WAR DAMAGE TO PROPERTY. (Hansard, 7 September 1939)

§ VISCOUNT SAMUEL

My Lords, I should like to ask the noble Earl a question of which I have given him private notice. As the subject is one that has caused a great deal of public concern, perhaps I may be allowed in a few sentences to explain the reason why this question is put. Last Friday, which was the day on which the first series of Emergency Bills was introduced into this House, I mentioned that one omission from those Bills was noticeable. I asked the noble Earl whether, next day or at some early date, it was the intention of the Government to submit to Parliament a Bill dealing with insurance for war damage to property. The noble Earl replied: I am not quite sure whether such a Bill is to be presented in the course of the next few days, but I know that a Bill dealing with the matter is being prepared, but how far it goes I am not fully informed. Since then nearly a week has elapsed, a large number of Bills have been introduced, and it is proposed to adjourn to-day for nearly another week. Therefore I should like to repeat the question which I then asked.

Perhaps your Lordships would allow me to draw attention to a statement made on behalf of the Government in another place by the Chancellor of the Exchequer as long ago as January 31 last. He then, with the leave of the House, stated the conclusions reached by the Government on the subject of compensation from public funds in respect of loss or injury caused to persons or property in this country arising from enemy action. The Chancellor of the Exchequer then laid 1025 down the general principle which he stated the Government thought should applied—namely, that such loss or injury ought not to be treated as merely the concern of those who directly suffer it, but must be regarded as falling upon the community as a whole, and consequently as constituting a proper subject for compensation from public funds. He proceeded: In other words the loss ought not to be left to lie where it happens to fall, for the risk is one which affects us all, and the particular person or particular property which is struck is the casual victim of a general peril which the State is engaged in doing its utmost to resist and counteract. Then the right honourable gentleman said that, so far as individuals were concerned, the Government were taking measures to provide proper compensation, but with regard to property, he stated that the question presented many grave complications, and that there were obstacles to the introduction of an insurance scheme, since it could not be known beforehand to what vast extent it was possible the losses might reach. He went on to say: The Government, therefore, cannot contemplate a scheme which would commit the community to so vague and indeterminate a liability. That does not mean in the least that individual properties which suffer ought to be left to bear the loss unaided. Then he proceeded: When the extent of the damage to property in private ownership is known, such contribution will be made from public funds as the circumstances make possible, in accordance with a scale which would, at any rate, pay in full up to a certain limit of loss and thereafter would be graded. He pointed out that compensation could only be paid at the end of the conflict. That was seven months ago, and very many individuals and important interests throughout the country are eager to learn what in fact it is proposed to do.

A number of mutual insurance funds have been founded, but the public in general is awaiting the Government scheme before deciding what steps should be taken. These mutual insurance schemes may or may not be in a position to provide substantial assistance. It is, of course, quite right that priority should be given to death or injury to a person, but that has now been dealt with in the Bills which have been passed by Parliament in the last few days. The question of damage to property, however, has still 1026 not been treated. I therefore beg to ask the noble Earl who leads the House when Parliament may expect to receive the promised legislation for providing compensation from the public funds so far as practicable for damage to buildings or other property arising out of our state of war. I should mention that the Chancellor of the Exchequer, in the Ministerial statement to which I referred, said that legislation would be necessary, and that it ought to be introduced as soon as possible.

§ EARL STANHOPE

My Lords, I must apologise to your Lordships because I am afraid I was incorrect in stating to the House last Friday that a Bill was in course of preparation dealing with this subject. I had in mind a number of Bills dealing with various aspects of compensation, such as the replacement of buildings that were essential to the nation, and also of stocks of goods; but the policy which the Government have undertaken to put into force is a scheme which was announced by the Chancellor of the Exchequer in another place and to which the noble Viscount has just referred. The Chancellor of the Exchequer pointed out, as the noble Viscount told the House, that loss due to enemy action ought not to be treated as merely the concern of those who directly suffered, but must be regarded as falling upon the community as a whole, and consequently as constituting a proper subject for compensation from public funds. The question then arose as to the method by which such compensation was to be provided. Normal forms of risk to property are generally the subject of insurance, but in the case of war damage to property the insurance companies had to decline to insure because, owing to the impossibility of estimating the damage that might be caused in war, there was no possible basis for an actuarial calculation of the risk. The same considerations made it impossible for the Government to offer an insurance scheme.

As the noble Viscount will, I am sure, realise, insurance implies premium and there is, of course, no possible actuarial information to fix what that premium should be. If indiscriminate air attacks take place damage may be very considerable indeed, whereas if bombing is confined solely to military objectives, the damage may be comparatively small. 1027 That matter, unfortunately, is not in our hands. Your Lordships will realise something of the extent of the problem when I say that an estimate, which can only be an approximate estimate, of the value of the property which is assured for fire purposes amounts to no less than £10,000,000,000. The Government felt that to undertake the responsibility for making good damage which might occur under those very problematical conditions was one which put such a vague and indeterminate cost on the State that they really could not under those conditions accept it. They therefore proposed that when the extent of damage to property was known, they would make the largest contribution towards meeting the loss caused thereby that was compatible with the financial circumstances of the country after the war, which will of course depend on how long the war lasts and how much it costs this country to win it. Whatever contribution was then found possible would be paid according to a scale which would at any rate pay in full up to a certain limit of loss and would thereafter be graded. That is the scheme which the Government have undertaken to put into force.

It should, however, be added that a number of suggestions have been made to the Government from time to time that the Government's scheme should be replaced or supplemented by a scheme under which contributions would be collected from property owners and the proceeds distributed, as soon as losses occurred, to the owners of damaged properties. In view of these suggestions the Government appointed a Conference under Lord Weir's chairmanship, to advise them whether any such scheme was practicable, it being understood that no scheme would be acceptable which would promise to provide an unlimited amount out of public funds for compensation. Lord Weir's Conference has not yet completed its inquiry and the Government are not in a position to say what is likely to be the nature of the Report. The difficulties are, of course, very great indeed. In view of the outbreak of war the Government have proceeded with the arrangements necessary to put in force the scheme announced by the Chancellor of the Exchequer in January last. I can say that arrangements of this kind are 1028 obviously necessary irrespective of any recommendations that may be made by Lord Weir's Conference.

The first essential under those arrangements is that the extent of whatever damage is suffered should be recorded and assessed as soon as possible after it has occurred. For this purpose arrangements have been made for the receipt of claims at the local offices of the district valuers of the Inland Revenue. A notice was issued to the Press yesterday explaining that the necessary forms of claim will shortly be obtainable at local town halls and at the offices of local authorities and district valuers by any who may be unfortunate enough to suffer this kind of loss. Your Lordships will realise that that does not require legislation, and therefore the Government at this moment are not proposing to introduce a Bill. I am afraid that is all the information I can give your Lordships at present.