Clause 1.—(ABOLITION OF RIGHTS AT COMMON LAW TO COMPENSATION FOR CERTAIN DAMAGE TO, OR DESTRUC-TION OF, PROPERTY.)

HC Deb 12 May 1965 vol 712 cc526-609

Lords Amendment: In page 1, line 7, leave out "whether before or"

3.50 p.m.

The Financial Secretary to the Treasury (Mr. Niall MacDermot)

I beg to move, That this House doth disagree with the Lords in the said Amendment.

I do not know, Mr. Speaker, whether it would be convenient if we were to discuss with this Amendment the Amendment in line 11, leave out "was, or", and the Amendment in line 12, leave out subsection (2). They all relate, I think, to the same topic.

Mr. Speaker

If the House is so pleased, I would approve that course.

Mr. MacDermot

I am obliged.

The effect of these Amendments is, as all hon. Members know, to abolish the retrospective effect of the Bill. This would enable 12 companies—we hear a lot of the Burmah Oil Company, but there were, I think, four companies—who were members of that group, and eight other companies—to pursue claims for full compensation when no other sufferers from war damage will be able so to do.

Perhaps we can, first, clear away some common ground. I think that there is no dispute now—if, indeed, there ever was—of the need to restore the law for the future to what it was previously thought to have been; in other words, to restore the law to the position that no claim lies at common law for compensation in respect of damage to property caused by lawful acts done by or on behalf of the Crown in war.

It is necessary at the outset to remind ourselves of this point, and it gains its importance from the fact that in their enthusiasm for the rule of law, and in their dislike of retrospective legislation, many speakers in this House and in another place have used terms of language which would almost go so far as to suggest that we in this House, or in the other House, have no right to question the justice of a decision reached by our courts—including the decision of the highest court of all, the House of Lords.

We do not, of course, question the correctness of the decision in law, but it is a very important responsibility upon us as legislators to watch the decisions that are reached upon the law, and if we find that in our view the law is unfair as it stands, that it is unjust, that it is inequitable, it is our duty to alter the law. This is the basis of a great deal of law reform.

I certainly do not need to remind those hon. Members who are lawyers that it is our not infrequent experience to hear judges say, when delivering judgments, "It is not for us to express an opinion as to whether the law should be what we find it to be." They sometimes indicate that perhaps they wish it were not. What they say is, "It is our responsibility and our function to apply and administer the law as we find it. If the law needs to be changed, that is the responsibility of Parliament."

I think that we are all agreed that the law as it stands, following the decision of the House of Lords in the preliminary point of law with which we are all familiar, would really be ludicrous and indefensible if it were allowed to continue. The very fine distinction drawn between "denial damage" and "battle damage" could produce the most inequitable results. It would mean that if property is destroyed as part of a "scorched earth" policy by a military commander before the invading enemy have appeared on the scene, that is denial damage, and compensation has to be paid, but that if the commander waits until the invader has overrun the property, or if the commander is unable, or has not the time, to destroy it before the enemy arrives, and then, after the enemy has arrived, proceeds to destroy it by shell fire or by aerial bombardment, that is battle damage, and no compensation is payable, the military and strategic object of the military commander being identical in both cases. To show the novelty of the proposition, I wonder how many hon. Members, before we debated this matter, had ever heard the phrase "denial damage"? I confess that I myself had not heard it.

Therefore, the question before us, and the only question before us, is whether the provisions of this legislation should be made retrospective. I hope that I shall not detain the House too long, because we have already debated the matter very fully on a number of previous occasions. I do not think that any new arguments were deduced in debates in another place, though there were different emphases on some points.

For example, Lord McNair, who moved these Amendments, and who is, of course, an international lawyer of the very highest distinction, stressed perhaps more strongly than was done here his belief that the retrospective provisions of the Bill would damage our reputation abroad and, I think, even then went so far as to suggest that it might be seized upon as a precedent for confiscatory legislation abroad.

I cannot accept his arguments, or agree with them. I think that his fears are grossly exaggerated in this respect, with all respect and deference to him, and I will seek to explain why——

Sir Harry Legge-Bourke (Isle of Ely)

In writing down the significance of the debate in another place, would not the hon. and learned Gentleman agree that the evidence, and it was evidence—firsthand evidence—from Lord Slim was by no means unimportant?

Mr. MacDermot

I have the very greatest respect for Lord Slim as a military commander—I think perhaps the greatest military commander we produced in this country during the war. I have not, I confess, quite such respect for his comments upon and judgment of the effect of the Bill.

When Lord Slim suggests that the Bill contains things against which we were all fighting in the last war, and includes in that suggestion the "over-riding of the courts"—which was one of the phrases he used—the point I make at once is that it is our responsibility and duty to override the court where we think that it is a proper and just thing to do.

Lord Slim also rejected in similar terms the retrospective effect of the Bill, as though it were enough just to try to say that legislation was retrospective to condemn it. As I shall seek to show, there are many precedents for retrospective legislation, and what I will seek to do—which, I think, remarkably few Members have sought to do at any stage in our discussions—is to try to formulate what, in my respectful submission to the House, are the principles to be adduced from those precedents as to when it was proper to pass retrospective legislation.

We all dislike retrospective legislation—our instincts are against it, and we lean against it—but, in some circumstances, and I think that this, again, is common ground, it is permissible. In some circumstances, it is proper. That has certainly not been challenged openly, though, as I say, some of the remarks that have been made during the course of the debates have been rather extravagant in their terms, and would suggest that on all occasions retrospective legislation is wrong——

Mr. J. T. Price (Westhoughton)

When my hon. and learned Friend Is developing this argument, will he not overlook the fact that whilst many hon. Members on both sides have considerable doubts about retrospective legislation in the abstract, this case is a piece of retrospective litigation, in so far as the cause of action could not have been pursued in an English court because of the Limitation Act? [HON. MEMBERS: "Oh."] This is on record. The cause of action was started in a Scottish court because those concerned could not have got the case on its feet in an English court. In that sense, therefore, it is retrospective litigation. It could not, about 17 years after the event, have been started in the English courts. [Interruption.] Hon. Members know the facts as well as I do. I have no personal interest to declare in the matter.

4.0 p.m.

Mr. MacDermot

With great respect to my hon. Friend—I have expressed this opinion already during the course of our earlier discussions—I do not think that any criticism can be levelled against the Burmah Oil Company for having availed itself of the advantage which it was to the company that there is a 20-year limitation period in Scotland. It was perfectly proper for the company to do that.

Let me proceed, therefore, to try to formulate what I suggest are the principles upon which we should approach the question of retrospective legislation, principles which, I suggest, are supported by the precedents. I do not think that any hon. Member on either side of the House whether arguing for or against retrospection in this case, has yet sought to do this during our discussions.

The first point, and the starting point, in this is a principle which was stated by Mr. Justice Willes. I referred to this in my speech on Second Reading. This is the underlying principle against retrospective legislation—the circumstances in which and the reasons why retrospective legislation as a general principle is to be avoided. The classical statement of it is the passage in the judgment of Mr. Justice Willes in the leading case of Phillips v. Eyre.

I will again remind the House of what the learned judge said: retrospective laws are, however, prima facie of questionable policy and contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts and ought not to change the character of past transactions carried on upon the faith of the then existing law. Such legislation is always bad. I need not go over all the facts of these cases to remind hon. Members that that principle has no bearing in this case. None of the claimants in these cases was acting upon the faith of the then existing law when, pursuant to the orders of the military commander, he assisted in the destruction of his property.

I suggest that the second principle is that retrospective legislation is justified when it is necessary to obtain justice or equity between one citizen or class of citizens and another, to ensure that people in like circumstances receive the same treatment and enjoy the same rights. But it must always be subject to the first and overriding principle to which I have referred.

It is on this principle which I have just sought to formulate that the Crown has acted in this case throughout, from start to finish. There are the clearest possible precedents directly in point, and, in particular, the Indemnity Act, 1920, which dealt with a very similar situation to that with which we are concerned.

May I remind the House again of what were the provisions of the Indemnity Act, 1920, the position then being, as after this last world war which gave rise to these claims, that millions of people had suffered damage of one kind and another. They could not possibly all be compensated in full. There were special provisions under the Defence Regulations to give limited compensation; but, in spite of that, after the war certain claimants sought to get more than the war damage compensation which was available to them under the Defence Regulations and sought to pursue claims at common law. They started litigation and issued writs.

In view of that, there was passed, in the widest possible terms, the Indemnity Act, 1920. Its provisions were as follows: No action or other legal proceeding whatsoever, whether civil or criminal shall be instituted in any court of law for or on account of or in respect of any act, matter or thing done, whether within or without His Majesty's dominions. during the war before the passing of this Act, if done in good faith, and done or purported to be done in the execution of his duty or for the defence of the realm or the public safety, or for the enforcement of discipline, or otherwise in the public interest". Quite clearly, those words would be quite wide enough to cover the denial damage which is the subject of these claims.

The Act goes on: and, if any such proceeding has been instituted whether before or after the passing of this Act, it shall be discharged and made void, subject in the case of a proceeding instituted before the twentieth day of July, nineteen hundred and twenty, to such order as to costs as the court or a judge thereof may think fit to make", that being the date, I think, on which the intention to pass the legislation was announced. So people who had started their actions earlier were entitled to compensation as to costs, but if they started their actions earlier at all in any circumstances their actions were to be defeated, which is what we are seeking to do in relation to the outstanding claims in this legislation.

Mr. Jeremy Thorpe (Devon, North)

I concede that the 1920 Act is authority for the proposition that there is a precedent for non-suiting pending litigants, but would not the hon. and learned Gentleman agree that the effect of Section 2(1,b) is that those who were non-suited—that is to say, those who could not bring a common law action in respect of damage sustained by exercise of the Royal Prerogative—were given an alternative form of compensation and that, therefore, it is not quite correct to say they were just denied their rights? They were given an alternative right in substitution.

Mr. MacDermot

I am anxious to save time. If hon. Members will have a little patience, they may find that I answer the point on which they seek to interrupt me. This was the next point I had intended to come to.

It may be argued that there was under the Indemnity Act a statutory scheme of compensation. Again, that that would not have assisted the Burmah Oil Company or the other claimants in like cirstances, because, as a careful study of the wording of that Section shows, the provisions for compensation—the statutory scheme—applied only to damage within the jurisdiction of our courts. If the damage occurred abroad, no compensation was to be payable in any litigation brought in our courts.

Sir H. Legge-Bourke

I am grateful to the hon. and learned Gentleman for giving way again. I am no lawyer, as I think that he knows; but am I not right in saying that a good deal here depends upon where the Royal Prerogative was, in fact, exercised? Is he aware that the company has been advised that the Royal Prerogative in this instance was exercised in London and, if so, that this would entitle the company to the benefit of Section 2(1)?

Mr. MacDermot

That would not have assisted in relation to the Indemnity Act, 1920, because the test was not where the Royal Prerogative was exercised, but where the damage was suffered. The actual wording is who has otherwise incurred or sustained any direct loss or damage by reason of interference with his property or business in the United Kingdom. So the property had to be sited in the United Kingdom before there was any right to compensation under the statutory scheme.

There is a further distinction in this case and a further answer to the hon. Gentleman's point, and that is that some compensation has been paid already in these cases. At the moment, I am dealing with the precedent of the Indemnity Act.

Mr. Selwyn Lloyd (Wirral)

Was not His Majesty in Council given by Order power to apply the Act to any part of His Majesty's dominions outside the United Kingdom?

Mr. MacDermot

Yes, I have looked at that point, too. Again, that would not avail or assist in the case with which we are concerned, if we are considering like legislation, for this reason.

First, no Orders were made under the Indemnity Act, 1920. There was none. None was made, for example, extending it to Burma or, indeed, to any other Colony. If one had been, the effect then would have been, one may assume, that the Order would have been passed setting up a scheme locally to be locally administered in respect of damage within that Colony. That, again, would have given rights only in respect of claims brought within the area of that Colony. It could not have given any right to statutory compensation in respect of claims brought within the United Kingdom, which is what we are concerned with here.

The question arises, why similar legislation to the Act of indemnity was not passed after the Second World War. As hon. Members know, the reason is that all other forms of war damage were already covered by existing wartime legislation and it was not thought that any claim lay for this peculiar and par- ticular type of damage which we have now heard about, denial damage. It obviously would have been a very curious waste of Parliamentary time for legislation to have been brought before the House to legislate against a theoretical possible cause of action which, in fact, was believed not to exist.

The third principle which I suggest is to be deduced from the precedents relating to retrospective legislation is that a very frequent justification for such legislation—this may be only an application of the second principle—is that retrospective legislation is justified where the purpose of the legislation is to restore the law to what it was previously thought to be. I remind the House in my Second Reading speech of what had been said by Lord Radcliffe during his decision in the Burmah Oil case. May I remind the House again? He said: There is not in our history any known case in which a court of law has declared such compensation to he due as of right. I invited any hon. Member to challenge that statement if he wished and I think that none has done so.

Lord Radcliffe went on: There is not any known instance in which a subject having suffered from such a taking, has instituted legal proceedings for the recovery of such compensation in a court of law. No payment has been identified as having been made by the Crown in recognition of a legal right to such compensation, irrespective of the institution of legal proceedings for its recovery. No text writer of authority has stated that there is this legal right under our law. I think that the only challenge to this assertion that this was the generally held view of the law came from Lord Conesford in a debate in another place. In support of his challenge he cited a passage in the judgment of Lord Dunedin in the well known de Keyser hotel case. The passage he quoted was: the texts give no certain sound as to whether this right to take is accompanied by an obligation to make compensation to him whose property is taken". Lord Conesford suggested that that supports the belief that it was recognised that the state of the law was uncertain. I think that an examination of that passage will show that what Lord Dunedin was, in fact, referring to was not dealing with denial damage, but with the right of compensation where there had been requisition of property. I think that all hon. Members—lawyers and non-lawyers—will agree at once that there is a ready distinction to be made between a case where the Crown has seized property in war to make use of it, requisitioned property for that purpose, and the case where property has been destroyed in order to deny its use to the enemy.

May I remind the House of the examples of retrospective legislation which illustrate this principle? I shall seek to do so briefly because they have been referred to before. There was the War Charges Validation Act, 1925. It will be remembered that the Milk Controller had imposed a levy on milk distributors and collected fees amounting to £18 million. It was held by the House of Lords that the orders under which that milk was collected had been ultra vires. As a consequence this Act was passed to validate the act of the Milk Controller in collecting those fees.

Not only were his acts validated, but it was said in terms that no proceedings whatever should be instituted by any person for the repayment of sums so levied or for compensation in respect of the making of the levy and if any proceedings had been instituted before the passing of the Act they should be discharged and made void and any judgment obtained after 18th December, 1924, should be made void. The Act was passed on 5th March, 1925. It went so far as to say in terms that in that limited period even a final judgment could be set aside. We are not, of course, concerned here with a final judgment. No one has obtained a final judgment or award of damages. The stage which has been reached is a decision adverse to the Crown on a preliminary point of law.

4.15 p.m.

The second example was the Charitable Trusts (Validation) Act. The courts gave a decision whereby many trusts were thought to be invalidated. The result was that residual legatees and next of kin became entitled to moneys. They had acquired rights which previously were not thought to exist. It was thought right to pass the Act to restore the law to what it had previously been thought to be. That was done by the Charitable Trusts (Validation) Act and again provision was made whereby in any legal proceedings begun on or after 16th December, 1952—the Act being a 1954 Act—and any order or judgment made or given before the commencement of the Act which would not have been made or given after the commencement of the Act, the court order by which the judgment was made or given was said to be set aside in whole or in part. It provided for such further order as the court thinks equitable with a view to placing those concerned as near as may be in the position they would have been in having regard to the Act.

This is a more remarkable provision again written into an Act, a retrospective power to set aside a judgment and that would include a final judgment made by a court. In this case it may be said, and it has been said, that it is different because the Crown was not involved directly, this was merely an Act to benefit the parties and not the Crown. I should consider that the Crown and was as legislators have the same responsibilities to safeguard the public purse in a case where it is proper to do so as we have to protect the interests of parties.

If hon. Members want a case affecting the Crown there is the Wireless Telegraphy (Validity of Charges) Act, 1954. In that case, £17½ million had been collected in wireless fees by the Post Office without any proper legal authority. That was established. Proceedings were started and, so clear was the position that the Government threw their hand in and then passed retrospective legislation. The legislation had retrospective effect to validate those improperly levied charges and to deprive all the people who had paid them of their unquestioned legal right to repayment of the moneys.

A further case was the Finance Act, 1960, Section 39, following the Whitworth Park Colliery case. The Revenue had wrongly deducted tax at source from certain interim payments made under the Coal Industry (Nationalisation) Act. Retrospective legislation was passed in the Finance Bill to withdraw those claims, withdraw them in the interests of the Crown, and to restore the law to what it had been thought to be before that decision.

In the retrospective legislation the claims of all other claimants who had not got final judgment in that case were defeated. They were in the same position as all claimants who are subject to the Amendments we are considering—they have not obtained final judgment, but a point of law had been decided in their favour. It can be said while Burmah Oil at least has a preliminary point of law decided in its favour that does not apply to any of the other claimants to whom these Amendments apply; but, in fact, these other claimants would be free, if we were to agree with these Amendments, to apply these principles to the present case.

I suggest to this House that the retrospective effect of this legislation is fully justified. It does not offend against the first principle—there is no question here of anyone acting in any way in the belief that the law was what it has now been shown to be. It is necessary, if justice is to be done, among all the different classes of people who have suffered war damage, that we should not allow public funds, and, incidentally, very substantial public funds on any basis to be paid in compensation to these claimants on a basis which no other sufferers from war damage have enjoyed, namely, full compensation at common law.

