§ Ultimate Incidence of Liability to Contributions.
§ 5. For the purposes of this Part of this Schedule, the fraction of the instalment in respect to any property attributable to any part of the property shall be taken to be an amount which bears to the whole amount of the instalment the same proportion as the annual value of that part bears to the annual value of the whole property.
§ THE LORD CHANCELLOR moved, in paragraph (5), to leave out "this Part of". The noble and learned Viscount said: My Lords, a noble Lord during the Committee stage said he thought that the Fourth Schedule would be easier to read if we omitted from it the subdivision into 819 Part I and Part II. He thought it might be confused with other Parts of the Bill. I think perhaps this Amendment will produce the result which my noble friend wanted.
Page 94, line 39, leave out ("this Part of").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
Page 94, line 44, leave out ("this Part of").—[The Lord Chancellor.)
§ On Question, Amendment agreed to.
Page 94, line 47, leave out ("set out in Part II of") and insert ("annexed to").—(Tlie Lord Chancellor.)
§ On Question, Amendment agreed to.
§ Then, Standing Order No. XXXIN having been suspended:
§ THE LORD CHANCELLOR
My Lords, I have it in command from His Majesty to signify to the House that His Majesty, having been informed of the purport of the War Damage Bill, gives his consent as far as His Majesty's interest is concerned on behalf of the Crown and on behalf of the Duchy of Cornwall, that the House may do therein as they shall think fit.
I therefore now move that this Bill be read a third time. I shall not need to detain you with any speech on the subject, but there are perhaps two matters which I might mention for the purposes of completeness and record. Much interest was taken on the Committee stage on the question of how the Boy Scout and Girl Guide organisations should be dealt with. My noble friend Lord Hampton, raised the matter and I suggested that he should take the opportunity of seeing me and representatives of the Treasury about it, with a view to ascertaining whether there was really going to be any controversy. The Chancellor of the Exchequer subsequently considered the case and an agreement has been reached which, while it will not give the Boy Scouts Association all they 820 ask, is, I understand, acceptable to Lord Hampton. He himself referred to a decision given in the High Court of Justice by Mr. Justice Clauson in which the learned Judge stated that the Boy Scouts Association was an educational charity. Well, we live under a system by which when a thing has been decided it is accepted without question, until a higher Court feels bound to differ. I do not think that there will be any tendency to challenge the learned Judge's view. The Inland Revenue will therefore be entitled to treat the Boy Scouts Association as an educational charity, which means that they will not pay full contribution but will pay one-third of the full rate only. Instructions will be given to the Inland Revenue to follow the law accordingly. That I think will give satisfaction to those interested in Boy Scout institutions, though of course they may regret that it has not been possible to exempt the Association from paying any contribution at all.
The only other matter I must mention arises from a reference I made, perhaps a little casually, to the position of building societies in reference to the mortgage clause. I said in reply to Lord Stamp, I think, in the debate on Wednesday last, as reported at the top of column 690 in the Official Report, that, while I did not imagine that the building societies were pleased at having to accept this burden, I thought they were not in a condition of violent protest but on the whole were prepared to acquiesce. I have since received representations from the Building Societies Association to the effect that while the societies were, with some misgiving, prepared to accept the liabilities placed upon them by the Bill as originally introduced in the Commons, they did express, from their own point of view, serious apprehension about the extension of those liabilities during the subsequent stages of the Bill. I am quite sure that whatever views the societies may have expressed during the progress of the Bill, they will, now that the matter has been decided by Parliament, whole-heartedly co-operate in its working. Thus we may take leave, as far as this House is concerned, of what is, I think it will be agreed, a very large, very complicated, remarkable and, I trust, most beneficient measure.
§ Moved, That the Bill be now read 3a.—(The Lord Chancellor.)821
§ LORD MANCROFT
My Lords, on this Motion, before we part with this Bill, I should like to say that I am a complete supporter of it in principle. It is a remarkable and unusual Bill. I do not remember in all the years I was in the House of Commons, a Bill of which it was said that it had had to be tinkered up with 150 Government Amendments. I do not think that such a state of things confers much praise for foresight on those who drafted the Bill. They had plenty of time to lock into the matter. There were the Inter-Departmental examination of April, 1937, and its Report of June, 1938, there was the Report of the Association of Chambers of Commerce, which was on the Weir Report, and they provided the draftsmen and provided the Government with a large amount of information to show the draftsmen what could be done and what could not be done. There was also the guidance of the Uthwatt Report. Still we arc told the Bill had to be subjected to 150 Government Amendments.
I pass from that and I wish now to refer to the clauses which I believe are now 64 and 65 in this Bill. I think these two clauses constitute a grave blemish on the Bill. It will be remembered that Clause 47 in the Commons, dealing with personal chattels, was subjected to very skilled and patient examination, a combing-out examination for which the country ought to be grateful to the House of Commons. The members there did fine work on this Bill. Now we have here Clauses 64 and 65 which, I suppose, are meant to give effect to what the Chancellor of the Exchequer has said. If my memory does not betray me, he said that the limit should be £10,000 instead of £1,500, and the motor car allowance; that there should be a few hundred pounds cover, to start with, which should be free, and that there should be special terms for jewellery and works of art.
