WAR DAMAGE BILL.

HL Deb 13 March 1941 vol 118 cc709-84

House again in Committee (according to Order):

[The EARL OF ONSLOW in the Chair.]

Debate resumed on the Amendment proposed by Lord Barn by to insert a new clause ("Rights over against mortgages in cases to which Section 25 does not apply").

VISCOUNT MAUGHAM

In offering some observations on this clause, I should like to point out in the first place that I am completely disinterested. I am neither a banker nor connected with a building society in any way, nor am I either a mortgagor or a mortgagee. In the remarks—I hope the not very lengthy remarks—which I am going to offer, I wish to point out that my real object is only to represent a view with regard to the mortgages and mortgage transactions which are affected by this Bill which has not, I think, been completely put before the House up to the present. I recognise the great difficulty of dealing with the mater after, and I am aware that the Government have already tried in some way to mitigate the hardship of this measure from the point of view of mortgagors.

I should like to say, before I come to the more important part of the subject, that I quite recognise that what may be called building society mortgages are in a class by themselves; and to my mind—subject, it may be, to certain Amendments which may be introduced later—it seems that the provisions with regard to mortgages of that kind in Clause 25 are reasonable and proper. I would add that my noble friend Lord Stamp, when he was dealing with that matter, put before your Lordships the illustration of a small house which had been erected with the assistance of a building society and another where the money had been borrowed by the owner of the house after it had been built. That illustration, I hope, will show your Lordships that there is really no hard-and-fast line between those cases where a building society mortgage is in question and cases where; owners of houses have subsequently borrowed money upon them for all kinds of possible purposes.

Although I recognise that the building society provisions are necessary, I think the fact that other mortgages are treated in the way in which they are treated in this Bill is the only serious blot on the scheme embodied in this Bill, so far as I understand it; and, although I recognise that remedies may be very difficult to find, I do think that something more might be done. My remarks are intended to lead to the result that the Government will consider, between now and the later stages, whether they are not able to do something in the direction of justice. I am thinking of mortgages of premises in such cases as where a man cannot buy his house entirely without assistance, and cases where there is, I agree, a covenant for payment, and the real security for the mortgage is the value of the house, in which the mortgagor is probably residing. In those cases I submit that it is unjust and indefensible to put the whole of the contributions payable under this Bill upon the mortgagor, the owner of the house.

My noble friend Lord Wardington put forward a number of reasons why, in his view, that was a just and justifiable thing to do; but, if your Lordships will allow me, I should like to point out what I think is the real error in the arguments which the noble Lord put forward. He said that to his mind the contributions leviable under this Bill are really almost exactly the same as the premiums for fire insurance in respect of mortgaged house property. I submit that that is completely fallacious, and I will very shortly state my grounds for saying that this example is not really a fair one. The first thing to be realised is that this Bill is intended to deal with misfortunes, with accidents, as we may call them, due to the war; and it must not be forgotten that the situation has so altered in this country that many mortgagors have already found themselves in the position, in "the first place that their premises are greatly depreciated in value, and secondly that they have suffered a large loss of income. Their properties are very often, and in many areas, practically unsaleable, except at a terrible loss. The consequence is that the mortgagor has lost one of the methods available to him in time of peace; if he is pressed to pay his debt to the mortgagee, he cannot now sell his property, in many cases at all, and in almost all cases except at a very serious loss of capital.

On the other hand, he has very often lost his possibility of redeeming the mortgage, because in order to redeem he would have to realise other property, which again may be so greatly depreciated that it is almost hopeless for him to raise the money payable under the mortgage at the present time. The consequence is that the position of many of these mortgagors in the present state of affairs is totally different from that which exists in ordinary times of peace; and it is at this moment and in these very serious circumstances that the Government, by this Bill, propose to place upon the mortgagor the whole duty of making these contributions for a period of five years, as if the mortgagee was not interested in the hypothetical house of which I am speaking being maintained, and being rebuilt if unfortunately a German bomb has fallen upon it and destroyed it in whole or in part. The condition of things is entirely different, and one must bear that in mind in considering what is fair to be done.

The second thing is this. These contributions which you are going to claim from the mortgagor are not really insurance premiums at all. They are a tax or an addition to a tax which will amount to a Crown debt, and the amounts which have to be paid in respect of these contributions are, as I think is admitted, enormously greater than the ordinary insurance premium on building property. Two shillings per cent. is the almost universal price for insuring a business in the country or in London. These contributions which the Government will levy as if they were a tax are many times greater. I suppose it is not unfair to say five times as much or something of that kind. Then it is said that in the case of insurance premiums they are payable under a contract in the mortgage. Of course, there is no contract in any ordinary mortgage which relates to the sort of tax which the mortgagor is going to have to pay under the Bill as it stands. It is completely different. It is the Government which steps in now, quite rightly I think, to enable these damaged buildings to be paid for at the expense of the community as a whole.

After all, the Government did not attempt to make the sums payable by people from whom contributions have to be levied equivalent to the risk which they are respectively suffering. That is because it is not an insurance premium, but something levied on the whole of the people who may be supposed to get any advantage out of this Bill. The result is that, people, let us say, in Dover are to pay the same amount as people in, say, Llandrindod Wells. Everybody in this House knows that there are many areas in this country which have not yet, after eighteen months of war, heard the sound of a German bomb, and there are many quarters where there is absolutely no conceivable reasonable risk to houses. But in other quarters they suffer very grievously and they have risks practically every night. Yet they pay the same, and I think it is quite right that they should pay the same. But then I think that because I take the view that this is a tax on the country as a whole, excluding only those properties which are not in the least likely to benefit as the result of the insurance. That is why you have left out salmon fisheries, for instance, or objects of that kind.

But when you are going to consider ordinary property and you are trying to be fair and just to people, I say without any fear of contradiction by anybody who understands this matter, that the mortgagees of house property in this country are every bit as much interested in getting the benefits of this Bill as are the mortgagors. It is ridiculous to suppose that in the state of things that will exist after the war, the loss that would be incurred by the destruction of property which we may anticipate before the end of the war is a loss that will fall on mortgagors rather than on mortgagees. The Government ought to look at the matter from a wide standpoint. If there is property of the nature of the mortgagee's interest in a house which is going to receive the benefits of this in other respects admirable measure, those people ought to pay their quota contribution towards the benefits which are to be received and in relief of the obligations which are going to be put upon mortgagors. It is not fair that, in the case of a house which is never going to be redeemed, because the unfortunate mortgagor cannot redeem it, and which is going to become, if it has not already become, in substance the property of the mortgagee, you should levy a tax on the possibly almost insolvent mortgagor, and get nothing out of the mortgagee. I cannot understand the justice of that idea. You have realised already in the Bill that the mortgagee may be in possession, and if he is in possession the mortgagee has to pay the contribution; but you have not apparently realised that there are hundreds, if not thousands, of mortgagees in this country who are entitled to possession, morally as well as legally entitled, and could walk in whenever they pleased with no fear, if you call it a fear, of the properties being redeemed and therefore their being compelled to walk out.

And if you are looking at the matter from the point of view of law, let me remind you that in the normal case the mortgagee is the legal owner of the property, and all the mortgagor has got is a right to redeem or to ask for sale of the property. There is no question, I agree, of looking upon this as a matter of strict law, because I agree—and I state it frankly enough—it is a question of substantial justice. What I am contending for is that the people who are really interested in the rebuilding of house property in a case where there is a mortgage on it are just as much the mortgagees as they are the mortgagors. I have not heard myself any argument against that.

Lord Wardington has made a point about trusts. He says it would be unfair to the beneficiaries under a trust which includes mortgages if the trust were compelled to pay part of the contribution. Surely it is more unfair on the beneficiaries of mortgaged property—because property in the trust may be mortgaged—if the trustees are compelled to pay the whole contribution, when the ultimate benefit from the compensation money on the reconstructed property inures primarily for the benefit of the mortgagee: Why should it? I agree that there is a difficulty in some respects in knowing how to recover the share of the mortgagee, but that has been a matter which noble Lords dealt with before me yesterday, and there are the methods which are put forward both in the Amendment now before the House and in the suggestions made by my noble friend Lord Swinton. But whatever the device may be, something should be done to make the matter more just as between the two classes.

I know it may be said, and I think it was suggested by Lord Wardington, that there is here a contract by the mortgagor under which he is bound in nearly every case under a covenant to repay the mortgage money. But that seems to me, if I may say so, an idle argument if you realise that the Bill is intended to deal with circumstances which were not in the contemplation of anybody at the time when the normal mortgage before the war was entered into. Contracts have all got to go by the board when the thing with which you are dealing is something that was not before the minds of the contracting parties at all, and when the Government come upon the scene to do something fair as between the parties who are interested under the contract. Therefore, I do hope your Lordships will not be persuaded by the fact that the mortgagor has covenanted to pay. This Bill is not intended to enforce contracts but to step in and do something as just as the circumstances permit in order to prevent grave hardships on a limited class of His Majesty's subjects.

There is, however, a point which I want frankly to admit, made in Lord Wardington's speech, to which I think great consideration should be given. He is obviously very interested in the matter of debenture holders, and he made some pertinent observations in reference to the fact that debenture holders are people who have not run the risk of the ordinary shareholders, and accordingly that it would not be fair that the sums payable by way of contributions should be shared in the same proportions between shareholders and debenture holders. He suggests, as shareholders get the profits of the adventure, their position is not truly that of people who should be equally treated with the debenture holders. I think that is true, but let me point out that the reason why it is true is largely this, that debenture holders are not really in the same position at all as ordinary mortgagees. Usually they can- not sell the property, usually they cannot redeem the property, usually they are in possession of security, debenture interest, giving them a right for a period of years, sometimes ten or twenty years, and sometimes for ever until it is irredeemable. They are therefore really not in the least in the same position as the ordinary mortgagee.

Accordingly I can see that the sort of clause which the Government might introduce to produce fairness as between mortgagor and mortgagee might exclude debentures just as special provision has been made with regard to building society mortgages. I think also the ordinary bank charges are not within the same principle, and these again should be left out of account in any Amendment that is brought in, but not of course including true mortgages of property in favour of the bank. These would be treated like any other mortgages of house property, but bank charges as a whole are in a completely different class. I conceive also that there may be other cases with regard to which some exception ought to be made; but because you cannot be completely just to everybody in an emergency measure of this sort, there is no reason not to try to be just at all.

If I am right in the general proposition which I have put forward that, in regard to house property, mortgagors are not more interested, taking them widely throughout the whole country, than are mortgagees to have the benefits of this Bill, then it follows that something ought to be done to adjust the matter as between these two classes, more particularly when you remember what I have already said as to the very great disadvantages under which mortgagors suffer since the war. What I submit is that something should be done. I am not wholly in favour of any of the schemes which have been suggested so far to distribute the contributions as between the two classes. Sooner than that nothing should be done, I would submit that a fairer thing would be to say that the amount of the contribution should be equally borne between mortgagor and mortgagee. That would be better than nothing, and it would approximate to justice, but to leave it as it is would, I submit, be most unjust and, as I think, it would lead to great difficulties in many cases, because many mortgagors throughout the country during the course of the next year will have very great difficulty in paying an extra tax to the Government in respect of properties which they never hope to be able to enjoy again.

There is no true distinction—and this has already been pointed out—between the case of the man who borrows on mortgage to build a house, the mortgage being secured on the house when built, and the case of the man who builds a house with his own money and subsequently is compelled to mortgage it; yet you are going to treat these two cases as wholly different and apart. What I ask the Government to do is not to accept the Amendment now before us, but to give an undertaking that between now and the next stage they will do their very best to find some means which, if not perfectly just, will be at any rate an approximation to justice between the poorer man, the mortgagor, and the richer man, the mortgagee. If the Lord Chancellor would undertake to do that, I should have myself the greatest hope that, with his ingenuity and the ingenuity of those who can assist him, some reasonable compromise would be reached which would remove what I regard as the blot on this Bill.

LORD BALFOUR OF BURLEIGH

More than one noble Lord in rising to address your Lordships on this Bill has been at pains to tell your Lordships that he was not interested either as mortgagee or mortgagor or in any other capacity. I must tell your Lordships quite frankly that I am interested in this matter, in one respect as being connected with banking and in another respect as a mortgagor. Perhaps I may venture to suppose I am not quite alone in your Lordships' House in being interested in the Bill in the latter capacity. Be that as it may, that does not blind me to the fact that the acceptance of this Amendment which is before your Lordships to-day would do a very great deal more harm than good.

Your Lordships have got to direct your minds to this matter from the widest possible aspect. It is necessary to remember that all investment is, in one degree or another, a lending of money, and, moreover, that all trade and business depends to some extent on either the lending of money or the giving and receiving of credit. It is not quite the same thing, but it is very much the same thing. The ingenuity of people who want to lend money is very great. They have devised a whole number of instruments and methods of lending money or of giving credit and of getting security for doing so. And the ingenuity of people who want to borrow money is no less great. When you get a combination of the ingenuity of the people who want to lend and the ingenuity of the people who want to borrow, you' get something which is very complicated indeed, so complicated that it is only people like the noble and learned Lord Chancellor and the noble and learned Viscount who has just spoken who can understand what it is all about. Indeed, it is not beyond the reach of imagination that the two learned Lords might find themselves giving dissenting judgments on such a matter if it came to the highest Court of Appeal in the land.

In the midst of this welter of ingenuity which concerns lending and borrowing money and giving and receiving credit, stand the hereditaments, if I may borrow a legal phrase, which are the subjects of Part I of this Bill—land and buildings. They are consequently intimately involved in the whole of the business as also are the trade and commerce of this country. It is not right to regard it simply as a matter of lending and borrowing. In that situation the Government no doubt have adopted the principle that the people to pay the contribution under this Bill are the people who are interested, and I think the Bill is a very ingenious attempt to meet that situation. Every speaker has said that it is quite impossible to meet every case, and I regard the Bill as an attempt, as others have said, to do rough justice. At one end of the scale you may have a debenture holder who is a mortgagee, but who really has no direct interest in the property, part of which may be his security. At the other end of the scale you have the building society advance where there is a large and more direct interest, and that is a description of advance where quite clearly the mortgagee is so directly interested as to make it fair that he should be called upon for contribution.

My noble friend Lord Swinton in his remarks yesterday said that the relationship of the building society and the borrower was an ordinary relation between mortgagor and mortgagee, with certain differences. I should not agree with that. I do not think it is an ordinary relation. I should say it is much more exact to say that the building society is an owner selling a house on the hire-purchase system. That may not be legally exact, but I take it that that more definitely conveys to the lay mind the truth of the matter than to say that it is the case of an ordinary mortgagor and an ordinary mortgagee. If there were other large classes of mortgages which could be so easily isolated, and which were really comparable, and were described in such feeling terms by my noble friend who has just sat down, why then they should be included also. Of course they ought to be included; nobody would dispute that; but the difficulty, as I apprehend it, is to draft a measure which would satisfactorily carry that out without giving rise to a much more inconvenient position than we have.

The only two noble Lords who have definitely supported the Amendment were the noble Viscount, Lord Swinton, and my noble friend Lord Barnby, and I venture to say to your Lordships that the difference between my two noble friends is that one has tried to draft an Amendment and the other has not. My noble friend Lord Swinton was very eloquent—I mean nothing disrespectful to his speech, which I admired very much—and he said, like the noble and learned Viscount below me, that something must be done, but it seems to me perfectly clear he did not attempt to say what. My noble friend Lord Barnby, on the other hand, has attempted and succeeded in drafting an Amendment. Just look at it. He says in effect that the section applies in the cases where the interest of a direct or indirect contributor in respect of a contributory property is at the relevant date subject to a mortgage, and he goes on to give a definition of a mortgage which is to include: any charge, Hen, floating charge, debenture, debenture stock or like security on any property (including in that expression floating assets) for securing money or money's worth. I can only assume that he has worded it like that because he could not find any means of doing it in any other way.

