HC Deb 25 May 1950 vol 475 cc2261-71

Motion made, and Question proposed, "That the Clause stand part of the Bill."

4.22 p.m.

Mr. Eric Fletcher (Islington, East)

I beg to move, in page 3, line 11, at the end, to insert: (3) Any Order in Council made under this section shall provide that all established claims for sums under five hundred pounds shall be paid in full as soon as possible and that a sum of five hundred pounds shall be paid as soon as possible in respect of every established claim in excess of that amount; and that all such payments shall be disregarded before providing for the distribution of any further payments. I can explain quite shortly the object of this Amendment which I hope will commend itself to the Committee. It is not often one has the opportunity in this House of suggesting Amendments to Statutory Instruments; but the Foreign Office have very conveniently and I think on this occasion appropriately, filed with the Bill the context of the two Orders in Council which it is proposed to bring into operation when the Bill has been passed into law. It is of course the detailed provisions that will be found in the draft orders that provide the machinery for the operation of this Bill.

As the proposals stand at the moment the sums which will be paid out of this fund will be paid out in accordance with the provisions of Article 4 (a) of the proposed Order in Council. In other words if one takes for example the agreement with Czechoslovakia, as matters stand at the moment the total sum of £8 million which will be paid over the period of the next four years from the Czechoslovakian Government is to be distributed among the claimants who establish their claims in accordance with Article 4 (a) of the draft order. That is to say, the amount will be distributed on a precise arithmetical basis, each claimant getting an exact fraction of the total distributable amounts.

I suggest that, in this case, that is not either the fairest or the most equitable way of dealing with this sum of £8 million. It does not necessarily follow that strict adherence to arithmetical theories produces the most desirable form of justice or equity. Among the claimants participating in this sum of £8 million there are a few large corporations, such as Imperial Chemical Industries, J. & P. Coats and others, all of whom it is known will put in claims for very large sums of money. In addition there will be a substantial number of small claims. I imagine it is under 1,000, because on Second Reading the learned Attorney-General estimated that the total claimants on both orders was about 1,800. Let us assume in the case of Czechoslovakia that it is approximately one half of that number. There would therefore be perhaps a thousand or less relatively small claimants, people in humble circumstances claiming relatively small sums.

The object of my Amendment is that instead of waiting perhaps 18 months or more before the precise sums for the large claimants are recognised and established, those who are able to establish small claims should be paid in full. I imagine that there will be a number of claims which are considerably less in total than £500. I suggest that to keep those people waiting until all the claims have been ascertained and the amounts calculated would be imposing hardship on the small claimants and would not be conferring any corresponding benefit on the large corporations about whose claims there may well be—in fact in most cases there certainly will be—considerable argument, before the amounts of their claims are accepted.

My proposal, therefore, is that if anybody can establish a claim to participate in this fund to the extent of £500 or less, that claim should forthwith be paid in full. Other claimants about whose claims there may be delay and argument, should, as a matter of justice, be entitled to receive £500 on account of their claim. I hope that this proposal will commend itself to the Committee. I would urge the Committee to remember that one of the objects of this Bill is to provide compensation to be paid to those who have suffered loss of their property by these nationalisation decrees of Czechoslovakia. They include a large number of British subjects who are in difficult circumstances and for whom it would be a hardship to have to wait before payment is made to them.

4.30 p.m.

I hope that, on those grounds, my hon. Friend will not hesitate to accept this Amendment. I hope that this fund will not be administered in a dull, prosaic manner as if it were a company liquidation, and the company winding-up rules were necessarily to be strictly observed. This is a matter in which it is necessary to have regard to the realities of the situation. It is idle to pretend that the few hundred individual claimants for relatively small amounts are in precisely the same position as a few hundred large corporations claiming very large amounts.

Mr. William Teeling (Brighton, Pavilion)

The hon. Member for Islington, East (Mr. E. Fletcher) referred to there being only a few people in this case, but earlier in his statement he said that a large number of people were concerned. He referred to the £8 million from Czechoslovakia. I am more interested in Yugoslavia. There, although there is, I believe, only £4 million to be paid, the sum at present is only £400,000. If the Minister could give some idea of the number of these small claims which are involved, it would be most helpful. The sum of £400,000 will not go a very long way when we take away the costs of the inquiries, and so on, and the possibility that we may not be paid any more for some time.

