FOREIGN COMPENSATION BILL

HL Deb 11 March 1969 vol 300 cc349-98

3.44 p.m.

THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD CHALFONT)

My Lords, I beg to move that this Report be now received.

Moved, That the Report he now received—(Lord Chalfont.)

On Question, Motion agreed to.

VISCOUNT DILHORNE moved Amendment No. 1: Page 2, line 4, leave out subsection (2).

The noble Viscount said: My Lords, it almost a month since we had the Committee stage of this Bill. I suspect that most of your Lordships have forgotten a great deal about it and if I may I should like to remind the House a little of the background to this measure. When the Baltic States—Latvia, Lithuania and Estonia—were deprived of their independence as the result of Soviet action, an Order was made freezing the property in this country of nationals of those territories, under the Defence (Finance) Regulations of that time. Then, when those territories were overrun by the Germans, those nationals became technically enemies of this country by virtue of the definitions in the Trading with the Enemy Act 1939, but it was not until 1951 that an Order was made under that Act vesting the Baltic gold in the Custodian of Enemy Property.

The noble and learned Lord the Lord Chancellor told us this on February 13. He explained that as these assets were frozen under Defence Regulations, there was no need to make a vesting Order, vesting them in the Custodian of Enemy Property, until those Regulations were about to be revoked, and that was in 1951. The noble and learned Lord spoke only about the vesting of the Baltic gold, but I assume that the other assets which the Custodian now holds were vested in him at the same time. If they were not so, of course, I will give way and hope to be corrected. On Second Reading and in Committee, I asked whether the effect of that vesting order was to deprive the owners of their rights to this property or merely to suspend those rights. That question has not as yet been answered and I think that I should press for an answer. I think that before this Bill is passed, we should be told to what extent it is confiscatory. The noble Lord, Lord Chalfont, told your Lordships on February 13 that the points of law I had mentioned—this was one of them—would be dealt with by the noble and learned Lord the Lord Chancellor. When he same to speak the noble and learned Lord did not deal with that point, and I hope that he will do so to-day.

The noble Lord, Lord Chalfont, also told us on February 13 that if the owners of the property now vested in the Custodian came forward to make a proper authenticated claim, they would get the property standing in their name in full, not a dividend. Those were his words and he pointed out that provision was made for this by Clause 1(3)(b) of the Bill. So far as that goes, I think that is satisfactory. But there is a curious differentiation between Clause 1(3)(a) and (b). Paragraph (a) makes provision for payment of money to the Foreign Compensation Board, together with income arising there from. There is no provision in paragraph (b) for a payment to a claimant—a person who claims that the money belongs to him—of any income that has arisen from his money. I hope that the noble Lord will look into this and say what the position is in relation to it.

Where the claim by a person is that he was the owner or successor entitled to the former owner's property, I gather that that will be dealt with under Clause 1(3)(c). I am afraid that this is going a little away from this Amendment, but it it part of the background, which I think it is important to remember, because as I understand it the main purpose of the Bill is to make provision for distributing among what I would call the creditors these assets now in the hands of the Custodian. But the noble Lord, Lord Chalfont, has made it quite clear that if any persons come forward and say to the Custodian or to the Treasury that this money or this property is theirs and they prove their title to it, they will get it back, whether it be money or property.

How that fits in with subsection (5) is another matter, because that subsection deals with a specific subject, but I think that the noble Lord, Lord Chalfont, agrees with me so far. If that is the main purpose of the Bill, surely it would be very odd indeed if at this stage, in 1969, the Government took power to get hold of other property not already vested in the Custodian of Enemy Property, to get it away from wherever it is now and put it into the hands of the Custodian, to let him distribute that also with these assets. I think that that is an entirely different subject, which requires the closest consideration. And it was because Clause 1(2) appeared to me to give the Board of Trade power now, so many years after the war, to make a further vesting order vesting other property in the Custodian, property which he has not now got, that I tabled an Amendment similar to that which I am now moving, to leave out that particular subsection.

The nationals of Baltic territories were only technically enemies during the German occupation. That has long since passed. But on its face, subsection (2) of Clause 1 appears to give the Board of Trade power now to treat the property of those nationals as if it were still enemy property and a state of war existed. When the noble and learned Lord the Lord Chancellor spoke on the first Amendment that I moved, which was to leave out words in subsection (1) of this clause (and, as I said then, it was a probing Amendment), he made a long statement about the legal position, in the course of which he said in relation to Clause 1(2): … the main object of Clause 1(2) is to perfect the title in the Custodian of Enemy Property so that there can be no question of his power to deal with this matter."— [OFFICIAL REPORT, 13/2/69; col. 608.] Again, in column 609 he said: The object of Clause 1(2) … is to make quite sure of the Custodian's position. He had indicated in his speech that there might be doubts as to the validity or legality of some of the Custodian's acts, and he made it clear that the object of this particular provision was not to enable more property to be vested in the Custodian, but just to validate the Custodian's position. That is what was said by the noble and learned Lord the Lord Chancellor before I had moved any Amendment in relation to subsection (2).