Just consider what it means. Suppose you have a small overdraft at your bank and the title deeds of your house are deposited with your bank. I think there is no doubt the banker has a banker's lien, and consequently would have to pay part of your contribution. It is absolutely fantastic. I have a great regard for my noble friend's sagacity, and I suppose if he could have produced a better Amendment he would have done so.

LORD BARNBY

May I interrupt to say that my noble friend may realise that the bank would have to try and collect it from their client?

LORD BALFOUR OF BURLEIGH

That may be, but that is only one illustration of putting in all sorts of liens which are expressed and unexpressed. I cannot help feeling that the real reason why there is not another defined class of mortgagee is that it has not been found possible to define them. If it were so I think it would be very difficult to resist the application in a wider range of cases. As it is I can only suppose that the Bill is drafted in the way it is after full consideration of all the relevant considerations, and I hope your Lordships will not accept the Amendment.

LORD TEVIOT

For a moment or two I want to draw your Lordships' attention to an aspect of this Amendment which I do not think has been quite touched upon. I will preface what I am going to say by stating that in my capacity as a trustee for various people I am interested in both capacities as a mortgagor and a mortgagee. So I have to look at it from both points of view. I was unfortunately unable to be here on the occasion of the Second Reading of this Bill, but I read the report of the debate with great care and at first glance I was distinctly impressed by what the noble Viscount, Lord Swinton, said on the subject. I thought the whole matter over, and for the purpose of my argument, and to endeavour to enable your Lordships to understand why I have altered my opinion, I propose to give an illustration.

Let us for the moment go back to the position before the war and before bombing. The mortgagee had lent money on a property, but the matter did not end there. It did not mean that he was lending money on a house or premises only. It meant that he was taking into consideration the position of the mort- gagor and, no doubt, taking into consideration other properties that he owned. The mortgagor had done everything he could do and ought to do to ensure the property against every eventuality as far as he could. Along comes the war, and the mortgagor finds himself in a terribly difficult position. If his house or premises are bombed out of existence, what is his position then? He has to find not only the interest due to the mortgagee but he also has to find money out of his other assets to pay off the mortgagee.

I must say it was a great relief to all of us who are interested in this matter to find the Government producing this Bill, because if one compares the position of the mortgagor without this Bill' and the position of the mortgagor to-day, it is in my view a tremendously greater benefit to him than it is to the mortgagee. He finds that the mortgagee is going to be paid. He is even given, I understand, by this Bill so much per cent. of the interest he is going to pay in the interim between the time when the damage took place and the payment of compensation. Looking at it in as clear a way as I can, I cannot agree with the noble Viscount, Lord Swinton, that it is unfair. I feel that if one adds up the pros and cons of this situation the mortgagor definitely benefits enormously through this Bill, and much more so, in my view, than the mortgagee. There is just one other point I would like to mention. It was rather suggested, I think, that the mortgagor got no benefit out of this at all, but surely he does. Let me take a case which I think is analogous. An individual sells a bit of property or he receives dividends which are paid straight into his banking account, thereby reducing an overdraft. Surely that means a benefit to him. Here it appears to me is an analogous case. I feel very strongly that this Bill is of enormous benefit to the community, and I must congratulate the Government most heartily on bringing it in. I hope that the noble and earned Viscount will resist this Amendment.

THE LORD CHANCELLOR

I have listened, as others of your Lordships have listened, with close attention to this most important debate lasting as it did for perhaps a couple of hours yesterday and nearly an hour to-day. It deals, I think, with the only controversy which you can call an issue of principle in the whole Bill. If we necessarily have spent some time on the present discussion it must not be inferred that when we have finished it we cannot get through the rest of the Bill at a much better rate of speed. It is very important that the Bill should become law as soon as possible, and I think it would be necessary to make quite special arrangements if we have not time to do justice to the remaining clauses to-day.

In the course of the debate there have been some very powerful speeches made on both sides of the matter. My noble friend Viscount Swinton, both on Second Reading and yesterday, stated his view with very great force and power. I need hardly say that I feel the responsibility of advising your Lordships as to a decision all the more if the decision I would recommend runs counter to what was said just now by my noble and learned friend Viscount Maugham. On the other hand, I cannot agree with him that there have not been most powerful arguments used on the other side. I approach it as impartially as I can—I suppose with a slight preference in favour of what other members of the Government and I thought right; but I hope I have approached it as broad-mindedly as anyone could do. I cannot agree that a clear-headed man necessarily comes down on the one side and that there are no arguments on the other.

Looking at it myself as a problem, I have been led to dwell a little on what is the real nature, generally speaking, of a loan on mortgage. My noble and learned friend Viscount Maugham just now said, of course with complete accuracy, that in law the mortgagee is the owner of the property. It was a compliment, no doubt, which one of the greatest masters of equity in this age was paying to the Common Law, but of course equity has taught us long ago that that is not the way in which the thing should be regarded, and it never is. We are dealing really with a debt which is secured by means of a charge on the borrower's property. Now I must call attention to the contrast between the two sides here. The man who is lending money—it may be, and often is, as a trustee under a marriage settlement or a will, or it may be on the advice of solicitors, or it may be some great finance house—lends it in return for the rate of interest which is agreed, and that is the full extent of the profitable advantage which he gets out of the transaction. He is a lender of money on certain money terms. The borrower of the money—it may be a business which is borrowing money for the purpose of enlarging its enterprise—is in no way limited as to the use that is made of the money or as to the extent of the profit that he may make out of it. It is, I think, a fallacy to speak of the mortgagee and the mortgagor as if their respective interests or their respective risks could be measured in some mathematical proportion in that way. That is not the real nature of the transaction.

I must add that for my part, although I regret to differ from an observation of my noble and learned friend, that I did think that the illustration which the noble Lord, Lord Wardington, put of a fire policy was not entirely out of point. There are differences I readily concede, because it is an ordinary matter of daily life that mortgagees would require the mortgaged property to be insured against fire. That is a known risk, but here we are dealing with a very novel, very terrible and, to a large extent, immeasurable risk. But there is point in the illustration. The mortgagee of course, in the case of an ordinary commercial mortgage, being the lender of money on security and nothing more, does not accept the risks to which the property may be put so far as he is aware of what those risks are likely to be. He stipulates that they are to be insured against at the expense of the mortgagor. No one would dream that when a man is lending money in these circumstances he takes upon himself an uncertain responsibility of that kind. His bargain is a bargain which ought to give him a limited, defined, specified return on the money which he advances and the uncertainties of the position are recognised as accepted by the mortgagor.

I agree that that is not conclusive. I concur with those who have urged that we are not required to chop law about this and we must try to do the thing which is right and just. I quite agree, too, that if there is a perfectly plain and obvious path of justice, and if all who take another view are guilty of advocating injustice, we ought to strain ourselves to follow the just course. But I do not think that is the position. I think the fact that in this debate we have had members of the House of great experience, probity and judgment taking exactly opposite views shows that it is hardly possible to proclaim that all the just men are on one side. It is plain that you cannot measure these two interests on any principle of strict proportion. The mortgagee relies upon something besides the security of the house. He relies upon the personal covenant of the borrower. He relies, as my noble friend Lord Balfour of Burleigh has said, upon other assets which the borrower may own and which may be seized. You cannot therefore do this as a matter of proportion, and the question in these very difficult circumstances is what is the better course to take. I cannot find any clear and absolute principle to guide me so as to evaluate the benefits of mortgagor and mortgagee. My noble friend who spoke just before me was prepared to go to the length of saying he thought that the benefit to the mortgagor was far the greater of the two. It may be so in some cases, but I believe it is impossible to work out a due proportion or anything like what would be the fair share of this particular subject matter.

The Committee will appreciate that though this matter is being freshly discussed here in this Chamber yesterday and to-day this is a topic which has been subject to most careful and elaborate examination by the Government for some months. We have called in to help us all the wisest people we can and I cannot see any possible ground on which the Government should prefer the scheme now put forward. The Chancellor of the Exchequer and others having studied this and having taken all the advice which they could, and having had the benefit of the best experience available, and with every desire to secure that they get impartial help, came to the conclusion which is embodied in this Bill. It was the subject of considerable debate in another place. I do not of course suggest that that is any reason why this House should not take a different view if it saw fit, but it does afford us a guide if after full debate in the House of Commons on more than one occasion that House accepted this view of the matter after this particular challenge was raised.

I turn now to what may be called the practical aspects of the matter. I think it is a little significant that with one exception—Lord Barnby—those who say that the Government plan should be rejected are not able, or are not willing, to produce a concrete plan in its place. If I understood my noble and learned friend Lord Maugham just now, he would exclude from the application of his proposition quite a variety of charges which I would have thought were correctly classed as mortgages, and if your Lordships will look at page 73 of the Bill you will find a definition of "mortgage" which "does not include a floating charge, but, subject as aforesaid, includes any charge or lien on any property for securing money or money's worth." Let us see how this is going to work out in practice. It is, if I may be excused for saying so, rather simple and easy to concentrate attention on the mortgage upon a particular house which in the words of my noble friend is occupied by a poor mortgagor who has borrowed from a rich mortgagee. I do not know any reason why mortgagees should be so described. There are hundreds and thousands of small people such as a widow who has been left £400 or £500 under a will, who go to solicitors to know how to invest and on their advice invest money on a house mortgage. Why should all people of this kind be called rich and why should anybody who borrows on mortgage be described as the poor mortgagor?

VISCOUNT MAUGHAM

I never did so describe them. I do think it is rather unreasonable to impute that to me. I never said or meant that the mortgagees are necessarily rich.

THE LORD CHANCELLOR

I am sorry; but I thought he was contrasting the poor mortgagor with the rich mortgagee.

VISCOUNT MAUGHAM

It was of average conditions that I was speaking.

THE LORD CHANCELLOR

I am afraid it is impossible in an Act of Parliament to introduce a definition which will secure that provisions of the Act will only apply in average conditions. That is why it has been found so difficult to do in a practical form what those who take the other view feel ought to be done. Take this common case only in one class of business. If a business man goes to his bank or if a company goes to the bank and desires to know what they can borrow, of course the property will not be limited to building or premises. There will very likely be charges on quite a variety of subject matters belonging to the borrower, and it may even be that the title deeds of the house are thrown in as a comparatively subordinate element. My noble friend Lord Barnby thoroughly appreciates that, bat how does he meet the point? He meets the point by providing that if the security is of this mixed kind, which is so common in business, then there is to be substituted for the amount of the mortgage a proportion which bears the same proportion as the value of that interest bears to the aggregate value of all the property, real or personal, then subject to that mortgage. I am not disputing for this purpose the justice of the rule of three, but manifestly it is an extremely complicated calculation. It involves the valuing of insurance policies; it involves the valuing of securities, whether the securities are quoted on the market or not; it involves the valuing of every kind of thing that is included in the charge.

When I look at the proposed clause to see how this is to be done, I find this: The said proportion, if it is not agreed between all the parties concerned, shall be determined by the Commission. My noble friend will excuse me, I hope, if I say quite bluntly that that is putting an impossible task upon the War Damage Commission. It has a great deal to do already. It has the advantage, no doubt, of the help of skilled valuers, valuers such as those, for example, who do so much to help the Inland Revenue in their valuations for Death Duties and Schedule A; but the War Damage Commission is not going to be staffed with valuers capable of valuing a tremendously long list of things of different kinds, some of which, at this time of day, it may be very difficult indeed to value. I must say, on behalf of those who have framed this Bill, that it is really not possible, in our view, to put upon the War Damage Commission this tremendous task, of dissecting every collection of securities, one element of which is a building, in order to determine how this proportionate sum could be worked out.

The point is a very serious one, because personally I do not see how, if the principle advocated here is the only principle which justice can suggest, you can possibly stop short by saying "I wish to apply it only to the case of houses." I do not understand how, if it is a just principle. It is possible to accept the suggestion made by my noble and learned friend, that there could be large exclusions. If the principle is a just one, it must surely be applied much more widely than that. Therefore, for the reasons which I have endeavoured to state, I am afraid that I must ask the Committee, if it is prepared to accept the view very carefully reached by the Government, not to accept this Amendment.

I certainly want to take a broad view. I certainly do not want to rely on narrow law. I certainly want to try to be just, as I suppose we all do. But, having taken due note of those urgings, which I certainly share, I still remain in this position, that nobody has produced a concrete scheme by which this can be worked. My noble and learned friend who spoke just now—realising, of course, that that is at least a legitimate form of inquiry—said that perhaps the best thing to do would be to make it half and half; but is it really going to be just to take a whole series of cases in which the proportions of the mortgage and the value of the property differ, and say, "Never mind; in the name of justice and because it is the best we can do, we shall make it half and half"? I can assure the Committee that there has been no prejudice at all on this matter on the part of the Government. I know with what minute care this has been considered; and while, if it could be' shown that there was some elementary principle of justice which was being violated, I should certainly agree that we should try to do better than we have done, rather than perpetrate a wrong, yet when I find that that is not, as I judge, the real position, I am entitled to call attention to the enormous difficulties which arise in applying any other proposal, even when that proposal is formulated only in general terms.

I am sorry, therefore, that I do not find the alternative solution either formulated or justified; and I must express on behalf of the Government the view, which we have not been led to change, that the course which should be followed in this Bill is to put these charges—as similar charges, if there were similar charges, would inevitably be put—upon those who borrow the money and not upon those who lend it, the latter, so far as I know, being people who have never been expected to do more than take their fixed and limited remuneration by way of interest, and rely upon their security as far as they can. It is a cause of very great and sincere distress to me that I should in this matter differ from my noble and learned friend who spoke earlier in this debate, and from others; but that is the conclusion which has been quite deliberately arrived at, and I trust that the Committee will be prepared to accept it.

LORD BARNBY

I would again say that I appreciate the kindness of the noble and learned Viscount in characterising my motives in assuring the discussion' of this part of the Bill as being of a constructive character only. He has been good enough to say that the putting forward of this Amendment is clear evidence of that. I find myself in a somewhat peculiar position, because my object in trying to make sure of discussion has been substantiated beyond my expectations, in that there has been demonstrated in this Committee a very strong division of feeling on the matter. It is fortunate that in my opening remarks I ventured, with due humility, to say that I proposed to refrain from discussing the legal side of the matter and to confine myself to that of public relations. I was fully cognisant of the extreme intricacy of the legal considerations which arose, and my expectation in that respect has not been disappointed by the character of the discussion.

I find that I have, so far as the broad principle of the justice of this matter is concerned, been supported in a very eloquent speech by the noble Viscount, Lord Swinton, and have received the support also of so eminent an authority on all these matters as the noble Lord, Lord Stamp. I then found myself unexpectedly in the position of obtaining confirmation of my main idea from no less a member of your Lordships' House than an ex-Lord Chancellor. In those circumstances, it will readily be understood that I feel that I must confine myself, as I have already said, to the aspect of the justice of this proposal, on which emphasis has been laid. I cannot, however, refrain, after listening to the noble and learned Viscount, Lord Maugham, from being impressed with the fact that my own remarks yesterday were insufficient in that they omitted certain very fundamental points which he made, in particular that the contribution of a mortgagor is in the form of a capital levy and not of a charge on income. He also brought out that in the case of the owner of a property which owing to war circumstances became practically incapable of being sold, or at least only subject to great depreciation of value, there were other circumstances than those of a peacetime character, like the Rent Restrictions Acts, which entitled the owner to special consideration.