In the light of all these precedents it is fanciful to suggest that this decision will in some way impair our international relations or respect for our consideration of the rule of law in other countries. All these precedents cited are cases where retrospective legislation was passed in order to defeat existing claims under these principles. They did not destroy the respect which other countries have for our judicial system. They were not seized upon by Governments in other countries as an excuse for seizing British property or any other property without compensation. There is no question here of confiscatory legislation. We are not seizing anyone's property without compensation.

I must say, in this connection, with the very greatest respect to the Lord Chief Justice, that I was surprised to find him suggesting that this was confiscatory legislation because it confiscated the right of action of the claimant without giving compensation. If this is the right way to approach it, it would mean that there never could be any retrospective legislation at all because all retrospective legislation by definition confiscates. That is to say, it sets aside the cause of action which is assumed to exist in certain claims and says that one is not to be entitled to damages or the return of the levy or the fees, whatever it was, but is to be deprived of a right of action, without compensation.

Mr. Percy Grieve (Solihull)

I am grateful to the right hon. and learned Gentleman for giving way. Is not the whole issue here dependent upon the fact that in this matter Burmah Oil has a right vested in it by the decision of the House of Lords where it succeeded in a claim at law and, therefore, this legislation would take that right away from the company? All that remains in that litigation is for that right to be quantified. Therefore, this is a case in which the right of the subject is being taken away without compensation.

Mr. MacDermot

The proposition is not correct. The company has not been awarded judgment subject to assessment of damages. A preliminary point of law has been established in its favour. There are other points of law which are taken by the Crown in the claim and which could still defeat the litigation. It is not even right that the issue of liability has been established. Furthermore, it is in no different position in this respect from all other litigants in these cases who would be affected by this litigation.

One of the points of law has been decided in a way which is to its advantage. But it has not got judgment and other litigants are in exactly the same position. They have started their actions and are established as far as that point of law is concerned to have, prima facie, a course of action. They are all in exactly the same position. We are not concerned only with the Burmah Oil Company. We are concerned with the other eight companies as a whole. They are in exactly the same position as the claimants in all these other precedents which I have cited of retrospective legislation, namely, that they were established by a decision of the courts to have a right of action or a potential right of action. They were deprived of that by retrospective legislation and deprived of it without compensation.

Sir H. Legge-Bourke

There is one very great difference, surely, between those precedents cited and the Bill. It is that, in all those precedents, in particular, that of Mr. Justice Willes, in the case of the War Charities (Validity) Act 1925, even despite that retrospection there was no change in the character of past transactions carried on upon the faith of the then existing law. In this particular situation there is a very substantial change.

Mr. MacDermot

I think that what the hon. Gentleman is referring to is their action in starting their legal proceedings. Of course, this must be provided for, and is provided for, in the Bill by a provision to ensure that they are indemnified as to costs. This was done in one of the Acts which I cited a few minutes ago, where provision was made to see that people who had brought their actions before the intention to pass the legislation was announced, should be covered and provided for as to costs. As far as the subject matter of the claim is concerned, nothing which was the basis of their cause of action was an act done by them in the belief that the law was as it has now been established to be.

I referred to the speech of the Lord Chief Justice, who is, of course, one to whom we look with the greatest respect and care for anything he may say on these matters. I confess that I have read very carefully both his speeches in another place and that I cannot find anywhere in them any concession that it is ever right to pass retrospective legislation.

Every argument that he adduced against the Bill is an argument against retrospective legislation in toto. I cannot believe that he is seeking to advise Parliament that in all circumstances it is wrong to pass retrospective legislation. With the very greatest respect to him I cannot see where he has directed his mind to the question which I am inviting the House to consider, namely, what are the principles upon which it is proper to pass retrospective legislation? We have heard a lot said in terms that this is a conflict between principle and expedience and that those who are supporting retrospective legislation here are merely concerned with the expedience of saving the taxpayers' money, and are casting a principle to the winds.

This is not so. We believe that what we are achieving here through this retrospective legislation is justice in the sense I have referred to, that is a right dealing, a fair dealing between all people in similar situations.

Mr. William Yates

The hon. Member for Nelson and Colne (Mr. Sydney Silverman), during the Second Reading, made this clear. He said that the action the Government were taking was entirely a political expedient and that he supported it on that account alone. There was nothing whatever to do with justice.

Mr. MacDermot

That may have been the view of my hon. Friend the Member for Nelson and Colne (Mr. Sydney Silverman). I am expressing my view as to the reasons why this legislation is put forward and why, incidentally, it was set in motion by the previous Government.

Sir John Foster (Northwich)

I do not think, with respect that the hon. and learned Gentleman has dealt with the point quite fairly of confiscation when the right of action is removed. He said he was surprised at what the Lord Chief Justice said, that there need never be retrospective legislation. I think that my hon. Friend has to face the fact that previous retrospective legislation was though to be confiscatory. He has not made the point fairly. If you remove a vested right of action, is that confiscatory or not?

Mr. MacDermot

We are using "confiscatory" in two different senses. One talks about confiscatory legislation meaning legislation enabling the Crown or someone to seize property without paying compensation, but here we are talking about it in the strict legal sense and I agree that all retrospective legislation in that sense is confiscatory. In that case, my answer to the Lord Chief Justice is that it is not sufficient to say that this is confiscatory, unless one is to go on to say that all retrospective legislation, because it is confiscatory, is to be disallowed and rejected. He did not say that, and he did not seek to argue that conclusion. All that I am pointing out is that any hon. Member who uses this argument is asking the House to say that retrospective legislation can never be justified. With all the precedents to support it, there are good reasons to justify it.

4.30 p.m.

Sir Kenneth Pickthorn (Carlton)

The Financial Secretary denies that the sole object is the saving of public money, but he goes on implicitly to say that the other object is the promotion of justice in the sense that nobody should get anything unless everybody else can get it. That is a very negative view. Is that the argument on which the Government are prepared to rest?

Mr. MacDermot

I do not find it a very negative view that the idea of justice is to give each man his due and that equality is equity, if I may use another legal principle. I agree that in all circumstances justice does not demand exact equality of treatment for everyone, but when we are considering the question of compensation for war damage I think that it outrages the sense of fairness of anyone who approaches the matter dispassionately that one small class of war damage should be entitled to compensation on the basis of full compensation when everyone else has to put up with a partial measure of compensation.

I deal now with the matter to which I alluded, namely, the position of our predecessors in office in this matter. I very much hope that on this occasion we shall receive the support of at least the members of the Front Bench opposite. Their position in this matter is this. First, they decided to resist these claims in the courts, basing themselves on and supported by the actions of the post-war Labour Government in pursuing an attitude in relation to these claims which had been maintained consistently by all Governments since the war, including their own Governments, over many years. They then came to the crucial point, which was when the Burmah Oil Company decided to pursue its claim in this country and, if need be, to proceed to the highest court in the land to see if it could get judgment, as it did in the end, on this preliminary point.

Mr. J. T. Price

May I get the record straight? As the Limitation Act made it impossible to pursue the claim in this country, they started the action in Scot- land, which was a dubious and very questionable device.

Mr. MacDermot

I have already said that I cannot agree with my hon. Friend that there was anything dubious or questionable in that. This was a Scottish company and if it wanted to bring a cause of action in this country against the Government it was perfectly entitled to bring it in the Scottish courts. If there is anything which needs correcting in relation to Scottish law on the matter of limitations, that is something which no doubt Scotsmen in the House will wish to consider. It is not, however, a matter on which I wish to comment at this moment.

As I was saying, there came the crucial stage in this matter. I think—someone will correct me if I am wrong—that at the time when the famous letter was written by the Treasury Solicitor on behalf of the Government the Burmah Oil claimants had already succeeded in obtaining a judgment at first instance. But the matter had not yet proceeded to the House of Lords. What was said in that letter was this: Her Majesty's Government are, moreover, satisfied that the claim made is not, in any event, one which ought to be met by the British taxpayer. Her Majesty's Government have accordingly decided that, in the unlikely event of your company succeeding, legislation would be introduced to indemnify the Crown and its officers, servants, or agents against your company's claim. That letter has been heavily criticised by some hon. Members.

I am very impressed by the argument of the Lord Chancellor, in another place, that so far from there being anything wrong in the writing of that letter it was the only fair and proper thing for the Government to do, provided that they had decided that they would introduce retrospective legislation if the need arose. If that was their decision, it was only right to warn the company of it so that if the company thought fit it could save itself the time and the trouble—I will not say the expense because if it was successful it must be indemnified as to costs—and the risk of expense if it lost its claim in pursuing the matter further.

I invite the House to consider what must have been the position at the time that that letter was written. I suggest that when that letter was written it must plainly have been a Government decision to introduce retrospective legislation if this situation arose. The letter was written by the Treasury Solicitor. This was criticised on purely technically procedural grounds by the Scottish courts. That is not the point here. The point is that at that stage the Treasury Solicitor obviously was not acting on his own authority, nor was he acting on the authority of the Attorney-General.

The right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) was the Chancellor of the Exchequer at the time. I assume that he must have known of the contents or purport of that letter at the time that it was written and approved of it. Indeed, I assume, also, that he must, at the very least, have consulted a number of his senior colleagues in the Government before announcing, and announcing publicly, in effect, that the Government would introduce retrospective legislation if the litigants were successful. This was an almost unprecedented action. As I say, I think that it was a perfectly proper action, but, clearly, it was one which could be taken only if it was a settled and determined decision of the Government that they would introduce this legislation if this situation arose.

Mr. R. T. Paget (Northampton)

As they were warned, and the silly fellows went on, why do we have to pay for the expense of their going on? Why have they any right to be indemnified as from the date of the letter?

Mr. MacDermot

My hon. and learned Friend is entitled to his own view. The way in which the Bill before us is framed is that it would be left to the courts to decide the fair measure of costs. I have already stated in the House, on behalf of the Government, that we will not seek to urge that the company should not have full indemnity as to costs. I think that the general view of the House is that that would be the right way to deal with this matter.

If it were not the firm and settled decision of the Government to introduce such legislation, then this would have been the most reprehensible letter to have written. It would have been a quite disgraceful action to be bluffing over a matter of this kind. It would have been without justification. In these circumstances, I find it very surprising that the right hon. and learned Member for Wirral and other members of the Front Bench opposite think it right to turn round and criticise the Government for acting in accordance with the clear and, as I suggest, proper warning issued by them when they were in office and when the right hon. and learned Gentleman was in charge of the Department which itself is responsible fox the Treasury Solicitor's Department and when he, on behalf of the Government, was directly involved financially.

What justification did the right hon. and learned Gentleman give before for the action which he took in supporting a somewhat half-hearted Amendment which came before the House dealing with this matter of retrospection? On that occasion he suggested that the reason we should think again and should have second thoughts about this was that perhaps there was not quite so much money involved as he thought there was. What he told the House on 2nd March was: We just do not know what is the measure of damages or whether this is a very large claim. I was certainly led to believe at the time when I first addressed my mind to these problems that it was a matter of hundreds of millions of pounds, as I indicated on Second Reading. We do not know whether it is a large claim, or whether this is quite a minor matter which will be disposed of in some other way."—[OFFICIAL REPORT, 2nd March, 1965; Vol. 707, cc. 1231–2.] I do not know where the right hon. and learned Gentleman got his "hundreds of millions of pounds" from, or to what period he was referring, but at the time when he was a member of the Government who authorised that letter to be written he knew what the claim was. The claim was one by the Burmah Oil group of companies for £31 million—not hundreds of million of pounds—plus interest claimed at 5 per cent. They were awarded interest at 5 per cent. That would be a further £36 million, making a total of £67 million.

In addition, there were eight other claimants who claimed a total of £8 million and, together with interest to the same extent, this would have resulted in total claims—all the Burmah Oil Company claims and the claims by the eight other claimants plus interest at 5 per cent.—amounting to £84 million. If compensation had been awarded on the basis of compound interest, which I think it is right to say is an exceedingly rare event in the courts, the very maximum at could have been recovered would have been £160 million. But I think it is fair to say that the right way to summarise the amount of the claim, including interest, at the time that the letter was written, is that it was about £80 million. I do not know what view the Government took at the time as to what sum they were on risk for—whether it was for £80 million or for some lesser amount—but, clearly, it was a substantial amount.

What is the position now? I know there has been argument—it has been referred to in our debates—that it is possible that the courts would take the view that the claims were worthless, on the basis that the Japanese would have destroyed the installations in any event. But the position was the same at the time that the letter was written. There is nothing new about that. The only difference that I can find is that it has been suggested by some hon. Members during the debate, presumably on instructions from the Burmah Oil Company, and I think there was the suggestion in the document which was referred to on a point of order earlier and which has been circulated to the House, that the company would frame its claim more moderately, that it would now be about £17 million and that the company would concede that there should be an allowance of the £4¾ million for what was called rehabilitation.

But is the right hon. and learned Gentleman saying that the difference between these figures is such as to make him change his mind and make him think that it is not right that the Government should act pursuant to that warning? I have heard no suggestion, either officially or unofficially, that the claims for interest have been withdrawn. When we are dealing with interest accumulating since the wartime period, the result from the figures that I have already indicated would be more than to double whatever would be the amount of damages if interest were awarded at 5 per cent. On any basis—it does not matter whether it is £15 million or £50 million—we are dealing with very large sums of money; this is still the position and it has never been any different.

I suggest that on any basis these are unacceptable claims, quite apart from the complete indignity and impossibility of the position of the Government who issue to a litigant in the middle of the proceedings the warning, "If you are successful we shall defeat your claim on retrospection", and then say, "If you will abate your claim somewhat and claim a more modest sum we will see if we can negotiate it with you; we will see if we can settle it for not quite so much".

If the right hon. and learned Gentleman thinks that that is the way in which any Government should behave, I cannot share his view.

4.45 p.m.

Sir Frederic Bennett (Torquay)

It is a strange argument for the hon. and learned Gentleman to adopt that the amount of damage involved could be a relevant factor in my right hon. and learned Friend's mind, since the hon. and learned Gentleman is on record as saying that if the amount had been trifling the present Government would not have continued with the debate.

Mr. MacDermot

I did not say that. I said that if the amount at stake was 6d. we would never have heard of it. Of course, we would not.

Sir F. Bennett indicated dissent.

Mr. MacDermot

Perhaps the hon. Gentleman would like to quote the actual wording.

Mr. William Yates

It is at column 1238.

Mr. MacDermot

It was referred to on the Report stage.

Sir F. Bennett

I have the quotation. At column 27 of the Report of the Committee proceedings—it was later referred to on Report—the hon. and learned Member said: The hon. Member then criticised my argument on the basis of the vast sums that are involved. This is an easy argument to deploy—that it does not matter whether it is a question of dealing with a sum of 6d or £100 million since the question is one of principle—and, frankly, I think that his argument was unreal and unrealistic. When we are concerned with large sums of money we have a responsibility as the Government and Parliament has a responsibility as legislators and as those responsible, above all, for the control of public expenditure. We must, therefore, balance up the matter and decide whether it is right to allow compensation to be paid on what would be a large scale which would single out these claimants for a particular and high level of compensation which nobody else who suffered war damage recovered. Then the hon. and learned Gentleman said this: If only 6d. were involved nobody would trouble to legislate about the matter. … It is only because there are substantial sums involved that the matter comes before the House of Commons."—[OFFICIAL REPORT, Standing Committee B. 23rd February, 1965; c. 27.] If that argument does not mean that he would not go on with the legislation if the amount involved was only 6d., what do those words mean?

Mr. MacDermot

That is what I said. If the claim were 6d. the matter would not arise. It is because there are substantial sums involved that as a matter of equity and fairness it is right that we should legislate to defeat these claims. What we have to seek to do here is to get fair treatment for these claimants in relation to the position of other claimants in like situations. If we were to allow these claims to proceed, and if the claimants were successful, they would receive very large sums of compensation on an utterly different basis from that on which any other war damage claims were met.

Mr. William Yates

Could the hon. and learned Gentleman give the House, either today or later, a list of the other companies to which he is referring, which are making substantial claims? The House must be interested in claims other than this one.

Mr. MacDermot

The Attorney-General will, if it is proper, deal with that matter. I do not know to what extent it is proper to refer to particular claims in actions which have not yet come before the courts, in which writs have been issued, involving companies which, like the Burmah Oil Company, have conducted a lot of publicity in the matter. As I say, there are eight other claimants who claim a total of about £8 million. All I would point out to the right hon. and learned Member for Wirral is that when these Amendments were voted upon in another place his right hon. and learned Friend the former Lord Chancellor, Lord Dilhorne, voted with the Government against these Amendments. So did Lord Simonds the former Conservative Lord Chancellor. So did Lord Carrington, the Leader of the Opposition in another place. No doubt I shall be corrected if I am wrong but so I think did every other person who was a member of the Government at the time when the letter was written think it right to carry out the warning that was issued at the time and to support the action that was taken by his Government at that time by rejecting these Amendments and supporting the retrospective measures in the Bill.

Mr. Thorpe

On the Committee stage eight ex-Tory Ministers voted with the Government and two ex-Tory Ministers against the Government.

Mr. MacDermot

Were all these Ministers at the time when the letter was written? That is the point. Certainly a substantial number, and if the hon. Member is right, the vast majority of members of another place who were Ministers at the time when the letter was written have thought it right to act in accordance with the terms of the letter and vote against the Amendments. I very much hope that on reflection we shall now have the support of the right hon. Gentleman opposite when we ask the House to reject these Amendments.

