§ THE EARL OF CAMPERDOWN had the following Question on the Paper—
§ To ask what amount of compensation, and on what principles, and in what proportion to the total loss, the Government has paid to persons whose property has been proved to Lord Parmoor's Committee to have been destroyed or damaged by air raids or by bombardment by the enemy; (2) whether the same principles of compensation will be followed in similar cases which may occur before the issue of the promised Government scheme which will, it has been stated, include an insurance against such occurrences; (3) when the Government scheme is likely to be presented to Parliament.
§ The noble Earl said: My Lords, the subject which is raised in my Question is a very important one—namely, the extent of the moral liability of the Government in cases of air raids or bombardment by the enemy. At the present time Parliament is, I think, entirely in the 126 dark. Bombardment and air raids have occurred, and so far as I am aware what has been done has been this. A Committee, which was called the East Coast Raid Committee and had as its chairman my noble friend Lord Parmoor, was appointed to inquire into this matter and to report. That Committee sat, I believe, very regularly, and it has reported to the Treasury. But further than that, so far as I am aware, Parliament knows nothing. We do not know what the Committee has advised or what the Government has done in any case, and therefore, seeing that these raids are not necessarily at an end, we have not any idea as to what may happen to any one whose property is damaged or destroyed. That is our position at the present time. The Government have given notice of a measure which is to deal with this question, but there may be raids before that measure has been laid before or passed by Parliament.
§ In the first place, I want to know what the principles are on which the Government intends to deal with cases which have occurred. In the second place, supposing that further cases occur before the Government has passed a Bill on the subject, what are the principles on which they are prepared to act? Are they the same principles on which they have acted up to the present time, and on what principles have they acted up to the present time? The Government proposal, so far as I have seen it stated in the newspapers, is to comprise a system of insurance, I think that proposal a very good one, even if it were for no other reason than this, that at any rate that insurance would be paid. Up to the present there are a great many people who have done their best to insure their property against damage, but none of the best insurance offices would accept the liability, and it does not at all follow in the case of those persons who have accepted it, if there should be any extensive damage done, that they would be able to meet the liability incurred. And it is quite possible, indeed probable, that there are many persons who believe they have insured themselves against damage who will find, if damage is done, that their remedy is not available.
§ But there really is more in it than that. It comes to this—and the question ought to be answered—What is the liability of the Government in cases of such damage? 127 If a riot takes place in a town and someone's house is destroyed, or his windows broken, or something of that sort; he has, so I understand, an absolute right of claim against the local authority. But what is the liability of the Government in this matter? Moral liability I contend there is, because the Government has the Navy and the Army and so on, and is supposed to protect the persons living in the country against damage. It seems very hard that because the damage is done in some particular place, say in some seaboard town, the persons who have incurred the loss should alone be liable for that loss. So far as moral liability goes there is no doubt to my mind that the Government is liable. But what in practice would occur is quite a different thing, and that is exactly what I should like to know. We ought to know how far the Government has gone, how far it is prepared to go, and how far it proposes to cover this matter by insurance. I also ask when we may expect this legislation. It seems to me that the delay ought to be as short as it possibly can, because we may have a raid any day before this legislation is passed, and then in what position shall we be? The whole subject is one on which Parliament ought to have definite information, and that is my object for putting to the Government the Question which stands in my name.
§ THE LORD CHANCELLOR (LORD BUCKMASTER)
My Lords, nothing that I shall say will, I hope, suggest that the Government fails to recognise in full the great importance of the question that has been raised by the noble Earl. It is unnecessary for me to emphasise that, or to repeat the expressions of sympathy that have already been made to the people who have been the unhappy victims of these air and coast raids. I think every one feels that the hazard of these attacks is the hazard of us all, but the risks are realised only by a few, and I am sure that all would be reluctant that on those few should fall the fill burden and brunt of the losses.