I raised this matter feeling very strongly that it was a case of grave injustice, and the discussion has not disappointed me. The noble and learned Viscount said that it was not a case of trying to chop law, it was a matter of trying to get an even balance of justice. My new clause does not in any way affect the basis or the operation of the Bill, but the noble and learned Viscount, as the custodian of justice, feels that he must resist it. I know well that the Chancellor of the Exchequer, whose task it was to put through a Bill of this astonishing complexity in a minimum of time, received with great patience and consideration all the suggestions made and is entitled to every admiration. But here I am in some doubt as to what course to follow. It is evident from the debate that there is a very strong body of opinion in the House in favour of my new clause. Equally I admit I have been impressed by the very clear speech made by the nobleLord, Lord Wardington; in fact it was so clear in many ways that I might almost have been convinced by it myself, had I not been so strongly impressed by the principle. But the noble and learned Viscount, Lord Maugham, with his eminent legal knowledge, saw reason to question many of the points made. In the circumstances I naturally do not want to press the Amendment to a Division, though the strength of the feeling in the Committee would justify my doing so. But I still hope, after the patient consideration given to the matter by the noble and learned Viscount, that he may yet see his way to reconsider the matter. I am cognisant of the fact that owing to the technicalities of the matter the terminology of my Amendment may be inadequate, but I would make another appeal to the Lord Chancellor, after what has been said in the debate, to give this question some further consideration.

THE LORD CHAIRMAN

Does the noble Lord withdraw?

LORD BARNBY

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 26 [Liability for instalments in case of shooting, fishing and other rights]:

THE LORD CHANCELLOR

The first Amendment to this clause is proposed in order to correspond with the Amendment which we have already made in Clause 20.

Amendment moved— Page 24, line 23, after ("1874") insert ("or any other in corporeal rights over any land").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is drafting.

Amendment moved— Page 24, line 41, after the first ("the") insert ("said").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next four Amendments are also in substance drafting alterations. They are consequential on the first Amendment to the clause.

Amendments moved—

Page 25, line 7, after ("property") insert ("comprising land")

Page 25, line 9, after ("rights") insert ("over the land")

Page 25, line 11, after ("rights") insert ("or fell to be computed by reference to an assessment or valuation in force at a time when the rights were not subsisting,")

Page 25, line 15, at end insert ("or, as the case may be, to the fact that the contributory value of the property fell to be computed as aforesaid.

( ) Where a direct contributor in respect of a contributory property who would be under a liability under subsection (1) of this section to pay an instalment, or an apportioned part of an instalment, on any such rights over any land as are mentioned in Section six of the Rating Act, 1874, proves that the fee simple in the contributory property comprising the rights was severed from the fee simple in the contributory property comprising the land, the liability in respect of the rights shall be discharged.")—(The Lord Chancellor.)

On Question, Amendments agreed to.

THE LORD CHANCELLOR

The next three Amendments are either quite formal or are drafting.

Amendments moved—

Page 25, line 16, leave out ("the last preceding subsection") and insert ("the two last preceding subsections")

Page 25, line 19, after ("or") insert "in the case of such rights as are mentioned in Section six of the Rating Act, 1874")

Page 25, line 20, after ("from") insert ("the occupation of").—(The Lord Chancellor.)

On Question, Amendments agreed to.

THE LORD CHANCELLOR

The next Amendment also does not need explanation.

Amendment moved—

Page 25, line 20, at end insert: ("( ) Nothing in the preceding provisions of this section shall be construed as affecting any liability for an instalment of contribution in respect of a property which was the subject of a valuation for rating purposes by virtue of the occupation of land ").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 26, as amended, agreed to.

Clause 27 agreed to.

Clause 28 [Deduction of indemnities from rent and mortgage payments]:

THE LORD CHANCELLOR

The Amendment here is merely a better form of words.

Amendment moved— Page 26, line 10, leave out ("the indemnity") and insert ("recover the said amount").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 28, as amended, agreed to.

Clause 29 [Properties in divided ownership at relevant date]:

THE LORD CHANCELLOR

This Amendment is pure drafting.

Amendment moved— Page 26, line 17, after ("property") insert ("comprising land").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 29, as amended, agreed to.

Clauses 30 to 32 agreed to.

Clause 33 [Provisions as to recovery of contributions on properties rendered unfit]:

THE LORD CHANCELLOR

There is a drafting Amendment here.

Amendment moved— Page 28, line 45, after ("comprised") insert ("wholly").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 33, as amended, agreed to.

Clause 34 [Indemnities payable and recoverable notwithstanding agreements to contrary]:

THE LORD CHANCELLOR

This is a drafting Amendment.

Amendment moved— Page 29, line 13, leave out the second ("in respect of") and insert ("for").—The Lord Chancellor.

On Question, Amendment agreed to.

Clause 34, as amended, agreed to.

Clauses 35 to 37 agreed to.

Clause 38:

Land belonging to foreign States and Sovereigns, etc.

38.—'(1) No claim for any instalment of contribution in respect of any contributory property or for any indemnity in respect of any such instalment shall be maintained by or against a foreign State, the Sovereign of a foreign State, the envoy of a foreign State accredited to His Majesty, a member of the retinue of such an envoy, the High Commissioner for a Dominion (as denned for the purposes of the Statute of Westminster, 1931), India or Southern Rhodesia or the Agent-General for a state or province forming part of a Dominion (as so defined).

THE LORD CHANCELLOR moved, in subsection (1), after "envoy," where that word occurs for the second time, to insert "a person to whom immunities and privileges are for the time being extended under Section one or two of the Diplomatic Privileges (Extension) Act, 1941." The noble and learned Viscount said: The words I wish to add are really to bring in this new class of persons who have, as the Committee knows, been given quite recently privileges under the Diplomatic Privileges (Extension) Act—namely, the representatives of Allied Governments who have taken refuge in this country.

Amendment moved— Page 31, line 6, after ("envoy") insert the said words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 38, as amended, agreed to.

Clause 39:

Land held for charitable purposes.

(2) The charitable purposes to which this section applies are charitable purposes of any of the following kinds, that is to say—

1. (a) the relief of poverty;
2. (b) the making of provision for the cure or mitigation or prevention of, or for the care of persons suffering from or subject to, any disease or infirmity or disability affecting human beings (including the care of women before, during, and after childbirth);

(4) Where immediately before the occurrence of war damage to a hereditament the conditions specified in paragraphs (a) and (b) of subsection (1) of this section are satisfied as respects land which constitutes or forms part of the hereditament—

1. (a) if apart from this prevision a value payment or a share of such a payment would be payable in respect of the damage under the preceding provisions of this Part of this Act to the owner of the proprietary interest held for charitable purposes, that payment or share, as the case may be, shall not be paid, but the Commission may if they think fit make, in lieu of that payment or share, a payment of such amount, to such person and subject to such conditions, as they may in their discretion determine after consultation with such persons or bodies (including, in the case of an interest in respect of which there is a one-third net liability for contribution, the owner thereof) as appear to them to be appropriate having regard to the nature of the purposes for which that interest is held;
2. (b) if apart from this provision a payment of cost of works would be payable in respect of the damage under the preceding provisions of this Part of this Act, the Commission may in their discretion after such consultation as aforesaid, and, if the proprietary interest held for charitable purposes was not the only proprietary interest in the hereditament, after consultation with the owners of the other proprietary interests therein, determine either to make the payment, or to make it in part, to such person and subject to such conditions as they may determine, or not to make it.

(6) A proprietary interest held— (c) by any person, for purposes the expense of the execution of which is defrayed wholly out of moneys being either moneys raised by rates or public moneys; shall not be treated for the purposes of this section as held for charitable purposes.

LORD HAMPTON moved to insert after paragraph (b) in subsection (2): (c) The promotion of the mental, physical, and spiritual welfare of boys or girls by the Boy Scouts Association, the Girl Guides Association, or other analogous organisation.

The noble Lord said: Since this Amendment was tabled it has been pointed out to me that whatever success I may expect to get from the noble and learned Viscount might be jeopardised by the last phrase, "or other analogous organisation," owing to the fact that it is vague and not likely to be workable in practice. I hope, if the noble and learned Viscount accepts my proposal, that he will at the next stage of the Bill suggest words, or have words suggested, that would get rid of this difficulty.

Under the Bill the annual contribution payable in respect of property is 2S. in the pound on the annual assessment. As the property of the two Associations I named—the Boy Scouts Association and the Girl Guides Association—is exempt from Schedule A tax, the contribution would be based on the annual rateable value. This would be a most grievous burden on Scout units working with very small funds, largely raised by the boys themselves. Clause 39 gives exemption where land is held for certain charitable purposes—for instance, there is no contribution if the property is used for the relief of poverty, the cure or prevention of disease, or the advancement of religion. One-third of the usual rate is payable if the property is for the advancement of education, learning, science, or research. The work of both these Associations falls under almost all four of these headings. You may say that the Boy Scout movement relieves poverty in that it supplies facilities for mental and physical training, for open-air recreation and holidays, and for careers in life which, if not all, at any rate the vast majority of its members would not otherwise enjoy. As regards the prevention and cure of disease, it does very much by its methods of physical education, hygiene, and open-air occupations to prevent illness and disease amongst its members. As regards religion, the basis of all work in Scouting and Guiding is of a religious nature. The Associations embrace all Churches, and every member of both movements is encouraged, and indeed required, to be above all a good member of his own particular church or chapel. To do his duty to God is the first part of the promise made by a scout or guide. Our scout and guide laws are a simple code of practical Christianity which is most effective in dealing with these young people.

Both Associations are legally classed as educational charities. With regard to the Boy Scouts, there is a decision of the High Court to this effect in the case in re Alexander: Seagar versus Alexander. The work of both Associations thus falls under all the headings mentioned, but cannot be said to come under any one exclusively. We were certainly under the impression that we should, at any rate, be entitled to the reduction to one-third of the ordinary rate as an educational charity, but we are now informed, though we do not know if it is correct, that the Treasury feel doubtful whether, on the present wording of the Bill, they could allow us such reduction. Even the one-third rate, however, would fall very heavily on the small units of Boy Scouts throughout the country. A great many of these units have, after many years of effort and a great deal of toil and trouble, perhaps, persuaded the local borough in which they live to grant them a small patch of ground at peppercorn rent. In many cases they have with their own hands built their own accommodation and decorated it. In these efforts we are naturally most anxious to encourage them because they teach the boys self-reliance and independence. Their funds are very small indeed. In many cases they consist of little beyond what the boys themselves subscribe, and they have to have recourse to all sorts of methods, perfectly legal and legitimate, of raising money. They do have a very great struggle, but we accept that and they accept it, because it all comes under the heading of Scout training. With regard to many of the Girl Guide companies the same applies. So in many cases there is very little beyond what the boys or girls subscribe in their weekly subscriptions to keep their headquarters going.

Believing that these considerations might apply to other youth organisations, we suggested to the Standing Conference of Juvenile Organisations—that is a body which was set up some years ago in order to keep an eye on the interests of all its constituent bodies—that representations might be made on behalf of all the organisations for amendment of the Bill so that recognised youth organisations could be exempted from any contribution. It was agreed that this should be done by the Standing Conference, for it seemed unlikely that the Government, which had recently stressed so much the importance of these great voluntary organisations for the training of youth, would wish that a burden of this kind should fall on the very organisations which are carrying on this work, particularly at a time when they would have the greatest difficulty in bearing it.

Subsequently we heard that Lord Aberdare had put down an Amendment which would exempt clubs and other analogous organisations, and this seemed to us entirely satisfactory. We have, however, now been informed that the Treasury are considering the exemption from contribution of one well-known boys' organisation—the National Federation of Boys' Clubs—on the ground that it exists for the relief of poverty, and in the meantime Lord Aberdare's Amendment has been withdrawn. If my information is correct, the Boy Scouts Association, the Girl Guides Association, and other such organisations should have similar claim for exemption, but I understand that the Treasury have some doubt as to whether Scout units can be considered to relieve poverty in the same way as do boys' clubs. I cannot with all due respect agree with that view.

There may be an impression that because there are units, and very flourishing ones, in practically every public school in the land, we therefore draw our membership from the better-circumstanced class of boy, but that is lot the case. It is true we have these units, and draw our leaders in a very large number of cases, quite rightly, from them, but the East End of London is, I am glad to say, full of Boy Scout troops, though not so full at the moment, obviously, owing to evacuation. I was, told only yesterday by Sir John Shea, our Scout Commissioner for London, that in two districts in the East End twelve scout halls had been totally destroyed by enemy action since the bombing began. We have also a very well-known hostel, Rowland House, in the East End, which is definitely the power-house for the Scout movement among the poorest boys. The spirit down there is beaten by no Scout spirit in any part of the country.

If it is true that the Treasury is prepared to grant exemption to boys' clubs, I have nothing but words of congratula- tion to offer to our friends in these clubs that they should have been so persuasive, and nothing but pleasure in the fact that the Treasury sees fit to grant exemption to them. At the same time I do suggest to the noble and learned Viscount that if that is so we and the Girl Guides Association, and, I would add, probably other analogous organisations, have the same claim on account of poverty. Though the assessment value of many of these little headquarters may make it seem a very small sum that they would be called upon to contribute annually for the next five years, yet it is a very real burden coming on the top of many other burdens and many other difficulties through which the organisations are struggling to preserve their movements intact against the time when peace will come again. I do hope that the noble and learned Viscount will consider the point and perhaps give us some crumbs of comfort, not necessarily in the form of the wording of my Amendment, but in some other form at later stages of the Bill.

Amendment moved— Page 32, line 34, at end insert the said paragraph.—(Lord Hampton.)

LORD ROCHE

I should like to add a very few sentences in support of the plea my noble friend has made to the noble and learned Viscount in charge of the Bill for further consideration of the matter of his Amendment. My noble friend Lord Aberdare was unable to be here to-day, but he kindly showed me, as indeed did the Lord Chancellor himself, certain correspondence that has taken place with regard to boys' clubs, and my plea is for the Scouts to be treated on the same lines, no better and no worse, as boys' clubs. I am, as a matter of fact, concerned with both organisations. I am Chairman of one of the clubs which is represented by Lord Aberdare's organisation, and I am very grateful to think that under the terms of the correspondence which the Lord Chancellor was kind enough to show me, a promise has been made that they shall be exempt if they are exempt already from Income Tax as a charge.

I think on consideration that the words as now in the Bill are perhaps not quite apt to accomplish the intention which it is desired to achieve in this regard, for this reason. I understand the intention is that poor clubs which cannot be de- scribed as compassionate in any way, but yet are dependent upon charity and are exempt from Income Tax, shall escape. No one could ask for anything better than that. On the other hand, the Federation of Boys' Clubs may have, in addition to other things, a shop for the purpose of supplying beer to its members. Of course, that is a profit-earning concern, and that will not escape the contribution either to Income Tax or under this Bill. It seems to me that the Scouts have exactly the same character. Organisations at Eton and elsewhere concerned in the training of the future leaders of the Scour movement, if they have any property at all, would rightly pay contributions, but if, on the other hand, they are central bodies for the moral and physical well-being by means of training of the youth of the country, they should not be taxed or made liable to a contribution under this Bill. That, I am sure, is not the intention of His Majesty's Government. That being so, will not the Government consider whether some better words are not required than those in the clause which says charities for "the relief of poverty"?

