Clause 5.—(COMPENSATION FOR CLOSURE OR REFUSAL OF LICENCE.) (Hansard, 29 June 1954)

Dr. Hill
I beg to move, in page 6, line 6, to leave out "March," and to insert "January."
The Amendment is intended to meet a small point. A number of local authorities passed resolutions on the subject of no more slaughterhouse licences early this year at a time when, in fact, slaughterhouses were not being licensed because they were not being used for the purposes of the Ministry of Food. Clearly such slaughterhouses should be brought within the ambit of compensation. In inserting the word "March" in the Clause we assumed that the slaughterhouses covered by such action on the part of the local authorities were covered by the Clause. We find that one local authority passed a resolution somewhat earlier, and therefore we propose to insert "January" to cover that case.

§ Mr. Charles Royle (Salford, West)
I do not know whether this is the moment to raise the whole question of compensation or whether you prefer, Sir Rhys, that it be dealt with on the Motion, "That the Clause as amended, stand part of the Bill." I should like to ask the Parliamentary Secretary one or two questions on the subject.

The Deputy-Chairman
It seems to me the whole question could be raised on that Motion.

Dr. Hill
I beg to move, in page 6, line 33, to leave out from the beginning, to "where," in line 1, on page 7, and insert: (6) In ascertaining for the purposes of this section what was at any material time the value of a person's interest in premises or land held therewith, the following provisions shall apply, that is to say:—
(a) the value of the interest at the material time shall be taken to be the amount which the interest would have realised at that time on a sale thereof in the open market by a willing seller;

(b) account shall be taken of the value of any plant or machinery, being fixtures, which were on the premises at the said time;
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(c) in relation to the value of the interest before the event giving rise to compensation under this section in respect of that interest, it shall be assumed that the sale referred to in paragraph (a) of this subsection would have been to a purchaser having reason to suppose that an application by him to tit:: local authority for the grant of a slaughterhouse licence in respect of the premises would be granted subject to the premises being, or being rendered. suitable for use as a slaughterhouse;

(d) subject to paragraph (b) of this subsection, no regard shall be had to goodwill or to any other matter not directly based on the value of the premises or land as such.
In Committee upstairs questions were asked from both sides as to the meaning of the compensation Clause and, in particular, whether in assessing compensation reference would be had to the premises as well as to the land and to fixtures, movable and otherwise. The Amendment is to meet an undertaking we gave that an effort would be made to clarify the position. It seemed wise to spell out in somewhat greater detail the compensation definition. That is the purpose of the Amendment.
I should add that it does not change the character or enlarge the field of compensation but that it defines it with greater precision. It will be seen that whereas in Clause 5 as it now stands there is reference to: Rule 2 of the Rules set out in section two of the Acquisition of Land (Assessment of Compensation) Act, 1919… in the Amendment the Rule is expressly set out so that there can be no misunderstanding about it. That is done in paragraph (a). In paragraph (b) there is a reference to plant and machinery, being fixtures. That is to make it clear, as was made clear upstairs, that compensation will relate to the loss of value in land, premises and landlord's immovable fixtures and not to movable apparatus, and so on, to be found in the slaughterhouse.
Paragraph (d) makes it clear that, in the assessment of compensation, what is taken into account is the loss before and after the ending of the licence, that loss being related to loss actually sustained in respect of land, premises and fixtures and containing no element of goodwill.
In paragraph (c) words are proposed to clear up a point which was discussed upstairs. The point was that a number 1254 of slaughterhouses will be eligible for compensation although at the moment of determining the compensation they will not, in fact, be licensed. It will be recalled that a number of slaughterhouse licensees or non-licensees will have the opportunity, if they make application within a fortnight of the passage of the Resolution, to bring themselves within the ambit of compensation.
The doubt was whether, when the assessment of compensation is undertaken, those undertaking the assessment and examining the difference between the slaughterhouses before the day and after the day would reduce the amount of compensation because of the fact that before the day the slaughterhouse in question was not in possession of a licence. It is a small point, but it was felt to be a legitimate fear, and it is covered by this paragraph.

§ Captain J. A. L. Duncan (South Angus)
I wish to say how grateful I am that the Government have met the various points raised on this side of the Committee, and, I believe, on the other side, in connection with the question of compensation. The Government have met all but one point admirably, and that is the question of movable specialist machinery. As they have met us so well on the other points, I do not propose to press them on that one. I thank them for what they have done.

§ Mr. Robens
I am glad that the Parliamentary Secretary has been good enough to produce this Amendment, which meets the points with which we were very concerned in the Committee upstairs, and I am glad of his assurance in relation to fixtures. It is a matter that we discussed and it covers the point that was raised in relation to things like electric saws, contributions to the purchase of which had been made by the Ministry of Food. The position is now quite clear in the Amendment, and we are ready to accept it.