I am in a position to answer more or less categorically the Questions that have been put down by the noble Earl on the Paper; but there are one or two supplementary questions which he introduced into his speech upon which I may not be able to give him quite the same exact information. After all, the real point is this—What has 128 been done to compensate people who have suffered in the past, and what will be done to compensate people who may suffer in the future? With regard to the people who have suffered in the past, the answer is this. There has been a Committee sitting, presided over by the noble and learned Lord, Lord Parmoor—who I am sure will be only too willing to supplement from his own wide knowledge any information that I give to the House—which has ascertained the loss suffered by people whose claims have been brought under its consideration, and up to the present time the amount awarded has been £90,038—a very considerable sum. The principle upon which that sum has been fixed may be stated in general terms to be what is known as an insurance principle—that is to say, a man is indemnified against the actual loss he has suffered, but he is not compensated for consequential damage or prospective loss which he might suffer. I will illustrate that by one or two concrete instances. If a man's shop is burned down he would be paid the value of his shop, but not the loss of profit he would incur through his shop being taken away. The same thing if a man's stock is destroyed; he would be paid the value of the stock but not the prospective profit he would make if his stock were left alive. Those are the principles, and I trust the House will think that they are fair, sound, and businesslike principles. The next question is, What is going to be done in the future?
THE EARL OF CAMPERDOWN
Can the noble and learned Lord tell us what proportion the sum he mentioned bears to the total amount of loss incurred?
§ THE LORD CHANCELLOR
It may be that my noble and learned friend Lord Parmoor can give that information. Certainly I cannot. I think it may be accepted that this £90,038 represents the loss, calculated upon the principle that I have stated, in all the claims that have been brought before the Committee over which Lord Parmoor presides. So if you accept, as I trust the House will, the principle upon which the award is based as a sound and businesslike one, this sum is a fair and adequate one.
§ THE LORD CHANCELLOR
Yes; it is actual loss that has been suffered, of course carefully sifted, tested, and examined, as the noble Earl will admit it should be, by the Committee over which the noble and learned Lord presided.
As to what will happen in the future, it is a little more difficult for me to give precise information, and for this reason. The noble Earl asked me to say whether there was a liability which the Government accepted in respect of future losses. I think it must be obvious that if a measure is going to be introduced for the purpose of dealing with those losses, it would be highly, undesirable to state in plain terms beforehand that the Government accepted any legal liability. I am not prepared to say that a legal liability does exist, but it certainly would not be wise to begin discussing your Bill upon the footing that there was a legal liability Which could be enforced by some means—I must say I do not know by what means—against the Government. For the rest, the Government is at the present moment anxiously considering this matter. I am told that they are pressing on the question as fast as they can, and that as soon as it is possible to arrive at a sensible definite solution of the whole difficulty, of which they are quite conscious, further information will be placed before the House. For the moment I cannot give any further information, because it is obvious it is not wise to discuss a scheme before it is born. The matter is receiving careful consideration; and I am sure that the noble Earl will realise that there are interests besides those of the persons whose property has been damaged that have to be considered in connection with a matter like this. The noble Earl referred to insurance companies. It is quite plain that the Government may be compelled to embark upon an enterprise which may bring them into conflict with trading concerns. I am not sure; I am not saying that is so; and therefore it is undesirable that I should say more than I have done—namely, that the Government are fully, aware of the importance of the matter, and are anxiously pressing on the scheme which will overcome the manifest grievances which exist.
§ LORD SOUTHWARK
My Lords, we are much indebted to the noble Earl for the very practical form in which he put his Questions, and also for the observations that accompanied them. I rise as the President of the London Chamber of Commerce to say that this question in the City of London is of a very grave and urgent character. The Government is well aware of the seriousness of the matter, and how much pressed the City is with regard to this question that something definite may be known, and known promptly. The noble and learned Lord on the Woolsack has given us some information with regard to the results of the Committee presided over by my noble and learned friend Lord Parmoor, who no doubt, will tell us something more about that presently. But what we want to know in the City of London and in the country generally is whether the policy that has been laid down and followed with reference to Lord Parmoor's Committee is going to be the policy in the future.