When I moved that Amendment (if I may quote my own words) I said: As I see it, under this subsection as it stands, it would give power to the Board of Trade to make a new order vesting in the Custodian property of someone who was formerly within the definition of an enemy, but who, of course, has ceased to be so as we are no longer in a state of war; to bring in, as one might say, fresh property into the hands of the Custodian." (col. 611.) And I asked for an assurance that there was no intention of using this subsection for that purpose. That assurance was given to me by the noble and learned Lord the Lord Chancellor in the clearest terms, in these words: As I understand it, vesting orders may be made, but they will relate only to what the Custodian has physical possession of." col. 612.) Those were the Lord Chancellor's words and they satisfied me, and consequently I asked leave to withdraw the Amendment.

Seven days later, the noble and learned Lord wrote to me this letter—and I do not think he will have any objection to my informing your Lordships of its contents. It is headed, "Foreign Compensation Bill", and says: During the Committee stage of this Bill on 13th February I informed you that, as I understood it, vesting orders made under the power in Clause 1(2) of the Bill would relate only to what the Custodian of Enemy Property already had in his physical possession. The relevant passage is at Column 612 of Hansard. It has since been brought to my notice that, whilst by far the greater part of the assets in question are now in the physical possession of the Custodian, there exist some other assets, estimated to be worth about £30,000 to £40,000, which have been reported to the Custodian as enemy property subject to control under Article 4 of the Trading with the Enemy (Custodian) Order 1939, but which have not yet been the subject of a vesting order and so remain in the physical possession of various banks, et cetera, in this country. It is proposed in due course to vest these other assets. Clause 1(3)(b) and (c) can, of course, be used to release money or property in particular cases where appropriate. I will explain this point to the House during a later stage of this Bill.

I am grateful to the noble and learned Lord the Lord Chancellor for correcting this matter. I am sure that the assurance he gave in those clear terms was given in the utmost good faith. I do not wish to suggest that there was the slightest desire on his part to mislead the House; I would never suggest it. I am sure the noble and learned Lord would not have given such an assurance unless he had had information before him at the time which led him to suppose that it was entirely correct. But it was not. It was because of that assurance that I withdrew my Amendment.

My Lords, it is not, of course, the Lord Chancellor's Bill, but it seems to me that we are back at the position that we were in on the Committee stage, as to the extent of the power which the Board of Trade now wish to have under this Bill, or which the Government wish to give them. It is clear now, as it was not then, that, quite apart from the main object of this Bill, which is the distribution of assets already in the Custodian's possession, this power is sought to enable the Custodian to get his hands on other assets belonging to people who are not our enemies, who have ceased to be our enemies and who never were anything but our technical enemies, by notionally treating them as enemies at the present time and by notionally treating this country as still being in a state of war.

I must say that this seems to me to be going much too far. I assume that what happened was that the people who held in their possession the property of those who were technical enemies reported it, and that was the first step that was taken before a vesting order was made. I should like to know—and I hope we shall be told—when these assets worth between £30,000 and £40,000 were reported. Was it before the order was made in 1951? Presumably these assets were also frozen by the Defence (Finance) Regulations. If those assets were reported before that vesting order was made in 1951, why was it that the vesting order was not applied to them at that time? If they had been reported they must have been known about. I cannot believe that they were left out of that vesting order at that time per incuriam. I feel that there must have been a good reason for it then. If that be so, we really ought to be told why there is a change of view with regard to these particular assets. This seems to me to raise a pretty important question. But, however it may be as to when these assets were reported, I must say that I am by no means convinced that it would be right for Parliament now to say that the Board of Trade can take away from the banks at which they are deposited these assets, which are not enemy property and cannot be treated as such if this subsection is not passed.

What is the position at this moment? As I understand it, it is that the owners of these assets, or their heirs or successors in title, can claim the return of the assets from the banks at which they are now deposited; and if the banks refuse to hand them over then these claimants can have recourse to courts of law, where they may be able to establish their claims—one does not know. But if a vesting order is made they will as I understand it be deprived of all recourse to courts of law. They will get their property back only if the Treasury, in the exercise of its discretion, thinks (to use the words of the noble Lord, Lord Chalfont) that they have a properly authenticated claim. That will be at the discretion of the Treasury without any right of appeal to any independent body from the Treasury's decision.

