DISTRIBUTION OF GERMAN ENEMY PROPERTY BILL [Lords] (Hansard, 29 May 1952)

§ The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss)
I beg to move, "That the Bill be now read a Second time."
This is virtually a one-Clause Measure which amends a definition in the Distribution of German Enemy Property Act, 1949, which, for convenience, I may perhaps refer to as the 1949 Act. That Act was passed by the late Administration on 16th December, 1949, and I think that the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) was concerned with it. The present Measure carries out an undertaking which was given by my right hon. Friend the President of the Board of Trade on 31st January of this year. The Measure passed by agreement in another place and I do not think that it is likely to excite any controversy.
By way of precaution I should perhaps declare an interest. I am not at all interested in any of the securities mentioned in the present Measure, but I think I am interested in one of the securities mentioned in the Act of 1949. If I might remind the House, that Act provided for the distribution of the proceeds of German enemy property in this country—which had been allotted to us as reparations by international agreement—to British persons who could establish claims in respect of German enemy debts. Those debts were defined in Section 8 (1) of the Act of 1949.
Briefly, they fell into two classes. The first and general class comprised sums due at the passing of the Act and arising out of a debt incurred by a German person to a British person before 3rd September, 1939. That was the general description of the debts to which the Acts applied. Secondly, German enemy debts, 1731 within the meaning of that Act, were sums due in respect of bonds of certain German and Austrian Government loans, usually known as Reich loans, and in the case of these bonds or securities it was not necessary to prove pre-war British ownership.
As the right hon. Gentleman will be aware, the ownership of bearer bonds frequently alters, and it is seldom possible to trace back ownership over a number of years. Some of the securities mentioned in the Act of 1949 had been issued with the commendation of the British Government at the time, and most of them had been enfaced with a certificate of British ownership. That was the position under the Act of 1949.
No similar exemption from the need to prove pre-war British ownership was provided in the case of the German-Sterling bonds which are named in the present Bill. They are generally called the German non-Reich Sterling bonds. I think the right hon. Member for Colne Valley will probably share my recollection that the reasons that they were not included were both a hope and a fear. The fear was that it might open the door to a possible distribution of these assets to foreign holders. The hope was that it would be possible to overcome administratively the difficulty of establishing prewar British ownership.
This hope has proved ill-founded. The right hon. Gentleman the Member for Huyton (Mr. H. Wilson), who was, I think, at that time President of the Board of Trade, appointed an Advisory Committee on the Distribution of German Enemy Property, under the chairmanship of Sir John Morison, to devise a satisfactory scheme of distribution of these assets. That Committee found the difficulty of proving pre-war ownership in the case of these non-Reich bonds insuperable and they drew attention to the inequalities of treatment and the unfairness which would inevitably arise if the Act of 1949 were not amended.
The House will find the most important passage in their Report in paragraph 34, from which perhaps I might read a single sentence: We see no way of remedying this position, which is inherent in the legislation itself, unless it should be considered possible to amend the Act so as to extend the provisions 1732 of Section 8 (1, b) to all bonds issued in London. That was their recommendation and that is the recommendation which the Bill carries out.
Perhaps I should mention one other matter, since it is one of some importance and does not appear in the words of the Bill. The Advisory Committee also recommended that, in addition to the conditions prescribed in the 1949 Act, the claimant should be required to show that the debt was due to a British subject at a particular recent date. That recommendation has been accepted, and the date is 7th November, 1951. The reason that it does not appear in the Bill is that it was provided for by Order in Council issued under Section 1 of the Act of 1949.
I think I have explained the origin of this Measure. It deals with what would otherwise be an inequality as between holders of different bonds. It carries out a recommendation of a very strong Advisory Committee and I think it will commend itself to the whole House.

§ Mr. Glenvil Hall (Colne Valley)
I remember very well the occasion upon which the original Act dealing with this matter was put through the House. It fell to me, in association with the hon. and learned Gentleman's predecessor, to present that Bill and to watch its progress through this Chamber. It was not a Measure which attracted very much attention except from one or two hon. Members who were interested personally, mainly, I think, in individual cases of refugees whose interests they sought very properly to safeguard.
The Act was nothing more than an enabling Measure and the procedure under it was to take effect through Orders in Council. As far as my memory goes, the amount expected to be realised in the way of liquid and other assets under the Act was no more than about £10 million to £15 million. These bearer bonds were not included separately as it was thought that they could be dealt with administratively. Obviously, the amount involved must be very small, although the hon. and learned Gentleman has not given us the figure.
We raise no objection to the Measure. We approve it and realise why it has had to be introduced. We hope that it will 1733 soon find its way to the Statute Book and, with the original Act, at no distant date enable this part of the aftermath of the war at any rate to be settled.