The noble and learned Lord on the Woolsack says that a Government measure is being prepared, and that he cannot disclose the contents of it before the Bill is introduced. But I should like to point out the urgency of the matter with regard to the City of London. The banks holding bills against goods, or making advances against goods, are asked to hold policies to cover the goods against all risks. Noble Lords will understand that the banks in some cases are asking for the insurance receipts before they make the advances, and in cases where they have made advances they are calling the money in because the goods are not insured. In the case of large warehouses there are hundreds of thousands, even millions, of money concerned. The insurance companies are not taking these risks at all. Therefore I urge upon the Government that this matter is serious. What we want is that the Government should state at the earliest possible moment what their policy is going to be. Whether it is Mincing Lane, Mark Lane, or the wharfingers, they all want to know what their liabilities are, and so far as I am aware they have had no guidance from the Government. I have always felt that this is a national liability and not a personal one; and the observation of the Lord Chancellor with regard to the sum of £90,000 assessed by Lord Parmoor's Committee proves to me more and more how 131 desirable from a business point of view it would be, on the ground of economy, for the State to take over the whole liability.
Whatever the effects of an attack by aircraft or bombardment may be—and I hope they will be limited to the extent they have been in the past—but whether they are large or small, I consider the liability should be upon the shoulders of the State. I agree with what the noble Earl said. We have our Army and our Navy; we pay taxes for the protection of our lives and property; therefore I consider that this question ought to be treated in the same way as if an ironclad is sent to the bottom—it should be considered a war risk and paid for by the State. Everybody would be sorry to find a great business concern ruined because of an aircraft raid or a bombardment. We ought to share all the losses alike, whether we live on the coast or inland. The Lord Chancellor was good enough to say that he had sympathy with the victims. But it is action we want, as I recollect saying to his predecessor. There was a big demand for a public meeting to be called in the City of London, but the meeting was deferred as we are anxious to know what the Government's policy will be. For in no way do the citizens of London wish to show that there is anything like a difference of opinion between them and the Government at a time like this. But this is an urgent question, and I beg the Lord Chancellor to acquaint his colleagues of that fact and to let us know at the earliest possible moment what policy the Government proposes to adopt.
§ LORD PARMOOR
My Lords, I think I might usefully supplement the information that has been given to the House as regards the work of the East Coast Raid Committee, in order that the principles upon which we have acted and the result of those principles may be clearly understood. As the Lord Chancellor stated, there can be no doubt, so far as what is called legal liability is concerned, that there is no liability in that sense upon the Government as regards damage by these various Zeppelin or other raids on the East Coast; and I apprehend that it was because there was no legal liability in the matter and no insurance scheme that the Committee of which I had the honour to be selected chairman was appointed to deal with this very complex question. We have made a series of Interim Reports. We 132 have dealt with more than 7,000 claims, ranging from a few shillings in individual cases up to £14,000—I think that was the largest of the individual claims that came before us. I cannot say exactly what the total claims were that were made, because in some cases claims were never put in in a money form. But in substance, whereas we recommended £90,000, the claims brought before us for which money compensation was asked were about £150,000 in the aggregate.
It was our duty to recommend the figures of damage to the Government. Of course, this is a matter for the Government and not for our Committee, but I believe that payments are being made by the Government in relation to the figures which we have advised and recommended. We always had in mind—the noble and learned Lord on the Woolsack has referred to it—the question of a possible insurance scheme. There is this difference. Under the recommendations which we made there really is an insurance scheme to which the whole country contributes, whereas you might have an insurance scheme in the ordinary sense to which parties might if they desired pay a premium, and then I presume only those who paid the premium would be compensated as regards any future damage. I may say that the cases of every raid that has taken place up to June 17 has been referred to us. The noble Lord opposite (Lord Southwark) and the noble Earl (Lord Camperdown) may be pleased to hear this, that apart from any general insurance scheme the principles which the East Coast Raid Committee have adopted would give the same compensation if damage is in fact suffered as, according to our views, any person injured would get if he contributed to a Government insurance scheme. The only difference, therefore, is that in the one case I presume you get the funds from the National Exchequer—or, as the noble Lord opposite put it, all people contribute towards the loss—whereas if you had an insurance scheme I presume that only those insured would have compensation, and the money would in the main be provided, or ought to be provided, by the premiums. One of the matters which the Committee have considered very carefully is the working out of an insurance Scheme, and the experience we have got is at the disposal of the Government or the Government's advisers should they wish to ask for it.
133 It is important that the exact basis on which we have awarded compensation should be fully appreciated. Therefore I propose to read the actual principle which we have adopted in dealing with these questions of compensation in respect of property. We have already had to deal with questions of damage to persons. Perhaps that is more difficult still, but that is not involved in the Question which the noble Earl has asked, and therefore I will limit myself to the question of damage to property.