All I say is this. The undertaking of the Chancellor of the Exchequer would, of course be honoured by him, but I should prefer some more apt words, and I think there could be found between this stage and the Report stage words that would cover associations which exist substantially for the welfare and improvement of persons of the poorer classes. I think the present Chancellor of the Exchequer and future Chancellors of the Exchequer and we who are interested in this matter would be more secure of the carrying out of this undertaking in letter and in spirit if between now and the Report stage the matter were put a little more definitely. I would suggest to my noble friend Lord Hampton that if the Lord Chancellor would be good enough to see that the Scouts and Girl Guides receive the same consideration, no better and no worse, as the boys' clubs and would give some consideration before Report stage to see how that could best be accomplished, then my noble friend would perhaps be well advised to consider whether he would not be satisfied with that course.

THE LORD CHANCELLOR

Everybody here must, of course, have the warmest sympathy and feeling of good will to these institutions, and I do not imagine we shall need to have a very long debate so far as that is concerned. In order that the matter may be cleared up, I must make a very short statement. I would be quite willing to fall in with the suggestion just made by my noble and learned friend, if Lord Hampton agreed, that we should not seek to decide this matter here to-day. No doubt he may give me an opportunity of seeing him, and if necessary he can see the people at the Treasury, and we can ascertain exactly what is in his mind. I must, however, for the sake of clearness, just point out these two things.

The first is this. This Clause 39, with its four paragraphs (a), (b), (c) and (d), is not giving a list of all the charitable objects that there are. It is picking out four broad categories—the relief of poverty, the relief of sickness, the advancement of religion, the advancement of education. The law recognises as charities things that are much wider than those. I speak subject to correction from those who may know better, but I believe I am right when I say that a society for opposing vivisection is a charity and a society for promoting vivisection is a charity. Anyhow, these are four broad categories in the Bill. What happened in the case of the boys' clubs? My noble friend Lord Aberdare, I understand, was asked to give some examples of the sort of boys' club that would not come within the clause. He supplied, I think, ten cases. They were examined at the Treasury and the authorities already had enough information to say as regards seven of them that they will be covered by the clause as it is; they will all come within "relief of poverty." As regards the other three, complete information was not available. My noble friend on that, I think very reasonably and sensibly, says that the substance of the matter is secured.

In the same way it may be correct, as Lord Hampton 1 think said in his speech, that really you can say that the organisation he is interested in falls within one or other of the categories mentioned. They will be examined, and it may be he would like to produce some examples to show exactly what is meant. The Government do feel great difficulty about adding another category to this list, because you cannot reasonably take one particular beneficent sort of effort and put it in a position of privilege, without going over the whole field and ascertaining if there are any others which may be just outside the present scheme and which must be given as far as possible equal treatment. I hope that what Lord Hampton and Lord Roche are interested in will be found in substance to be within the scheme. If that is not so, I am sure the authorities would be glad to consider the details of specimen cases. 1 think on that ground, on the right use of the time available and the proper handling of the Bill, it would be better, if I might suggest it to my noble friend, that he should withdraw the Amendment at this stage and that some conversations should be undertaken before Report.

VISCOUNT MAUGHAM

I have been acquainted with these matters and have dealt with them judicially for a large number of years, because nothing is more common than to have to ascertain whether a particular charity mentioned in a will is within the Statute of Elizabeth. I have not heard the matter argued here, and therefore I will not express a judicial opinion, but I think it is right that I should say, in the interest of both the Boy Scout and Girl Guide organisations, that at the present moment I have the greatest doubt whether either of these institutions comes within any of these four categories. I hope that will be borne in mind when this matter is dealt with on the Report stage.

LORD HAMPTON

I would like to say how grateful I am to those who have supported my Amendment and to the noble and learned Viscount for the way in which he received it. I would very much like the opportunity of talking the matter over with him and at this stage I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in subsection 4(a), after "charitable purposes," to insert "or to any other person in right of that interest." The noble and learned Viscount said: The provisions of this clause cover a discretion of the Commission to make a value payment in respect of an interest held for a charity. The words in the clause provide for payment to the owner of the interest, but the Bill provides for cases in which payment is to be made to someone other than the owner. We are only tidying up the Bill by inserting the words which I propose.

Amendment moved— Page 33, line 3, after ("purposes") insert ("or to any other person in right of that interest ").—[The Lord Chancellor.]

On Question, Amendment agreed to.

THE EARL OF SELBORNE moved, in paragraph (a) of subsection (4), after "conditions," to insert "incidental or appropriate to making good the war damage to the land of a contributory property." The noble Earl said: In this Part of the Bill we are dealing only with war damage to land or property, but the words in the clause which I propose to amend allow the Commission to impose any conditions whatever in their award of compensation. It is purely a matter in their discretion. There is no kind of limitation or reservation whatever. My noble and learned friend the Lord Chancellor has been so very courteous as to have a correspondence with me on this matter, but he has entirely failed to persuade me either that his own great legal ingenuity would not be able to frame an appropriate Amendment or that no Amendment is necessary. I entirely admit that a great discretion must be left to the Committee. You have only to turn to Clause 7 and you will see what a great variety of circumstances the Commission will have to consider. But what I am afraid of is this. I will give a concrete instance.

There are two very important and famous London schools, St. Paul's Boys' School and St.Paul's Girls' School. Their endowments depend entirely on London house property left by Dean Colet when he founded the schools. These properties have suffered grievous damage from bombs. As this Bill is framed there is nothing whatever to prevent the Commission saying to the governors of St. Paul's school, "We will award you compensation, but our condition is that you make a change in your governing body." It is no consolation to me to be told either that that is very improbable or that the governors need not accept this condition, when I know that if they do not accept conditions they will get no compensation. But is this absolutely improbable? I am told that this is going to be a very important and responsible Commission—that is quite true—and that we may trust the Commission. I agree that any Commission appointed by the present Chancellor of the Exchequer would be one that we would probably be able to trust, but I do not know who will be the future Chancellor of the Exchequer. I would also draw your Lordships' attention to the First Schedule, which puts no limit whatever on the number of Commissioners that may be appointed and then enacts that two may act as a cuorum. Therefore I cannot feel absolute security for the future.

Apart from that, I do protest that it is bad legislation, however much you may trust the Commission, to give it entirely unnecessary and overwide powers. What conceivable connection with war damage could there be in such a condition as I have described? What I suggest to the noble and learned Viscount the Lord Chancellor is that it is quite possible for him to find words which, while leaving the widest scope to the Commission for all considerations that can possibly arise in connection with war damage to land or property, will leave out matters such as I have suggested which have nothing whatever to do with it.

Amendment moved— Page 33, line 7, after ("conditions") insert ("incidental or appropriate to making good the war damage to the land of a contributory property ").—(The Earl of Selborne.)

THE LORD CHANCELLOR

I am fully alive to the importance of the point which the noble Earl has just made. Indeed it is not the first time in the last few days that we have had to debate whether a provision imposing conditions in very general terms does not open the door to more than is necessary. I would be very glad to see if some limiting words can be found, but of course the noble Earl will appreciate what is the real difficulty which we have to overcome, all of us together. It is most difficult to anticipate all the varieties of circumstances which will have to be dealt with in awarding these compensations and determining the use of them. I think in the correspondence I had with my noble friend I gave him as an illustration one which I know is likely to be in his mind. That is that when the War Damage Commission makes payment in respect of London churches that have been bombed or damaged, it might be a very reasonable scheme—I know that is the view of some of the ecclesiastical authorities—not to rebuild churches in each case on the present site but to see if a plan could not be made for using the money more effectually in consultation with the authorities.

That is an illustration that occurs to me now. It is difficult to say how many more and different illustrations might arise. If the noble Earl will agree, I would consider with those who advise me whether any qualification is possible. Of course, the instance he has put is not what was in the minds of the draftsman or of the Government at all. The difficulty is to have words wide enough to cover cases which are proper but which do not give the appearance of giving much too wide and general a power. It would be foolish, I think, to suggest words at this moment, but if I might have that indulgence I will consider and consult as to whether it is possible to put in qualifying words, which will not on the one hand give rise to the suspicion that something extravagant is authorised, but on the other hand will really cover every sort of case which I think it will be agreed ought to be covered. I do not know whether that sort of qualification looks reasonable, but that is the kind of thing that was meant.

THE EARL OF SELBORNE

I am very much obliged to my noble and learned friend. I understand him to undertake to consider whether limitation is possible without any promise that he will succeed. In these circumstances I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in subsection 4 (b), to leave out "it in part" and insert "in lieu thereof or of any part thereof a payment of such amount." The noble and learned Viscount said: This Amendment is necessary because the paragraph as drawn only empowers the Commission in a case in which a cost of works payment is the appropriate payment either to make it, or to make it in part, or not to make it. Since a cost of works payment can only be made in respect of works actually executed the paragraph as drawn confers no power on the Commission to make a payment on cash in lieu of paying for the execution of works. It is very desirable that the Commission should have this power in the case of the properties held for charitable purposes in order to give them the full freedom of action which the administration of the clause will require.

Amendment moved— Page 33, line 22, leave out ("it in part") and insert ("in lieu thereof or of any part thereof a payment of such amount").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is consequential.

Amendment moved— Page 33, line 24, leave out ("it") and insert ("any payment in respect of the damage").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved, at the end of subsection (4), to insert: (c) in respect of the cost of any works reasonably executed for temporarily meeting the circumstances created by the damage as to which, in consequence of the preceding provisions of this subsection, the provisions of Section five of this Act do not have effect, the Commission may make to the person by whom such cost is incurred such payment as appears to them to be requisite in order to confer upon him the like benefit as he would have had under the provisions of that section.

The noble and learned Viscount said: These are words introduced because, in a case in which the Commission decides not to make any payment in respect of damage to any particular property held for charitable purposes, the provisions of Clause 5 of the Bill as to temporary works payments will not operate, as Clause 5 only makes provision for that to operate where value payments or "payments of cost of works are made. This defect was pointed out in another place and the Government promised to remove the defect in this House.

Amendment moved— Page 33, line 24, at end insert the said paragraph.—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD BISHOP OF LONDON moved, in paragraph (c) of subsection (6), to leave out "for purposes the expenses of the execution of which" and insert "if the expense of executing repairs on the land." The right reverend I Prelate said: I understand that this Amendment is being accepted by the Lord Chancellor and it will therefore be necessary for me to say very little about it. It merely clears up one doubtful point. It might have been thought that under this clause Church schools would become contributory properties and the insertion of these words makes it clear that they remain non-contributory.

Amendment moved— Page 33, line 36, leave out from ("person") to ("is") in line 37, and insert ("if the expense of executing repairs on the land").—(The Lord Bishop of London.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved to add to the clause: (8) If any conditions subject to which any sum is paid by the Commission under this section are not complied with, the sum paid shall be recoverable as money had and received to the use of His Majesty.

The noble and learned Viscount said: The words I propose to add under subsection (8) are necessary because there must be some sanction for the observance of conditions imposed under this clause.

Amendment moved— Page 33, line 47, at end insert the said subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 39, as amended, agreed to.

Clause 40:

Land occupied for purposes of undertaking.

40.—(1) If at the relevant date in any year any contributory property is occupied mainly or exclusively for the purpose of the carrying on of an undertaking and either—

1. (a) that undertaking is a public utility undertaking; or
2. (b) the contributory property was the subject of a valuation for rating purposes made by reference to the accounts, receipts, profits or output, of that undertaking;

no instalment of contribution shall be payable for that year in respect of that property.

(2) Such contributions towards the expense of making payments in respect of war damage shall be made in respect of properties to which subsection (1) of this section applies as Parliament may hereafter determine.

THE LORD CHANCELLOR had given Notice of an Amendment in subsection (1), to leave out all words after the first "undertaking" down to the end of paragraph (b) and insert "to which this section applies," and of another to insert the following after subsection (2): ( ) The undertakings to which this section applies are—

1. (a) public utility undertakings;
2. (b) except in so far as Parliament may hereafter determine, any undertaking of such a character that the valuation for rating purposes of hereditaments in which the undertaking is carried on is made by reference to the amounts, receipts, profits or output of the undertaking;
3. (c) any other undertaking to which Parliament may hereafter determine that this section shall apply

The noble and learned Viscount said: I propose to cut out what is printed in the Bill from the third line of subsection (1) to the end of line 7 and to substitute a better and clearer form of words. These undertakings are not to pay contribution. Generally speaking, they are undertakings which are rated not by reference to annual value and other undertakings to which Parliament may hereafter determine that the Bill shall apply. In applying valuations for rating to the present purpose, we are making them do work for which they are not designed. Hence some of the difficulties. This is, I believe, a much clearer re-statement of the clause than as it at present stands.

Amendment moved— Page 34, line 3, leave out from ("under taking") to end of line 7, and insert ("to which this section applies").—(The, Lord Chancellor.)

LORD STAMP

On a point of drafting common to the original and to the substituted version, I have some misgivings that the clause may go further than it ought to do and than the Government intend, when they speak in paragraph (b) of "reference to the accounts, receipts, profits or output of the undertaking."

THE LORD CHAIRMAN

I think it is the second Amendment to which the noble Lord is now speaking.

LORD STAMP

It is on Clause 40, line 13.

THE LORD CHANCELLOR

I apologise. I am afraid I added the two together, which I ought not to have done without asking leave.

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved— Page 34, line 13, at end insert the said new subsection.—(The Lord Chancellor.)

LORD STAMP

To my knowledge there are properties in respect of which in the course of valuation the valuation is pre dominantly made by reference to accounts, receipts, profits and output. It is not the intention, I am sure, to exclude, for example, all tied houses and brewery premises, where the rent is inconclusive of trade valuation and rack rent. Reference is always made to what are the receipts and profits, or, in the case of an owner-occupied hotel, it is usually made to the accounts and receipts. Even in the case of a school a valuation is adopted as to the number of scholars who happen to be resident there at any one time. The noble Viscount may reply that the words "by reference to" have some other form of legal context and that I have, as usual, got hold of a mare's nest. He may say that the valuation in that case is made by reference to rack rental or to the annual value. This is an ellipsis, but I must say I would be reassured if he would tell me that that point would be looked at.

THE LORD CHANCELLOR

I am greatly obliged to my noble friend. I do not know why he should attribute to me an expression of opinion that he usually discovers mares' nests. That has not been my general experience, even though I do not quite agree with him on one of the points which he made yesterday. Actually the version is taken, I think, from the Rating and Valuation Act, 1935. Of course I will see that the warning which the noble Lord gives is carefully considered and if necessary will consult him. We certainly do not intend to let off any of the things he mentioned.

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is consequential.

Amendment moved— Page 34, line 27, leave out from ("undertaking") to end of line 31 and insert ("to which this section applies").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 40, as amended, agreed to.

Clause 41 [Highway]

THE LORD CHANCELLOR

The next three Amendments are purely drafting, and perhaps they, may be taken together.

Amendments moved—

Page 36, line 1, leave out ("other than this section"),

Page 36, line 5, leave out ("other than this section"),

Page 36, line 12, leave out ("shall") and insert ("may").—(The Lord Chancellor.)

On Question, Amendments agreed to.

THE LORD CHANCELLOR

The next Amendment is also purely a matter of drafting.

Amendment moved— Page 37, line 12, leave out ("Corporation of London as trustees of") and insert ("mayor and commonalty and citizens of the City of London acting as trustees of the.")—[The Lord Chancellor.]

On Question, Amendment agreed to.

Clause 41, as amended, agreed to.

Clauses 42 to 44 agreed to.

Clause 45 [Definition of "owner" in relation to proprietary interests]:

THE LORD CHANCELLOR moved to add to subsection (2): In relation to land of which possession has been taken on behalf of His Majesty in the exercise, during the period beginning with the twenty-fourth day of August, nineteen hundred and thirty-nine, and ending with the thirty-first day of August, nineteen hundred and forty-one, of emergency powers, the reference in paragraph (b) of this subsection to rent shall be construed as including a reference to compensation payable under the Compensation (Defence) Act, 1939, or under any such agreement as is mentioned in Section fifteen of that Act, and the reference in the said paragraph (ft) to the person in receipt of rent shall be construed as a reference to the person who is, or, if a claim therefor had been duly made under that Act, would have been, in receipt of such compensation as aforesaid.