Later this afternoon we shall be considering an Amendment, which I am very glad to see on the Order Paper, in the name of the noble and learned Lord the Lord Chancellor, giving a right of appeal in certain circumstances from a decision of the Foreign Compensation Commission, who will be charged with the responsibility of dealing with the claims by creditors on these assets, but will not be dealing with claims by people who say, "These assets belong to me." But there is no appeal from the Treasury's direction to the Custodian refusing to allow him to pay out to a claimant, who is told: "You cannot have back this property which is now under a vesting order but which was in the bank up until 1969." That seems to me entirely wrong.

One has here to bear in mind that the rights of individuals which existed heretofore under (I think it was) the Enemy Property Act 1953 are being cut down. The noble and learned Lord the Lord Chancellor dealt with that point last time in Committee. But I think it is now clear that, whereas before someone could come along and say, "This property which is in the hands of the Custodian never really was enemy property," and trace it right through into the hands of whoever held it, at the present time that power is being restricted to individuals. A company, a partnership, apparently, will not be able to avail themselves of that. That is of a very limited field, however, because that is only when, as I understand it, some property has been wrongly labelled as enemy property. But here the issue is quite different. Here is a question where someone says, "This is mine", or "It was my father's, and I deposited it in the bank". Why now, in 1969, should we give the Government power to vest that person's property in the Custodian of Enemy Property?

I do not think I need say more in moving this Amendment, but I should like to conclude by repeating the question which I have asked so often and which is really relevant to this Amendment, and it is this. Is the effect of a vesting order such as to deprive the owner of a property of his rights of ownership, or does it merely operate to suspend those rights? Whatever the answer to that question may be, I must say that at the present time it seems to me quite wrong that this Bill, whose main purpose is something quite different, should include this specific power to enable the Custodian to obtain possession of assets that are not as yet in his possession. My Lords, I beg to move.

4.4 p.m.

THE MARQUESS OF LANSDOWNE

My Lords, I rise to support the Amendment so ably moved by my noble and learned friend, Lord Dilhorne. This Foreign Compensation Bill is fraught with legal technicalities. Indeed, we have heard to-day that even the noble and learned Lord who sits on the Woolsack was in error on one question; and naturally he remedied this as soon as he could. This gives one an idea of the complexity of this Bill. I am afraid that possibly we may become lost in legal technicalities and forget some of the things which I, for one, and I know my noble and learned friend, Lord Dilhorne, and my noble friend Lord St. Oswald, find so particularly objectionable about this Bill.

My noble and learned friend, Lord Dilhorne, reminded us a little of the background of the whole of this matter, because it is some time since we discussed it all. At the risk of boring your Lordships, I am afraid that I also must run over some of the ground. The noble and learned Viscount, in his strong speech on the Second Reading, referred twice to the assets which we had under discussion as not being assets which belonged to this country. This has been my view all along, and still is. Unfortunately the Bill we are discussing to-day is one that is consequential on what I consider to have been a shameful Agreement made by Her Majesty's Government with the Government of the Soviet Union. This Agreement, as your Lordships will remember, became effective immediately upon signature. Parliament did not have the opportunity of giving its approval. On Second Reading the view was expressed that, had Parliament had an opportunity of being consulted and asked to give its approval, the Agreement would have run into very strong opposition indeed. Of this I am convinced. Unfortunately, the Agreement must stand. All that Parliament now has the chance of doing is to remove from the consequential Bill some of the particularly, as I think, mean and distasteful elements.

What we are being asked to do is to approve of the disposal of other people's property for the settlement of a claim against a third party. I do not think there can be any argument about this. My noble and learned friend Lord Dilhorne has explained to us how all this happened. The Baltic States, as your Lordships will remember, were first of all coerced by the Soviets and then overrun by the Nazis, in 1941. I think it would be true to say that until June 13, 1940, the Governments of these three Baltic States were masters in their own house, but thereafter they were no longer masters. The interesting thing about the assets we are discussing to-day is that all of them were deposited in British banks before June 13, 1940. Therefore, by no possible stretch of the imagination could one say that any of these assets in British banks here were the assets of enemies.

The three Baltic States, let me remind your Lordships, all declared their neutrality; they were neutral States. They arranged to send certain of their assets to British banks for safe keeping. They even discussed (the noble and learned Lord the Lord Chancellor will remember that I referred to this point on the last occasion I spoke on this matter) whether it might have been advisable to send their money to another country—America, for instance—and they were assured by the authorities at the Bank of England that their money was perfectly safe here. So they did nothing about it. But I happen to know that some of the Baltic assets were sent to other countries: some were sent to America and some were sent to Switzerland. I believe—although I am perfectly prepared to accept it if anybody can give information to the contrary—that these assets are perfectly safe in the United States and are perfectly safe in Switzerland. There is no question of the Government of the United States making use of these assets to meet claims against third parties. Yet this is what Her Majesty's Government are proposing to do. This is what Her Majesty's Government have done. All I say is that somehow or other we should try to mitigate what I believe to be an absolute outrage; somehow or other we must show that we disapprove of this action. Surely there is still time, and surely there are still the means of doing so.