My noble and learned friend on the Woolsack just referred to works of art in relation to this Bill. I think it is a dangerous reservation. I refer to works of art; I leave out jewellery because we all know what jewellery is. But who is going to define a work of art? One could speak for hours on the point. Is one going to say that a picture, painted by a Royal Academician thirty years ago—an oil painting in a gilt frame—is always a work of art, to-day, or ever? I doubt it. I 822 doubt whether some of the pictures of the modern French schools, which have cost collectors great sums of money, will be defined years hence as words of art. I therefore think that it would be much better if the "works of art" proposed reservation were left out, and a man allowed to do as he does in the case of ordinary insurance against fire and burglary"—specify the value of a certain and separate article, if it is very valuable, and within the £10,000 limit of this Bill, and pay the necessary premium on the individual item.
Clauses 64 and 65 are supposed to carry out what the Chancellor of the Exchequer told us would be done. But I regard Clause 64 as perfectly meaningless. Using the old nursery language, I would characterise this clause as saying "Open your mouth and shut your eyes and see what the Board of Trade arc: pleased to prescribe under Section 72." As the words are "may be prescribed" this is even hypothetical". It commits the Government to nothing. We are going into this chattel scheme blindfolded; we are passing this scheme as we might be buying a pig in a poke. We do not know what the Board of Trade are going to prescribe. It is not Parliament but the Board of Trade who arc going to prescribe. Then in Clause 65 we find this:Without prejudice to the generality of the power of the Board of Trade"—not the power of Parliament—to determine the extent and nature of the indemnity …I should like to protest, before this Bill goes through, against allowing the Board of Trade to say what the limited amount is to be, how the scheme is to operate in detail, and what arc to be regarded as works of art. We are in fact placing ourselves in the hands of a Department without knowing what we are doing.
Again, if your Lordships will look at Clause 62 (6) you will see that it says:Where, under the prescribed form of policy"—this is under the business scheme—the maximum amount recoverable in respect of any goods is, irrespective of the sum insured, less than the value of those goods, subsection (1) of this section shall have effect in relation to those goods as if that maximum amount were their value.If anyone can understand that, I congratulate him! The noble and learned 823 Viscount on the Woolsack has said that parts of this Bill could not be judged by the rule of three. Reading these words, it is as if this Bill were to tell us that we must find the latitude and longitude of the rule of three! Although this deals with the business scheme, it will be, I suppose, applicable to the chattels scheme also as a guide in operating the chattels scheme. I hope that the other House, when this Bill returns there, will take note of the fact that, although we were led to understand by the Chancellor of the Exchequer that there would be a limit of a fixed amount, and that there would be so many hundred pounds allowed free and that there would be reservations for jewellery and works of art, not a word of all that appears here in the Bill. We are to open our mouths and shut our eyes and be thankful for what the Board of Trade are pleased to prescribe under Section 72. I protest against this method of legislation.
There are two or three technical questions which I should like to ask. I know nothing about insurance law, and I must ask my noble and learned friend to put into proper words what I can express only in a chaotic way. I have, as a manufacturer, shipped goods abroad, and I know that under a marine policy there is what is known as "F.P.A."—freedom from particular average. How is this proviso going to apply to the insurance which is to be effected under this Bill? Let me assume, for the sake of argument, that the limit is going to be, as I understood the Chancellor of the Exchequer to say that it would be, £10,000. Let me take an extreme case. A man says" I am going to insure and pay premium to provide cover against £10,000 worth of war loss less the £300 or £400 free, on all my household chattels wherever they are." Is that what is! intended? Is it to be a general personal insurance? Or is it to be an insurance of this type, that if a man has twenty houses and parts of his chattels in each, if one of those houses is bombed and everything destroyed, does the amount of his cover for the rest of the nineteen houses become reduced in aggregate to £8,000?
Again, let us say a man owns £15,000 worth of chattels and he can insure up 824 to £10,000 and does in fact do so; if his house is bombed and £10,000 worth of his chattels, as agreed by the assessors, destroyed, is he to be allowed cover for the £5,000 worth of chattels which still remain in his house? If so—I do not object to it—he will apparently have received cover for £15,000; that is, £10,000 plus £5,000 for the premium on £10,000. That point will have to be settled when the Board of Trade are kind enough to prescribe what we are going to do.