The noble and learned Viscount said: This is a drafting Amendment to make clear who is to be regarded as the owner of a proprietary interest in the case of certain properties which are requisitioned under the Compensation (Defence) Act, 1939.

Amendment moved— Page 41, line 35, at end insert the said words.—[The Lord Chancellor.]

On Question, Amendment agreed to.

Clause 45, as amended, agreed to.

Clause 46 [Destination of payments in certain cases]:

THE LORD CHANCELLOR moved, after subsection (3), to insert: (4) Where a value payment is to be made in respect of war damage to a hereditament and immediately before the occurrence of the damage a person had a right to remove from the hereditament an article comprised therein to which he would have been entitled on removing it, and either—

1. (a) there was subsisting in the article a proprietary interest owned otherwise than by that person or owned by him otherwise than in the capacity in which he had the right to remove the article (being an interest against which his right to remove it was exercisable); or
2. (b) the article was included in a mortgage of a proprietary interest in the hereditament, and that person's right to remove it was exercisable against the mortgagee;

then, for the purposes of Section nine of this Act the article shall be dealt with as a separate part of the hereditament, and

1. (i) in a case falling within paragraph (a) of this subsection, the said Section nine and the other provisions of this Act as to the vesting and devolution of the right to receive a share of a value payment shall have effect as if the proprietary interest mentioned in that paragraph had been owned by the person who had the right to remove the article, or owned by him in the capacity in which he had the right to remove it, as the case may be; and
2. (ii) in a case falling within paragraph (b) of this subsection, subsection (4) of the said Section nine shall not have effect in relation to the share of the value payment attributable to the article."

The noble and learned Viscount said: This Amendment deals with the entrancing subject of removable fixtures, and the purpose of the Amendment is to prevent an injustice which would otherwise arise from the provisions of the Bill as it stands as to value payments in the case of removable fixtures. The difficulty arises from the fact that whilst the true owner of a removable fixture is presumably the person who has the right to remove it, the legal owner is the owner of the land. As the Bill stands, the owner of the land is the person who would receive the compensation for the destruction of a removable fixture, and that would certainly be most inequitable.

Amendment moved— Page 42, line 31, at end insert the said subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 46, as amended, agreed to.

Clause 47 agreed to.

Clause 48 [Power to raise capital for defraying contributions]:

THE LORD CHANCELLOR

The first Amendment which I have to propose to Clause 48 is merely a matter of drafting.

Amendment moved— Page 44, line 13, leave out ("for") and insert ("on").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved, at the end of the clause, to insert: (6) Any expenses incurred by the Admiralty in discharging any liability as a direct or indirect contributor arising in respect of lands vested in them by virtue of the Greenwich Hospital Act, 1865, or the Naval Knights of Windsor (Dissolution) Act, 1892, or as mortgagees of a direct or indirect contributor arising by reason of an exercise of the powers conferred on them by Section forty of the said Act of 1865, may be defrayed out of cash standing to the credit of the Greenwich Hospital capital account; and for that purpose the Admiralty nay from time to time convert into money any securities for the time being held by them for the benefit of Greenwich Hospital and all money produced by any such conversion shall be paid into the Bank of England to the cash, account of His Majesty's Paymaster General who shall carry it to the Greenwich Hospital capital account.

The noble and learned Viscount said: This deals with a special case. It has been inserted in order to provide for the situation at Greenwich Hospital and, I think, for certain other lands held by the Admiralty on behalf of the Crown.

Amendment moved— Page 44, line 21, at end insert the said words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 48, as amended, a greed to.

Clause 49 agreed to.

THE LORD BISHOP OF LONDON moved, after Clause 49, to insert the following clause:

Liabilities to repair chancels, etc., not to extend to war damage.

"—(1) A liability to which this section applies to repair a chancel of a church or other ecclesiastical building shall not extend to any repairs required for making good war damage.

(2) Where war damage occurs to a chancel of a church or other ecclesiastical building in respect of which such a liability exists, then, in so far as the discharge of that liability, as modified by the provisions of the preceding subsection, is, having regard to the extent of the War damage—

1. (a) impracticable, or only practicable at a cost which is unreasonable in view of all the circumstances; or
750
2. (b) of no substantial advantage;

the liability shall be suspended until the war damage is made good to such an extent that the discharge thereof is practicable at a reasonable cost and is of substantial advantage.

(3) Where, under the preceding provisions of this section a liability is modified or suspended, all rights and remedies arising out of the non-discharge of the liability shall be modified or suspended accordingly.

(4) The preceding provisions of this section shall be deemed to have had effect as from the third day of September, nineteen hundred and thirty-nine.

(5) Where war damage occurs to a chancel of a church or other ecclesiastical building in respect of which such a liability exists, or to the church of which such a chancel forms part or to premises of which such a building form part, the Commission shall, in exercising the powers conferred on them by subsection (4) of Section thirty-nine of this Act in relation to that damage, have regard to the circumstances affecting the church or those premises as a whole, and may make provision under that subsection in relation to the church or to those premises as a whole.

(6) This section applies to a liability arising as mentioned in Section thirty-one of the Tithe Act, 1936, or in any other manner whatsoever except by virtue of a contract providing expressly for the execution of repairs required for making good war damage or by reason of a person's holding property upon trusts which authorise its application in the execution of such repairs."

The right reverend Prelate said: I understand that this new clause which I am proposing will be accepted by the Government, but, even so, perhaps I may state in a few words, for the benefit of Lord Quickswood and others, what the clause deals with. As your Lordships know, in the case of many chancels of churches there is a legal liability on the lay rector to keep the chancel in repair. In the case of many lay rectors, that liability has been removed, but it remains in the case of a few, and in particular in the case of Oxford and Cambridge colleges, and probably Eton College, and the Ecclesiastical Commissioners. In those cases this position arises: if a chancel is destroyed, there is a double remedy. The appropriate authority may come to the War Damage Commission and demand compensation, and it may also go to the lay rector and demand that he shall rebuild the chancel. It is clearly unsuitable that there should be that double remedy. It is not the intention of the Government that a private person should suffer on account of war damage, and this new clause relieves lay rectors of all liability for war damage.

Subsection (2) relieves lay rectors from the necessity to do any repair to a surviving part of the chancel if it would be unreasonable because another part of the chancel has been damaged. That liability is postponed until the war damage has been remedied. I may add that in moving this clause I have the support of the Ecclesiastical Commissioners and the express approval and support of the Oxford colleges and of the Cambridge colleges.

Amendment moved— After Clause 49, insert the said new clause.—(The Lord Bishop of London.)

THE LORD CHANCELLOR

I should like to say to the right reverend Prelate that the Government accept his proposal with great pleasure, but I am not myself entirely clear as to the construction of subsection (1). It may be that I am raising a quite absurd point, but this subsection speaks of the liability "to repair a chancel of a church or other ecclesiastical building." Does that mean the liability to repair a chancel of a church or a chancel of another ecclesiastical building, or does the second limb of the proposal cover ecclesiastical buildings at large?

THE LORD BISHOP OF LONDON

Perhaps I may borrow a phrase from the noble and learned Viscount and say that I should like notice of that question. I will give it, due consideration before a later stage is reached. I strongly suspect that all that is concerned is a chancel, whether of a church or of some other building.

THE LORD CHANCELLOR

I should have thought so, and in that case it ought to run: "a chancel of a church or of another ecclesiastical building."

THE LORD BISHOP OF LONDON

I agree.

On Question, Amendment agreed to.

Clauses 50 and 51 agreed to.

Clause 52 [Disposal of salvage]:

THE LORD CHANCELLOR

The Amendment to Clause 52 is merely drafting.

Amendment moved— Page 46, line 7, leave out ("the site thereof") and insert ("any land").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 52, as amended, agreed to.

Clauses 53 to 55 agreed to.

Clause 56 [Power of Commission to obtain information]:

THE LORD CHANCELLOR moved, in subsection (1), to leave out "apportionment or making of a value payment" and insert: determination or ascertainment by the Commission of the kind or amount of a payment to be made under this Part of this Act, or of the person entitled to receive such a payment or any share of such a payment, or of the determination by the Commission of any other question falling by virtue of this Part of this Act to be determined by them, or for the purpose of facilitating the determination by agreement of any question arising thereunder.

The noble and learned Viscount said: I think that this proposal speaks for itself. It merely enlarges the power to obtain information.

Amendment moved— Page 46, line 35, leave out ("apportionment or making of a value payment") and insert the said new words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 56, as amended, agreed to.

Clause 57 agreed to.

Clause 58 [Interpretation of Part I]:

THE LORD CHANCELLOR moved to leave out Clause 58. The noble and learned Viscount said: This Bill is a long one, and I think that in three different places there is an interpretation clause, a sort of dictionary. If you are to have a dictionary, it is better to have only one dictionary, which you can find at one place, and I therefore propose to remove it here and also somewhere else, while at the end of the Marshalled List of Amendments I have an extremely long proposal which puts together the whole dictionary from A to Z.

Amendment moved— Leave out Clause 58.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 59:

Insurance schemes.

(2) Each of the schemes shall be such as to secure that, subject to the provisions of this Act,—

1. (a) the extent and nature of the indemnity provided by the Board of Trade as insurers under the scheme, and the cases in which and the conditions subject to which that indemnity 753 is provided, are determined by a policy of insurance issued in the prescribed form by a person acting on behalf of the Board;
2. (b) there are payable under the policy such premiums as may be prescribed,

and different forms of policy and different premiums may be prescribed in relation to different classes of cases, and any prescribed form of policy may be such as to incorporate by reference provisions set out in the order prescribing the form:

Provided that …

(4) No payment under either of the schemes shall be made on any claim in respect of war damage if the amount recoverable, or, where it appears to the Board of Trade that part only of the damage could properly be included in that claim, the amount recoverable in respect of that part of the damage, is less han five pounds.

THE LORD BISHOP OF LONDON moved to insert in subsection (2): Provided that, where goods are insured under the business scheme by virtue only of paragraph (b) of subsection (2) of the next succeeding section and the order so prescribes, any payment by the Board of Trade on a claim in respect of war damage shall be made to such trustees as may be prescribed.

The right reverend Prelate said: This deals with rather an intricate and difficult point. The words which it is proposed to insert are a direction about payment in respect of war damage, that in certain cases it "shall be made to such trustees as may be prescribed." Clause 60 (2) of this Bill puts the furniture of churches into the business scheme, and under that scheme the Bill assumes that any indemnity paid will be paid to the person who pays the premium, and that the payment will be made with no conditions attached. That is to say, in the ordinary case if you lose your office furniture you receive your indemnity and can do exactly what you like with the money. In the Church of England, however, the legal position is peculiar. First of all, it is necessary to decide to whom the furniture and the fittings of the church belong. The incumbent has some interest in the furniture and fittings, and the churchwardens certainly have an interest in them. Under the Parochial Church Councils Measure, however, the interest of the churchwardens is very largely transferred to the parochial church council. Let us suppose that the parochial church council pay the premium and that therefore the payment for damage to the organ, pews and so on is made to the parochial church council. Under the Bill as it stands that payment will be made unconditionally, and it appears to those for whom I speak to be an insecure situation that a parochial church council should receive perhaps some hundreds or even thousands of pounds without any condition attached, and with complete control over the money.

The objections to that may be indicated thus. In the first place, it will be possible for a parochial church council to take that money and expend it, not on replacing their furniture at all, but on other purposes. In these days it is unfortunate that many church councils find themselves in difficult financial conditions, and they might very well say, "We have overspent our funds; we have incurred an overdraft at the bank, and this indemnity will come in very useful to get rid of it," thereby losing the money with which they ought to restore the furniture and fittings which they have lost. Another point is that in many areas the parochial church council is hardly there. I can think of districts in London in which the Vicars tell me that they have no single member of the parochial church council left in their parish. At any rate, they are immensely scattered by evacuation and so forth, and it would be extremely difficult to allot to such a scattered body the control of a possibly large sum of money.

Further, in many cases where a church has been destroyed it will not be rebuilt, and therefore the furniture and fittings for that church will not be required. That raises a number of difficult questions of all kinds with which the Church will have to deal subsequently by a Measure in the Church Assembly. But in the meantime it would be, as we think, wise and desirable that money thus paid for damage done to furniture and fittings in churches should not be paid over unconditionally, but be put into the hands of trustees, to be held until it can be decided how best it may be spent, and it can be secured that it shall be spent, if needed, on furniture and fittings and nothing else. The Amendment provides that in cases of this kind the Board of Trade may prescribe that an indemnity for damage shall be made "to such trustees as may be prescribed"; that is to say, in the case of the Church of England we should ask the Board of Trade to prescribe that payment be made either to the Ecclesiastical Commissioners or to the Diocesan Board of Finance, and held by them and expended with their consent on proper purposes.

The Amendment is perfectly general in form, with its phrase "such trustees as may be prescribed," partly for brevity and partly because I have reason to think that other Churches would welcome a similar arrangement in their case. They are not quite in the same position as the Church of England, but I do know that representatives of the Church in Wales, the Roman Catholic Church, the Methodist Church and the Baptist Church—which are all those with whom I have so far been able to get in touch—would welcome and support this Amendment. I hope I have sufficiently explained that it is a precautionary measure so as to secure that money paid as indemnity for the destruction of church furniture may be safeguarded so that it may be spent in the proper way.

Amendment moved— Page 51, line 10, at end insert the said proviso.—[The Lord Bishop of London.)

THE LORD CHANCELLOR

The right reverend Prelate has, of course, explained the purpose of this Amendment very clearly, though it is a complicated matter. If I may say so without any desire to criticise, it is a pity it has come up so late, because when time is so important in getting this Bill on the Statute Book and starting the work and appointing the War Damage Commission, the Government do feel a good deal of difficulty in assenting straight off to a proposal which could not, I think, be limited to the Church of England or to specific religious bodies. It would presumably on principle have to apply to a great many other cases too. After all, it is rather a strong measure, because it comes to this, that the people who will pay the insurance premium are not the people who are to get the insurance money if the damage occurs. I think it will be appreciated that one has to look at that very carefully, because at any rate usually the fact that you have paid the premium is the reason why you get the right to receive the money.

This is a proposal that certain persons should pay the premium but, for reasons which have been pointed out so clearly, it might be better to hand the money to somebody else. I recognise that the phrase "such trustees as may be prescribed" really would enable the Board of Trade to reduce this proviso to the narrowest operation. They might say, "Well, we will not prescribe any trustee," but I hardly think that would be playing fair by the proposal. What I wish to do on behalf of the Government is to ask that we might study it. I am not by any means sure that we can reach a conclusion before the Report stage. If we cannot, I entirely agree that this ought to be a topic dealt with at the very next opportunity of legislation, which will not be more than a few months ahead.

THE LORD BISHOP OF LONDON

May I add one word in answer to something which the noble and learned Viscount has said? It does appear entirely wrong that if one body pays the premium it should not receive the money, but it must also be borne in mind that in very many cases the parochial church councils, who are the owners of the fittings, will not pay the premium or will not pay the whole of it. If you go down" to the East End of London, where the parishes are simply destroyed, you will find that they will not be able to pay any premium at all, and in fact the diocese in very many cases will either have to pay the premium or make a very large contribution towards it. That is an additional reason, quite obviously, why they should have some control over the way in which the money is spent.