As I have said, the legal complexities of this Bill are terrible. I know that my noble and learned friend Lord Dilhorne, has spent hours working on it, and I, as a layman, obviously had to spend even longer because it is terribly difficult to understand. But what we have to consider this afternoon is that we are confronted with a Bill which will enable the Government to confiscate. My noble and learned friend Lord Dilhorne was more cautious than I am because he asked whether this subsection is in fact confiscatory. With the greatest respect to the noble and learned Viscount and the noble and learned Lord the Lord Chancellor, I do not see that it can be anything else. These monies do not belong to us. They would not be in the control of the Custodian of Enemy Property if these countries had not become technical enemies. We all know perfectly well that they are no more enemies than Denmark, France or Belgium, so how can we possibly justify this extraordinary behaviour?

Perhaps I may explain to your Lordships a little about the process of how money becomes controlled and comes under the Custodian of Enemy Property. There are three phases. The first phase is simply control. Suppose you leave some money in a British bank and you are technically an enemy. As my noble and learned friend Lord Dilhorne said, that money will be reported and will be automatically put under control. It is blocked; it is not necessarily vested. If it is vested then the Custodian has additional rights; he has the right to sell. That is why all these other sums that we have just managed to unearth the £30,000 to £40,000—have to be vested so that Her Majesty's Government can sell them and have the cash. I think that is the answer, but perhaps the noble Lord, Lord Chalfont, will tell me if I am wrong.

It seems to me that we are being asked to underwrite a piece of theft. The theft has already, alas!, been committed and the only thing left to us is to arrange for the rightful claimants to have the possibility of getting back their property. I include not only individuals but also institutions. I know that the question of institutions is far more difficult, but it seems to me that the money deposited by the Baltic banks is just as little our property as the money deposited by Baltic individuals.

I should like to draw your Lordships' attention to some information which I received from a source which I am afraid I cannot disclose, but which I think is reliable, about some of the assets that have been held by the Custodian and which have in fact been released. The letter which I have received says: It would seem that concessions for the release of such assets have on occasion been afforded on an ex gratia basis to United Kingdom personal representatives of deceased residents of the Baltic States or to persons having left these territories to reside elsewhere. My correspondent goes on to say: After the signature of the recent Anglo-Soviet Financial Agreement such concessionary arrangements do not seem to be any more available. It is not difficult to understand why. I must ask the noble Lord, Lord Chalfont, if my information is correct and certain sums have in fact been released, how can it be that we are prepared to use the balance to meet claims of third parties. It does not seem to me to add up. I was not able to give the noble Lord notice of this question because this information came into my possession only this morning. I should be grateful if the noble Lord could look into this matter.

Perhaps it might be worth while for a moment to consider other Estonian assets—and this time it is only Estonian. Some of your Lordships may remember that there were Estonian shipping companies with ships plying all over the world. When Estonia was overrun it was somehow possible to get word to the masters of these ships to sail to British ports. This they did, and something like 20 Estonian cargo ships reached British ports. They did not go back to Estonia; they became part of the British Fleet.

Naturally claims were made and claims were met, both by institutions—the shipping lines—and by individual shareholders in those shipping lines. If I may refresh the noble Lord's memory, the principal among these was the Tallinn shipping company, and I think the principal case was the "Vapper" case. That was the name of one of the ships and I think it means "Courageous". Here, a perfectly equitable settlement was made of Estonian property which was in British hands and properly treated and respected, but in the case of the assets that came under the control of the Custodian of Enemy Property apparently we think it perfectly right and proper to confiscate these assets and then to "shell them out" to meet the claims of third parties.

It is apparent that even the greatest experts in the law do not find this Bill easy, but whether or not we are experts in the law it is not difficult to form an opinion where we are being asked to endorse behaviour which falls well below the high standard of British fair dealing. That is what I believe we are being asked to do, and for that reason I support the Amendment put forward in the names of my noble and learned friend Lord Dilhorne, myself, and my noble friend Lord St. Oswald. I believe that unless this subsection is removed we shall be underwriting a piece of shameful confiscation.

LORD BALFOUR OF INCHRYE

My Lords, I am no lawyer and I find difficulty in trying to understand the proposals in this Bill. Therefore, I have tried to reduce the proposals, as I understand them, to one lay sentence and perhaps in his reply the noble Lord, Lord Chalfont, will say whether my interpretation is correct. It is this: in support of an Agreement which I personally consider reprehensible, the Government are proposing to expropriate free property held here by individuals, by resuscitating war-time powers used in a war 23 years past. Is that or is that not so?

4.19 p.m.