Mr. Selwyn Lloyd

I will go some way with the hon. and learned Gentleman and say that I agree with what he said about the future and altering what has been established as the law in this case. I agree with him that it is correct to put the law back to what it was thought to be, but I must disappoint him with regard to his last question because I shall ask the House to support the Lords Amendments for practical reasons. I will try to explain those reasons to the House.

The Lord Chancellor in opening his speech on this Amendment in another place said: … this is not in any way a Party question."—[OFFICIAL REPORT, House of Lords, 13th April, 1965; Vol. 265, c. 335.] Lord Silkin in a letter in The Times of yesterday, which will have been seen by many hon. Members, referring to this controversy, said: Here a vital question of principle in no sense political is involved. I am therefore encouraged to ask the House to look at this matter without regard to party discipline or dogma, and I remind the hon. and learned Gentleman, and hon. Members who are getting so indignant from a sedentary position below the Gangway, that several of their hon. Friends on Second Reading made critical remarks about the retrospective aspects of the Bill.

I have tried to be fair with the House at each stage of the Bill's progress. We know that successive Governments of both political complexions have taken the view that the company had no good claim. The Government of which I was a member—and I have never sought to burke this—authorised the sending of the letter of July, 1962. A Government of which I was a member gave instructions for a Bill to be drafted. We did not see the Bill when it was drafted or decide that it should be introduced. I quite agree that we have a "record" on this Bill, in the sense that that word is used in the courts.

Mr. S. C. Silkin (Dulwich)

The right hon. and learned Gentleman has referred to the letter and has acknowledged that the Government of which he was a member supported it. Would he also acknowledge that he personally was aware of the contents of the letter and personally approved of the letter being sent?

Mr. Lloyd

Certainly, since I was Chancellor of the Exchequer at the time I accept responsibility but, unlike some people and some Ministers, I have never believed in the doctrine of the infallibility of Governments, not even Governments which had the advantage of having me as a member. If a Minister is right more often than he is wrong, that is a considerable achievement. The idea that mistakes are never made is nonsense. Therefore, whatever may have happened in the past, and without necessarily agreeing with all that has been said on one side or another, I have no compunction in asking the House to reconsider this matter on the merits and not as a party issue.

Mr. MacDermot

Is the right hon. and learned Gentleman saying that he now thinks that he was wrong in authorising the sending of that letter?

Mr. Lloyd

If the hon. and learned Gentleman will listen to my speech I will deal with that point. I see the hon. Member for Fife, West (Mr. William Hamilton) smiling. We know that we have had a warning that if he is called by the Chair he will criticise the Amendment. I suspect that with him it is because this is a Lords Amendment and not on the merits, because we know that despite that very winning smile he is of a perverse and contrary nature. Although the hon. Member was for long a thorn in my side I grew to be quite fond of him, which is one of the odd things that happen in this House. I can predict for him an assured future and say that one day, as Lord West Fife, he will be a respected Leader of the Opposition in another place. That is the psychological and biological explanation of the hon. Gentleman. He has an incurable love-hate complex for the other place and that always colours his arguments.

As to the merits, on Second Reading I gave a number of reasons why I thought that the previous Government had taken up the position which they did, apart from the fact that they were consistently advised that there was no claim in law.

The principal one which affected my mind certainly was the size of the claim. The Financial Secretary to the Treasury said that it was not hundreds of millions of £s. My recollection of the advice which I was given was that the figure was of the nature which he mentioned, about £160 million if one included compound interest, but my recollection is that I was also advised of other consequential claims which would follow and which might swell the sum involved. In view of the magnitude of that sum it was felt, according to precedent going back to the American Civil War, that only very much scaled-down claims could be met and that the sum of £4¾ million which the company had received should be adequate to compensate it. On Second Reading I asked the Government to try to dispose of the matter by negotiation. There was a full debate and on Second Reading 222 voted for the Bill and 129 against, a majority of 93.

When we came to Report, it was obvious that there were other matters to be taken into account which had not been in the minds of previous Governments, for example what had happened in the Sarawak and Brunei case, which I did not know about in 1962 or in 1964. In that case the oil companies were by agreement covered against denial damage. The Financial Secretary suggested in his speech that it had not been thought that there was such a thing as denial damage.

Mr. MacDermot

Is the right hon. and learned Gentleman suggesting that there is no comparability between a claim for damages for compensation under a contract and a claim at common law which previously was thought not to exist and which he thought therefore justified the retrospection?

Mr. Lloyd

The hon. and learned Gentleman has talked a great deal about equity. It seems to me quite illogical that just because people never thought that the war front would reach Burma, the Burmah Oil Company should be penalised. That is one of the new facts.

5.0 p.m.

The second was that it became quite clear—this appeared from what the hon. and learned Gentleman said—that the £4¾ million was not, in fact, paid as compensation. It was a grant for rehabilitation made in the interests of the people of Burma, not of the company. The hon. and learned Gentleman made that clear during the later stages of the Bill.

Mr. MacDermot

The right hon. and learned Gentleman is quite wrong. It was paid for the purpose of it being used for rehabilitation, but it was granted absolutely freely. There were no strings attached. The Burmah Oil Co. was entirely free to do what it wanted with it; it could have distributed it to its shareholders if it had wished.

If the right hon. and learned Gentleman is referring to what I said about the payments being rehabilitation and not compensation, this is a point which has been referred to several times in our debates, and what happened was this. I was interrupted by the hon. Member for Aylesbury (Sir S. Summers) and asked whether I was suggesting that it was compensation. I said: I have made clear in what I have said already that it was made clear at the time that it was not being paid as compensation but as rehabilitation."—[OFFICIAL REPORT, 3rd February 1965; Vol. 705, c. 1100.] The passage I referred to when I said that I had made it clear already was my explanation a few minutes earlier that the announcement of February, 1943, made two matters clear, the second one being that the object was to provide for rehabilitation rather than for full compensation. The Lord Chief Justice accepted in another place that rehabilitation was compensation, and I should have thought that that would accord with anyone's common sense. The distinction is that rehabilitation was limited compensation, intended to help rehabilitate the actual properties. It was not full compensation which would include compensation for consequential damage.

Mr. Lloyd

I have heard the hon. and learned Gentleman's intervention. I still believe that, when this sum was paid, it was paid for rehabilitation purposes and in the interests of the people of Burma. Otherwise I do not believe that it would have been paid.

The next new factor was the measure of damages. From the speeches of the law Lords when dealing with the case finally it became clear that the measure of damages might easily be very different from what was expected. Another new factor to which the House should pay some regard is the widespread indignation about the Bill felt by people with no political affiliations, almost a sense of outrage at the action which the Government were trying to take. On Report, I moved a new Clause which would have had the effect of delaying the Bill, providing a rest pause and requiring a further Parliamentary decision for the Bill to be implemented. I did that to give the Government a further opportunity to see whether the matter could be disposed of by negotiation. On that occasion, my Motion was defeated by 137 votes to 149, a very different vote from the vote on Second Reading—a majority of only 12.

In another place, on both Second Reading and in Committee, there were some outstanding speeches on these Amendments. Lord McNair, an eminent jurist highly respected throughout the world—[Interruption.]—I am surprised that people on the benches opposite should snigger when I mention the name of Lord McNair. He is a distinguished jurist, highly respected throughout the world, and he was for 10 years our judge at the International Court at The Hague. He opposed the Bill and moved these Amendments in their Lordships' House on three grounds.

First, he said that the power given in the Bill to the Crown to stop proceedings against it disturbed the correct balance between the rights of the subject and the rights of the Crown. It made nonsense of the Crown Proceedings Act, 1947. He considered that the action contemplated threatened the independence of the judiciary. Thirdly, he referred at length to the international repercussions.

The hon. and learned Gentleman talked about a fanciful view being taken on this matter. These views expressed in another place cannot be brushed on one side as fanciful when they are shared by men of the calibre who spoke and voted. Lord Longford, I think, once talked of the I.Qs. of their Lordships being higher than the I.Qs. in this House, and he spoke also about their independent national stature and reputation. Lord McNair was supported by lawyers like Lord Cohen, Lord Devlin, Lord Morton of Henryton, the Lord Chief Justice, Lord Shawcross, a former Law Officer, Lord Forster, Lord Guest, Lord Tangley, Lord Silsoe, all men of great eminence in the legal profession. He was supported by others, people of independent mind, like Lord Adrian, Lord Sherfield—Sir Roger Makins as he was known to us—Lord Robertson, and former colleagues of ours like Lord Amory, Lord Chandos and Lord Boyd.

The Attorney-General (Sir Elwyn Jones)

Would the right hon. and learned Gentleman care to comment upon the I.Q. of the three Lord Chancellors or ex-Lord Chancellors who supported the Government?

Mr. Lloyd

I shall deal with that point in a moment. I cannot see that the intervention of the right hon. and learned Gentleman goes in any way contrary to the effect of the quotation I made from his noble Friend, Lord Longford.

The debate in the other place was of a very high order, with distinguished men of independent mind expressing their opinions. With names like the ones I have given, any talk about backwoodsmen and shareholders and so on is quite pointless.

I know that it will be said that some former colleagues of mine voted with the Government, but the Lord Chancellor began his speech by saying that it was not a party occasion, and the fact that my noble Friends acted as they did strengthens rather than weakens my argument for a new, dispassionate nonparty look at the matter. I repeat that, on Second Reading in this House, many of the hon. and learned Gentleman's hon. Friends expressed their dislike of the Bill. It is not a party issue. There has been a wide measure of public indignation about it among those who are reputable in this field of thought and action. Once again, I ask the Government to see whether this matter can be disposed of in some other way. What matters now is not what has been said in the past but what the House does this afternoon on these Amendments.

To summarise them, these are the reasons which, in my view, should operate to induce hon. Members to support the Amendments. First, there is the strength and the quality of the opposition to this part of the Bill. Second, there is the argument put forward by Lord McNair about the Executive interfering in pending litigation. Third—this is something which has offended people—there is the very long time-lag in dealing with the matter.

Mr. MacDermot

We were not responsible for that.

Mr. Lloyd

I mean the very long time-lag since 1947, since the time when the Burmah Oil Company was advised to litigate in the courts of Burma and so on. If the Bill had been brought in in 1947, people's minds would have been quite differently motivated.

Mr. MacDarmot

The right hon. and learned Gentleman and his hon. Friends knew about it.

Mr. Lloyd

Of course, we knew. I am suggesting that the Government should think again. This arrogance, this idea that it is impossible for anyone ever to make a mistake, seems to be typical of the present Administration.

Mr. MacDermot rose——

Mr. Lloyd

I really must get on. I have given way many times.

Mr. MacDermot

The right hon. and learned Gentleman said——

Mr. Deputy-Speaker (Dr. Horace King)

Order. The hon. and learned Gentleman knows that, if the right hon. and learned Gentleman does not give way, he must sit down.

Mr. Lloyd

I have given way many times to the hon. and learned Gentleman, and I have very nearly finished.

The fourth reason why people should think again is the one based on the international repercussions dealt with by Lord McNair. Finally, there is the amount involved.

The Government's prestige is not involved in this matter. There is no face to be saved. They will not lose face if they listen. On this occasion, there will not be any inquests if they listen to argument. They can blame us as much as they like if they change their minds. The point is that the right thing to do is to dispose of this matter in some way other than by the operation of this part of the Bill. This is the feeling of the overwhelming majority of people who have considered the matter. I ask the Government to think again. I have never criticised them on it. Each time, I have asked them to think again and to see whether they can resolve it by negotiation.

Mr. MacDermot

Will the right hon. and learned Gentleman, before he sits down, answer the question that he did not answer before? When he wrote that letter, did he think that the Government were acting rightly?

Mr. Lloyd

The Government of the day were advised that the company had no claim in law. I think that they would have been failing in their duty if they had not written that letter. Nevertheless, that did not amount, in my view, to a committal by the Government of the day in all circumstances to bring forward this legislation.

Mr. William Hamilton

The right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) has seldom made a more unconvincing speech. I was going to say "dishonest", but I acquit him of that. He talked about this issue as not being party politics, quoting the Lord Chancellor. But what the Lord Chan- cellor said was that six successive Governments had taken the same view on this matter since the end of the war. That is what the Lord Chancellor meant by his assertion that it was not party politics. But when the Bill went to the House of Lords it became party politics. It became company politics and I want to refer to that in a little detail later.

At the outset, I want to say that I have a very great deal of respect for some, but not all, of the lawyers who advanced the case in another place, particularly Lord McNair. I do not think that anyone could challenge his integrity. I would have reservations about some of the others, and I will come to them in a moment.

Hon. Members

Oh.

Mr. Deputy-Speaker

Order. The hon. Gentleman must not question the integrity of members of another place. I read the hon. Gentleman's earlier speech and I would remind him that it is not in order for him to attack personally members of another place. He can attack them politically as much as he likes.

Mr. Hamilton

I will direct my fire at them politically as far as I can.

I want to refer to some of the points Lord McNair made, because I think that one can challenge even some that he put. I speak as a layman and not as a lawyer, still less an international lawyer of his standing. Lord McNair somewhat jeered at the fact that the Lord Chancellor had quoted examples of retrospective legislation, with particular reference only to domestic matters. This point was referred to by my hon. and learned Friend the Financial Secretary today.

Lord McNair pointed out, quite rightly, the international character of the operations of the Burmah Oil Company and cited the interest of international lawyers in proceedings in this case. He said that, of course, if this legislation were unamended it would be an encouragement to some predatory foreign Governments. I want to put to the House two aspects which I hope will put the think into perspective and persuade it to reject the Amendments.

5.15 p.m.

The right hon. and learned Member for Wirral accused me of having a peculiar relationship with the House of Lords. I do not choose to reject the Amendments, because I intensely dislike the other place. I intensely dislike the way in which this thing has been dealt with by the other place. The first aspect, already referred to, is that this is a nonparty matter in the sense that six Governments have treated it in the same way and the second is the universal dislike of retrospective legislation.

Each time such legislation is brought forward, by whichever Government, it is objected to, and is rightly subjected to, the most critical scrutiny by both sides of the House. Indeed, I have heard some of the most passionate and eloquent speeches on the principle of retrospective legislation. But no Government could or should eschew for all time and in all circumstances the right to legislate retrospectively if exceptional circumstances seem to warrant it.

The argument of the Lord Chancellor and of the Government is that there are in this case quite exceptional circumstances. If the principle of equity demands or suggests that a Government should legislate retrospectively, then that seems to me a very sound reason for a Government so to act. This is just such a case. Indeed, it appears to me to be unanswerable, quite apart from the considerations which I will shortly put.

The bare bones of the problem have been gone through both here and in another place in many speeches and I do not want to weary the House by repeating the arguments. I would add here that such letters as I have had on this issue from laymen do not bear out what the right hon. and learned Gentleman said about public reaction. Indeed, those letters have been supporting my view rather than the view that he has been taking and which was taken in the House of Lords on 13th April.

In global war, it is inevitable that people suffer enormous losses of life, limb and property. It is a sheer economic impossibility for any Government of any colour of a country bankrupted by war—and remember that Mr. Churchill, as he was, said that at the end of the war we would be facing bankruptcy—to compensate everybody in full for losses sustained.

Apparently this same battle was fought after the First World War. Most people and companies at that time accepted the Government's position patriotically or because they could afford not court action to challenge it. The Lord Chancellor quoted very powerfully from the speech made on the Indemnity Act, 1920, by Lord Sumner, which is to be found in the House of Lords OFFICIAL REPORT, of 4th August, 1920. I shall not repeat that argument.

Again, I say that I speak as a layman, with none of the legal jargon at my fingertips. The Burmah Oil Company has received £4¾ million up to now, the same proportion on losses as other claimants. Being rich and profitable as a company, and perhaps not as patriotic as others, the Burmah Oil Company decided to have a gamble by going to the House of Lords.

As was made clear by Lord Citrine in the other place, if one examines the voting of the judges in all the courts that have been called upon to decide on this case, one finds the majority against the company. But of course one appreciates that the legal system does not work that way. Nevertheless, it is a point worth making.

It seems that if the Government now accepted the position laid down by the House of Lords the floodgates would be opened for untold claims, Burmah Oil is claiming, according to the Lord Chancellor, £31 million. Other companies are claiming £8 million. The hon. Member for The Wrekin (Mr. William Yates) asked for the names of the other companies in our earlier proceedings and they were given by the Lord Chancellor. The hon. Member can read them in HANSARD. They are the Indo-Burmah Petroleum Company, the Shell Company of Hong Kong and the Shell Company of India. They are making total claims of £39 million.

In addition, these companies are claiming a 5 per cent. interest since the end of the war. If that is simple interest, the total becomes £84 million and, if compounded, £124 million. I recall that right hon. and hon. Members opposite chastised us violently for getting rid of prescription charges at the cost of £23 million a year. Now, however, they will vote for rich oil companies to get £124 million. [HON. MEMBERS: "Oh."]

Nobody can ever accuse me of beating about the bush. Everybody knows exactly where I stand on this and other issues. I do not couch my language in legal jargon and humbug. I say what I think. This is an issue of capitalism seeking to get a hand into the public purse. It is nothing more than that.

Sir F. Bennett

Would the hon. Gentleman care to say whether, if there were poor claimants in this case, he would be, according to his own words, advancing totally contrary arguments?

Mr. Hamilton

I am just coming to this point. The poor claimants, the widows, the orphans, the disabled ex-Service men who gave their lives and their limbs in Burma, cannot afford to do what the Burmah Oil Company did, but they gave a damned sight more for the country than the Burmah Oil Company ever did. That is how I view the situation and I hope that if my hon. Friends have experience, first hand or second hand, they will give examples of men and women who fought and who laid down their lives, or who are limbless and who are watching very carefully the results of this action of the Burmah Oil Company.