I would add this further point. It is clearly the Government's desire that as many churches as possible should insure their furniture, and that this should not be confined merely to those churches which have already been destroyed and are certain therefore to have a claim. If the Government wish as many churches as possible to insure, there is no doubt that the dioceses will have to bring pressure to bear and make a considerable contribution, and they would do so, quite obviously, much more readily if they were assured that there would be some control over the way in which the money is spent when it is received, than if they know it is merely going into the hands of the parochial church council, to be spent possibly very injudiciously and either on alien objects or on very inferior furniture. It should be borne in mind that in the case of ordinary church fittings there is already the control of the faculty system by which nothing may be put into the church or taken out of it except with due authority. In the case of this insurance money there is no such security. We are asking for what is another method of securing a control which obtains already in other respects.

LORD QUICKSWOOD

Perhaps I might be allowed to offer a suggestion. Possibly the Lord Chancellor's objection might be met, or at any rate greatly mitigated, if the consent of the persons who had paid the premium was required before the money could be dealt with by the trustees. Of course conceivably that might lead to a deadlock, the trustees wanting one thing and the payers of the premium another. But that deadlock would probably resolve itself in a few days, because without joint consent the money could not be spent at all, and that no one would wish. I should have thought that that might have met the Lord Chancellor's objection, and it differentiates it from other cases which he probably has in mind.

THE LORD CHANCELLOR

I appreciate the value of that suggestion very much. But I do not think it can be disputed in the light of what has been said already that this is rather a complex matter, and when one considers that it must have wider application than to the Church of England alone I do not think it unreasonable to ask that there should be adequate time to go into it. I will not fail to consider the suggestion, but I wish to deal frankly with the House, and I am myself doubtful whether we shall get a clause in the proper form agreed in time for the Report stage, but I repeat that if that is so, I should regard it as almost a necessary matter to be attended to later.

THE LORD BISHOP OF LONDON

I should like to express my thanks to the Lord Chancellor. I was in a measure criticised because this matter was not brought up at an earlier stage, but the Government themselves only transferred fittings and furniture from the private chattels scheme into the business scheme at the very end of the proceedings in the House of Commons, and it took some time to consider all the implications. I am perfectly ready to withdraw the Amend- ment in the hope that it may, if possible, be dealt with before the Report stage.

Amendment, by leave, withdrawn.

LORD BARNBY moved, in subsection (4), to leave out all words after "made" and insert: in respect of war damage to goods insurable under the scheme in question which appears to the Board of Trade to have occurred on any occasion if the amount recoverable under the scheme in respect of the damage is less than £2.

The noble Lord said: This incorporates the appeal I made to the Government at the end of my remarks on the Second Reading ——

THE LORD CHANCELLOR

I hope the noble Lord will forgive my interrupting, but it may shorten the proceedings if I say I am prepared to accept this Amendment.

Amendment moved— Page 51, line 21, leave out lines 21 to 25, and insert the said new words.—(Lord Barnby.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is drafting.

Amendment moved— Page 51, line 28, after ("payment") insert ("other than an assignment which does not affect any beneficial interest in such a payment or in any part of such a payment").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 59, as amended, agreed to.

Clause 60:

Goods insurable under the schemes.

60.—(1) Subject to the provisions of subsection (4) of this section, the goods insurable under the business scheme in relation to any person carrying on business in the United Kingdom are all goods situated in the United Kingdom—

(2) For the purposes of his Part of this Act—

1. (a) an activity shall not be deemed to be other than a business by reason only that it is of a professional nature, or that it is not carried on for gain;
2. (b) the carrying on of any activity by a corporation or unincorporated body of persons shall be deemed to be the carrying on of a business:

Provided that goods which would, apart from this proviso, be insurable under the business scheme in relation to a corporation sole or a body of persons who are trustees, and would be so insurable by virtue only of paragraph (b) of this subsection shall, in such cases as may be prescribed, be deemed not to be insurable in relation to the corporation or body of persons under the business scheme.

THE LORD CHANCELLOR moved, in subsection (1), to leave out "in the United Kingdom," where those words first occur. The noble and learned Viscount said: As previously drafted, the Bill provided that goods to be insurable under the business scheme had not only to be situated in the United Kingdom but to be insurable in relation to a person carrying on business in the United Kingdom. This would have excluded from insurance equipment situated in the United Kingdom but belonging to or insurable in relation to persons who, though carrying on business, might be held not to carry it on in the United Kingdom. There is no good reason why such property should be excluded and anomalies might result if it were.

Amendment moved— Page 52, line 34, leave out ("in the United Kingdom").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD BISHOP OF LONDON moved, in the proviso in subsection (2), to leave out "sole." The right reverend Prelate said: This Amendment is really to ask for a matter to be cleared up. This is the subsection that actually puts church fittings, pews, pulpits, organs, and everything else into the business scheme. It concerns the carrying on of an activity which is deemed to be the carrying on of a business. Under Clause 62 the business scheme is compulsory, and requires insurance to the full value of the article. Therefore, as the Bill stands, every parish church and every chapel will be compelled to insure all the fittings they possess and to insure them to their full value. On the Second Reading I indicated that this was, in fact, almost impossible. To ascertain the full value of some articles would be very difficult indeed, and you cannot, in fact, compel a church that may have no money at all to provide £75 or £150 to insure an organ for £6,000, which may be its full value.

Clause 62 also gives power to exempt from the provisions of the clause. The Board of Trade has power to make insurance in the case of churches voluntary, and they have power to make it not necessary to insure to the full value. If they exercise that power, all is well and I am perfectly satisfied, but we have not yet got from the Board of Trade any assurance that they will make it voluntary or will allow insurance at less than the full value, still less that they will allow us what is called "first loss" policies and not "average" policies. Supposing they do not give us that liberty, we shall want to contract out of the scheme altogether, and the way to contracting out is in the proviso at the top of page 52 which says: Provided that goods which would, apart from this proviso, be insurable under the business scheme in relation to a corporation sole or a body of persons who are trustees, and would be so insurable by virtue only of paragraph (b) of this subsection shall, in such cases as may be prescribed, be deemed not to be insurable in relation to the corporation or body of persons under the business scheme.

We might go to the Board of Trade and say we wish to come out of the business scheme altogether, and I am inclined to think that in many ways the private chattel scheme would be better for church fittings than the business scheme; but if we want to come out we have to be a corporation sole, because it is only a corporation sole which has a way out under this proviso. I wish to leave out the words "sole" for this reason. The incumbent is a corporation sole, but the Dean and Chapter are not; they are a corporation aggregate. Church wardens—and they have some rights in these matters—are a quasi-corporation, while the parochial church council is a corporation. Therefore, if the word "sole" is omitted, all these various kinds of corporation will come in, and we shall all have our way out if we desire. But I end by saying that if we can be quite sure that church fittings will come under the business scheme in a voluntary form and not at their full value, and possibly under a "first loss" policy, I shall be perfectly satisfied to leave the matter as it is.

Amendment moved— Page 52, line 9, leave out ("sole").—(The Lord Bishop of London.)

THE LORD CHANCELLOR

It appears to me that in this Amendment the right reverend Prelate is proposing one thing in order to extract another. I am very willing to submit to the process, and therefore I begin at the end by saying that the right reverend Prelate may be assured that it is intended to make church property voluntarily insurable. The details are being worked out. The proposal which it was necessary to make in order to extract the avowal is one to which I should have had to take objection for other reasons, but after what I have said, which is intended to answer him in the spirit as well as in the letter, probably the right reverend Prelate will on this occasion leave the "sole" alone.

THE LORD BISHOP OF LONDON

I appreciate that replay very much in all its forms and aspects. I hope the Lord Chancellor will forgive me for having rasied the matter, but it was important to get it quite clear.

Amendment, by leave withdrawn.

Clause 61 [Time for payment of losses under the schemes]:

THE LORD CHANCELLOR

The next Amendment is drafting.

Amendment moved— Page 54, line 6, leave out ("before the said date") and insert ("at an earlier date than would be all owable under subsection (1) of this section").—(The. Lord Chancellor.)

On Question, Amendment agreed to.

Clause 61, as amended, agreed to.

Clause 62 [Insurance under business scheme to be compulsory]:

THE LORD CHANCELLOR

These are all drafting Amendments, and with your Lordships' permission I would move them en bloc.

Amendments moved—

Page 54, line 16, leave out ("otherwise than")

Page 54, line 16, leave out the second ("of") and insert ("in the United Kingdom of any business not being")

Page 54, line 26, leave out ("otherwise than")

Page 54, line 27, leave out ("of") and insert ("in the United Kingdom of any business not being")

Page 56, line 10, leave out ("not")

Page 56, line 11, after ("them") insert ("otherwise than").—(The Lord Chancellor.)

On Question, Amendments agreed to.

On Question, Whether Clause 62, as amended, shall stand part of the Bill?

LORD MANCROFT

May I draw attention by way of warning to the words which appear in this clause? It says it shall be an offence if there is not in force a policy of insurance "for a sum not less than the value thereof for the time being." What is "the value thereof for the time being"? We have these same words in the War Risks Insurance Act, 1939, and a lot of trouble they gave. They give no guide to the insurer as to how to calculate the value for the amount he should insure, nor do they form a basis for figures to be used if a claim is to be made and settlement arrived at. I was much impressed by what my noble and learned friend said on Clause 25 when he warned us. He said it was impossible for the probate valuers to value things in view of the fact that conditions were completely abnormal. If my memory does not betray me there was a memorandum in the first presentation of this Bill in another place to say the Board of Trade would go to the Probate Office and the Inland Revenue to obtain values for these insurance purposes. If that, as the Lord Chancellor has just told us, is to apply in this particular case, it will be impossible for the insurer to be happy when he gets a valuation made by the Probate Office in the way which the Lord Chancellor has already told us.

I think that if valuations are made, or if figures are put by the Board of Trade that do not fall in comfortably with what the insurer has fixed in his own fire insurance policy, the insurer will feel himself dealt with unjustly. I think, therefore, it would be advisable to define the words "for a sum not less than the value thereof for the time being." What time being? It would be advisable to define these words by some Government announcement in order to avoid the irritation and confusion that followed on the scheme under the War Risks Act of 1939. In any case the value will have to be defined the first time that a dispute arises, and it is no good refusing to face the facts now, and leaving the matter to be dealt with at the last moment, as the Board of Trade usually does, in a hurry. I therefore utter this word of warning and ask my noble and learned friend if he cannot take some steps to define in a less nebulous way what is meant by "not less than the value thereof for the time being."

THE LORD CHANCELLOR

I admire my noble friend's logical mind, which he applies perfectly reasonably to the phrase in the Bill. Of course in this practical world you cannot demand scientific accuracy to a farthing. I am very willing to consider some words if there is anything which should be added or explained. The substance of it, I suppose, is that it is desired that the property should be covered by insurance. If it is property which is changing rapidly in value, the fact that it had previously been insured at a lower figure would not justify the leaving it at that because it would not be insured for the highest figure at which it was then worth. But one must, I think, take a broad view of this. Nobody would dream of prosecuting anybody if he had a good explanation, but some provision to the effect that the property should be covered for the time being is, I think, not an unreasonable provision. How much difficulty there has been under the War Risks Insurance Act I am not very fully informed of, but I have just been asking those who might know, and their impression is that the difficulty has not been as great as my noble friend thinks. Will he allow me to inquire into the matter and I will see whether there is anything which ought to be added for the purpose of making the application of this part of Clause 62 more reasonable?

LORD MANCROFT

Is my noble friend aware that no insurance policy can be taken out under this clause until the insured knows how to proceed about it? It would be quite easy, I submit, that a memorandum should be issued to guide the insurer upon what footing the insurance should be made. In any case there are bound to be disputes if the insured does not know how to proceed, and why not, sooner rather than later, guide him as to how to proceed when he takes the insurance policy out under this Bill when it becomes an Act?

THE LORD CHANCELLOR

The policy, I understand, is a policy which will be in accordance with regulations that are made by the Board of Trade, and to that extent some guidance would in any case be given, but it may be that this is one of the points on which a certain amount of explanation should be issued as suggested. If that is so I am sure the Board of Trade will be very willing to do that.

LORD MANCROFT

I am very much obliged to my noble and learned friend.

VISCOUNT MAUGHAM

I think the matter does require a little further elucidation in the Bill. This House has always been very unwilling to have a subject exposed to the risks of the penalty under a Bill unless he has knowingly done something contrary to his duties as a citizen, and as the Bill stands, it seems to me, subject to the better opinion of the Lord Chancellor, that if stock has gone up in value very speedily after the date when the insurance was taken out, the man would technically be subject to an offence under the Bill because he would no longer be insured to the "value of the goods for the time being," which I think means at any time at which he may be challenged. Something, I think, requires examination with regard to that either by the insertion of a clause Saying that if he says he has insured the property to the proper value at the date of the insurance he should not be liable, or something of that sort.

THE LORD CHANCELLOR

I am obliged. That again completely supports what my noble friend said in the first instance. I had not been able then to look at a piece of information which had been handed to me and which I will read now. It informs me that the Board of Trade is in touch with commercial and industrial interests with a view to seeing whether this can be defined more closely.

Clause 62, as amended, agreed to.

Clause 63 [Power of Board of Trade to obtain information]:

THE LORD CHANCELLOR moved, after subsection (1), to insert: ( ) Where—

1. (a) under paragraph (a) of subsection (2) of Section sixty-one of this Act a payment in respect of the destruction of or damage to any goods has been made under either of the schemes at an earlier date than would be allowable under subsection (1) of that section, and the Board of Trade have imposed conditions as to the application of the sum paid; and
2. (b) a person authorised by the Board of Trade for the purposes of this subsection has reason to believe that there are on any premises any goods acquired with the proceeds of the payment to replace the goods destroyed, or any goods repaired out of the proceeds of the payment,

the powers conferred by the last preceding subsection shall be exercisable by that person in relation to those premises for the purpose of ascertaining whether or not the said conditions have been complied with in relation to the goods as they are exercisable by a person authorised in that behalf by the Board of Trade in relation to such premises, and for such purposes, as are mentioned in that subsection.

The noble and learned Viscount said: Clause 6r, subsection (3), which we have just passed, provides that the Board of Trade may impose conditions restricting the manner in which an immediate payment of indemnity under the insurance scheme is applied. The proposed Amendment to Clause 63 would give the Board of Trade the necessary power of investigation to secure that any conditions laid down under Clause 61 (3) were observed. There is, I believe, a similar power conferred on the War Damage Commission under Part I of the Bill in Clause 57. The powers of investigation which the proposed Amendment would confer on the Board would be similar to the powers conferred on them by Clause 63 of the Bill as at present drafted, in order to enable them to enforce the obligation to insure under the business scheme in cases where the equipment held is worth more than £1,000. I beg to move.

Amendment moved— Page 57, 1ine 7, at end insert the said subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 63, as amended, agreed to.

Clauses 64 to 70 agreed to.

THE LORD CHANCELLOR moved, after Clause 70, to insert the following clause:

Meaning of owner in relation to certain property falling within definition of "goods."

Where anything falling within the meaning in this Act of the expression "goods" has been so affixed to any land as to have become part of the land, it shall be deemed for the purposes of this Part of this Act to be owned—

1. (a) if there is any person who is entitled to remove it from the land, and would be entitled to it if he so removed it, by that person.
2. (b) if there is no such person, by any person having the fee simple in, or a tenancy or right of occupation of, the land.

The noble and learned Viscount said: This proposed new clause is to make clear who, for the purposes of the Bill, is to be regarded as the owner of certain goods that are insurable under Part II. Goods may be attached to a building and are in the legal ownership of the freeholder of the building. The sort of example which is given to me is that of the Neon sign. If fixed to the building, subsection (a) of the new clause provides that for the purposes of the Bill, if it can be removed, it is to be regarded as owned by the person who is entitled to remove it. As regards paragraph (b), that deals with the case of landlords' fixtures in which tenants or sub-tenants may have interests which they wish to insure. It makes the freeholder and all tenants owners, but the insurance will have to be limited to insurance of his own particular interest.