LORD ST. OSWALD

My Lords, in speaking to this Amendment, moved with such force and lucidity by my noble and learned friend Lord Dilhorne, I would first of all make clear my view, as did my noble friend Lord Lansdowne, that it does no more than reduce, in one particular, the manifest injustice of a Bill which should never trespass on the British Statute Book.

There is another factor which affects my own approach to this Amendment. I have to appreciate from the experience of the Committee stage on Thursday, February 13, that in discussion with the noble Lord, Lord Chalfont, across the Floor of the House, a certain delicacy, not to say daintiness, in debate is required. I hope he will not mind my saying that I have never before known a Minister who considered that quoting directly from his own speech of the previous week constituted a reflection on his personal character. At a time when a senior Cabinet Minister is slinging about in public such salubrious terms as "shifty and spineless" and subsequently "weasel" when referring to the Leader of the Opposition, Ministers of all ranks I should have thought might feel themselves a little vulnerable when they complain of what are the far kindlier references made in this House. I do not think my own language on that occasion was any stronger than that of my noble friend Lord Lansdowne, for instance; and certainly it was far more restrained than that employed at all stages of this Bill in another place. However, there is no practical point in getting under a Minister's epidermis if it is possible, instead, to apply massage to his better nature, which I am sure the noble Lord, Lord Chalfont, possesses.

All the same, it would ill befit me to disguise my opinion to the point of misleading either the noble Lord or the House. I will avoid this by putting a request to the noble Lord, Lord Chalfont, and his colleagues. I would ask them not to suppose that there is anything artificial or exaggerated in the way I express my indignation over the purpose of this Bill as a whole, and especially the iniquitous purpose of this particular subsection, as described by my noble and learned friend. This is an anger shared by certainly almost all of those taking part on this side of the House; it is not peculiar to me. My noble friend Lord Lansdowne on Second Reading said very plainly that the banks of the three Baltic countries who were "the customers of the Bank of England concerned" have had their gold stolen from the Bank of England, the theft having been perpetrated by Her Majesty's Government, and he repeated the same reflection to-day. Since that is how I see it also, it gives cause for the most genuine and unavoidable wrath.

Another noble Lord on the Government Benches said during the Committee stage that he found it difficult to understand how we on this side could lash ourselves, in his words, into a state of white-hot indignation. To speak for myself, I require no lashing apart from a reading of the facts. I should feel myself less than a man, less than an Englishman, if I did not react with a cold anger to what I see as theft from innocent and defenceless people by the Government of my country. This seems to me an unjust and injurious Bill, and the present subsection (2) perhaps the meanest part of it. I echo the words of my noble friend Lord Lansdowne at an earlier stage, "What price now the old adage, 'As safe as the Bank of England'?" With him, I believe we cannot—and more's the pity!—defeat this Bill, prevent it from reaching the Statute Book

My Lords, what we are debating now may seem a small point or a large point, according to how one looks at it. I think it is a large point, involving both principle and individual rights. I shall argue it, not at great length but with deliberation, and I hope that your Lordships will bear with me, in attempting to prevent an extra injustice. I do so now in the hope that it will not be necessary to intervene on Third Reading.

The assets, which have never morally belonged to any British Government, have been expropriated, and the "swag", unlike most "swag" admittedly, is to be distributed mainly to deserving people, to some who have suffered in other ways, in less extreme degrees than the nationals of the Baltic States themselves. I dare say that the noble Lord, Lord Chalfont, thinks of himself as some kind of modern Robin Hood: he rather took that attitude on the last occasion. But Robin Hood chose his victims a little more fastidiously, and he never proposed to give a luscious "sweetener" to the Sheriff of Nottingham. Having seized these assets in a manner which seems to many of us dishonourable, the Bill now seeks, as we have heard, through this subsection to fleece those who otherwise escape the main depredation.

There seems to me, as there seems to the Government, to be some doubt as to who these owners may be or whether they are still alive. It is a very different thing to say that because we cannot identify them to-day they are therefore extinct and have no possible successors. It is clear that the Government see these rightful owners in a rather different light from some of us. It was explained by implication at earlier stages of the Bill why the Government consider them beyond the normal laws of human behaviour. It was explained, faultlessly, in the words of the noble Lord, Lord Chalfont, that: In the summer of 1940 the Baltic States came under considerable Soviet pressure and to a large extent ceased to be free agents."—[OFFICIAL REPORT, 4/2/69, col. 11.] Three ultimatums were followed by massive invasion of the three countries. The noble Lord, Lord Chalfont, did not mention to what even small extent after that they remained free agents. But he rightly pointed out that territories over-run by the enemy (in the case involved in the Bill the German enemy) are necessarily regarded as enemy territory so far as trading with the enemy provisions are concerned. And this entitled Her Majesty's Government to place the Baltic assets in the hands of the Custodian of Enemy Property. He later said, and here is another direct quote of impeccable accuracy: …the effect of vesting is to make the Custodian the legal owner of the property. Once the gold had been vested in the Custodian, he was legally entitled to sell it and realise the asset under exactly the same powers." (col. 66). My Lords, all that was exquisitely and undoubtedly factual. I hope the noble Lord will not interpret it as an attempt at character assassination if I point out that it was only a tiny corner of the whole picture.

