WAR DAMAGE (CLEARANCE PAYMENTS) BILL (Hansard, 29 March 1960)

§ THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE)
My Lords, this is a Money Bill which has been unanimously agreed to in another place and whose only purpose is to correct an error, or at least a probable error, in the interpretation of the War Damage Act, 1943. One of the earliest problems which the War Damage Commission had to face arose from the clearance of the "total-loss" sites. If the rubble or useless remains were removed by the local authority the owner obviously had a great advantage over an owner of a site from which the remains were not removed and who might have to pay for the removal himself. But under Section 20 of the Act the Treasury were allowed, by direction to the Commission, to ensure that Part I of the Act 448 should be applied in conformity with the public interest. It was considered by the Treasury that it was in the public interest, both as regards amenity and also in order that the sites should be ready for development as soon as possible, to have war damaged sites cleared at the earliest possible moment, and it was in the public interest that there should be equality of treatment between the claimants.
Therefore, in May, 1945, the Treasury issued a direction, under Section 20 of the Act, to the War Damage Commission enabling them to pay for the expense of clearance. That, I think everybody would agree, was the right and sensible thing to do, and at that time the Treasury were acting on what was then thought to be good legal advice. Since then the War Damage Commission have gone on acting in good faith on that advice. But lately the Commission have taken further legal advice on the subject and it appears that they have probably been acting ultra vires. This Bill puts the matter right by, first of all, revoking the Treasury direction of May, 1945, but validating all payments which have been made under its authority by the War Damage Commission; and, then, by giving statutory authority, instead of a direction, to enable the War Damage Commission to go on making such payments. I beg to move that the Bill be read a second time.

§ LORD PETHICK-LAWRENCE
My Lords, in a brief and clear statement the noble Earl has laid this matter before your Lordships' House. I should like to say at the outset that this Bill passed without any opposition in the other place, and it is certainly not the intention of those who sit with me on this side to divide the House upon it. Furthermore, I think the only Party in this House which stands unscathed in the matter (if there are any scars to be owned up to) is that of our noble friends who are not at the present moment on the other side of the gangway to hear their clearance from blame. But this is a case where the Treasury, whose fiat generally runs, have been proved mistaken, not through the fault of some individual but through the advice they 449 received. We are obliged to realise that in this case Homer has nodded; because it appears that the direction is considered to-day, at any rate to have been ultra vires, and that everything done under it could therefore be challenged. It is not very likely that anyone would make that claim; but, at any rate, that is the opinion of the highest legal authorities in the matter at the present time, and we are bound to accept that view.
When the, first decision was made, the Caretaker Government was in office, but a very short time afterwards the Government of my noble friend Lord Attlee came into power. During all those years, and during the period of office of the Government of the present day (which, over the years, has undergone various metamorphoses) the mistake, if it was such, was never discovered, and it is only a short time ago that it came to light. No one ever likes retrospective legislation, and I think that view is held equally by all Members of this House. However, in this case retrospective legislation seems to be justified, in my opinion at any rate, and the best thing has happened: those responsible for the present position have owned up to the mistake that was made and in the circumstances have come to the two Houses of Parliament for pardon and asked us to pass this Bill. In view of those facts, I certainly have no wish to say anything against the Bill, and my noble friends sitting with me here make no objection to its passage into law.

§ LORD SILKIN
My Lords, I had not intended saying anything, but I should like to ask the noble Earl one or two questions about this Bill. Who is this legal genius who has discovered that, after fifteen years of operation of the War Damage Act, everything that has been done in those fifteen years is illegal? When was it discovered, and who discovered it? And are the Government quite sure that they are right now? I myself am not satisfied that they have been acting illegally. I do not profess to pit my legal views against the high legal opinion that the Government seem to have, but, having read Section 20, I am not satisfied that they have been acting illegally, or that the Bill is really necessary. Perhaps the noble Earl can explain where the Government, whichever 450 Government it was, have gone legally wrong.
Then, could the noble Earl say how much money has been paid out illegally? And can he also tell us what change the Bill makes in future procedure? In my view, they are going on exactly as they have been going on. They are going to make the same kind of payments in future as they have made in the past, though presumably not under the shadow of illegality. I should be interested to know whether anyone has ever complained about the illegality of this procedure; whether any claimant or other person has come forward and said that the Government are acting ultra vires; or whether this is being done in the interests of the purity and sanctity of legal procedure.