Amendment moved— After Clause 70 insert the said new clause.—(The Lord Chancellor.)

THE LORD BISHOP OF LONDON

I simply want to utter a word of warning. The noble and learned Viscount said that the purpose of this clause was to make things clear. In relation to churches, it leaves some things extremely obscure. We still do not know in the case of some articles whether they are part of the fabric of the church or whether they are goods. Take the case of a font which is generally bedded in. Is that part of the fabric, or is it a fitting? Again, we do not know whether the pews, the pulpit, the reredos or the altar are part of the fabric or whether they are fittings. I mention the matter because it is of very great importance. Take, for example, the case of the reredos which has become fixed to the land. Who is its owner? Nobody is entitled to remove it. It would appear therefore from paragraph (b) that it belongs to the person "having the fee simple in, or a tenancy or right of occupation of, the land." Is that the lay rector to whom I referred earlier? If so, we should object to the lay rector becoming the owner of the reredos. I merely mention these things to show that the clause does not make matters plain and simple. In relation to church furniture I think the matter should be examined subsequently. It would satisfy us if it were made clear that such goods as have become fixed and are still goods and not part of the fabric, should be regarded as owned by the parochial church councils.

THE LORD CHANCELLOR

I am bound to say that I had not appreciated that this proposal would raise difficulties in ecclesiastical quarters and I will have the matter looked into. I had supposed, taking the case of the font, for example, that there would be no particular difficulty because whatever be the legal niceties of the matter one would expect that it was in the same ownership as the church and that there was not likely to be a conflict of interests. I will, however, do my best to see that the matter is considered before Report.

On Question, Amendment agreed to.

Clause 71 [Meaning of "prescribed"]:

THE LORD CHANCELLOR

There is a drafting Amendment to this clause. I beg to move.

Amendment moved— Page 59, line 15, leave out from ("prescribed") to end of subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

LORD LUKE moved to insert the following new subsection: (3) In relation to any goods held for charitable purposes the Board of Trade may before prescribing the sum to be specified in a policy under the private chattels scheme or making a payment in respect of war damage to such goods or making any order or decision under this Part of this Act consult with such person as they think fit including a national, regional or other body representing the purposes for which the goods are held.

The noble Lord said: Since this Amendment was put down it has been explained that it is unlikely that hospitals will be as generously treated for equipment as for the building. That is to say, they will have to pay a premium for the insurance. I hope that premium will be one which they can afford. The right reverend Prelate mentioned in the case of churches a first loss policy. That is what we would like to obtain, in the same way as farmers have obtained it. We would like it to be possible to insure a portion of the equipment of a hospital if the hospital could not afford a premium on the whole equipment. We would like it to be possible to insure that portion of the equipment which the hospital would desire to renew at once. For instance, it is possible to carry on without an X-ray equipment, but it is not possible to carry on without an operating theatre. I hope that this Amendment will be sympathetically received.

Amendment moved— Page 59, line 22, at end insert the said new subsection.—(Lord Luke.)

THE LORD CHANCELLOR

These things are, I agree, rather perplexing, but may there not be a little misapprehension here? The equipment of hospitals and other charitable bodies will be insurable under the business scheme. They will not be insurable under the private chattels scheme, and I cannot help thinking that my noble friend in moving this Amendment has to that extent not quite correctly appreciated this complicated proposal. If he will look at Clause 60 (2) (a) he will see that the business scheme includes goods which are in a man's possession and held or used for purposes of his business. The definition of business is, I think, wide enough to cover the carrying on of the beneficent work of hospitals. It is necessary to realise that the equipment of hospitals will be insurable under the business scheme and not under the private chattels scheme.

The Board of Trade have consulted the Ministry of Health about hospitals, and of course the British Hospitals Association is in the closest touch with the Ministry of Health, and if there are any representations which have still to be made about hospitals they will certainly receive most sympathetic consideration. I would like therefore to give my noble friend an assurance that the Board of Trade will, if necessary, consult the Ministry of Health on any questions affecting hospitals which may arise in the course of the administration of Part II of the Bill, and I am able to say that the Ministry of Health will, if necessary, consult the British Hospitals Association. I think my noble friend has possibly already had that assurance privately, but it is well to make the statement publicly for the benefit of hospitals at large.

On the Second Reading debate when the noble Lord, Lord Luke, was not able to be here, the noble Lord, Lord Wardington, included in his speech on his behalf some questions about the insurance of hospital equipment, and I think it would be well for me to put on record the answers to those questions. The noble Lord, Lord Wardington, said he feared that the hospitals would not be able to insure their equipment for full value. He was under the impression—it was a mistaken impression—that the equipment would be insurable under the private chattels scheme and therefore would be subject to the limit of £10,000. The noble Lord pointed out that many great hospitals had equipment worth more than that. The answer really is that this is not a cast; of private chattels and that there is no limit of that sort. The noble Lord, Lord Wardington, also pointed out that the Board of Trade had power to pay compensation even though there had been no insurance. It may be said that that power would be used to pay compensation for damage occurring before the passage of the Bill, but it is not intended under the Bill to compensate hospitals for damage to equipment which is not insured after the insurance scheme comes into operation. In other words, the business insurance scheme will operate from now on for a period, but we have to make provision for the past.

THE LORD BISHOP OF LONDON

I only want to say a few words and I hope these are my last. I think I am the only member of this Bench who has ever sat through the whole Committee stage of a Bill of this size. I may say I only did so because I had to. This matter affects both hospitals and churches in exactly the same way. I agree that we come in under the business scheme. What we both want is to be able to insure up to a certain amount on a first loss policy. There is no other way in which it can be done. A cottage hospital might have most valuable equipment which it could not insure up to its full value. A church may be in the same position. In each case what is wanted is enough money to put back sufficient equipment to carry on. That means that either a hospital or a church must be entitled to insure, say, £5,000 even if the true value is £20,000, and what we want is to receive £5,000 and not one-fourth, which might be the figure taken on an average policy. I hope that the noble and learned. Viscount will give this the fullest consideration.

THE LORD CHANCELLOR

If my noble friend sees his way to withdraw the Amendment I will see that any point which he raised in it is carefully considered.

LORD LUKE

May I, by leave of the Committee, ask if we are treated in the same way as the churches? Also, I understand that we are to go to the Ministry of Health end through the Ministry of Health to the Board of Trade and not direct to the Board of Trade. I am speaking for King Edward's Hospital Fund, and the Nuffield Trust, and the British Hospitals Association is associated in this. I would like to know just whether we may go direct to the Board of Trade or whether we must go to the Ministry of Health first.

THE LORD CHANCELLOR

Perhaps my noble friend and those for whom he speaks will communicate with the Ministry of Health and find out which is the most direct way to proceed. The Ministry, I know, is deeply interested in the work which the hospitals are doing, and I thought it might possibly be a more sympathetic Department to approach than the hard-hearted Board of Trade.

LORD LUKE

I beg to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 71, as amended, agreed to.

Clauses 72 to 75 agreed to.

Clause 76 [Exclusion of certain goods from commodity insurance schemes]:

THE LORD CHANCELLOR

This first Amendment is purely drafting.

Amendment moved— Page 61, line 26, leave out ("proviso").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved to insert at the end of subsection (1): (1A) For the purposes of the proviso to the last preceding subsection, any goods shall be deemed to be owned by the person in whom the property in the goods is vested: Provided that any reference in that subsection to the owner of any goods —

1. (a) shall include a reference to any person for the time being entitled, either unconditionally or conditionally, to have the property in the goods vested in him;
2. (b) in relation to any goods—

1. (i) the property in which is vested in any person otherwise than in the course of a business carried on by him in the United Kingdom, or as respects which any person is entitled to have the property therein vested in him otherwise than in the course of such a business; and
2. (ii) which any person carrying on business in the United Kingdom is for the time being entitled to sell as agent, shall include a reference to the last-mentioned person,

and any reference to goods owned by any person shall be construed accordingly.

The noble and learned Viscount said: This is a drafting Amendment also.

Amendment moved — Page 61, line 42, at end insert the said new subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 76, as amended, agreed to.

Clause 77 [Miscellaneous amendments]:

THE LORD CHANCELLOR moved, after subsection (2), to insert: ( ) In subsection (2) of the said Section fifteen for the words 'Subject to the provisions of this and the next two following subsections, any goods shall' there shall be substituted the words 'Save in so far as is otherwise expressly provided in this Part of this Act, any goods shall, subject to the provisions of this section,'. The noble and learned Viscount said: This is a drafting Amendment and is consequential.

Amendment moved— Page 62, line 28, after subsection (2) insert the said new subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

Perhaps I may refer to the next Amendment at line 34, and take with it the Amendment at line 44, also the Amendments on page 63, line 10 to line 35, and on page 64, line 2. These Amendments have been put down after consultation with the Chamber of Shipping of the United Kingdom and the Shipbuilding Conference. They are intended to make clearer the intention of Clause 77 (3) which deals with the insurance of ships under construction and which substitutes three new subsections for Section 15 (4) of the War Risks Insurance Act.

Amendments moved—

Page 62, line 34, leave out from ("thereof") to end of line 39 and insert:

("(a) would, apart from the provisions of this subsection, have been deemed for the purposes of this Part of this Act to be owned at any time by the person from time to time carrying on the business; ")

Page 62, line 44, leave out from beginning to ("be") in line 45 and insert ("then, notwithstanding that they would not, apart from the said provisions, be deemed for the said purposes to be owned by the person from time to time carrying on the business, the ship and any part thereof and any goods so appropriated as aforesaid shall, subject to the provisions of the next following subsection,")

Page 63, line 10, leave out lines 10 to 35, and insert:

("(4A) The provisions of the last preceding subsection shall apply in relation to the construction under contract in the course of a business of part of a ship, not being part of a ship which is being, or has been, constructed by the person from time to, time carrying on the business, as they apply in relation to the construction of a ship—

1. (a) with the substitution for references to a ship of references to part of a ship;
2. (b) where the contract for the part of the ship is with the person for whom the ship is being constructed, with the substitution for references to the acceptance of the ship under the contract in question of references to the acceptance of the ship under the contract for the construction thereof;
3. (c) where the contract for the part of the ship is with any other person, with the substitution for references to the acceptance of the ship under the contract in question of references to the acceptance of the part of the ship under the contract for the construction of the part by the person for whom it is being, or has been, constructed.")

Page 62, line 39, after the first ("of") insert ("the loss of or")

Page 64, line 2, after ("the") insert ("loss or").—(The Lord Chancellor.)

On Question, Amendments agreed to.

Clause 77, as amended, agreed to.

Clause 78 agreed to.

Clause 79 [Definition of "war damage"]:

THE LORD CHANCELLOR moved, after subsection (2), to insert: (3) References in this Act to the occurrence of war damage shall be construed as references to the taking of the action or measures specified in subsection (1) of this section from which that damage results. (4) In determining the value of a hereditament, or of a proprietary interest in a hereditament, in the state in which it was immediately after the occurrence of war damage, it shall be assumed that all war damage which is known at the time when the valuation is made to have resulted from the taking of the action or measures in question could have been foreseen immediately thereafter.

The noble and learned Viscount said: If you inspect this clause you will see its purpose. The purpose, of the proposed new subsection (3) is to define the phrase "the occurrence of war damage" which is used in a great many places in the Bill. If the phrase were left undefined it would be doubtful if it referred to the time of the falling of the bomb, or other occurrence which causes the damage, or to the time when all resulting damage has occurred and become known. Cases in point are where damage is done by the weather after the bomb has fallen or where some of the damage done by the bomb remains latent for a time The phrase is used in the Bill as referring to the time of the falling of the bomb and the Amendment makes this clear.

Amendment moved— Page 65, after subsection (2) insert the said new subsections.—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is purely drafting.

Amendment moved— Page 65, line 16, after ("loss") insert ("of").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 79, as amended, agreed to.

Clauses 80 and 81 agreed to.

Clause 82 [Payments under Parts I and II to be subject to conditions in case of non-residents]:

THE LORD CHANCELLOR moved to add to the clause: (3) Regulations made for the purposes of this section may contain such provisions (including penal previsions) as appear to the Treasury to be necessary for securing the due operation and enforcement of the regulations. The noble and learned Viscount said:

This Amendment is purely drafting.

Amendment moved— Page 67, line 11, at end insert the said words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 82, as amended, agreed to.

Clause 83 [Certain expenses not to be a deduction from Income Tax, National Defence Contribution or Excess Profits Tax]:

THE LORD CHANCELLOR

This is a drafting Amendment.

Amendment moved— Page 67, line 29, leave out ("of the interest").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 83, as amended, agreed to.

Clauses 84, and 85 agreed to.

Clause 86 [Provision as to certain mutual insurance schemes]:

THE LORD CHANCELLOR moved, after subsection (2), to insert: ( ) Where the persons entitled to participate in the distribution of any such fund as is mentioned in the last preceding subsection, or the shares in which persons are entitled to participate in the distribution of the fund, are, under the deed or instrument regulating the application of the fund, to be ascertained by reference to any date specified in the deed or instrument, the deed or instrument shall be construed, for the purposes of a distribution made by virtue of the last preceding subsection, as if the said date were the date of the passing of this Act.

The noble and learned Viscount said: This Amendment seeks to insert a new subsection in Clause 86 to cover cases where the articles of a mutual insurance society do not provide sufficiently for the winding-up of the fund during the war, as this contingency was not expected when the articles were drawn up. The Amendment would save the societies, in many cases, the heavy expense of calling a general meeting and of applying to the Court for permission to wind up.

Amendment moved— Page 70, line 7, insert the said new subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 86, as amended, agreed to.

Clauses 87 to 93 agreed to.

Clause 94 [Interpretation]:

THE LORD CHANCELLOR moved to leave out Clause 94 and insert the following clause:

Interpretation.