It is a matter of history that very nearly the whole of the mainland of Europe was overrun by Nazi Germany and Fascist Italy during the war. As a consequence, as this House was told by the noble Lord, Lord Brown, on February 13, £34 million from belligerent countries was vested in the Custodian of Enemy Property. The whole of this, understandably, was confiscated in one form or another, mainly for reparations. We were told at the same time by the noble Lord, Lord Brown, in answer to a Question of mine, that the total amount taken over from the "technical" as distinct from the "belligerent enemies was not known or could not then he given. It seemed likely that the figure must be astronomic, including, as we were told, the assets from France among other countries.

Since then, through the kindness of the noble Lord, Lord Brown, my noble friend Lord Lansdowne and I have been given figures which, without being claimed as absolutely precise, are extremely revealing and extremely telling. The total taken under control by the Custodian from "technical" enemies was £380 million. Of this vast sum, only £8.4 million remains in the Custodian's hands or under his control; of which £8.4 million, nearly £7 million is from the Baltic countries. So that already, even without this subsection, these unhappy countries have been treated differently from all others. They are being discriminated against, coldly and inhumanly, simply because they are helpless. There is an ironic note in the fact that Italy, which, after all, fought against us actively during the greater part of the war, has had £9,975,000 returned—infinitely more favourable and more civilised treatment than that which is being given now to the entirely innocent Baltic peoples.

The noble Lord, Lord Chalfont, said repeatedly the other day that the onus is on the former owners to present and prove their claim now, if not earlier. But these people are not living in Bognor or Bishop's Stortford; they are behind the Soviet frontier. What he demands, in effect, is that they should risk their lives to escape, with little or no possibility to obtain or take out with them the necessary documents. So they are by circumstance, and by the provisions of this Bill, in a cruelly under-privileged category.

I would ask one final direct question of the Minister. Am I right in thinking that the statutory duty of the Custodian of Enemy Property is to preserve the assets taken under control, to preserve and eventually to return them to the original owners? He needs no further Parliamentary approval or consent for either of these two duties. I should like either the confirmation or the contradiction of this statement from the noble Lord. If I am right, it follows that a Bill through Parliament is necessary in effect to order the Custodian to do what is otherwise a breach of his statutory duty. If that is so, this is plainly a confiscatory Bill, and this subsection adds to the discriminatory act thought up between Mr. Harold Wilson and Mr. Alexei Kosygin a little over two years ago. This is a measure which makes the friends of Britain ashamed, as I think it should all of us. The Amendment moved by my noble and learned friend would relieve a little of that shame and reduce by a little the total injustice.

4.30 p.m.

THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD CHALFONT)

My Lords, let me first express my gratitude to the noble and learned Viscount, Lord Dilhorne, for the lucid and reasonable way in which he introduced this Amendment and for taking us through a little of the history of this Bill, which relieves me of some of the duty of doing so. I must confess that, as always, I am somewhat less grateful to the noble Lord, Lord St. Oswald, who then proceeded, in his impeccable and predictable way, to confuse the whole matter irretrievably. I do not propose to follow him through the labyrinthine ways of his own mind—indeed I do not think it would be possible to do so. But since his literary allusion to me as a kind of failed Robin Hood seemed to give him a great deal of pleasure, perhaps I might delve into my own literary storehouse and say that I saw him as a kind of Anglo-Saxon d'Artagnan, with the unfortunate difference that he so frequently gets his sword in between his legs and falls flat on his face that really in the end one is left with a sort of slapstick version of what this extremely serious business is all about.

LORD ST. OSWALD.

My Lords, would the noble Lord care to give one example of that in the speech that I have just delivered?

LORD CHALFONT

My Lords, in the course of my speech I shall hope to point out, if only by implication, that there were numerous occasions on which the noble Lord was well wide of the point. I think perhaps the most obvious illustration (this is not one that is the monopoly of the noble Lord) is in what I believe to be the constantly theatrical expressions of outrage about the Agreement between this country and the Soviet Union and the Bill that follows it. The noble Lord said there was nothing theatrical or exaggerated about this outrage. If there is not, then I can only suggest that it is hopelessly misplaced.