With regard to the third point, let me take an extreme and hypothetical illustration to show what I have in mind. Suppose a man has a large old home in the country, full of chattels which are not works of art but an accumulation of household goods, valued at £30,000. He takes out his insurance for £10,000, as he is allowed to do under this Bill, and the whole of the contents of his house are bombed and destroyed. How does the insurance law, if it is not provided for in this Bill, operate? He has had £30,000 worth of chattels at risk and has been insured only for £10,000, so that he is under-insured to the extent of two-thirds. Does he himself bear a part of the loss, as he would by the average clause under a marine policy or a fire policy, in view of the fact that he has been able to insure only for £10,000 on £30,000 worth of chattels? Finally, does a loss which has released cover, permit transfer of that cover to other existing chattels? I shall not detain your Lordships further. I have mentioned several points which I think ought to be brought before your Lordships' House, so that if possible the draftsmen and my noble and learned friend on the Woolsack, or even the House of Commons, may look into them if thought fit.
THE LORD BISHOP OF LONDON
My Lords, I desire to speak on what I may perhaps call a more generous note in relation to this Bill. It is a most remarkable Bill, and everyone must have been amazed at the skill with which it has been drafted. It has raised, from my point of view, many intricate questions concerning churches, chapels and religious bodies, and I have been entrusted with the task of watching their interests generally. I have already expressed the gratitude that we feel to His Majesty's Government for the particular arrange- 825 ments which they have made for charitable and religious bodies, and I wish before the opportunity passes to say a word of special appreciation of Treasury officials and Government draftsmen for the assistance which they have given to those of us who are particularly concerned with the interests of the Church. As I have said, the particular questions which arose were most intricate and very difficult, and they required research and close attention. Those of us who have acted in this matter for the Church have found quite astonishing understanding and help from the Treasury officials and Government draftsmen, and T think it is right to make some acknowledgment of that at this stage.
§ THE LORD CHANCELLOR
My Lords, I must interpose for a moment for two purposes. First of all, I want to thank the right reverend Prelate very sincerely, on behalf of those who cannot sneak for themselves, for the tribute which be has paid to them, and which I know from my own observation is not more than is deserved. This is such a complicated matter that I do not feel it is surprising that a great many Amendments have had to be made after the Bill was printed. I do not think the number is unique. But at any rate it is better to get these things right, and if it is important to get the legislation carried through promptly we must submit to the inconvenience, if inconvenience it be, of considerable amendment in the course of the passage of the Bill. I am not myself convinced that in all cases it is an inconvenience. There must be many instances where your Lordships have had your attention particularly called to a clause of the Bill because it had to be briefly explained on Amendments when you might have passed a feature of the Bill quite unnoticed had nothing been said about it at all.
My noble friend Lord Mancroft has, naturally I think, called attention to the extreme generality of some of the clauses in Part II of the Bill. I think it is quite right so to describe them, but I am completely satisfied that, however much time was at our disposal, Parliament would never wisely undertake the concrete decision of the details, to some of which he pointed. In effect the Board of Trade is being authorised by Parliament to become 826 a great insurance company, and you can no more lay down by Act of Parliament or in Schedules of an Act of Parliament what are the provisions in the different kinds of policy that they may have to issue, and what are the sometimes very technical remedies they have to impose, than you could if you were incorporating by a Private Act of Parliament a private insurance undertaking. In this matter one has to have a great deal of confidence in a great Government Department, and we have this security, that if it does it badly, well then, it is quite certain to hear more about it from Parliament itself.
The question which he put specifically to me is not, therefore, to be answered by looking at the terms of the Bill, but I will gladly tell him what is the intention. He put the point that if there is a limit of £10,000 as the maximum sum that can be secured by a private chattels insurance, how will it stand if the owner has a much larger quantity of chattels than £10,000 worth if they happen to be destroyed? The insurance is intended to be general. If, for example, he is insured for £10,000 and he has six houses he will get his loss on any one up to £10,000.
§ LORD MANCROFT
Do I understand that he is only to get £10,000 if, to take an extreme case, he has a house in Kent, a house in London and a house in Lancashire? Is he only to have £10,000 for one of these houses and the others will not be covered?
§ THE LORD CHANCELLOR
I will ascertain the point; it may not have been actually decided. May I deal with his next point? He will get £10,000 if he has lost £10,000 and he will be allowed then to take out a further £5,000, but he must not have more than £10,000 outstanding at any one time. The policy will be a first loss policy, that is to say, he will not be subject to average. I£ his chattels are worth £30,000 and he loses the whole of them, he, will get £10,000 if he has insured for that amount. I am not quite sure how the other matter would stand, but possibly the noble Lord will let me have a word with him afterwards. I did, in fact, in view of some questions he raised on the Committee stage, write him a letter, but evidently it has not, reached him yet. In conclusion, let me 827 say that now that this Bill goes back to another place I feel it will be recognised that the very hard work that this House has put into it will greatly improve the Bill, and I presume will make it satisfactory in another place?
§ On Question, Bill read 3a, with the Amendments.828
§ Moved, That the Bill do now pass.—(The Lord Chancellor.)
§ On Question, Motion agreed to.
§ Bill passed accordingly, and returned to the Commons.
§ House adjourned.