Mr. Sydney Silverman (Nelson and Colne)

I hope that the Government will approach this Amendment certainly with sympathy but with some caution. I think we would all be favourably impressed with the notion that the administration of this scheme should not be rigid or too hidebound by rules, but should pay some regard to the humanities involved. I think that is what my hon. Friend the Member for Islington, East (Mr. E. Fletcher) had in mind. His view was that persons to whom a small amount, a small claim, made a very great difference should be dealt with in some priority to more powerful persons or corporations, to whom the amount involved was of less significance.

No one would contend that that was not the right way to approach these matters. All the same, I doubt very much whether this Amendment would have that effect. It presumes that the man who has a small claim is a poor man, and that the man who has a large claim is a rich one. That is not necessarily the case. It may often happen that a man has a claim, which is comparatively large, in circumstances in which it is all, or nearly all that he has in the world, whereas in the case of a very powerful or wealthy individual or corporation, the amount of the claim may be small. Looking at the matter in that way, the effect of this Amendment would be to grant priority to a wealthy or powerful individual or corporation in respect of a small claim, at the expense of a small man whose claim is larger but whose means outside this claim are nonexistent or very small.

It would be much better if there could be some different criteria so that the guide to the question of whether any priority should be shown, should not be the amount of the claim involved but the proportion which the claim bears to the total resources of the claimant. If my hon. Friend or the Government could devise some Amendment to ensure that, I should be enthusiastically in favour of it; but in the form in which it is presented to the Committee I am afraid the object which my hon. Friend has in mind would not be served. I hope that the Government, while paying due attention to the motives which have induced my hon. Friend to put the Amendment on the Order Paper, will look at the terms of the Amendment with some care having regard to the considerations I have put before the Committee.

The Under-Secretary of State for Foreign Affairs (Mr. Ernest Davies)

The Government have looked carefully at this Amendment and we fully sympathise with the motives which inspired my hon. Friend the Member for Islington, East (Mr. E. Fletcher) to put it on the Order Paper. On the face of it, the case he made out appeared very plausible, but, if my hon. Friend looks into the matter more closely, he will see that in practice his Amendment, if accepted, would not work out fairly for the other claimants. There are two reasons for that. The first is that the duty of the Commission is to decide on the eligibility of the claims. The duty of the Commission is not to assess, as between one claimant and another, which has the greater need or which has the lesser.

The Commission must decide whether the claims are eligible or not and it must then treat all claims on an equal basis. If we introduced a system of priorities, those who receive priority would be better treated than others. In the case put forward in support of the Amendment, they would receive most favourable treatment in this respect. If the Amendment is accepted in the way in which it is now worded, it will simply mean that everybody who makes a claim for £500 which is admitted as a claim, will receive that amount of money in full. Everybody else who makes a claim will receive £500, irrespective of how great the claim may be.

In practice, when the time comes to distribute the amounts which are received among all the different claimants, it will not be 100 per cent. which will be distributed to everybody: it may be only 30 per cent. Under the Amendment, a person with a claim for £500 would receive £500 and a person with a claim for £1,000 would receive £500 and then only 30 per cent. of the rest, which is £200, so that the latter would receive in all £700.

If my hon. Friend, in his profession, had two clients, one of whom claimed £500 and the other £1,000, and the person with the claim for £1,000 received only £700 while the first claim was paid in full, I feel sure that he would say that that was not an equitable basis on which to distribute the funds. On that ground alone, I suggest that my hon. Friend should reconsider the Amendment and withdraw it.

I would point out that the case regarding the waiting period is not so bad as he suggested. Article 5 of the draft Orders in Council makes full provision for interim part payment. It is hoped that once the claims have been assessed and it is possible to distribute the amount so far received, some payment will be made. I do not think that the small persons will necessarily have to wait for as long as he suggests.

Then, of course, as my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) pointed out, we cannot accept the fact that the person who makes a small claim is necessarily a person of lesser means than one who makes a large claim. In that respect, after all, the shareholders in companies are not all rich people, and we might have, in the case of Messrs. Coates, which was mentioned, or in any of these very large companies, a very large number of small shareholders whose claims are surely just as important to them, and who it is necessary should receive payment to the extent to which they are entitled to it, as would be a small person with an individual claim.