§ Mr. Royle
We ought not to part with the Clause without asking the Minister questions regarding compensation. I agree with my right hon. Friend the 1255 Member for Blyth (Mr. Robens) and the hon. and gallant Member for South Angus (Captain Duncan) that the Amendment which has just been written into the Clause is very good and is a real safeguard. We are obliged for it. But the time has now come when the Government should give the House and the country an idea of what this compensation means and an estimate of the total.
It is almost nine weeks since Second Reading, and during that interval the local authorities have been preparing for Monday, 5th July, and the reopening, on the Minister's own estimate, of something like 2,500 slaughterhouses. The Minister at this stage should have some knowledge of exactly how many slaughterhouses are to be opened next Monday if the Bill becomes law by that time. If so, he must also be in possession of the facts as to how many applications for licences have been refused. That in turn should lead the Ministry of Food to an estimate of the compensation that will be paid out to applicants who have been unsuccessful in getting their slaughterhouses opened. There are many ramifications to this question, and we know how local authorities up and down the country are behaving in very different ways as to the number of slaughterhouses that are being opened.
Sooner or later the Government, whether Tory or Socialist, must get down to the provision of an adequate number of public abattoirs and slaughterhouses. That is the ideal which the Minister avows is his aim, and it is certainly the policy of us on this side of the Committee. We have never believed in the reopening of great numbers of private slaughterhouses, as is now suggested by the Government.
When the time comes, the capital expenditure on the new slaughterhouses will be colossal. Some Government or local authority some day will have to face that vast capital expenditure, and it must be a burden on ratepayers and taxpayers. It is a burden that ought to be faced. But if we are to add to that ultimate burden by paying out huge sums of compensation, as is suggested in the Bill, that will be added to the bill for the large municipal abattoirs which ultimately will come. Therefore, before we part with this compensation Clause, the Committee 1256 should have some knowledge of the Minister's estimate.
11.0 p.m.
I said on Second Reading that the Bill was a premature doctrinaire line which the Government were 'taking in their free-for-all policy. The Government are adding to the taxpayers' and the ratepayers' burden considerably by introducing this Bill at this time as part of their future meat policy. I say without hesitation that hundreds of traders who had slaughterhouses in 1939 had written them off. They had decided that the day of the small, miserable private slaughterhouse had gone. Many of these places have become warehouses or rubbish dumps.
Hundreds who were slaughterhouse licence-holders in 1939 have ceased to be in the business. Many of them are dead. Yet these miserable places, buried away in all parts of industrial and rural areas, are to be re-opened. Even worse, if they are not to be re-opened, slaughterhouses which have been written off are to be the subject of compensation at The expense of the ratepayer or taxpayer. I hope that before the Committee parts with this Clause it will be given some estimate by the Government of what the financial burden will be.

§ Mr. Ian Horobin (Oldham, East)
It may save the time of the Committee if I raise briefly a point which otherwise I shall have to raise on Third Reading. It is not narrowly concerned with the compensation to be paid for those slaughterhouses which are not re-opened: but, as the Minister has been asked to give an estimate of how many there will be under the Government's policy, I want to give him an opportunity to deal with an anxiety which is acute in my constituency. It is feared there that the Government's policy may lead to what may be practically a monopoly. I do not want to go into all the details which have been given to me, but people fear that they may be left with only one available abattoir, not counting the Co-operative's. The point may be more general than the fear in my constituency.
I hope that the Minister, or the Parliamentary Secretary, will be able to give an assurance that action taken under The Bill, which has to have the sanction of the Minister, will not be used to produce the unsatisfactory state of hundreds of 1257 shops in an area being in effect tied to a monopoly held by one wholesaler.

Dr. Hill
Perhaps I might be allowed to deal with the questions directly concerning compensation, leaving the more general considerations to be dealt with on Third Reading. It is difficult to estimate the effect of the Bill in terms of compensation at the present stage. The hon. Member for Salford, West (Mr. Royle) will realise that the compensation system of the 1938 Act provided for compensation of owner and occupier, in respect of losses sustained. This Bill provides for compensation in the case of a slaughterhouse which is closed because of redundancy following the establishment of a public slaughterhouse. That compensation is rigidly and narrowly defined.
On the general policy of moderate concentration, it is possible to form only the vaguest of estimates. Our estimate, and I severely qualify it because of the difficulties, is between £2 million and £3 million, half of which will fall upon the Exchequer, and half upon the local authority. So far as we are able to judge, the compensation commitment which follows from the passage of the Bill and subsequent events we estimate to be about £500,000, half falling on the local authority and half on the Exchequer.
Again, we find it very difficult to form an assessment until much more is known about the conditions of the slaughterhouses which have been opened. The question of the number of slaughterhouses being opened is relevant to what I have no doubt will be subsequently said and asked of the Minister. Some 2,300 licences have been issued in respect of individual slaughterhouses and some 2,800 applications are under consideration by local authorities.

§ Mr. Thornton-Kemsley
For England and Wales only?

Dr. Hill
Yes. I am giving the figures for England and Wales.

§ Mr. Royle
Does that mean that the estimate of 2,500 may be doubled?

Dr. Hill
It is impossible to judge the extent to which local authorities will defer a large number of doubtful or less satisfactory applications. I am giving the figures as they are. I should hesitate to infer from the 2,800 what proportion 1258 of them will, in fact, subsequently be licensed; 2,300 is the number already licensed and 2,800 the number of applications under consideration.

§ Mr. Frederick Willey (Sunderland, North)
I appreciate the Parliamentary Secretary's difficulty. Can he indicate how many of the 2,800 are live applications and are actively being considered, and how many are what I may call "compensation" applications?

Dr. Hill
I cannot, in the nature of the case, judge the degree of liveliness of the applications. All I can say is that that is the number which it has been reported to us as under consideration. Perhaps the Committee will feel that this is sufficient information now, in response to the questions raised by the hon. Member for Salford, West, leaving any other questions over for subsequent discussion.
In reply to my hon. Friend the Member for Oldham, East (Mr. Horobin), let me say that I am aware of the details of the Oldham difficulty. We have about a dozen difficult cases to settle. Perhaps it may not be appropriate now to go into a difficult local position. We are in communication with the local authority and have given it certain advice as to what we believe the legal position to be. As sometimes happens, the local authority has shown reluctance to accept it. The matter is being probed further and examined.