Mr. Paget

Will my hon. Friend permit me a question about the Government's performance of their duties and contracts? If we were to make up the pensions of our servants to what they would be worth in good money, that is, to pay off the depreciation and grant parity to public servants, not merely men, would that not cost less than the £120 million which it Is now being proposed to give to the oil companies?

Mr. Hamilton

That raises a point of principle. If the Government accept that compensation ought to be paid to Burmah Oil, every man and woman and child who lost life or limb or breadwinner has an equal right to come forward and say, "We claim the same right as Burmah Oil." This is not a legal but a moral matter.

Let me revert to the principle of retrospective legislation and the rule of law. Introducing my Ten-Minute Rule Bill on 4th May, I referred to what happened in a case with international implications. I am now coming back to the point made by Lord McNair when criticising the Government for producing examples of retrospective legislation relating exclusively to domestic matters. I referred to the question of the elections in Gambia two years ago.

Let me recapitulate what happened on that occasion. On 28th May, 1963, the Commonwealth Relations Secretary announced his intention to validate certain elections in Gambia which the West African Court of Appeal had declared to be invalid. That this was retrospective legislation there can be no doubt. Indeed, it was admitted by the then Minister who now sits on the Front Bench opposite.

On that day, the right hon. Gentleman said: Although I dislike as much as most hon. Members retrospective legislation, I decided that, in all the circumstances … and he went on to say that he had had to introduce it. He was subsequently challenged by my hon. Friend the Member for Flint, East (Mrs. White) and he replied: What we are doing is to pass legislation—something which very often happens—which has been shown to be necessary by a decision of the court."—[OFFICIAL REPORT, 28th May, 1963; Vol. 678, c. 1124.] In this instance there was retrospective legislation which was of great international import in one of the most politically sensitive areas of the world, in Africa, affecting the individual rights of people and not of property. And—and this is a very important consideration—the issue was never mooted in the House of Lords, because it concerned the rights of people while this issue concerns the rights of property.

The Observer was quite right when, on 18th April, it said: The rule of law is indivisible. If it is wrong to take away retrospectively a valuable property right, then it is equally wrong to tamper with voting rights—the most valuable right of all in a democracy. Upholders of constitutional principles should at least be consistent.

Sir J. Foster

Does the hon. Gentleman approve or disapprove of the legislation about Gambia? He has now introduced the argument, "I can commit a murder because you have".

Mr. Hamilton

I am trying to find out why there is the difference of approach. [HON. MEMBERS: "Answer."] The hon. and learned Gentleman has asked his question and he must allow me to answer it in my way. That is the risk he must run if he intervenes.

We a re now discussing Lords Amendments. I have been trying to show, by reference to the Gambia case, that there is a difference of approach when dealing with retrospective legislation affecting the rights of individuals and with retrospective legislation affecting the rights of property. That was the point I was dealing with and I think that I have made it. It is not for me to say whether I support one or the other. What I am saying is that the House of Lords is anxious to condemn retrospective legislation when it affects property interests, but not prepared to utter a cheep when it is retrospective legislation affecting the rights of individuals to exercise the franchise.

I want to put one or two further facts before the House. On 13th April, the Lord Chancellor said that if Burmah Oil was successful, claims could be expected from the other companies which I have mentioned. One of those is the Shell Company, so that Shell has more than a passing interest in seeing victory for Burmah Oil.

Two directors of Shell voted in the Lobby without declaring an interest. Here I come to a very important issue. Lord Southborough and Lord Shawcross are directors of Shell, which has an interest in seeing that Burmah Oil wins this case. At no point in the House of Lords did they seek to declare their interest and at no point, as far as I know, did they seek to take part in the debate.

Sir J. Foster

On a point or order. Is it in order for the hon. Gentleman to criticise members of another place for not having disclosed an interest, when he does not know the facts and when the fact is that these claims are out of time?

Mr. Deputy-Speaker

The hon. and learned Gentleman has contradicted his own point of order, but I will deal with the matter. Declaring an interest in another place is something for the other place and I hope that the hon. Member for Fife, West (Mr. William Hamilton) will not refer to it. If he will continue his speech in the political way that he has, he will be in order.

5.30 p.m.

Mr. Hamilton

I am much obliged. We have to keep the party clean, so I will not pursue the matter. I shall not refer to the record of one of these members in any great detail except to say that he was a Member of the Labour Government of 1945–51, which came to a view on this matter precisely on the lines given by my hon. Friend this afternoon, and as contained in the Bill. Presumably, that person gave advice to the then Government, whether or not they acted on it. It was never made clear in the other place what that advice was, but we must assume that it was advice which led that Government to introduce their legislation.

I ask what has happened between then and now which has caused him to change his mind. I merely put the facts on record. As I said in my letter to The Times, I let the facts speak for themselves. I say no more than that, except that if that member's advice was not accepted by the Government of the day, I would have thought that if he felt sufficiently strongly about the issue he would have resigned from the Government. The fact that he did not means that he accepts collective responsibility for the decision taken. I draw no conclusions, but I am sure that many could be excused for doing so.

In view of what you have said about the question of declaring an interest, Mr. Deputy-Speaker, I hesitate to take the matter further. I agree that unless a person speaks in a debate there is no way of declaring an interest, and no obligation to do so. But it is interesting to note that two days after I made my Ten Minute Rule speech in this House there was a debate in another place on the Corporation Tax, and a Minister remarked that it was significant that every noble Lord who spoke, without exception, made a great point of declaring his interest. If we can get them to do this it is some advance.

On the point of order that I raised before we began the debate I referred to the question of Burmah Oil shareholders in this House. I know that there are very many, and I know that the great majority are on the opposite side of the House—and I can name them. I pay great tribute to the research department of the House of Commons Library for providing me with all the material.

Mr. Grieve

On a point of order. Is this anything to do with the matter under discussion, Mr. Deputy-Speaker, namely, the Lords Amendment?

Mr. Deputy-Speaker

So far, the hon. Member for Fife, West (Mr. Hamilton) is not out of order. I shall deal with him if he gets out of order.

Mr. Hamilton

I am sure you will, Mr. Deputy-Speaker. The hon. Member need not be afraid. I shall mention only one name, and I bear that hon. Member no malice. I gave him notice that I would raise this matter—because he is a next-door neighbour—as a neighbourly gesture.

I am speaking of the hon. Member for Fife, East (Sir J. Gilmour). He is mentioned three times in the list of shareholders in my possession. His name is linked with the Marquess of Linlithgow on one occasion; on another occasion it is linked with Major the Rt. Hon. Earl Rocksavage, whoever he is, and the Marquess of Linlithgow, and on the third occasion with Sir Horace James Seymour, G.C.M.G., C.V.O. There is nothing sinister in that. I do not condemn the hon. Member for those connections. I do not know whether they are good or bad. It is for him to decide.

Sir John Gilmour (Fife, East)

I thank the hon. Member for giving way, and also for telling me that he would raise this matter. In fact, the gentlemen to whom he has referred in connection with these three shareholdings is not myself, but another gentleman of the same name. However, I want to make it clear, just as the hon. Member did, that I am a shareholder, and have been a shareholder, in the Shell Oil Company, and, therefore, have an interest. I agree that it is right and proper to declare it. But I can imagine few hon. Members, whether in some association, or as shareholders, who did not have an interest which conflicted the whole time. Many of my hon. Friends have raised the point of Ministers and their trade union associations. In my opinion, the hon. Member is doing a disservice by trying to bring this sort of atmosphere into a debate in which we are talking about the principle of retrospective legislation.

Mr. Hamilton

I withdraw what I have said. It is very coincidental. This material was supplied by the Library.

Mr. Deputy-Speaker

We can clear up this point at once. I know that the hon. Member will withdraw wholeheartedly.

Mr. Hamilton

Of course, Mr. Deputy-Speaker. But the hon. Member has admitted that he is a shareholder in the Burmah Oil Company. [HON. MEMBERS: "Shell."] The Shell Company is an interested party. [HON. MEMBERS: "No."] Of course it is. As I have pointed out, if the claim of the Burmah Oil Company succeeds the Shell Company will proceed with its claim.

Several Hon. Members rose——

Mr. Deputy-Speaker

Order. Hon. Members seem to be growing increasingly unable to listen to opinions with which they disagree. I thought that Parliament was a place for disagreement. Furthermore, two hon. Members cannot intervene at the same time.

Mr. Hamilton

I withdraw anything that I have said in respect of the hon. Member which is irregular.

Perhaps I may divert the fire to other hon. Members opposite who are Burmah Oil shareholders and who have consistently voted in the Lobby without having declared their interest in the House. When we compare that state of affairs with the treatment of council tenants in connection with council house rents, the double standard employed in respect of the two matters makes me want to be sick. If we allege that a councillor who is a council house tenant cannot engage in debates on council house rents because he may be accused of corruption, and yet, in the House of Lords and in this Chamber, we can allow people to speak and vote without necessarily declaring an interest, it is time that we looked at the whole problem again.

It is regarded as almost obscene by hon. Members opposite to ventilate these matters in the House. If anybody attempts to do so he is ridiculed and shouted down. I understand the point of view of hon. Members opposite when they are faced with the facts of the situation. We have all this talk about retrospective legislation and the violation of sacred principles and the rule of law, but they know that many of them are talking a lot of humbug. What we are discussing is the exercise by a powerful public company of the advice that it derived in the Scottish courts to push a claim which nobody else either could or would push. And it has the backing of the other place. Many of the lawyers there are inspired by principles, but many voted there inspired not by principles, but because they had vested interests.

Mr. Deputy-Speaker

Order. I asked the hon. Member very early on to make all his comments, in respect of this place or the other place, political. It is not in order for him to suggest that members of another place voted for improper motives.

Hon. Members

Withdraw.

Mr. Hamilton

I withdraw nothing.

Mr. Deputy-Speaker

My duty is to act in the best interests of good relations between the two Houses. It is not in order for the hon. Member to impute motives.

Mr. Hamilton

I take it, Mr. Deputy-Speaker, that you are not asking me to withdraw anything that I have said up to now.

Mr. Deputy-Speaker

If the hon. Member recalls his last sentence and his last words, he will realise that he must withdraw them.

Mr. Hamilton

Of course, Mr. Deputy-Speaker, if you direct me so to do, then I do so, but I intend to put on the record, again without comment, the number of peers who voted "Content" and who are stockholders in Burmah Oil. I refer to them as Lords——

Sir J. Foster

On a point of order. The only point of the hon. Member in doing that is to make some improper criticism of another place.

Mr. Deputy-Speaker

I have listened to the arguments of the hon. Member for Fife, West (Mr. William Hamilton). He is arguing a general issue. Apart from the two occasions on which he imputed improper motives, which I asked him to withdraw, he has been in order. I will call him to order when he is out of order.

Mr. Hamilton

I am simply putting the facts on the record. If the hon. and learned Member for Northwich (Sir J. Foster) feels that there may be a guilty conscience somewhere, I cannot help that. [HON. MEMBERS: "Oh."] All that I am saying is that there is a list, which I have, of peers who are Burmah Oil shareholders and who voted "Content" in the House of Lords on 13th April. I leave it at that. They are: Lord Amory, Lord Atholl, Lord Baillieu, Lord Boothby, Lord Bridgeman, Lord Chelmer, Lord Cohen, Lord Coleraine, Lord Congleton—all familiar names to some of us—Lord Cornwallis, Lord Craigmyle, Lord Crathorne, Lord Croft, Lord Cullen of Ashbourne, Lord Daventry, Lord De La Warr, Lord Digby, Lord Ebbisham, Lord Falmouth, Lord Godber, Lord Grenfell, Lord Howe, Lord Ilford, Lord Killearn, Lord Limerick, Lord Meston, Lord Milne, Lord Morton of Henryton, Lord Reading, Lord Rowallan, Lord Selkirk, Lord Strathalmond, Lord Strathclyde, Lord Swinton, Lord Swaythling, Lord Teynham, Lord Verulam, Lord Wrenbury. The total was 38. Three voted "Not Content"—Lord Granville-West, Lord Jessel and Lord Peddie. All credit to them for voting in that lobby.

When right hon. and hon. Members ask me to speak on this matter about principles of the rule of law and retrospective legislation, I can speak on those subjects. I can speak in legal jargon. But I speak as an ordinary layman, I hope with some morals and some principles, and it makes me very angry when, under this kind of subterfuge, this kind of practice is indulged in. I do not believe that this argument is being conducted on that high plane. I believe that it is being used to deceive people into accepting something for other reasons. The basic reasons——

Mr. Deputy-Speaker

Order. The hon. Member was perfectly entitled to raise the broad issues which he has raised before the House. But he must not impute improper motive to Members either in another House or in this House.

Mr. Hamilton

The issue is a fairly simple one to my lay mind. A battle is going on for money out of the public purse by a company which suffered loss in Burma. Thousands of ordinary humble citizens also suffered loss. If this House accepts the claim of this company, because it is wealthy enough to pursue its claim through the courts, then I shall see to it in any way that I can that every one of my constituents who suffered in Burma by losing life or limb or breadwinners will make the same kind of claim on the Government, and I hope that the Government will accept those claims in the way in which they are being asked to accept this claim.

That is all that I am asking. This is the political issue which is involved. Retrospective legislation and the rule of law are, of course, important and I attach importance to them, but let us not lose sight of the basic issues.

5.45 p.m.

Sir Derek Walker-Smith (Hertfordshire, East)

In view of the preoccupation of the hon. Member for Fife, West (Mr. William Hamilton) with interests, may I start by saying that I am not a shareholder in the Burmah Oil Company. I will also say, in an abundance of caution, that, like many other people, I am a shareholder in the Shell Company, though I understand that, in fact, it has now no interest in these matters.

Mr. William Hamilton

That is not true.

Sir D. Walker-Smith

I have made no examination of that, and it makes not the slightest difference to my attitude in this matter. My interest in it, like that of right hon. and hon. Members generally, is a constitutional interest.

Mr. Paget

The right hon. and learned Member says that he understands that Shell has no longer any interest in this matter. Is he aware of how many millions of Burmah's stock are owned by Shell and how many of its subsidiaries are interested directly?

Sir D. Walker-Smith

I have not made the close study of these matters which the hon. and learned Member for Northampton (Mr. Paget) has found the time to do. I have other calls upon my time which preoccupy me in preference to that. I envy the hon. and learned Member the leisure which he evidently has. I know nothing of the ramifications of the financies of the oil industry. Like a vast number of people, however, I have some shares in Shell Oil. My interest in the matter is a constitutional interest, like that of right hon. and hon. Gentlemen generally.

I am not so sure about the hon. Member for Fife, West; I am not sure what is his interest in these matters. He has a style of speaking which would make even good points sound eminently unattractive. I must, in all fairness, say that that is a pure surmise on my part. I have never heard the hon. Member have a good point as yet, though I have listened to him a great many times.

Mr. Archie Manuel (Central Ayrshire)

Just try to answer the points.

Sir. D. Walker-Smith

The hon. Member need not worry about that. He has been here long enough to know that I shall address myself to the argument quite fairly. When I want any assistance I shall be only too ready to ask for it, but, again, I must in all candour say that the hon. Member for Central Ayrshire (Mr. Manuel) is not the hon. Member who would first spring to my mind as a source of assistance.

Mr. Deputy-Speaker

Order. I should be grateful if the right hon. and learned Gentleman would come to the Amendment.

Sir D. Walker-Smith

I am in your hands Mr. Deputy-Speaker. It is, I think, an ancient and well-accepted tradition of the House that an hon. Member who is fortunate enough to catch the eye of the occupant of the Chair not only may properly address himself, as a preliminary, to the observations which have been made by the hon. Member who has just resumed his seat but is under some duty to do so. During the 20 years in which I have had the honour to be a Member of the House, I have more than once heard an hon. Member criticised for failing to refer, first, by way of replication, to that which has fallen from the hon. Member who has immediately preceded him.

Mr. Deputy-Speaker

I am sorry that the right hon. and learned Member has misunderstood me. What he says is quite correct. I was, however, referring to his extension of that practice to another hon. Member.

Sir D. Walker-Smith

I think that if there be any blame, some should be attached to the hon. Member for Central Ayrshire.

I intended to make some other observations about the speech of the hon. Member for West Fife, but he has been so excellently answered by my hon. Friend the Member for East Fife (Sir J. Gilmour), in the interjection which he made, that I think it would be an act of supererogation to do so. I would, finally, commend to the hon. Member the words of C. P. Scott: Comment is free, but fact is sacred. If the hon. Gentleman must make this sort of speech, he ought to be very certain first, that he gets his facts right. Otherwise, we will think that his comment, so far from being free, is perverse and prejudicial.

We are here to consider—as you very properly reminded me, Mr. Deputy-Speaker—the Amendments from another place. I would venture to submit that when we have a Measure such as this, turning upon matters of constitutional and legal interest, it would be a very unwise House of Commons which would lightly reject the Amendments of the other place. This is not because of the Division lists in the other place—I am not concerned with those—but because of the quality of the argument which was adduced in the speeches in the other place and because of the high judicial and legal standing of the noble and learned Lords who there contributed to it.

These are the considerations which we should have in mind, because this issue turns on matters of great constitutional moment—the effect upon the rule of law of retrospective legislation. I do not think that this matter can be resolved as the Financial Secretary appeared to think, by the unearthing of precedents and seeking their application. In spite of his dredging, I do not consider that he has found a precedent which really covers this case. Even if he had, I should recommend the House not to follow it.