On these grounds, I suggest to my hon. Friend that we are being quite reasonable and not being harsh in rejecting the Amendment. The Government have looked at this matter sympathetically and have considered most carefully the question of priority. They have decided that they cannot introduce any means test, as was partially suggested by the hon. Member for Nelson and Colne, and cannot give any priorities.

Mr. E. Fletcher

Obviously, I am not going to press this Amendment, if only for the reason that, in its existing form, it would require certain provisions to be incorporated in the Order in Council. It is still open to the Department to consider the suggestions which will be made in the discussions on the Bill before the final form of the Order in Council is fixed, and I very much hope that, as a result of this discussion, some further consideration will be given to the matter, because I am not impressed with the reasons which have been given by my bon. Friend for rejecting the Amendment.

I may not have made myself entirely clear. I think the real comparison that ought to be considered is not between two claims, one of £500 and another of £1,000 but, perhaps, between 20 or 30 claims for £500 each and one or two claims for £100,000 or £500,000. I think that is the reality of the matter. There will be a few persons with claims of about these figures, and there will be a larger number of individuals having claims for sums of under £1,000. In these circumstances, I do not think it is any hardship on a person with a claim of perhaps £100,000 that he shall not be paid until after all the small claimants of sums up to £500 have been paid.

Mr. Teeling

Let us suppose that, in the cases of some of the claimants in this country, all that they possess in the world is the £100,000 in Yugoslavia? When then?

Mr. Fletcher

That is a hypothetical question.

Mr. Teeling

No.

Mr. Fletcher

If it is a real case, if there is any hardship imposed on the person concerned, it is quite obvious from the figure given that the global amount that can be absorbed by paying everybody with claims up to £500, is very limited, and that it will not affect very much the amount which is left over for distribution among the large claimants. However, I am not tied to any form of words, and I have not attempted the job of the Parliamentary draftsman, but I hope that, before the Order in Council is framed finally, some further consideration will be given to this proposal.

Mr. Ian L. Orr-Ewing (Weston-super-Mare)

Before any step is taken to withdraw the Amendment, I hope the Government will not be over-impressed by the argument which has just been advanced. If they were to accept the Amend- ment, they would be setting a form of precedent which would be embarrassing, and, in fact, fatal to any Government forced to follow that precedent in years to come. The hon. Member for Islington, East (Mr. E. Fletcher) has been suggesting that the holders of shares in companies which may be seriously affected will not get any consideration at all, if the total claim of the enterprise exceeds £500, until after those with direct personal claims of up to £500 have been set aside.

I should like to draw the hon. Gentleman's attention to the fact that that has never been the approach either of the present Government or the last Government to the system of compensation under nationalisation as applied in this country. Is the hon. Gentleman suggesting that this general means of compensation should be adopted widely, or only in this particular international connection. Is he suggesting that those whose property is acquired as a result of legislation passed by this House should be compensated in the same sort of manner?

To adopt such a precedent in one particular case of this nature would be a very difficult matter indeed, and it is almost impossible to imagine what the results would be in the payment of similar interests in large concerns, if this proposal were brought into effect. To select one particular class of case of this nature and give compensation is not only unjust but practically without precedent in the laws of this country. In addition, under the policy of "fair shares for all," there must be some yardstick in matters of this kind. I suggest that the argument which has been advanced on this Amendment is quite the wrong one.

4.45 p.m.

Mr. S. Silverman

I want to make it clear that I am not at all against the principle of priorities in claims of this kind, and I think the hon. Member for Weston-super-Mare (Mr. I. L. Orr-Ewing) is mistaken in thinking that such a principle of priorities would be unprecedented in the laws of this country. On the contrary, there is ample precedent for them in connection with the winding-up of companies and under the bankruptcy laws. I know that it is not precisely the same, but, from the point of view that we are now discussing, it is fair to say that the principle of paying small claims in priority to large claims, and paying them in full, before the others are considered, has ample authority and precedent in the laws of our own land.

My objection and complaint about my hon. Friend's form of Amendment is that it seems to me at any rate, to apply the wrong test for such priorities. I think the test that we apply in our own law for priorities of that kind is the importance of the amount at stake to the particular applicant, as, for instance, in the case of bankruptcy, where there is an absolute priority for arrears of wages or things of that kind. If my hon. Friend's Amendment had been so drafted as to relate the degree of priority to the importance of the claim in relation to the general resources of a particular applicant, I would have been in favour of it.