§ LORD PARMOOR
Yes; in every single case so far, as referred to us. We made a Final Report on June 3, and we have made interim Reports. We have sat de die in diem, though not the whole day. We have appointed skilled assessors to give advice with regard to the amount of compensation, and where the Committee have had any doubt as to the information given by the advisers they have gone themselves to the spot in order to view the premises. This is the principle on which we have acted, and I think it is very important that people should know it, not only in reference to the past, but that others who are now making claims—and there are claims coining in every day—should be perfectly cognisant of the principle on which we shall act with regard to claims sent in. I will therefore read the passage from our Report which we sent in on June 3, and in which we laid down our principle—In assessing the figure of damage to buildings the Committee have had regard only to damage directly caused by the bombardment and have not included claims for consequential damage. … To have included them would have placed the owner of uninsured premises or buildings in a better position than an owner who had taken the precaution to insure, either wholly or partially, under the usual terms of a war risk policy. The Committee thought that any such result would be highly undesirable, and in fixing the figure of damage gave full weight to this consideration. The same basis of assessment has been applied in fixing the figure of damage for furniture or trade plant or stock. In the case of furniture or plant capable of repair the Committee have taken the cost of repair as the measure of damage, and where stock has been destroyed or injured they have based the figure of damage on the cost to the trader and not on the profit which the trader might have expected to obtain from a sale of such stock by him in the ordinary course of his business.134 Your Lordships will appreciate that that is in accordance with the statement made by the noble and learned Lord on the Woolsack—namely, what he called an insurance principle. So that if an insurance scheme should be introduced, an injured person under that insurance scheme would be entitled to receive, and would receive, exactly the same measure of compensation as is now awarded ender the principles laid down by the East Coast Raid Committee. I do not think it is necessary to go into any further detail, but I thought it desirable that your Lordships should know what the principle adopted was; and that principle will be applied at any rate to any damage up to June 17. I am not aware of the intention of the Government, but it seems to be that until their insurance scheme is perfected all damage in the meantime should be referred to this Committee, which will deal with all claims in the same way and on the same basis.
§ LORD SOUTHWARK
Can the noble and learned Lord state what has been done with regard to injury to persons? As he is no doubt aware, accident insurance companies will not be liable; and it would be interesting to the country to know whether any policy has been adopted with regard to loss of life or injury to persons.
§ LORD PARMOOR
I have not before me the actual terms of our proposal with regard to injury of persons in the same way as I have with regard to injury to property. But I may put it shortly in this way. Where the case is such, owing to the position of the person injured, that he would be the same class of person as would claim compensation under the Workmen's Compensation Act we were guided by the principles of that Act. I do not mean to say that in every case we gave the exact sum because we had to consider the special conditions in each case, but the guiding line was that if he were a workman injured, or a workman killed, he would receive the same measure of compensation as he or his dependants would have received had he been injured or killed in the course of his occupation. We thought that that was fair and just in cases of that sort. We bad a large number of other cases which were very difficult to deal with—people who could not have had the benefit of the Compensation Act because they would never have come within the definition of work— 135 men at all. In the majority of those cases we thought it sufficient, as regards the claims made, to pay any outgoings incurred as regards doctors' bills or other matters of that kind. We did not, in other words, think that a person altogether above a workman as regards his position in life could fairly claim compensation other than to be reimbursed any expenses he had incurred. Between those extremes there were a large number of cases which were very difficult to deal with, but we endeavoured in each case, as I say, to put the person injured as nearly as possible as money compensation could do it back in his old position, subject always, of course, to what is obvious in these cases, that you 136 cannot restore health and vigour, unfortunately, to any man, and no money compensation can compensate in that way. I hope I have sufficiently indicated what the principles are. I am bound to say that in dealing with persons there was far greater difficulty than as regards property, and far greater difficulty in laying down any general principle that could be followed in all cases.
§ House adjourned during pleasure.
§ House resumed by the Lord COLEBROOKE.
§ House adjourned at half-past Eight o'clock, till To-morrow, half-past Ten o'clock.