really provided the answer. There are something like 1,800 claims which, I think, will fall to be investigated under the two agreements. Until all of them have been examined and established in some particular amount or rejected altogether, it will be impossible to fix the dividend payable in respect of each claim. As the House appreciates, claimants will receive such a proportion of their own claim as is finally admitted as the total admitted claims bear to the amount distributable; and that is bound to take some little time to determine. It took a very considerable time under the old procedure. I think that some of the various commissions went on for four years. We hope that the procedure of this Commission will be very much more expeditious.

The valuation of the claims will be as at the date at which the property was expropriated or the debt was extinguished under the particular legislation which is referred to in the draft Orders in Council; but, as the hon. Member will see in Article 19 of both the draft Orders, the Commission is given a very wide discretion indeed in regard to the principles which it adopts in valuing the particular claims, and it will be left to the Commission in the light of all the circumstances to do the best it can to achieve justice in regard to them.

I think that that answer deals also with the point which was raised by my hon. Friend the Member for Oldham, West: the dates which are material are those laid down in the draft Orders in Council referring to the relevant legislation extinguishing that method of expropriating property. My hon. Friend appreciates that it is only the claims in regard to matters with which those Statutes deal which are the subject of the global settlement under the agreements and which are, consequently, within the scope of these Orders in Council. I hope that, with these explanations, the House will now be prepared to give this little Bill its Second Reading.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Royle.]

Committee Tomorrow.