§ THE EARL OF DUNDEE
My Lords, I think that was a pretty fast over. I shall do my best to try to take all six balls at once, if I can, but I may not, perhaps, satisfy the noble Lord altogether in doing so. The first question was: who was the genius who originally gave this legal advice?

§ LORD SILKIN
No. Who discovered that this was ultra vires?

§ THE EARL OF DUNDEE
Who discovered that it was wrong? That was the next question, surely. Never mind. I was going to say that I did not know who gave the legal advice, and that my right honourable friend the Financial Secretary to the Treasury, in the House of Commons, when he was asked by Mr. Chuter Ede [OFFICIAL REPORT, Commons, Vol. 617 (No. 58), col. 1302] … how high in the judicial system the person who gave the original ruling has now reached", replied: I cannot give the right honourable Gentleman an answer to that question …". And obviously I cannot either.
The next question was when it was discovered. It was discovered in 1958, when the Commission obtained fresh legal advice on the subject. After that, everybody agreed that it would be a good thing to have legislation, but this has apparently been the earliest moment at which time could be found for the legislation to be introduced. A much more interesting question, I think, was the 451 noble Lord's third one: am I quite sure that this is necessary and that the legal advice given in 1945 was in fact wrong? That question has also occurred to me, my Lords. So far as I know, there has never been any case in the courts about this—if there has been I am not aware of it. I do not think there has ever been any legal decision; and, not being an authority on the interpretation of law, I do not think I could tell your Lordships authoritatively that the advice given in 1945 was wrong. All I would say is that one usually prefers more recent advice to older advice—and, surely, it is better to be on the safe side. Obviously, it cannot do any harm to make sure that what is being done is legal, if there is any doubt on the subject, and the legal advice which was received in 1958 throws at least very serious doubts on the legality of the action that has been taken since 1945.

LORD FARINGDON
My Lords, I wonder whether the noble Earl, before he leaves that point—this is quite fascinating—can tell us what led the Commission to ask for additional legal advice in connection with a procedure which they had been operating for thirteen years quite happily. It is purely a matter of curiosity, but one likes to know why they should suddenly want additional legal advice.

§ THE EARL OF DUNDEE
I suppose they felt doubtful about it; or it may have been that some bright person outside suggested it to them. At any rate, they got this advice in 1958. The final question asked by the noble Lord, Lord Silkin, was: what difference will the Bill make? He said that they will go on taking this action. So they will. The difference is that it will now be done by statutory authority, by an Act of Parliament, instead of by Treasury direction. Therefore there is no doubt whatever about its legality.

§ LORD PETHICK-LAWRENCE
My Lords, may I, with the leave of the House, ask one further question arising out of the noble Earl's reply? He told us just now that this was discovered in 1958. If that is correct, and if the Commission's advice, therefore, was that they had been acting illegally up to the middle of 1958, or whenever it was, did they cease acting in that way during the year and some months that have elapsed from that time, or have they been acting on 452 a direction which they themselves thought to be incorrect?

§ THE EARL OF DUNDEE
My Lords, the Treasury authorised them to go on doing this in the knowledge that Parliament would put matters right, as it was generally agreed we ought to do; and, of course, as the noble Lord, Lord Silkin, has pointed out, there is no final legal authority for saying that it was in fact illegal. It is only because we think our modern advice is superior to the advice which was received by the Treasury in 1945.

§ LORD SILKIN
My Lords, I should be grateful if the noble Earl could answer the question put by my noble friend Lord Faringdon. What gave rise to this being questioned at all? The Government had been paying out quite happily, and no one had complained.

§ THE EARL OF DUNDEE
My Lords, I certainly do not know, and I do not think it matters in the least how it was found out. The fact is that it was found out and that new legal advice was asked for and given.