Mr. I. L. Orr-Ewing

Surely, the hon. Gentleman is not suggesting that the priority given to arrears of wages is based on the effect of the size of the claim? It has nothing to do with it. It is the basis on which the claim is submitted that gives it the priority. Is he now suggesting a rigid form of means test?

Mr. Silverman

I think that the justification for paying wages in full, in priority to other claims, in the bankruptcy laws of this country is precisely the importance of the amount at stake to the particular applicant, having regard to his general resources. I may be wrong about it, but I have a very clear view about it, and I think that view is generally shared by those with some experience of the practical administration of these things in our own law. I do not say it is wrong to ask for priorities, and I do not agree with my hon. Friend the Under-Secretary in thinking that the principle of priorities is wrong. My complaint is that this Amendment applies the wrong principle. If the Amendment had been so drafted as to give an absolute priority to the payment in full of small or even large claims in respect of those applicants to whom the claim was far more important than the claims of some powerful or wealthy individuals or corporations, I would be in favour of it. I suggest to the Under-Secretary that he should give some reconsideration to these matters, and that he should not discard altogether the principle of priorities, but should consider what is the proper principle of priorities and what is the proper yardstick.

Mr. E. Fletcher

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Teeling

On a point of order. May I ask for your guidance, Major Milner? Are we allowed to discuss these Orders in Council? The Clause provides for distribution of money by Order in Council under such and such terms. The draft Orders in Council have been published.

The Chairman

I do not think it is permissible to discuss the contents of the Orders in Council. I suppose they will in due course be laid, and that then there will be opportunities to discuss them.

Mr. Teeling

The whole question turns upon the draft Orders in Council.

The Chairman

We cannot discuss the contents of the Orders in Council.

Mr. Derek Walker-Smith (Hertford)

Further to the point raised by my hon. Friend. The Bill provides for the annulment of Orders in Council by Resolution of the House of Commons. I wonder, Major Milner, if you will enlighten the Committee as to what procedure, if any, there is for proposing at any time to deal with any Orders in Council, for which a Motion to annul seems hardly the appropriate method?

The Attorney-General (Sir Hartley Shawcross)

Further to the point of order. You will see, Major Milner, as indeed you have ruled, that these Orders in Council are, of course, no part of the Bill. We took the unusual and, I think, admirable course of publishing the Orders in Council in draft in order that we might be able to explain to the House and to the Committee exactly how we hoped this machinery would operate. If hon. Members think there are any particular points in the Orders in Council which might well be amended, and if they will write to us, we shall be most happy to consider the matter before the Orders are laid. It is perfectly true that when Orders are laid there is no Parliamentary procedure for their amendment, as distinct from their annulment; but we should be glad to receive any suggestions that hon. Members may like to put forward with regard to their amendment at this stage. That is why we took this rather unusual course of publishing them in draft.

Mr. Walker-Smith

Speaking for myself, I should like to say that the course suggested by the right hon. and learned Attorney-General fully meets the point I have in mind, which is that it is more suitable, in fact, for them to be dealt with by the method he suggests than by trying to debate them in this Committee.

Mr. E. Fletcher

On this point of order. It may be a matter of some importance for the future that we should get it clear. Speaking for myself, I entirely agree with the suggestion that the matter should be dealt with in correspondence. However, I would submit with great respect that, as a matter of form, where we are to have a Section in an Act of Parliament saying that His Majesty may by Order in Council provide so-and-so, and saying that any Order in Council under the Section may make provision, and when we have indicated to us in a detailed manner what the contents of the Orders in Council are to be, it is open to hon. Members, in a Debate upon the Clause which is to be that Section, to discuss the contents of the Orders in Council, as indicated in the Clause itself.

The Chairman

This Bill is, in the main, a machinery Bill. There will be opportunities to discuss the Orders in Council, and to accept or reject them as they stand, although, of course, they may not then be amended; and I certainly think that it would not be desirable to enter upon a detailed discussion of the merits of the Orders in Council on this Bill.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clauses 3 and 4 ordered to stand part of the Bill.