I do not think there is any point in wearying your Lordships or in wasting your time with arguments about whether or not the Agreement with the Soviet Union was a shameful one. I do not believe it was. I believe that it was an honourable and a practical one. There is no profit, however, in arguing about that. The Agreement exists, and the Bill flows from it; and I suggest that we limit our attention to the Bill and, if the noble Lord will allow, to the Amendment that is at present before your Lordships' House.

The concern of the noble Lord, Lord St. Oswald, and indeed to some extent of the noble Marquess, Lord Lansdowne, was to show a sense of outrage against this Agreement and against the Bill that springs from it. My concern, on the other hand, is to settle the claims of a great number of people who have now been waiting 30 years for the money which we believe is owing to them and which we intend to give to them.

There has been a great deal of play with the idea of this Bill as a confiscatory Bill. Most of the property in this case has been vested in the Custodian; and although vesting orders are said to have the same effect as an order of the High Court under the Trustee Act 1925 this does not mean that the Custodian holds property in trust. All the reference to that Act does is to do away with any need for a conveyance or a share transfer. The property to be taken is that which was the subject of a Soviet claim, a claim which the Soviet Government, in the Agreement made between our two Governments, have now undertaken not to pursue and which, at the end of the process of managing the Compensation Fund, has not been claimed by anybody.

VISCOUNT DILHORNE

My Lords, may I interrupt the noble Lord? I am trying to follow what he is saying. I thought that the property vested in the Custodian was property vested under the Trading with the Enemy Act 1939. That was done in 1951, long before the Agreement made with the Soviet Union.

LORD CHALFONT

Yes. I hope that as I go on this will become clear to the noble and learned Viscount, if it is not now at this moment. As he rightly says the gold was vested in the Custodian in 1951. The great majority of the other assets of course, the subject of this Bill, were vested (and I think he asked me this question) before the date of the vesting of the gold; that is to say, before 1951. I entirely agree with him about this.

Before I deal with the specific questions put to me by the noble and learned Viscount, about income, and by the noble Marquess, Lord Lansdowne, about the releases of property (I should like, if I may, to deal with these later) it may be as well at this stage to look at the various kinds of property with which we are dealing. I think there has been some misunderstanding and confusion about this. As I think the noble and learned Viscount, Lord Dilhorne, has said, the effect of the subsection with which we are now dealing, subsection (2) of Clause 1, is to enable orders to be made vesting in the Custodian the property with which the Bill is concerned. It will ensure that the Custodian has a good title to the property; and therefore it follows, of course, that he is able to give a good title to any transferee.

At the Committee stage, and I think he implied it again this afternoon, the noble and learned Viscount said he had no objection to the power given by this subsection in so far as its purpose was to perfect the title of the Custodian to property already vested in him. He did, however, express anxiety lest the power should be used to make a new order to bring into the hands of the Custodian property which he had not already got, and the noble Viscount asked for an assurance that there was no intention of using subsection (2) for that purpose.

The noble and learned Viscount has said that in Committee my noble and learned friend the Lord Chancellor said that, as he understood it, the subsection would relate only to what the Custodian already had in his physical possession. As we have heard from the noble and learned Viscount, the Lord Chancellor was then unaware—through, as the noble and learned Viscount has been good enough to say, no fault of his own—that there existed unvested assets of between £30,000 and £40,000, and there has been correspondence between the two noble Lords to which the noble and learned Viscount referred this afternoon. I will come to this question of unvested assets in a moment, and I hope that when the noble and learned Viscount has heard what I have to say about them, and what I have to say about the assurance which he sought, he will feel able once more to withdraw his Amendment.

But before I do so I should like to deal in turn, as I say, with the different categories of assets, starting with the category of vested assets. The overwhelming majority of the assets with which this Bill is concerned have already been made (and I think this will clear up the point which the noble and learned Viscount put a moment ago) the subject of orders vesting them in the Custodian of Enemy Property. The effect of a valid vesting order is, as I have said, to transfer the legal title to the property concerned to the Custodian.

VISCOUNT DILHORNE

My Lords, when the noble Lord says that, does he mean that the rights of the former owners to that property are extinguished?

LORD CHALFONT

My Lords, I shall come to that point in a moment, if the noble and learned Viscount will have patience with me. When I say that the effect of a valid vesting order is to transfer the legal title, that is of course true; but there is in some cases doubt whether or not the vesting orders were valid. However, for simplicity I shall refer to them as vested assets. As I have said, the main object of subsection (2) is to enable orders to be made which would perfect the Custodian's title to these vested assets. It is no part of the object of this Bill or of this subsection to bring in asset; which are outside the scope of the trading with the enemy legislation. The estimated value of these vested assets is around £6½ million—and I have said this before—though the exact figure can appear only when all the assets, not all of which are in the form of money, have been realised. These assets formerly belonged to persons—and in this term I include corporate persons, as well as individuals—resident or carrying on business in the various territories now forming part of the Soviet Union with which this Bill is concerned.