.—(1) In this Act, unless the context otherwise requires, the following expressions have the meanings Thereby assigned to them respectively, that is to say:—

"agricultural land "and" agricultural buildings" have the same meanings as in the Rating and Valuation (Apportionment) Act, 1928, except that "agricultural building" includes a farm-house occupied in connection with any agricultural land and any agricultural cottage so occupied which is on or contiguous to that land;

"agricultural cottage" means, in relation to any land, a house used as a dwelling-house of a person who is employed in agricultural operations on that land in the service of the occupier thereof and is entitled, whether as tenant or otherwise, so to use the house only while so employed;

"building" includes a building in an incomplete state, and in relation to such a building the expression "use" includes potential use;

"contributory property" has the meaning assigned to it by subsection (1) of Section nineteen of this Act, "contributory value" has the meaning assigned to it by subsection (2) of Section nineteen thereof, "direct contributor" has the meaning assigned to it by subsection (2) of Section twenty-three thereof, and "indirect contributor" has the meaning assigned to it by subsection (1) of Section twenty-five thereof;

"Defence Regulations" means regulations made under the Emergency Powers (Defence) Act, 1939, or the Emergency Powers (Defence) Acts, 1939 and 1940;

"emergency powers" means powers conferred by Defence Regulations, by Section fifty-two of the Telegraph Act, 1863, or by Section seven of the Air Navigation Act, 1920, or exercisable by virtue of the prerogative of the Crown; and "exercise" includes, in relation to emergency powers, a purported exercise thereof;

"family" means, in relation to any person, any one or more of the following, that is to say—

1. (a) his wife, son, daughter, father, mother; and
2. (b) any person, whether related to him or not, who is wholly or mainly dependent upon him;

"goods", does not include money, negotiable instruments, securities for money, evidences of title to any property or right or of the discharge of any obligation, or any documents owned for the purpose of a business, but, subject as aforesaid, includes all corporeal property neither falling (whether, generally or in relation to any particular land) within the meaning of the expression "land" as hereinafter defined, nor deemed, for the purposes of Section forty-one of this Act, to form part of a highway;

"land" means land in the United Kingdom, and—

1. (a) includes any buildings or works (other than plant or machinery excluded by paragraph (d) of this definition, and other than any works used mainly or exclusively for the exhibition of advertisements and comprised in any property as respects which the proviso to subsection (1) of Section nineteen of this Act has effect by virtue of paragraph (i) of that proviso) situated on, over or under land;
2. (b) includes anything which, on a valuation for rating purposes for the time being in force made by reference to the accounts, receipts, profits or output of an undertaking, was treated as the subject of an occupation enjoyed by the person carrying on the undertaking;
3. (c) includes, in relation to land not comprised in a hereditament for rating purposes which is the subject of such a valuation as is mentioned in the last preceding paragraph, such plant and machinery as would, if the land were a hereditament to which Section twenty-four of the Rating and Valuation Act, 1925, applied, be by virtue of the provisions of that section and of the Plant and Machinery (Valuation for Rating) Order, 1927, deemed for the purposes mentioned in subsection (1) of the said section to be a part of the land, or, where the land is a hereditament to which the said section applies, such plant and machinery as is so deemed for those purposes to be a part of the land;
4. (d) does not include any plant or machinery other than such as is included by virtue of paragraph (b) or paragraph (c) of this definition;
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5. (e) does not include any crop, whether grown for food or not, and does not include trees, except trees forming part of a hedge and trees whose value for shelter or amenity is greater than their value for felling or for the growing of fruit for sale;

"making good" includes, in relation to war damage, demolition or clearance requisite as a preliminary to, or in the course of, the making good thereof;

"mortgage" does not include a floating charge, but, subject as aforesaid, includes any charge or lien on any property for securing money or money's worth;

"net liability" has the meaning assigned to it by subsection (1) of Section twenty-five of this Act;

"owner", in relation to a proprietary by interest, has the meaning assigned to it by Section forty-five of this Act;"

prescribed "—

1. (a) in Part I of this Act, means prescribed by regulations made by the Treasury; and
2. (b) in Part II of this Act, means prescribed by order of the Board of Trade;

"proper cost" has the meaning assigned to it by subsection (3) of Section three of this Act;"

"proprietary interest" means, in relation to any hereditament or property—

1. (a) the fee simple in the land comprised therein or in any part of that land; and
2. (b) any tenancy of that land or of any part thereof, other than a short tenancy;

"rating authority"—

1. (a) means a rating authority under Section one of the Rating and Valuation Act, 1925;
2. (b) in relation to London, has the meaning assigned to it by subsection (2) of Section seven of the Rating and Valuation (Apportionment) Act, 1928;
3. (c) in relation to the Isles of Scilly, means the Council of the said Isles;

"relevant date" has the meaning assigned to it by subsection (2) of Section twenty of this Act;

"risk period" means the period beginning with the third day of September, nineteen hundred and thirty-nine, and ending with the thirty-first day of August, nineteen hundred and forty-one;

'Schedule A" and "Schedule D" have the same meanings as in any enactment relating to Income Tax:

"short tenancy" means a tenancy granted for a term of seven years or less (without any right of renewal which would enable the tenant to prolong the term thereof beyond seven years), and includes—

1. (a) a tenancy granted for a term of more than seven years but subject to a subsisting right of the landlord to determine the tenancy at or before the expiration of seven years from the beginning of the term;
2. (b) a tenancy from year to year;

"Special Commissioners" has the same meaning as in the enactments relating to Income Tax;

"temporary works payment" has the meaning assigned to it by Section five of this Act

"tenancy" includes a tenancy under an under-lease and a tenancy under an agreement it for a lease or under-lease, but does not include an option to take a tenancy and does not include a mortgage;

"war damage" has the meaning assigned to it by Section seventy-nine of this Act;

"works" includes any structure.

(2) In considering for the purposes of this Act the length of time which any tenancy, other than such a tenancy as is mentioned in paragraph (a) or (b) of the next succeeding subsection, has still to run at any date, it shall be assumed that the tenant exercises all options to renew the tenancy which are available to him at that date or fall to become available to him thereafter, and does not exercise any similar power to determine the tenancy, and that the landlord exercises any power to determine the tenancy which is available to him at that date or becomes available to him thereafter.

(3) For the purposes of this Act—

1. (a) a tenancy which by virtue of subsection (5) of Section one hundred and forty-nine of the Law of Property Act, 192.5 (which relates to leases for lives and similar tenancies), takes effect as a tenancy for a term of ninety years determinable in the manner provided by that subsection shall be treated as having, at any date, twenty or more, but less than twenty-five, years to run; and
2. (b) a tenancy granted for any term, but subject to a power to determine the tenancy on or after the happening of any event, shall be treated as having still to run, at any date, a period of twenty or more, but less than twenty-five, years:

Provided that where at that date less than twenty years of the term is unexpired, the tenancy shall be treated as having then still to run a period equal to so much of the term as is then unexpired.

(4) References in this Act to any other enactment shall, save where the context otherwise requires, be construed as references to that enactment as amended by or under any subsequent enactment, including this Act.

The noble and learned Viscount said: This is the omnium gatherum dictionary, which has been put together in a single clause, so that the interpretations may be readily ascertained.

Amendment moved— Leave out Clause 94 and insert the said new clause.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 95 [Application to Scotland:]

LORD ALNESS

All the Amendments which stand in my name, and which refer to this Scottish clause, are either drafting or consequential, and I think that I should not be justified, therefore, in taking time by discussing them in detail. I will only say that if any noble Lord desires an explanation of any one of these drafting Amendments, I shall be happy to give it.

Amendments moved—

Page 73, line 27, after ("Health") insert ("or to the Minister of Agriculture and Fisheries or to the Board of Education").

Page 73, line 31, at end, add,—

("(3) the expressions" local authority and "local authority for the purposes of Part II of the Housing Act, 1936," mean a county or town council, and the expression "precept" includes any certificate or other document requiring payment from a rating authority.")

Page 74, line 30, at end, add,—

("The expression" rating authority "means (a) in Section thirty-nine a county or town council, and (b) elsewhere a county or town council charged with the duty of causing a valuation roll to be made up.")

Page 75, line 1, leave out ("forty-five and forty-nine"), and insert ("forty-five, forty-nine, and ninety-three").

Page 75, line 9, at end, insert,—

("(a) paragraph (ii) and (iii) of the proviso to subsection (1) and the words from "so however" to the end of the subsection were omitted and there were substituted the following:—

(ii) if the property consisted of salmon, oyster or mussel fishings ".)

Page 75, line 21, at end, add—

("( ) Section twenty shall have effect as if (a) for paragraph (e) of the proviso to subsection (3) the following paragraph were substituted—

(e) which consisted of shootings or of fishings (other than salmon, oyster or mussel fishings) or of any other incorporeal rights; and

(b) the words in subsection (3) from "but nothing" to the end of the subsection were

Page 75, line 22, leave out subsection (n) and insert the following subsection:—

("(11) A tenement comprising dwelling houses the rateable value of none of which exceeds thirty-five pounds shall, notwithstanding that some or all of its component parts may be separately assessed to Schedule A or separately entered in the valuation roll, be deemed for the purposes of Section twenty-five to be a single contributory property to which that section applies".)

Page 75, line 34, at end, add,—

("( ) Section twenty-six shall have effect as if—

1. (a) for any reference to rights mentioned in Section six of the Rating Act, 1874, 779 there were substituted a reference to shootings or fishings other than salmon, oyster or mussel fishings; and
2. (b) subsections (3) and (5) were omitted".)

Page 76, line 34, leave out subsection (20).—(Lord Alness.)

On Question, Amendments agreed to.

Clause 95, as amended, agreed to.

Clause 96 [Application to Northern Ireland]:

THE LORD CHANCELLOR moved to leave out subsection (5) and insert: ( ) Section eleven shall have effect as if in subsection (1) thereof for the word 'area' in the first place in which that word occurs there were substituted the word 'district,' and as if for the words 'In this subsection the expression "area" means the area of a local authority for the purposes of Part II of the Housing Act, 1936,' there were substituted the words 'In this section the expression "district" means the district of a local authority for the purposes of Part II of the Housing Act (Northern Ireland), 1939.' ( ) Section nineteen shall have effect as if in the proviso to subsection (1) the words from 'so, however' to the end of the proviso, and the proviso to subsection (2), were omitted.

The noble and learned Viscount said: I think this speaks for itself.

Amendment moved— Page 77, leave out lines 37 and 38 and insert the said new subsections.—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved to insert after subsection (8): ( ) Sections nineteen and twenty shall have effect as if for the references therein to the Minister of Agriculture and Fisheries there were substituted references to the Minister of Agriculture for Northern Ireland. ( ) Where a house or building let in different apartments or tenements, and occupied by-two of more persons severally, comprises more than one contributory property, but each of the contributory properties is used or suitable for use for residential purposes and has a contributory value not exceeding thirty-five pounds, the house or building shall be deemed for the purpoes of Section twenty-five to be a single contributory property to which that section applies. ( ) Paragraph (a) of the proviso to subsection (1) of Section twenty-six shall have effect as if for the reference to the rating authority for the area in which the properties mentioned in that section are situated there were substituted a reference to the Commissioner of Valuation.

The noble and learned Viscount said: We have here a series of Amendments which are really designed to apply the Act to Northern Ireland. They go from the one which we have already adopted and the one with which we are now dealing down to page 79, line 30, and they are all consequential upon that proposal. The only Amendment of substance is that which deals with Clause 25 in relation to blocks of tenements in Northern Ireland. Your Lordships will probably feel that by reading the clause you will understand it quite as well as if I explained it.

Amendment moved— Page 78, line 9, at end insert the said new subsections.—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The other Amendments to Clause 96 are consequential, and perhaps may be taken together.

Amendments moved—

Page 78, line 15, leave out paragraph (a).

Page 78, line 25, leave out from ("or") to ("the") in line 26 and insert ("any drainage authority")

Page 78, line 30, leave out from ("undertaking") to the second ("the") in line 31 and insert ("and in relation to any mining or quarrying undertaking")

Page 78, line 34, at end insert:

("(d) in relation to any other undertaking, such Government department as the Ministry of Finance for Northern Ireland may determine;")

Page 79, line 7, leave out ("and")

Page 79, line 9, at end insert;

("and

(d) for the reference to a traffic sign there shall be substituted a reference to any sign post or other device provided by a highway authority for the guidance or direction of persons using a road or street".)

Page 79, line 9, at end insert:

("( ) Section forty-two shall have effect as if for the references to the Air Raid Precautions Act, 1937, to the Civil Defence Act, 1939, and to Section twenty-two of that Act there were substituted respectively references to the Air Raid Precautions Act (Northern Ireland), 1938, to the Civil Defence Act (Northern Ireland), 1939, and to Section twenty of the last mentioned Act: for the references to the Minister of Home Security and to the Board of Education there were 'substituted respectively references to the Ministry of Public Security for Northern Ireland and' to the Ministry of Education for Northern Ireland; for the reference to Parliament there were substituted a reference to the Parliament of Northern Ireland; for the reference to materials provided on behalf of His Majesty there were substituted a reference to materials provided on behalf of the Crown or of any Government department.")

Page 79, line 30, at end insert:

("( ) Section ninety-three shall have effect as if, in subsection (1) thereof, for the references to the Lord Chancellor and to the High Court there were substituted respectively references to 1he Lord Chief Justice of Northern Ireland and to the Supreme Court.")—(The Lord Charcellor.)

On Question, Amendments agreed to.

Clause 96, as amended, agreed to.

Clause 97 [Liability of Northern Ireland Government Departments as mortgagees]:

THE LORD CHANCELLOR

I beg to move.

Amendment moved— Page 80, line 5, leave out ("necessary") and insert ("(determined in accordance with the Irish Land (Finance) Rules, 1910, made by the Treasury under Section forty-six of the Irish Land Act, 1903) which is required").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 97, as amended, agreed to.

Remaining clauses agreed to.

First Schedule [Constitution and procedure of the War Damage Commission]:

LORD JESSEL

With regard to the First Schedule, I should like to ask the noble and learned Lord Chancellor a question. The War Damage Commission will have very difficult duties to perform and, very naturally, the Bill does is not state have members are to be appointed; but my attention was called by the noble Earl, Lord Selborne, whom I am sure many of us were glad to see in his place to-day, to the fact that the quorum of this Commission is only two. I should like to ask whether the noble and learned Viscount thinks that for an important Commission like this two is sufficient for a quorum. I should have thought three would be a better number, and I should like the Government to consider this matter.

While I am on my feet, in order to save time, I should like to point out something which I consider rather important with regard to the whole of these Schedules. If you look through these Schedules you will see that the First Schedule is headed "Constitution and Procedure of the War Damage Commission." One knows to what Part of the Bill that refers. The Second Schedule also relates to Part I, and again that is clear, as is also the case with the Third Schedule. The Fourth Schedule, however, is somewhat misleading, because it is divided into two parts—Part I and Part II. I have made inquiries into this matter, and I find that Part II of the Fourth Schedule refers to Part I of the Bill. I think that the Fifth Schedule comes under Part II of the Bill, but it is divided into Part I and Part II. I should like the noble and learned Lord Chancellor, with his advisers, to see whether this cannot be made more clear and some is other method chosen, instead of referring to parts of the Schedule as Part I and Part II, which is most misleading, the Bill itself being divided into Parts. The impression is given that Part II of the Fourth Schedule refers to Part II of the Bill, but this is not the case. I am sorry at this late hour to have to call attention to this, but I think that from the drafting point of view what I am suggesting will make the Bill clearer.

THE LORD CHANCELLOR

Let me take the second point first. I followed the comment made, that the Fourth Schedule is divided into two Parts. The Fifth Schedule, dealing with repealed enactments, is also divided into two Parts, because Part I relates to Great: Britain and Part II is limited to Northern Ireland. I think that that is 'the usual way in which Schedules are I divided, but, in view of what my noble friend has said, I will certainly see whether the draftsman feels able to propose a rather different use of words, so that there shall be no confusion between Parts of the Bill and Parts of the Schedules.

As regards the question of the quorum, what I think has not been widely appreciated as yet is that I believe it to be the intention of the Chancellor of the Exchequer and of the Government that the members of the War Damage Commission will not all sit in one place; there will be a great deal of business which will be done in different parts of the country, to save time. I have no doubt that the provision that the quorum should be two was made to provide for a possible case where two Commissioners went to some place and dealt with the business locally there. On the other hand, I am confident that the really serious business of the Commission will naturally fall into the hands of a larger body than two.

First Schedule agreed to.

Second Schedule agreed to.

Third Schedule [Payments under Part I in cases of repealed damage]:

THE LORD CHANCELLOR

I beg to move.

Amendment moved— Page 85, line 18, leave out from ("which") to the third ("the") in line 19 and insert ("the hereditament, with the damage not made good, would have as a site,")—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved—

Page 86, line 37 at end insert: ("7. In this Schedule references to war damage occurring, or sustained, on any occasion shall be construed as including references to war damage that results subsequently from the taking on that occasion of such action or measures as are specified in subsection (1) of Section seventy-nine of this Act.").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Third Schedule, as amended, agreed to.

Remaining Schedules agreed to.

House resumed.

House adjourned.