§ Mr. Hylton-Foster (York)
This being a Bill to remedy an injustice, naturally it has the support of the whole House, and I would not detain the House merely to explain why I support it. My plea to the Government is that, while they are removing the injustices associated with the distribution of enemy property, they should make a thorough job of it and a complete job of it. That is the reason why I shall detain the House for a moment.
My hon. Friend the Member for Croydon, East (Sir H. Williams), who is no longer in the Chamber, earlier sailed gaily back to 1899. Had he not done so I should have been somewhat diffident in going back to the Treaty of Peace of 1919. At that time some hon. Members were not demobilised, others were at school, and others, more fortunate, had not even got there. But if one had no reason to look into the matter—and this would not be true of my hon. and learned Friend or of the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) because they had to look into it—one might well think that the charges imposed in favour of the Custodian of Enemy Property under that Act were now completely as dead as her late lamented Majesty Queen Anne.
But they are not, and because they are not, curious injustices result. It was the fact that about 1919 people were expecting that the question of the distribution of enemy property, dealing with that war, would be wound up by legislation. It never has been, but that is what was generally expected and people made their dispositions and their wills on that basis.
Perhaps I may trouble the House with an example which has been brought to my attention. The result of there having been no legislation such as was anticipated is that, in one instance, a gentleman who has been out of Germany for half his lifetime and who has for many years been a United States citizen is wholly deprived of the benefits of what his great uncle sought to leave, the great 1734 uncle being a British subject. The testator's whole intention has been defeated. The House would not doubt that that is a matter of injustice, because the court in the first instance and the Court of Appeal, finding themselves compelled so to decide, each expressed themselves as doing so with the utmost reluctance.
Why do I ask the Government to consider this matter in relation to this little Bill? My reasons for making the request are two-fold. First of all, the opportunities when this House deals with topics of this kind are comparatively rare and, secondly, there is a little bit of unfortunate history. The principal point to which I am seeking now to draw attention was raised, as I expect the right hon. and learned Gentleman will remember, in another place by the noble and learned Viscount, Lord Simon, during the Committee stage of the principal Act in 1949.
Lord Lucas, speaking on behalf of the party opposite, was very pleased to extend his grateful thanks to the noble and learned Viscount for having drawn attention to something that does need rectifying, and he said, It will be thoroughly studied with a view to proceeding somewhat upon the lines which the noble and learned Viscount wishes …"—[OFFICIAL REPORT, House of Lords, 13th December, 1949; Vol. 165, c. 1490.] Whereupon the material Amendment was withdrawn and the opportunity was, therefore, lost to remedy this injustice in the principal Act. It was lost because the matter was considered, and the legal advice given to His Majesty's then Government was apparently contrary to that which is now given to this Government.
They took the view that nothing could be done to get rid of this injustice by legislation then, so nothing was done, and the opportunity was lost. I gather that further legal advice has now been taken, considered and tendered, and now I think it is commonly accepted that by legislation this unfairness could be removed. It may be said, "You have only mentioned one case to this House." I do not know any way in which a Private Member can find out how many cases there are, and I can only say, on a cursory inspection of the Law Reports, that it is possible to find another will which appears to bear the mark of illusion 1735 which I spoke about. I hope that this matter will be wound up by legislation, which it never has been, and all I ask now is to be allowed, if the opportunity arises, to put on the Order Paper provisions which, I hope, will have the right effect of removing these inequalities, and that they may be favourably considered by the Government and by my right hon. and learned Friend.

§ Mr. H. Strauss
May I, with the leave of the House, add a word on the topic which my hon. and learned Friend the Member for York (Mr. Hylton-Foster) has raised. As regards the possible Amendment of the Act of 1949, it is only fair that I should say to my hon. and learned Friend that I can see considerable difficulties in amending this Bill and so greatly extending it as to deal with such a topic as he has mentioned, because this Bill is confined by its long title to a single purpose, namely, altering one definition in the Act of 1949.
I say that quite irrespective of any merits that the case to which my hon. and learned Friend has alluded may have. I am sure he will not mind my saying that I am not, of course, admitting that it has merits. Nor am I saying anything about the merits of any kind, but I see great difficulty in amending the present Measure, which is confined to a single purpose. Nevertheless, I need hardly say that if my hon. and learned Friend puts something on the Order Paper I should give it proper and serious consideration.