Precedent is a decisive factor or circumstance in the administration of the law by the judges in the courts. Their function is to interpret the law—[An HON. MEMBER: "And no more."]—and no more. Precedent is not and cannot be the sole criterion for Parliament, because Parliament's function is to make the law. Therefore, Parliament has to be concerned not so much with precedent as with principle. Where there are precedents which derogate from some great principle like the rule of law, they are not to be followed but to be disregarded——

Mr. Sydney Silverman (Nelson and Colne) rose——

Sir D. Walker-Smith

I will come to a semi-colon, if I may.

Such precedents are not sign-posts for the future—the hon. Gentleman may recognise that expression—but danger signals from the past. The more bad precedents which can be unearthed, the greater the responsibility of the House not to add to their number.

Mr. Sydney Silverman

Supposing that the right hon. and learned Member is right—I am not concerned to dissent—that their Lordships when dealing with the legal aspect of this matter in another place came to a correct decision as to what the law was. Suppose that he or Parliament generally came to the conclusion that although the company might be right in law, it had no merits in its application at all. Would he think that it was wrong for Parliament to give effect to the merits, even though the law did not do so?

Sir D. Walker-Smith

They would have the merit which is the relevant merit in this case. They would have a legal decision of the courts in their favour—[An HON. MEMBER: "That is not the point."] Yes it is, the whole point. That right should not be retrospectively taken away from them. The House must recognise the clear distinction in matters of this sort, a distinction between what Parliament has the power to do as a matter of vires and what it ought to do as a matter of constitutional propriety.

Mr. Arthur Woodburn (Clackmannan and East Stirlingshire)

The right hon. and learned Gentleman was a member of the Government when the Chancellor of the Exchequer introduced a proposal for retrospective legislation in regard to dividend stripping, which took away money from people which had been, in accordance with the law, gathered from the country. He was also in the House, I think, on a previous occasion, when a large sum of money was taken away from people who had made a deal in whisky. I particularly remember Lord Saltoun being nearly brokenhearted at the possibility of losing a very large fortune because the money made in that deal was, by retrospective legislation, transferred into taxable income instead of being capital gains. The right hon. and learned Member was a member of the House when that was done. I do not remember him attacking the principle on that occasion.

Sir D. Walker-Smith

The matter of the whisky has not stayed in my mind quite so closely and tenderly as it obviously has in that of the right hon. Gentleman.

If these are good precedents, they are not in line with this case. If they are bad precedents, the observation which I made holds good: we should be very careful not to add to them. I would submit with confidence that retrospective legislation is the great enemy of the principle of the rule of law. Nothing undermines confidence in the operation of the law more quickly than the knowledge or the belief that if the State does not like the decision of the courts, it can retrospectively change it. This Bill is retrospective in that sense, naked and unashamed.

The Financial Secretary sought to show that no right was taken away. On that I think that it is sufficient if I remind the House of what was said by Lord Morton of Henryton in that context——

Mr. MacDermott rose——

Sir D. Walker-Smith

I was about to cite Lord Morton of Henryton. He must know me well enough to know that I mean no conceivable disrespect when I say that of two opinions, if they differ, I would prefer Lord Morton's to his.

Mr. MacDermot

If the right hon. and learned Gentleman, with his great wit, is seeking to draw a contrast between what Lord Morton says and what I say, all I ask is that he does not misrepresent what I say. I never contended that there was here no taking away of a right.

Sir D. Walker-Smith

I am glad that there was one bad point which the hon. and learned Gentleman refrained from making.

Lord Morton of Henryton said: '… the Bill deprives a litigant who has succeeded against the Crown in this House of a right which he has established."—[OFFICIAL REPORT, House of Lords, 13th April, 1965, Vol. 265, c. 325.] That is exactly the point made by my hon. and learned Friend the Member for Northwich (Sir J. Foster). Therefore, I think that it is clear that this is, on the face of it, retrospective legislation; which is agreed to be repugnant in principle, and should only be accepted if this Measure could be fitted into some admitted class of exceptions.

What is said? The hon. and learned Gentleman says that it brings the law into line with what it was previously thought to be. I believe that to be a very dangerous doctrine in general and I believe it to have no application in the facts of this case. It is dangerous in general because it is a very short step from that for a Government to be able to say, "We thought this was the law. It is true that the courts have found that we were wrong, but, as we are the majority party, we must represent the largest number of people and it must, therefore, be assumed that generally this view is held. That makes a case for retrospective legislation." That is a pernicious principle which is not far behind what has been said here today.

I say, also, that it has no application in the facts of this case. It is clear, I think, that whether there was a right to compensation in the circumstances of this case depended on which side this matter lay of a borderline which has existed through the centuries in legal thinking about compensation. It is the borderline between acts done by the enemy and acts done by the State through unavoidable necessity, for which compensation does not rank, and acts done by the State deliberately, freely and by precaution as Vattel put it, for which compensation does rank. Until this matter had been considered by the Judicial Committee of the House of Lords for 10 days it was impossible to say on which side of the borderline these acts lie.

6.0 p.m.

The hon. and learned Gentleman sought to draw some principle as to what matters could properly be the grounds for retrospective legislation. I do not believe that there is any comprehensive or precise definition. I venture to submit that it should be very narrowly drawn. It should include the correction of manifest error, rather like the slip rule of the Rules of the Supreme Court, and the indemnification of innocent functionaries together with such matters as the validation of marriage by bogus clergymen, to take the example, given by Lord Conesford in the House of Lords.

For this sort of thing, retrospective legislation is proper. I suggest that the principle is this. The State may retrace its steps with retrospective legislation to correct an error, but never to grasp an advantage. It may use retrospective legislation as an instrument of mercy to raise up the citizen, but never as a weapon to oppress, to strike him down.

I wish to conclude by respectfully reinforcing what Lord McNair, with his unique and unrivalled authority in this field, was so concerned about, regarding the international implications of this matter. We shall no doubt sustain commercial and practical detriment, as he so properly apprehended. Obviously, the spectacle of the Government using retrospective legislation to deprive citizens of their rights and to seize advantage for the State will excite the interest and stimulate the emulation of other countries which may be minded, as he pointed out, to expropriate British property or cancel British concessions.

That is a practical and material detriment, but it is not the only one. I am also concerned about the international implications of this in the defacing of Britain's image abroad——

Mr. William Hamilton

What about the Gambia?

Sir D. Walker-Smith

—and the lessening of the contribution which this country can make in the second half of the twentieth century by giving guidance and leadership in the ways and workings of parliamentary democracy and the rule of law. If we, who should be the guardians of the principle of the rule of law, are seen to violate it, who can be surprised if the same thing happens else- where? How can we seek to set an example if we do not follow it ourselves? In the words of the Scriptures: For if they do this thing in a green tree, what shall be done in the dry? If the trumpets sound with such an uncertain tone on the rule of law in this country, the ancient citadel of liberty and the law, who can be surprised if its call be muted in countries as yet groping their way? I believe that the provisions in the Bill, if unamended, will do great damage to the operation of the rule of law in this country, and will greatly diminish the strength of Britain's constitutional example abroad. These would be grave and unwelcome consequences and I hope that the House will avert them by accepting the Amendments.

Mr. Christopher Norwood (Norwich, South)

I rise not to speak as a lawyer, not to match the first part of the words of the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith)—which I doubt that I could do, though I think that when it comes to his argument a case may be made against it. The right hon. and learned Gentleman spoke first of the argument of authority, the argument that this House ought not to fail to accept these Amendments because they have been accepted by wise and loyal men. How strong has the rule of authority been over the centuries? How many barbarities were perpetuated because other men were wiser? How many theories were accepted in the first place, and later refuted, because authority said that they were correct?

It is fair to say that if one has a good argument one does not use the argument of authority because one does not have to use it. What this argument in essential, appears to me—a new Member—to amount to is this. If this House cannot make up its mind, it ought to be left to another place to do so for this House. Is not that an absolute travesty of the reason why we are here? I do not dispute the integrity or the learning of those who sit in another place. I do not accept the argument of the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) that their I.Q. is necessarily higher. I do not know. I have not examined it. I do not greatly care. The question is, on this particular issue, are they right or wrong?

I cannot match the sophistries of some of the legal interruptions which we heard when my hon. and learned Friend the Financial Secretary was speaking. Sometimes they were sufficiently uninvolved for me to be able to follow. On other occasions I could not follow them at all. Sometimes they were so involved that I think the hon. Members concerned lost themselves. This is not essentially a legal argument. It will not be seen in the country as a legal argument. It does not seem to me to be a legal argument. I do not mind whether the company has managed to achieve this situation because it happened to be registered in Edinburgh at the turn of the century.

I do not accept the comment of the right hon. and learned Member for Hertfordshire, East when he said—I have great sympathy with this—that retrospective legislation should raise up the citizen and not strike him down. I take two points from that. The first is that the right hon. and learned Gentleman admits the pressure of the degree of the permissive nature of retrospective legislation, provided that he or someone else agrees with it. He admits that it is on occasions justified, and then he tells us that it should raise up the citizen and not strike him down. That is a fine principle, but we are not talking about the ordinary citizen, are we?

The point made by my hon. Friend the Member for Fife, West (Mr. William Hamilton) is abundantly true. This does not concern an ordinary citizen. This is not an innocent voter coming to the slaughter in front of the House. This is a mighty and powerful corporation seeking, on figures which are not in question, a loan on its own account of £67 million. I do not necessarily say that if the matter was £1 million or £67 million it would make all that difference to me, but I do say that we cannot pretend that an ordinary citizen could come to this House, with the degree of advertisement which we have already seen and the degree of pressure which we have all felt, and ask for £67 million. By heaven, if I could promise that to my voters I should be here long enough to be regarded as the oldest Member. That is true, is it not? We could all do it.

The argument, putting the lawyers' argument aside, putting the barristers' sophistries into simple terms, is that the company would have no claim if it destroyed the installations on its own initiative. It has a claim because it was instructed so to do by the Government. In other words, it would have no claim if it had been loyal enough to destroy the oil rather than leave it in the hands of the Japanese. It is only because the Government of this land said, "You must destroy the oil rather than let it stay in the hands of the Japanese", that this company has a claim. So it has a claim only because it was prepared to be disloyal.

Mr. William Yates

I think that the hon. Member for Norwich, South (Mr. Norwood) must be very careful. I should have thought that the Burmah Oil Co. was under instruction from the Burma Government to produce oil for the use of the Army and civilians for as long as possible. I am surprised that the hon. Gentleman should charge the company with disloyalty.

Mr. Norwood

As to any argument about the company having been instructed to destroy those installations, I understood that those instructions were not given by the Burma Government but by the British Government. Indeed, that was the reason why, I imagine, the action failed in the courts of Burma. I am arguing about this as a layman and not as a barrister.

Contrast the situation of this company—which, let us remember, is making this claim only because it destroyed those installations on instructions—with the point of view of a Service man. My hon. Friend the Member for Fife, West made this point and, while he was doing so, the benches opposite occasionally erupted into laughter. I do not know why.

I know a man, a hard man I admit, who was a boy in the Royal Navy. After the sinking of his ship he was captured and sent to work in the pits of Japan. Somehow he lived. As I say, he was a hard and strong man; in some ways, a man to be respected perhaps more than liked. Nevertheless, he survived from 1941 to 1945 working as a collier in the pits of Japan. When I met him some time ago he told me that he had received a total of £36 in compensation. He may have received more since then. I do not know. Contrast that case, which can be only one of many, and the cases of people who came back mentally disturbed, who had been brutally treated and who had been given not a fraction of the consideration—or, dare I say it, a fraction of the time—of this House or of another place with the huge organisation of the Burmah Oil Company.

It is no good telling ordinary people that we sit here in Parliament to adjudicate on the principle of retrospective legislation, particularly if we have an able and brilliant speaker opposite who says that he will admit it in certain circumstances but not in this. Can it be argued that the volunteer should be paid a higher degree of war pension than the conscript or that the conscript, because he was forced to serve, should receive his war pension but that the volunteer should receive none? That is what the right hon. and learned Member for Hertfordshire, East is arguing vis à vis this company.

Conflict between principle and expediency? I do not know. Ordinary lay people like myself—who are more lay than the rest of this House since, being a new arrival, I have not become used to the more gentle ways of speaking or some of the conventions of the House—can listen to the debate. I am disturbed because I see tremendous talent, effort and wit being used to a purpose which, frankly, I cannot call even worthy. It disappoints me because if one wants to spend £80 million on people who were injured in Burma and in the Japanese camps one might have a case, but to want to spend it on a company which is already the largest individual shareholder in B.P., apart from the Government—a company which, unless it had enormous assets, could never have undertaken this campaign—then, while not going as far as my hon. Friend the Member for Fife, West—because I am less able to judge men's motives—I can only say that I have been disappointed at what I have heard today.

I heard, for example, the intervention of the right hon. Member for Carlton (Sir K. Pickthorn) who, when addressing the Financial Secretary, said that even if one cannot be fair to all one should be fair to some. If we give this company what it wants, does it matter if we have not helped others, too? That was the burden of his intervention. The answer is that it does. It matters terribly. It matters more than anything when people who are willing to speak in defence of an organisation which is capable of looking after itself are not necessarily willing to speak in the defence of ordinary people who were maimed and who suffered in the war.

I ask the forgiveness of the House for speaking with more intensity than befits a newcomer to this place. I assure hon. Members that I have not said more than I feel. Having listened to all the sophistry of the arguments about retrospective legislation and the rule of law, I cannot believe and I do not accept that the standing of the present Government will be reduced if they show that they have the courage and stature to stand up against such a powerful business corporation.

I take the point of the right hon. and learned Member for Hertfordshire, East about the strength of the Government being used against an individual and I agree that if that were to happen the Government would lose standing. However, we are considering a well-contrived, well-built and well-inspired campaign which would take out of the hands of the people of this country £60 million to £80 million and give it to the shareholders of a limited company when if we needed to spend that money on those who were hurt in the war we would be willing to do so without requiring an order from Her Majesty's Government to do so.

6.15 p.m.

Mr. Jeremy Thorpe (Devon, North)

The hon. Gentleman the Member for Norwich, South (Mr. Norwood) spoke with great feeling and sincerity and I come straight away to the main point he made.

On Tuesday mornings I used to go to a a settlement in the East End of London, known as Cambridge House. There a team of barristers and sometimes solicitors would give free legal advice to any member of the public who asked for assistance. I remember the first case I had. It was an old lady who was, perhaps, rather older than she should have been to undertake the sort of work she was doing. Indeed, there was some question whether she had given her age incorrectly in order to get employment. She had lost three fingers in a machine. I took down the facts and it was clear that there had been negligence on the part of her employers. It was right to say that she would have a good action.

The first thing she said, when I made the facts clear to her, was, "Yes, but I was employed by a Ministry, a Government Department. Does that make any difference? Surely it will be very difficult for me to have a successful case?" I said "No, it makes absolutely no difference at all". I did not explain to her that since the passing of the Crown Proceedings Act, 1947, the Crown, when sued, is in exactly the same position as the ordinary citizen.

Mr. William Hamling (Woolwich, West)

It was introduced by a Labour Government.

Mr. Thorpe

I agree that a Labour Government introduced that Measure, as I have admitted in the past. I pay tribute to the party opposite for having introduced it. [Interruption.] I am not here to answer for the Tory Party, but to discuss the Amendments to the Bill.

Mr. Hamling

The hon. Gentleman is on their side.

Mr. Thorpe

That happens to be a geographical accident. During the last six years I have had more experience of opposition than hon. Members on either side of the House. I am standing here at the moment and who happens to be around me is no concern of mine.

I return to the remarks I made to that old woman. They represented a great guarantee which had been given to her by the rule of law; that she would be able to sue her employers whether they were a powerful Government Department, a State corporation, or an individual employer. The second thing she said to me was, "I am a very poor woman. How can I afford it?" I was able to tell her that she could afford to bring an action if she could show that she had a good case and that she would get legal aid, again introduced by a Labour Government in the Legal Aid Advice Act. That, again, is part of the rule of law.

The old lady might have asked, "Suppose I get legal aid, and suppose I get judgment in the courts for many hundreds of pounds against that Government Department, can they take it away from me? Can they deny me the fruits of that litigation?" One would then, of course, have said, "No. The courts cannot be interfered with. They are totally independent of the legislature. It may well be that laws will be changed, that judgments may produce the necessity for altered legislation in the future, but, under the rule of law, you will be given financial assistance to fight your case. It is irrelevant who the defendants may be. It is also certain that if you recover, nobody can do anything about it. They may take you to appeal, but no one can take the matter out of the grip of the courts."

Therefore, when hon. and right hon. Members are getting somewhat anxious about those who served in the war, those who paid a very great price to serve their country, let us just remember that for those people as well as for any others, it is vital that the rule of law shall be protected. It is vital that the rule of law shall be there for them.

To me, believing, as I do, in the rule of law, one of the great causes for doubt after the war was when it was found by a majority decision of the House of Lords that William Joyce, "Lord Haw-Haw", was found guilty of high treason, and was hanged. He had no merits, but it is very arguable whether he was rightly convicted. As one who is anxious to defend the total impartiality of the criminal law and the civil law, I had very grave doubts whether that decision was right in law.

The point is that if one believes in the rule of law one is anxious to see its purity maintained. Whether it be an accused person against whom one might have very violent feelings—as in the case of William Joyce—or whether it be a great public corporation for whom hon. and right hon. Gentlemen may not have tremendous sympathy, or whether it be an individual humble subject, the principle remains the same. And surely the principle is put to the test when emotion is not there to back it up; when it is the principle that has to be looked at, and looked at alone.

I therefore ask right hon. and hon. Members, when taking the point about those who suffered during the war, that they should remember that the maintenance of the rule of law—whether it be for a public corporation, or whether it be for a British subject who broadcast for the Nazis during the war—depends on the utter independence of that judiciary and that judicial system, whatever the merits or de-merits of the individual concerned may be.

Mr. Ivor Richard (Barons Court)

I thank the hon. Member for giving way, because I intervene to make a serious point. As I understand him, he is using the case of Joyce to illustrate the fact that Parliament should not legislate in such a way as to reverse the decision of a court of law retrospectively.

First, would he agree that the legislation that would have been required in the Joyce case would have been to acquit a person of a criminal offence of which he had been convicted? Secondly, would he not agree that there is a great difference between retrospective legislation in relation to a civil action that is going through the courts, and legislating so as to make something that has not been a criminal offence punishable in the criminal court?

Mr. Thorpe

I certainly agree that retrospectively to create a criminal offence is to take a far greater step than retrospectively to take away the winning of a civil action. But I say that if one believes in the rule of law, one is just as concerned when a bad, wicked, man is convicted, if one thinks that he was wrongly convicted, as one is concerned if a corporation, with whom people may not have great sympathy, is deprived of a civil action that it has won in the court, because both attack the principle of the rule of law——

Mr. Raphael Tuck (Watford)

It has not won.

Mr. Thorpe

The hon. Gentleman says that the company has not won, but it has so far succeeded on one point of law before the Judicial Committee of the House of Lords. I say that the Bill is extending the precedent of interference by the legislature with the judicial process.

I concede straight away that there may be cases where retrospective legislation can be justified——

Mr. William Hamilton

This is one.

Mr. Thorpe

I shall seek to show why I think that this case is not one. If I can say this about the hon. Member for Fife, West (Mr. William Hamilton), I was surprised by the moderation of his speech. I was sympathetic with the somewhat difficult position in which the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) found himself, but knowing that he is to vote in favour of accepting the Lords Amendments, I for my part—having had the doubtful virtue of consistency throughout the case—applaud the fact that we have, so to speak, made an "honest woman" of him at last.

It is true that the official Opposition is in a very difficult position, and that members of the Opposition Front Bench intend to vote in favour of accepting Amendments which their ex-Ministerial colleagues in another place voted to reject. At the same time, in one respect, the hon. and learned Financial Secretary was a little unfair about the Opposition's support for the Lords Amendments. The Opposition did, after all, provide him with the support and encouragement of the noble Viscount, Lord Dilhorne, and I am sure that the hon. and learned Gentleman is appreciative of that fact.

I think that retrospective legislation—and the right hon. and learned Gentleman the Member for Hertfordshire, East (Sir D. Walker-Smith) put it, if I may say so, in a far more lucid and succinct way than I can—is justified in the case where the parties to a transaction have done something in good faith, usually in the public interest, at a time of national emergency, and have discovered that it has a totally unexpected legal consequence. They should be protected from the consequences of those acts, perhaps from vexatious litigants who are anxious to take some purely technical point, and who would, therefore, find themselves at an unexpected disadvantage.

I ask, rhetorically, whether or not that test applies to this case. I believe that the first great criticism of the Bill is that it has the power to non-suit pending litigants. As Lord Jowitt said in another place on 4th March, 1947, the Crown Proceedings Act was intended, in regard to actions against the Crown, to place the Crown in the same situation as the ordinary litigant. Whether or not this Bill is justified, it unquestionably has the effect of non-suiting a litigant; that is to say, in the middle of a case one can no longer continue with it. If that principle had been applied equally to the old lady who had lost her fingers in the machine, I should have thought that every hon. and right hon. Member opposite would have said that it was wrong; that she was in the middle of her case, which should be allowed to run its natural course.

6.30 p.m.

Where I differ from hon. Members opposite is that I am not concerned with whether it is an old lady working in a machine shop, or with whether it is a great corporation. The principle remains the same. I am more convinced of the rightness of the principle because it applies, in my view, even where there is no emotional argument in support of the corporation's case.

The second thing which I think it is important to realise is that the Bill seeks to tell the courts what they are to do in respect of pending cases. They are to set those cases aside. I should have thought that it was a very grave interference with the rule of law that the courts are to be instructed by Parliament as to what they are to do in any particular case.

The Financial Secretary mentioned precedents. With respect to him, they are not all applicable to this case. I think that the Indemnity Act, 1920, comes as near to it as any. I still think that there is an argument on Section 2(1,b), but I will not go into that now. If the Bill is passed, I can imagine that it is more likely and not less likely that in four or five years' time another Bill will be introduced of a retrospective kind and another Minister will say, "There is nothing unusual about this. As recently as 1965 we introduced a Bill which had retrospective effect". Therefore, I do not think that merely, to use the term without disrespect, building up the dung-heap as high as one can get it is any justification for fouling the legal nest.

I do not think that many of the precedents are relevant. They do not all convince one that a case has been made out. Then there is the third case which Lord McNair made out. I am delighted that the right hon. and learned Member for Wirral has not only adopted the Liberal line, but most of Lord McNair's speech as well, so mine will not be quite as long as it might otherwise have been. It is true to say that this will have an effect in indicating the sort of treatment which our courts are, through the action of the legislature, forced to mete out to this and other similar companies.

One of the great complaints about Governments in newly emergent countries is, not only that in many cases people are denied their individual political rights and their power of criticism of the Government—we know many countries where this is so; they are not all the new democracies; they are some of the old ones as well—but, also, that the property of the individual is very often liable to confiscation.

I know that "property" can stir up many powerful emotions in the breasts of right hon. and hon. Members opposite. I must declare my interest at this late stage. I speak as a capitalist. The total shareholding which I possess in the world amounts to two shares in the North Devon Liberal Club, which produce me about 6s. a year in dividends, although they have somewhat appreciated in recent years. The Bill deals with a matter in which this country has jealously preserved constitutional rights.

The Bill will certainly make it more difficult, as opposed to making it more possible, for anyone accredited to a British company with money and investments abroad which are subject to an act of confiscation, and when the company is possibly denied the right of access to the courts, to deplore the action of the Government of that foreign country if that Government can say, "What about your War Damage Act?"

I know that the measure of damages again stirs up tremendous emotions. Figures such as £80 million and £120 million have been bandied about. I do not think that the Financial Secretary is pressing the compensation point now. I think that the rehabilitation payment was accepted as rehabilitation, albeit to be credited against any sum that might subsequently be recovered. I have two questions on this aspect. First, did the Government or their predecessors take an opinion as to what the measure of damages was likely to be? Did they go into this point? It is a point on which a lawyer would, presumably, be able to advise. It would be interesting to know what view the Government took of it. Secondly, when the rehabilitation payment was made did the Government take a receipt for it and, if so, in what form? Would I be right in saying that it was not regarded as being in discharge of all outstanding liabilities? It would be interesting to know the answer to this question.

There is one person to whom I should like to refer, since we are so apt to get on to purely emotional arguments. We are not dealing only with a large corporation. We are dealing, for example, with an individual—Mr. Alexander Dewar—whose workshops were destroyed and thrown into the Irawaddy at Syriam, during the war. He was not able to claim. He did not come in under the rehabilitation payment. Therefore, we are not dealing solely with great powerful corporations. We are dealing with at least one individual and, for aught I know, there may be more. [An HON. MEMBER: "Did he issue a writ?"] I cannot say whether Mr. Dewar has issued a writ. It could well be that he would be out of time.

If we believe in certain basic principles, one of which is that the rule of law is one of the greatest constitutional bulwarks which the individual possesses in this country—the right to be able to go to court, financially assisted, if necessary, capable of suing any Government Department and any State corporation—we must be concerned about the effect that the Bill, which we are asked to pass unamended, will have on the rule of law, which is far more important in the long run to the great mass of people than it is to a powerful corporation, which can put its assets abroad and which can get out of the jurisdiction.

We are not doling out to a great corporation. We are doing something much more important. We are protecting the rule of law so that it can continue for the protection of the people of this country.

Mr. Richard

I am sure that the hon. Member for Devon, North (Mr. Thorpe) will forgive me if I do not follow in detail all the points he made. However, I want to take up one or two. The first is that which I hinted at when I interrupted him. The Joyce case is no fair analogy with the legislation being put before the House by the Government, for one very simple reason. The Joyce case was a criminal matter. This is not a criminal matter. It is a civil action pending. Indeed, we are often told that the action has not been completed; it is still pending before the courts.

I can think of no circumstances in which it would be justifiable, save in the gravest of national emergencies, for the House to pass an Act making something a criminal offence which at the time when it was performed was not a criminal offence. That type of retrospective legislation can be justifiable only in the most exceptional circumstances. Perhaps I am being over-cautious in going only that far. It is probably right to say that it can never be justified.

Mr. Thorpe

With respect, the hon. Gentleman has not quite grasped the point I made. It is probably my fault for having been so obtuse. My point was this, and I think that the hon. Gentleman will agree with me about it. If one believes in the rule of law, if one believes in the impartiality of the courts, if one believes in the availability of the courts to the ordinary citizen, one would mind if a criminal, even a man who was making treasonable broadcasts throughout the war from Germany, was wrongly convicted; not because one had any sympathy for him, but because the rule of law is of such importance that its impartiality must be maintained, even though it lets off somebody whom we all know to be a criminal, although it may not be possible to prove that under the law.

Mr. Richard

I entirely accept that as a principle, but, as I understand the hon. Member, the only relevance in introducing the Joyce case into this debate would be that somehow or other what the Government are trying to do in this Bill eats into the sort of rule of law which the hon. Member thinks was not made available in the case of William Joyce. I go thus far that the rule of law is something which ought to be maintained. It is something, however, which is not sacrosanct. Indeed, the hon. Member in his speech and the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), although they are not in the same party, agreed that there were exceptions in principle. There are exceptions to this principle.

The hon. Member proposed his exceptions in a certain way. I would put the matter somewhat differently. It seems that retrospective legislation is justified, but all hon. Members agree that there must be a residual duty of the House of Commons and Parliament generally to retrospect in the public interest where that is the only way—I emphasise this—in which justice can be done as between the Government and the citizen and as between classes of citizens themselves. It may well be that if an action proceeds through the courts it will produce a certain legal result. This happens day in and day out. Judgments are asked for and are given, but there must be a residual duty in this House of Commons. Otherwise, to a large extent, we are here for naught. There must be a duty, if necessary in the public interest and in order to achieve justice as between Government and citizen and between citizens themselves, to look at the results of litigation and if necessary to overturn them.

I accept that this is an exceptional thing to have to do, but it is a duty we have, something we are obliged to do by the very nature of this place and the duties which we perform in it. The courts of law are not the only guardians of human rights and of human liberty in this country. This Chamber is a guardian of the rights of the individual. This Chamber, the House of Commons and Parliament, is where the rights of the British citizen have been established over the centuries, not—with the greatest respect to all the judges—the courts of law.

Time and again it may be that Parliament and the courts have come into conflict. On each and every occasion it has been this House and Parliament which have emerged supreme. The question we have to ask is, accepting the test as I put it forward as to whether or not this legislation is justified in the public interest to secure justice between the State and citizens and between citizens themselves, is this particular piece of legislation justified? Are we justified in rejecting the Lords Amendments? I think we are.

Let us not burke this issue. The distinction which is at the basis of the claim is that a distinction exists between denial damage and war damage. I refer to what Lord Kilbrandon said. It is quoted in the House of Lords OFFICIAL REPORT of the Second Reading in another place on 25th March, 1965. In the course of his speech Lord Conesford quoted Lord Kilbrandon as saying: There is, accordingly, a certain artificiality in holding, as I have done, that the incidents averred in the pleadings give rise to a claim for compensation, whereas if substantially similar incidents had taken place a day later, they would not. It is not a sufficient answer to say that what I am considering is a question purely of law. When law and common sense find themselves taking different roads, it is time for law to suspect that she has missed the way."—[OFFICIAL REPORT, House of Lords, 25th March, 1965; Vol. 264, c. 786.] I could not put it better than that. It seems that in the House of Lords decision, coming to the conclusion that this artificial distinction exists between denial damage and war damage, the law has diverted from common sense. We should not only suspect that the law has missed the way but that this House should put it right.

Mr. Thorpe

For the future.

Mr. Richard

Very well, for the future. We are therefore all agreed, I understand, that the law has missed the way and should be turned back to the right and proper road so far as this distinction exists. The question concerning hon. Members opposite, and which indeed has concerned hon. and right hon. Members on this side of the House, is whether we are entitled to overturn a decision of the highest court in the land.

6.45 p.m.

I make two points on that. On the first I have an unlikely ally for an hon. Member speaking from this side of the House—the former Lord Chancellor. It would not be expected that he would be quoted from this side. In the same debate, as reported at column 757, the noble Lord put a point which I agree with and which I invite hon. Members to note. He said: If, in 1962, the then Government, instead of sending the warning letter, had introduced a Bill, would there have been any objection to that Bill? I doubt it very much. I am confirmed in this view by the fact that one of the chief critics, if not the chief critic, of this measure has said that in 1962 he would have been in favour of a Bill barring the Burmah Oil claim and the claim of the other claimants. Does not the question which has to be considered in relation to the retrospective part of the Bill come to this: has anything happened since 1962 which makes it wrong to do now what it would have been right to do then?"—[OFFICIAL REPORT, House of Lords, 25th March, 1965; Vol. 264, c. 757.] I pray that part of the noble Lord's speech—an unlikely ally—in aid on this point. It is a point which ought to be considered by hon. Members opposite. If in 1962 the then Government had chosen to introduce a Bill of this sort, would it not have received almost universal assent in this House? Would not people have said, "Quite right. It would be wrong for this nation to treat denial damage and war damage in different categories. It would be wrong to treat this great and powerful corporation in a different way from the way in which this nation has treated people who have been injured or families who have lost the breadwinner." Would not that have been the attitude? I suggest that not only would it have been the attitude of this House but it would have been the right attitude for this House to take in 1962.

If it was right in 1962, the question which has to be faced is simply, does the fact that there is now a decision of the House of Lords completely overturn the principle that would have been right to have been enacted in 1962? Does it or does it not? This is the simple question which has to be faced by every hon. Member in this House. In my judgment it does not. The mere fact that a court of law, albeit the highest in the land, has issued a declaratory judgment declaring that certain rights in law exist does not seem to remove from this House of Commons the residual duty to decide—even if those rights exist—whether it is just as between various classes of citizens who might have been affected.

Going back, not to 1962 but to the position in 1947 after the war had finished, had the then Government chosen to introduce a Bill along the lines of the Act of indemnity passed after the First World War, does any hon. Member seriously think that it would not have been passed? Does anyone contend that if it were thought that the Burmah Oil Company was placed in a unique position this House would not have said, "Let us ignore that distinction; we shall keep on exactly the same basis as every class of person injured in the war."? If it would have been right in 1947 and 1962 to have done this and if we in the House of Commons would have been fulfilling the residual duty of this House, what has happened between those two dates and today so to alter the position and make that which would have been right then wrong now?

Mr. Thorpe

The hon. Gentleman asks what would have been the reaction if such a Bill had been introduced in 1947 or 1962, before this letter was sent. Suppose such a Bill was introduced, which meant that for the future there would be no claims for denial damage and the hon. Gentleman said, "Is this going to affect any particular company?". Suppose he found that it was going to affect the Burmah Oil Company. Would he not say, "The Sarawak and the Brunei cases were covered by special agreement, by contract. Companies in this country were covered by Statute. Some might even have been able to recover by common law."? Would he not have said that some compensation provision should be made for this company whose accrued rights were being affected?

Mr. Richard

That is precisely what happened. This is what hon. Gentlemen opposite do not seem to be able to appreciate. The various companies injured as a result of hostilities went along to the then Government and the result of their negotiations was that they were paid £4¾ million. The distinction that is sought to be drawn between money paid as rehabilitation and money paid as compensation is a distinction I frankly do not understand. I fail to see how it could be said that the £4¾ million paid to the Burmah Oil Company in the 1940s cannot be said to he compensation within the general sense of the term. If it was not compensation, what was it?

Sir K. Pickthorn

There is another distinction surely. Whether you call it compensation or ex-gratia payment or whatever, this was an amount decided wholly, entirely and exclusively by the person or authority going to make the payment.

Mr. Richard

This is the inevitable concomitant in a state of affairs when a country has emerged from a war and when a lot of people have been injured by it. It is known full well that all their claims cannot be met in full. It is impossible to compensate everyone injured as if they were entitled to bring a common law claim for damages in the courts. When a Government are placed in the position of saying, "We cannot meet all these claims in full, we must apportion them," it is an inevitable happening. I see nothing wrong, in those circumstances, in the Government saying to the Burmah Oil Company at that time, "Your share of the amount of money that we can afford for rehabilitation compensation for Burma companies who have suffered as a result of this law is £4¾ million." Hon. Gentlemen may say there is something sinister and very odd in this, but I do not see it.

Where one has a situation in which in 1947 and 1962 this Act was justified, can one then go on and take the next step, and say that, because there is a decision in the House of Lords on a preparatory point, that so changes the situation as to remove from this House that residual duty which we all say we are entitled to have? This is the point and for the life of me I do not see how hon. and right hon. Gentlemen opposite can say that the mere fact that a number of law Lords, respected as they are in the field of law, have come to a conclusion on a point of law wholly removes from this House the right to decide if that decision is just, if it is right and if it produces a fair and equitable result between Government and the citizens and between various classes of citizens.

A decision of the House of Lords does not remove that duty from this House and we should be abrogating the duty of the House and of Parliament as such if we were not to face this duty and examine this problem and if we were not then to go on and enact this legislation.

In the course of the Second Reading of the Bill the right hon. and learned Gentleman the Member for Wirral (Mr Selwyn Lloyd) said: Having been a party to the decision to warn the company, I feel that I myself cannot honourably vote against the Second Reading."—[OFFICIAL REPORT, 3rd February, 1965; Vol. 785, c. 1106.] His honour seems to have permitted him and his hon. Friends opposite to vote against the Third Reading and to take the action they have. It is disgraceful manoeuvring upon the part of the Front Bench opposite, and I trust it will be noted in the country.

Mr. Edward Gardner (Billericay)

It is very surprising to hear the hon. Gentleman the Member for Barons Court (Mr. Richard) talking about disgraceful manoeuvring. Before I deal with the substantive point raised, I should like to declare a personal interest in this subject. It is the only personal interest that I have and it is perhaps right that the House should know of it. It is the interest which I am sure is shared, by everyone in this House, that as a result of the debate on these Amendments we shall reach a decision which will bring, as the Financial Secretary to the Treasury has said was his ambition, right dealing and fairness.

I hope that it will not seem irrelevant if I say that I have no shares in the Burmah Oil Company, or in any oil company. Looking at the way those shares have been behaving under the impact of the Government's policy, I am really rather glad.

The hon. Member for West Fife (Mr. William Hamilton) is under the impression that anyone who talks on this subject, or holds views on the subject of the Burmah Oil Company, or happens to have any shares in that company or its associates, is so critically prejudiced that he is not really listened to with any respect. If this is his view, or if I put it too severely, I apologise, but that is something like the sense of what he has been saying, I can only say that if he had any shares in the Burmah Oil Company I feel that no one in the House would begin to suspect that his views were in any way prejudiced.

It may well be the fact that some people who do not have any shares are affected by the absence of holding any shares and take a poor view of this and that it has prejudiced them. May I make it clear that the rich oil company which he feels so hostile to is, in fact, a company in which thousands of people holding very small interests—[Interruption.] Not the poor men again. These are little people, and their rights are important. When we are talking of the rule of law, it does not matter upon whom that rule operates, be it a company or a person. It is still the rule of law, and it is still something which I am sure the majority of the House respects.

7.0 p.m.

The Bill has two purposes. One is to alter the law in respect of compensation for war damage. It is the other purpose to which we on this side of the House are hostile, and it is to give retrospective effect to the provisions on compensation for war damage. The Lord Chief Justice, in another place, said that he objected to this, not merely because it was confiscatory, but because it was contrary to the rule of law. That was a view taken by Lord McNair. The Lord Chief Justice went on to say that, in its present form, the Bill would extinguish the right of a subject which had been confirmed by our highest judicial tribunal: the Bill would require the court to set aside proceedings on the application of a defendant who had lost.

Mr. Hamling

Was this the view of the hon. and learned Member on Second Reading, or his party?

Mr. Gardner

My view about the Bill has always been that the retrospective element is wholly dangerous, that it undermines a principle which we in the House should be the first to uphold and that it is a principle which can be avoided only in the most exceptional cases. I do not accept that there are special circumstances about this matter which justify abrogation of the rights decided by the House of Lords.

The hon. Member for Fife, West said—and I was very happy to hear him say it—that he had a great respect for Lord McNair. I am sure that that is something which we all share. As the hon. Member well knows, Lord McNair was wholly hostile to the retrospective element in the Bill. Indeed, all the Law Lords, whether they were of the opinion that there was a legal right in the company or not, expressed the view that the company had, and has, a moral right to compensation. Indeed, in Sarawak, Brunei and North Borneo the Government willingly gave to the companies which lost their assets by reason of denial damage the full cost of that damage. They awarded them the full cost of the denial operation, and they also awarded them the loss of profit.

Because we are trying to establish fairness and fair dealing and justice, may I give as another example the case of the Irawaddy Flotilla Company which, in 1942, agreed with the Ministry of Transport that if it allowed its coal and fleet in Burma to be destroyed in order to deny the use of those assets to the enemy it would be entitled to compensation; and that is what it got. The value of the assets amounted to £1,360,000. It recovered some of the fleet which was not damaged and it was given by the Government £1,076,000 in compensation. So far as I know, nobody raised a whisper in opposition.

Here is an opportunity of considering again the possibility of entering into negotiation with this oil company to settle this claim. If the Government can pay, as they have paid in the past, companies almost in full for the damage which they have suffered of precisely the same kind as the damage suffered by the Burmah Oil Co., what prevents them from considering this claim again and coming to an equitable solution?

Mr. MacDermot

If the hon. and learned Gentleman thinks that it is wrong to pass retrospective legislation, would he explain why he wants us to negotiate? If he wants this matter decided on what he declares to be a question of principle, why should we allow the actions to proceed?

Mr. Gardner

I will willingly deal with that point in a few moments.

It has been said by the hon. Members for Fife, West and Norwich, South (Mr. Norwood) that if the Government were to pay the Burmah Oil Co. compensation there would be unfairness which was quite outrageous because people who had served in that area of war who deserve—and no doubt deserve in full; let there be no mistake about that—compensation from the Government, there would be in some way unequal treatment as between one and the other. I do not pretend to speak on behalf of people who were injured in the war and who suffered the agony of war in that area, but I think that I can draw the Houses's attention to what was said by someone in the debate in another place who can and did speak on behalf of these people, Field Marshal Lord Slim. He was against the Bill. He thought, I believe rightly, that we do not fight a war so as to allow a Government to obliterate and override private rights in the way that this Bill overrides the right of the Burmah Oil Co.

Mr. Norwood

I wonder whether the hon. and learned Gentleman would accept these figures? I believe that they have been quoted in the OFFICIAL REPORT. He might find it significant that 100,000 prisoners of war were paid compensation of £4.8 million.

Mr. Gardner

I do not doubt that figure for one moment. What I am suggesting is that this is a confusion of thought and an introduction of an emotional element which has no relevance to the question of whether we should allow a Bill, by its retrospective effect, to confiscate what the highest legal authority in the land has decided is the right of this company. I should not like it to be thought that I am in any way challenging the sincerity of what was said by hon. Members who took this point, but I submit with equal sincerity and gravity that it is an irrelevant point which should not be taken into consideration when we decide in a few moments how we should vote on the Amendment.

Mr. Richard Crawshaw (Liverpool, Toxteth)

If I understood the hon. and learned Gentleman correctly, he stated that the Irawaddy Company said, "If we destroy our plant, will we get compensation?". Did Field Marshal Slim say in his speech how many of his men said, "If I do what my commanding officers want me to do, will I get compensation?".

Mr. Gardner

That is the sort of emotional argument which should have no part in a serious debate about whether a Bill of this kind should have retrospective effect.

Mr. Richard rose——

Mr. Gardner

We must get on with the debate.

Mr. Richard

All that I want to ask the hon. and learned Gentleman is simply this. Does not he think that, as a matter of elementary justice, there is something wrong in putting the war injured in one category and not giving them full common law compensation and putting the Burmah Oil Co. in a different category and giving it full common law compensation?

Mr. Gardner

The hon. Member mistakes the position. I am not arguing that those who were wounded in the war were given too little or too much. This is not the point. The fact is that they did get compensation. If it was inadequate there is an argument for increasing it, but it has nothing to do with this aspect of our debate. In fact, the Burmah Oil Co.—I know that this is disputed by many hon. Members opposite—can have no compensation, none at all. The £4¾ million that was supposed to have been paid as compensation was not paid as compensation at all. It was money paid for rehabilitation—something quite different. [Laughter.] Hon. Members opposite must be able to appreciate these distinctions. [Interruption.]

Mr. Speaker

Order. Hon. Members should remember that one of the privileges of being in this House is the opportunity to listen to arguments with which one does not agree. They cannot be listened to if there is din.

Mr. Gardner

I should like to say this about retrospective legislation, of which this provides a particularly obnoxious example. The Financial Secretary to the Treasury has given many examples of past legislation that has had a retrospective effect. Indeed, he has brought to the attention of the House the Indemnity Act, 1920. But does he not see and do not hon. Members opposite appreciate that that Act of 1920, although it had a retrospective effect, was not put into law with any particular target in view? It was passed in order that it would deal with all claims that were about to come up or may have come up. The situation is quite different in this case. This Bill came into being because of a particular company and the claim made by that company, and in order to defeat that claim.

The criticism of the retrospective effect of the Bill has come from the most distinguished judges, law Lords and jurists in this country. It comes from both sides of the House. Indeed, during the Second Reading of the Bill the hon. Member for Manchester, Cheetham (Mr. Harold Lever) used these words, speaking from the opposite side of the House: The simple question that we have to decide is what we are to do about a judgment lawfully obtained and binding according to the system of law which we all respect, and whether in the circumstances we can properly and reasonably and retrospectively abrogate that decision."—[OFICIAL REPORT, 3rd February, 1965; Vol. 705, c. 1165.] The hon. Gentleman came to the conclusion that we would do wrong if we let the Bill remain with this retrospective poison still in its Clauses. If I may say so with respect to him, I think that he was absolutely right. We do not make good arguments out of a series of bad precedents. We cannot override a principle of this importance, even just once, without weakening and putting its ultimate survival in peril.

For those reasons, we on this side of the House support the Lords Amendments, all of them, and we ask the House to take a non-political decision, as the Lord Chancellor has invited us to do, by voting for these Amendments.

7.15 p.m.

The Attorney-General (Sir Elwyn Jones)

I believe that the speech of the hon. and learned Member for Billericay (Mr. Gardner) is his first from the Opposition Front Bench. If that is right I congratulate him upon his maidenly, if somewhat overdue, appearance in that place—a long overdue appearance, if I may say so.

I take up with the hon. and learned Gentleman immediately the remarkable proposition that, so far as the Opposition are concerned, this is a non-party non-political issue. Of course, it was in another place, and, whatever views my hon. Friend the Member for Fife, West (Mr. William Hamilton) may have about another place, I think that he might be tempted to review them after today's performance in this House, because, of the Ministers in the late Administration who were party to the action which the present Government are now taking and feel that it is right to take in the public interest, eight of those Ministers in another place had the courage and consistency to vote for this Bill.

I am bound to express my dismay and, indeed, my distress at the total inconsistency and lack of principle displayed by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) in speaking in this debate. I waited impatiently to hear whether there was any single reason which justified him taking a different position today from that which, as Chancellor of the Exchequer, he took when the famous letter was sent saying that the Government would refuse to make any payment to the Burmah Oil Company in respect of these claims.

It would seem to me that the only difference is that now the right hon. and learned Gentleman is sitting on the benches opposite whereas previously he was sitting on this side of the House. He has suggested that there are certain factors which have influenced his change of mind. He put first, apparently, the size of the claim. But the claim is not inconsiderable even now. Indeed, we are faced with a matter of £39 million in this debate or, if we add 5 per cent., £84 million. The sum is very considerable.

We are not concerned merely with the four subsidiaries of the Burmah Oil Company. There are eight other claimants. The Rangoon Electric Tramway and Supply Company claims nearly £¼ million. Consolidated Cotton and Oil Mills Ltd. claims just over £400,000; the India Burma Petroleum Company, £2,800,000; British Burma Petroleum Company, £4,115,000. Now come two interesting claims, in view of the disclaimers about any interest of the Shell Company in this matter. The Shell Company of India claims a modest sum, £7,767; the Shell Company of Hong Kong, £108,100; Steel Brothers, £152,000; and then, burning the candle at the bottom, is the Burma Candle Company with a claim of £82,000.

Mr. William Yates

Are any of these claims statute-barred now, or are they all running?

The Attorney-General

No, they are not statute-barred.

These are companies registered in Scotland, and the relevant summonses have been issued by these companies registered in Scotland. We are not dealing with chicken feed. We are dealing with vast sums of money. The position taken by the Opposition now is that it is right that these companies should be put in a special position of privilege and should enjoy a claim for compensation at common law which would give them a benefit shared by no other victim of damage during the war—all at the expense of the taxpayer who, in many cases, may have suffered grievously with no compensation at all as a result of sufferings during the war.

Then the right hon. and learned Gentleman claimed that some knowledge had come to him since he made his basic decision as Chancellor of the Exchequer. He must have been very actively involved in this because, as a custodian of the public purse, he had a big personal responsibility here.

The right hon. and learned Gentleman seems to make something of the point that the £4¾ million paid to the Burmah Oil Company was by way of mere rehabilitation. This argument has been churned over time and again in both this House and in another place. I am quite content to accept for this purpose the view expressed by the Lord Chief Justice in another place when he said that he was quite prepared to concede that something by way of compensation had been paid. That something was £4¾ million.

I shall say a little in a moment about how that amount compared to similar payments in respect of damage in the Far East. But that is the fact, that £4¾ million were paid to the company and that that sum was paid without strings. I understand that it was used to rebuild the company's installations and to put the company back in business in Burma, a perfectly proper enterprise to engage upon. But to say that there is no element of compensation in that is a sheer denial of the meaning of words.

Then there came the other explanation by the right hon. and learned Member for Wirral on his change of view—that he was impressed by the public indiga- tion. There has been a most impressive lobby, but whether that reflects the views of my constituents in Canning Town and Custom House I gravely doubt. But the final factor which apparently has permitted the right hon. and learned Gentleman to stray from consistency and principle is the eloquence and quality of speeches in another place. He has adopted, perhaps in memory of his own old Liberal days, the speech of Lord McNair, for whom I have great respect because he was my tutor a long time ago.

Mr. William Yates

It must have been a very long time ago.

The Attorney-General

It was a very long time ago.

May I submit to the House that those who, if they did not have the benefit of hearing it, will read the speech of my noble Friend the Lord Chancellor will find in it devastating destruction of all the arguments that have had to be confronted during the course of this dispute. I therefore come back to my submission that the Ministers of the late Administration, who have a direct burden of responsibility for their own conduct in the past in this matter, are guilty of a grave betrayal of their responsibilities by their conduct, in this debate.

The Government's case on this matter has been put many times and I do not intend to repeat it in any detail. It rests, broadly, on three propositions. The first is that retrospective legislation in general is wrong and contrary to the rule of law. That we accept. The second is that there may be, however, exceptional circumstances which make it just and equitable to depart from that rule. The third is that this is one of those cases.

I do not want to traverse the first two of these propositions, because I think that they are broadly accepted by the House, but I should like to remind the hon. Member for Devon, North (Mr. Thorpe), whose delightful speech we all enjoyed, that perhaps the closest parallel, as he has admitted it to be, to this legislation now being taken through the House is the Indemnity Act, 1920, which, if my memory of history serves me right, was introduced by an Administration led by the late Lloyd George.

Mr. Thorpe

Another Welsh lawyer.

The Attorney-General

The right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), in his characteristic speech, spoke about retrospective legislation and condemned it as not raising up the oppressed citizen. He condemned it for its character of oppressiveness. The most dramatic illustrations of retrospective legislation in recent years were perhaps the 1954 Wireless Telegraphy (Validation of Charges) Act and the Charitable Trusts (Validation) Act. Both these Measures did not raise the oppressed citizens up—they knocked them on the head; and they were introduced by an Administration of which the right hon. and learned Member was then an enthusiastic supporter and which I think he joined shortly afterwards. There is, therefore, abundant precedent and authority for the proposition that from time to time the Government of the day find it necessary in the public interest to introduce retrospective legislation damaging to private rights in circumstances which render it fair and equitable to do so.

I now come to the really critical argument in the debate, namely, whether this is such an exceptional case. It is essential to place the background of these 12 claims in its proper context. The background is a destructive war which inflicted massive damage on our community. Millions of our people suffered loss or injury. Many no doubt thought that the compensation which they received was inadequate. Many, indeed, suffered losses for which no compensation was paid or could be paid. There is nothing wrong in this being emotional. These are simple facts.

For those losses for which compensation in money could be paid, the principles were announced by the coalition Government in 1943. They were unequivocal and unchallenged and they were embodied in legislation which was enforced throughout the Commonwealth. During the years after the war, claims for compensation on this basis were assessed and public funds were made available for distribution on the principles which the Coalition Government had announced. The effect of what the opponents of the Bill propose would be, or could be—for, as it has been said, litigation has not yet reached a point of decision on a number of important issues in the case—that a few companies which have been ingenious enough to find a loophole in this legislation by asserting a principle never previously applied in a British court of law should get more than their fair share of the compensation that is made available.

I used the words "fair share" in this context. The position about what has been done with regard to the companies is that in 1948 Her Majesty's Government made available ex gratia the sum of £10 million to be distributed among those who had suffered loss in Burma, and of that £10 million the sum of £4¾ million went to the Burmah Oil Company subsidiaries. That was the payment then made, and the fault which has been made by Lord MacNair and others—I say this with very great respect—is that they have looked at the retrospective aspects of the Bill in isolation and outside its context in a history of an attempt fairly to assess a basis of compensation and fairly to distribute such sums as were available.

The £4¾ million paid to these companies were not, of course, full compensation for the loss they suffered, but, in the circumstances prevailing in 1948 and in the light of the extent of the war damage which the country and its taxpayers had to meet, can it really be said that it was inadequate?

In my submission, it is only in the context of the whole chain of events from 1942 to 1965 that the Bill falls into its proper perspective as part of the regulating of compensation, of which the rehabilitation payments after the war were another part, for denial damage in Burma in 1942.

Mr. Thorpe

Am I not right in thinking that this is the first time in the whole of this case when it is being suggested that the rehabilitation payment constituted a full and final discharge of any obligation which might be laid? If I am wrong in that, is it not a fact that Sir Stafford Cripps, after that payment, advised the company that it might well have an action against the Government of Burma and said that he did not think, as a matter of law, that there would be an action at common law in this country?

The Attorney-General

It was made perfectly clear that this was all the companies would get from the British Government. When that payment of £4¾ million was made, Sir Stafford Cripps, I think, used the vivid phrase to the companies, when they asked for more, "You can whistle for the rest". But it is perfectly right that, in order to assist the companies in their litigation against the Government of Burma on a claim under the Burma rules, the payment was made on the basis of rehabilitation. That explains the use of the phrase and the language, so that the claims of the companies should not be prejudiced.

That is the explanation of the term "rehabilitation"; but, so far as the British Government were concerned, it has been made clear at all times that this was a final payment from British taxpayers' resources. That has been said to the companies time and again, by four Conservative Governments and by two Labour Governments. Before they launched on this litigation, they were warned of the action which would be taken if they persisted in it. There has been no litigant more clearly forewarned of what was in store.

It has been said in this House and in another place that the Bill will have damaging effects internationally because of its harm to our reputation for observing the rule of law and for integrity in these matters. But the Bill can properly be considered as part of a whole series of arrangements which were made for regulating payment of compensation for denial damage arising during the last war, and, when it is looked at in that way, it is sheer nonsense to speak of this as a piece of expropriation without compensation. It is only by repeating that wholly false assessment of the matter that any damage can be done to the reputation of this country.

If I may say so, it is more fitting that the full reality of the matter should be borne in mind, and I hope that we shall hear no more of this alleged breach of international obligations or of international repercussions.

Mr. Gardner

Is the Attorney-General really saying that the views so strongly and clearly expressed by the Lord Chief Justice and by Lord McNair are wholly wrong?

The Attorney-General

On this matter, I say, with very great respect, that they are wrong because they have looked at the Bill in isolation, out of the context of its being part of arrangements to pay compensation for damage suffered during the war. Under those arrangements, these companies were given the very substantial sum of £4¾ million, consistent with the kind of sums which the British Government found it possible to pay in other territories in the Far East at this time. Here are some comparable figures. Claims for war damage in Malaya amounted to £160 million. The British Government contributed £20 million, about one-eighth of the amount claimed. In Borneo, the claims were £12½ million. We contributed £2¼ million, about one-sixth of the amount claimed. In Burma, there were claims of £165 million. The British Government recognised for consideration British claims totalling £67 million and they paid £10 million in respect of those, about one-seventh of the amount claimed. So that, in terms of proportion, it was the same in respect of Burma as in these other territories.

The point has been put to me that the payment made to the Irawaddy Flotilla Company was very different. Of course it was. The British Government had entered into contractual relations with that company in 1942 under which the company's vessels were retained in the danger area, and the company was given certain indemnities. The Irawaddy Flotilla Company had a very special claim and was given very special treatment because its fleet was requisitioned by the British Government in order to assist the British Army. So the circumstances are quite incomparable with the losses suffered by the oil companies in common with others in the face of the advancing Japanese. Indeed, most of these installations were destroyed the very day before the Japanese occupied them. This, too, is part of the reality of the story.

The problem facing a modern nation in trying to deal with war damage in total war is a grave and intractable one. It is a problem which the Government of this country had to meet in 1920, and they then introduced the Indemnity Bill. It is interesting to recall, especially for those who are lawyers, what people like Sir Ernest Pollock, the Solicitor-General of the day, Lord Birkenhead and Lord Sumner—great figures in the law and great upholders of the rule of law—felt it necessary to say in a situation identical with the one which this Government now face.

My hon. and learned Friend the Financial Secretary cited the provisions of the 1920 Act. When the Bill was presented to the House, Sir Ernest Pollock, the Solicitor-General, said, in effect, "Here is the position. Take shipping. We simply could not afford in the war to give to shipowners whose ships had been requisitioned and sunk that which would compensate them adequately for their loss. We said that this was all we could afford, and the Government agreed, and everybody agreed, that it was the most we could afford".

Most of them accepted the compensation and said, "Thank you very much; we quite appreciate the position". But what happened was that certain shipowners issued writs and said, "We want to get ahead of all our competitors. We intend to get more than anybody else. We shell try to rely on and exact our full legal rights". This is what Sir Ernest Pollock said on behalf of the Government: Ship owners, I think, as a whole, have acted quite patriotically, and have accepted the rates. They have suffered great losses, but, broadly speaking, have bent their energies to the common weal. I should be very sorry to make any distinction or to suggest that that was not true of any class, but I am pointing out the difficulties which particular classes may have had. I think, however, that what this House, and those who have already settled their claims, would deprecate, is that there should be a new and larger measure of compensation in the future for those persons who have not been ready, so far, to accept the compensation which others have accepted, and that those persons who, so to speak, stood out for their rights, should get those rights, while those who were prepared, for the public weal, to take less and make an end of the matter, should be paid less compensation. … You must either re-open the cases for all alike, or you must stand by the principles which have been drafted. …"—[OFFICIAL REPORT, 4th August, 1920; Vol. 128, c. 1756–7.] If what is contended for in the Burmah Oil case is right, how could the Government morally refuse the

claims of the millions of people in Burma? The hot rake of war, to use Sir Winston Churchill's great phrase, was torn through the length and breadth of the country. Millions of Burmese and thousands of British citizens suffered damage. If we concede this claim, how could we resist the further claim that would be brought on the basis if not of legal obligation because of the operation of the Statute of Limitations but of the moral obligation of the Government?

During that debate in 1920, Sir Frederick Banbury asked whether the Indemnity Act would have the effect of overriding a decided case—namely, the Newcastle case. Sir Ernest Pollok said that it would override the decision in the Newcastle case and the decisions which depended upon it. The circumstances of the Newcastle case and this case are almost exactly parallel. In the case of Newcastle Breweries Ltd. v. the Attorney-General, the claimants had succeeded in the court of first instance in obtaining a declaration of liability against the Government. But before the appeal was heard the Indemnity Act became law and there was an end to that litigation.

For the same reasons, the present Government find it necessary to do the same in respect of the Burmah Oil Company litigation. They are the same reasons of equity and a fair sharing of the burdens of the community equally among us. These are the factors which led these great lawyers of the day to justify that piece of retrospective legislation and, although I do not claim to compare myself with them, it is with the utmost confidence that I invite the House to reject the Lords Amendment.

Question put, That this House doth disagree with the Lords in the said Amendment:—

The House divided: Ayes 168, Noes 158.

Division No. 108.]	AYES	[7.44 p.m.
Allaun, Frank (Salford, E.)	Blackburn, F.	Butler, Herbert (Hackney, C.)
Allen, Scholefield (Crewe)	Boston, T. G.	Butler, Mrs. Joyce (Wood Green)
Armstrong, Ernest	Bowden, Rt. Hn. H. W. (Leics S.W.)	Chapman, Donald
Atkinson, Norman	Boyden, James	Coleman, Donald
Bacon, Miss Alice	Braddock, Mrs. E. M.	Corbet, Mrs. Freda
Barnett, Joel	Bray, Dr. Jeremy	Craddock, George (Bradford, S.)
Bence, Cyril	Brown, R. W. (Shoreditch & Fbury)	Crawshaw, Richard
Benn, Rt. Hn. Anthony Wedgwood	Buchan, Norman (Renfrewshire, W.)	Cullen, Mrs. Alice
Dalyell, Tam	Jeger, George (Goole)	Perry, Ernest G.
Davies, G. Elfed (Rhondda, E.)	Jenkins, Rt. Hn. Roy (Stechford)	Price, J. T. (Westhoughton)
Davies, Harold (Leek)	Johnson, Carol (Lewisham, S.)	Pursey, Cmdr. Harry
Davies, Ifor (Gower)	Jones, Dan (Burnley)	Redhead, Edward
Delargy, Hugh	Jones,Rt.Hn.SirElwyn(W.Ham,S.)	Reynolds, G. W.
Dell, Edmund	Jones, J. Idwal (Wrexham)	Rhodes, Geoffrey
Dempsey, James	Jones, T. W. (Merioneth)	Richard, Ivor
Diamond, John	Kelley, Richard	Roberts, Albert (Normanton)
Dodds, Norman	Lawson, George	Robertson, John (Paisley)
Doig, Peter	Lee, Rt. Hn. Frederick (Newton)	Robinson,Rt.Hn.K.(St.Pancras,N.)
Duffy, Dr. A. E. P.	Lever, L. M. (Ardwick)	Rogers, George (Kensington, N.)
Dunnett, Jack	Lewis, Ron (Carlisle)	Rose, Paul B.
Edwards, Rt. Hn. Ness (Caerphilly)	Lipton, Marcus	Ross, Rt. Hn. William
Ensor, David	Lomas, Kenneth	Sheldon, Robert
Evans, Ioan (Birmingham, Yardley)	Mabon, Dr. J. Dickson	Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)
Fernyhough, E.	McBride, Neil	Short, Mrs Renée (w'hampton.N.E.)
Finch, Harold (Bedwellty)	MacColl, James	Silkin, John (Deptford)
Fitch, Alan (Wigan)	MacDermot, Niall	Silverman, Julius (Aston)
Fletcher, Sir Eric (Islington, E.)	McGuire, Michael	Silverman, Sydney (Nelson)
Fletcher, Ted (Darlington)	McInnes, James	Skeffington, Arthur
Fletcher, Raymond (Ilkeston)	McKay, Mrs. Margaret	Slater, Mrs. Harriet (Stoke, N.)
Foley, Maurice	Mackenzie, Gregor (Rutherglen)	Slater, Joseph (Sedgefield)
Foot, Sir Dingle (Ipswich)	MacMillan, Malcolm	Small, William
Freeson, Reginald	MacPherson, Malcolm	Snow, Julian
Garrett, W. E.	Mallalieu, E. L. (Brigg)	Solomons, Henry
George, Lady Megan Lloyd	Mallaliey,J.P.W. (Huddersfield,E.)	Soskice, Rt. Hn. Sir Frank
Ginsburg, David	Manuel, Archie	Steele, Thomas (Dunbartonshire, W.)
Gregory, Arnold	Mapp, Charles	Stones, William
Grey, Charles	Mason, Roy	Summerskill, Dr. Shirley
Griffiths, Rt. Hn. James (Llanelly)	Mendelson, J. J.	Symonds, J. B.
Griffiths, Will (M'chester, Exchange)	Millan, Bruce	Taylor, Bernard (Mansfield)
Hamilton, James (Bothwell)	Miller, Dr. M. S.	Thomas, George (Cardiff, W.)
Hamilton, William (West Fife)	Milne, Edward (Blyth)	Thornton, Ernest
Hamling, William (Woolwich, W.)	Morris, Charles (Openshaw)	Tomney, Frank
Hannan, William	Neal, Harold	Urwin, T. W.
Heffer, Eric S.	Newens, Stan	Varley, Eric G.
Hobden, Dennis (Brighton, K'town)	Noel-Baker,Rt.Hn.Philip(Derby,S.)	Wainwright, Edwin
Holman, Percy	Norwood, Christopher	Walker, Harold (Doncaster)
Houghton, Rt. Hn. Douglas	Oakes, Gordon	Wallace, George
Howarth, Harry (Wellingborough)	Ogden, Eric	Watkins, Tudor
Hoy, James	Oswald, Thomas	Wells, William (Walsall, N.)
Hughes, Emrys (S. Ayrshire)	Paget, R. T.	Whitlock, William
Hughes, Hector (Aberdeen, N.)	Palmer, Arthur	Wilkins, W. A.
Hunter, Adam (Dunfermline)	Pannell, Rt. Hn. Charles	Williams, W. T. (Warrington)
Hunter, A. E. (Feltham)	Pargiter, G. A.	Willis, George (Edinburgh, E.)
Hynd, H. (Accrington)	Park, Trevor (Derbyshire, S.E.)	Woodburn, Rt. Hn. A.
Hynd, John (Attercliffe)	Parker, John
Janner, Sir Barnett	Pearson, Arthur (Pontypridd)	TELLERS FOR THE AYES:
Jay, Rt. Hn. Douglas	Pentland, Norman	Mr. W. Howie and Mr. B ian O'Malley.
NOES
Agnew, Commander Sir Peter	Dalkeith, Earl of	Harris, Reader (Heston)
Allason, James (Hemel Hempstead)	Davies, Dr. Wyndham (Perry Barr)	Harvey, John (Walthamstow, E.)
Atkins, Humphrey	Dean, Paul	Hastings, Stephen
Balniel, Lord	Deedes, Rt. Hn. W. F.	Hawkins, Paul
Batsford, Brian	Digby, Simon Wingfield	Hay, John
Bennett, Sir Frederic (Torquay)	Dodds-Parker, Douglas	Heald, Rt. Hn. Sir Lionel
Berry, Hn. Anthony	Douglas-Home, Rt. Hn. Sir Alec	Hendry, Forbes
Biggs-Davison, John	Drayson, G. B.	Higgins, Terence L.
Birch, Rt. Hn. Nigel	Eden, Sir John	Hill, J. E. B. (S. Norfolk)
Black, Sir Cyril	Elliot, Capt. Walter (Carshalton)	Hirst, Geoffrey
Blaker, Peter	Emery, Peter	Hooson, H. E.
Bowen, Roderic (Cardigan)	Errington, Sir Eric	Hordern, Peter
Brewis, John	Eyre, Reginald	Hornsby-Smith, Rt. Hn. Dame P.
Brinton, Sir Tatton	Farr, John	Howard, Hn. G. R. (St. Ives)
Brooke, Rt. Hn. Henry	Foster, Sir John	Hutchison, Michael Clark
Bruce-Gardyne, J.	Fraser, Ian (Plymouth, Sutton)	Irvine, Bryant Godman (Rye)
Bullus, Sir Eric	Galbraith, Hn. T. G. D.	Jenkin, Patrick (Woodford)
Buxton, Ronald	Gammans, Lady	Johnston, Russell (Inverness)
Carlisle, Mark	Gardner, Edward	Kerr, Sir Hamilton (Cambridge)
		Kershaw, Anthony
Channon, H. P. G.	Giles, Rear-Admiral Morgan	Kilfedder, James A.
Chichester-Clark, R.	Gilmour, Sir John (East Fife)	Kimball, Marcus
Clark, William (Nottingham, S.)	Glover, Sir Douglas	King, Evelyn (Dorset, S.)
Clarke, Brig. Terence (Portsmth, W.)	Goodhew, Victor	Kirk, Peter
Cooke, Robert	Gower, Raymond	Kitson, Timothy
Cooper-Key, Sir Neill	Grant-Ferris, R.	Legge-Bourke, Sir Harry
Corfield, F. V.	Grieve, Percy	Litchfield, Capt. John
Craddock, Sir Beresford (Spelthorne)	Griffiths, Eldon (Bury St. Edmunds)	Lloyd, Rt. Hn. Selwyn (Wirral)
Crawley, Aidan	Griffiths, Peter (Smethwick)	Longden, Gilbert
Crosthwaite-Eyre, Col. Sir Oliver	Grimond, Rt. Hn. J.	Lubbock, Eric
Curran, Charles	Hall, John (Wycombe)	McAdden, Sir Stephen
Currie, G. B. H.	Hall-Davies, A. G. F.	MacArthur, Ian

Mackenzie, Alasdair(Ross&Crom'ty)	Pitt, Dame Edith	Thompson, Sir Richard (Croydon,S.)
Mackie, George Y. (C'ness & S'land)	Pounder, Rafton	Thorpe, Jeremy
Macleod, Rt. Hn. Iain	Prior, J. M. L.	Turton, Rt. Hn. R. H.
McMaster, Stanley	Quennell, Miss J. M.	Tweedsmuir, Lady
Maude, Angus	Ramsden, Rt. Hn. James	van Straubenzee, W. R.
Mawby, Ray	Rawlinson, Rt. Hn. Sir Peter	Vaughan-Morgan, Rt. Hn. Sir John
Maydon, L.t.-Cmdr. S. L. C.	Ridley, Hn. Nicholas	Walder, David (High Peak)
Meyer, Sir Anthony	Roots, William	Walker, Peter (Worcester)
Mitchell, David	Russell, Sir Ronald	Walker-Smith, Rt. Hn. Sir Derek
Monro, Hector	Sharples, Richard	Ward, Dame Irene
Morrison, Charles (Devizes)	Shepherd, William	Weatherill, Bernard
Mott-Radclyffe, Sir Charles	Sinclair, Sir George	Webster, David
Munro-Lucas-Tooth, Sir Hugh	Smith, Dudley (Br'ntf'd & Chiswick)	Whitelaw, William
Neave, Airey	Stoddart-Scott, Col. Sir Malcolm	Wills, Sir Gerald (Bridgwater)
Noble, Rt. Hn. Michael	Studholme, Sir Henry	Wise, A. R.
Nugent, Rt. Hn. Sir Richard	Summers, Sir Spencer	Wood, Rt. Hn. Richard
Onslow, Cranley	Talbot, John E.	Wylie, N. R.
Osborn, John (Hallam)	Taylor, Sir Charles (Eastbourne)	Yates, William (The Wrekin)
Page, John (Harrow, W.)	Taylor, Edward M. (G'gow,Cathcart)
Page, R. Graham (Crosby)	Taylor, Frank (Moss Side)	TELLERS FOR THE NOES:
Pearson, Sir Frank (Clitheroe)	Temple, John M.	Mr. Martin McLaren and
Peel, John	Thatcher, Mrs. Margaret	Mr. Jasper More.
Pickthorn, Rt. Hn. Sir Kenneth	Thomas, Rt. Hn. Peter (Conway)

Remaining Lords Amendments disagreed to.

Committee appointed to draw up reason to be assigned to the Lords for disagreeing to their Amendments to the Bill:—the Attorney-General, Mr. Edward Gardner, Mr. Selwyn Lloyd, Mr. Niall MacDermot, and Mr. Brian Walden:—Three to be the quorum.—[Mr. MacDermot.]

To withdraw immediately.

Reason for disagreeing to the Lords Amendments reported and agreed to; to be communicated to the Lords.