By far the greatest part of these assets belonged to companies which have been nationalised. Some of the assets were, however, the property of individuals nearly all of whom of course now live, if they are still alive, within the Soviet Union. In so far as the property of former companies is concerned, our understanding and belief is that those companies have gone out of existence. The Soviet Government have undertaken, by the Agreement of January 5, 1968—whatever certain noble Lords may think of that Agreement—not to pursue further their claims to such assets.

When this Bill has become law, it is our intention that the Custodian should realise those company assets which have not already been realised, and should pay the available proceeds over to the Foreign Compensation Commission for distribution. We shall do the same with the vested assets which formerly belonged to individuals who are nationals of the Soviet Union, in so far as the Soviet Government have undertaken not to pursue their claims. They made that undertaking under Article 2 of the Anglo-Soviet Agreement.

THE MARQUESS OF LANSDOWNE

My Lords, before the noble Lord leaves that point, may I ask for a little clarification? Does the noble Lord suggest that the ownership of these assets—and by "ownership" I mean ownership in its legal sense—is vested in the Custodian of Enemy Property?

LORD CHALFONT

My Lords, in the case of vested assets, as I understand it, the legal title has passed to the Custodian where there is a valid vesting order.

THE MARQUESS OF LANSDOWNE

My Lords, would the noble Lord mind answering my question? I want to know who owns these assets. Is it the Custodian of Enemy Property?

LORD CHALFONT

My Lords, I think I should be treading on dangerous ground if I started to make some kind of legal distinction between a title and what the noble Lord calls "ownership". I can only repeat my answer to his question. If he is not satisfied with that, then I shall have to seek advice from those who are more expert than I am. All I know, and all I can say, is that the effect of a valid vesting order is to transfer the legal title to the property to the Custodian. Whether that involves, in the legal sense—

THE MARQUESS OF LANSDOWNE

My Lords, perhaps I can help the noble Lord. I think I am right in saying that the Custodian of Enemy Property cannot release property unless there is a cessa- tion order or a treaty of peace. We quite understand why there was no treaty of peace or cessation order in respect of these particular assets, but what I want to know—and I should be grateful if the noble Lord would look into this point—is whether or not the Custodian of Enemy Property cart be considered as the owner of that property. I will quite understand if the noble Lord cannot answer that question now, but I should be grateful if he would find the answer for me.

LORD CHALFONT

My Lords, if there is a point here that has escaped me, l will look into it and I will let the noble Lord have the answer.

VISCOUNT DILHORNE

My Lords, I raised this question on Second Reading; I raised it again on Committee and I raised it to-day, and it really does not suffice for the noble Lord to say that the Custodian has the legal title. The Custodian's powers are purely statutory: he is a statutory creature. What I want to know is whether—as would follow if the Custodian has become the owner of the assets—the former owners have had all their property rights extinguished. It really does not satisfy me, if I may say so, for the noble Lord to say that if he has not dealt with my noble friend's question he will look into it, because this point has been raised again and again since the commencement of our discussions on this Bill, and the noble Lord or the noble and learned Lord the Lord Chancellor ought to give this House clear advice on the matter.

LORD CHALFONT

My Lords, I am clearly not in a position to give the House legal advice on this or any other matter. In my view, and according to my advice, I realise—

THE MARQUESS OF LANSDOWNE

My Lords, as the noble and learned Lord the Lord Chancellor is here perhaps he would be good enough to enlighten us.

LORD CHALFONT

My Lords, may I say first that if I could at least finish a sentence we might get a little nearer the end of these long and complicated proceedings. If the noble and learned Lord on the Woolsack cares to intervene I am sure he will do so. In my view, and according to my advice, title and ownership mean the same thing. If the vesting order is valid, then the ownership of this property is passed to the Custodian. I am afraid that I can give the House no other advice than that.

THE MARQUESS OF LANSDOWNE

My Lords, I should like to remind the noble Lord what he has said: that the ownership of this property has passed to the Custodian. In other words, the noble Lord is telling me that the Custodian of Enemy Property is the owner. Well, I beg to differ.

LORD CHALFONT

My Lords, if the noble Lord begs to differ—

THE MARQUESS OF LANSDOWNE

The noble Lord has answered my question.

LORD CHALFONT

My Lords, I have answered the question by saying that my advice is that ownership and title are the same thing, and that in the case of a valid vesting order the legal title has passed to the Custodian. That is what I have said.

I wonder whether at this stage I could pass on to the question of the unclaimed vested assets. I must explain here that there are some vested assets formerly belonging to individuals which were not covered by the Anglo-Soviet Agreement. If the original owners of these assets or their legal heirs, whether they are now inside or outside the borders of the Soviet Union, come forward to claim these assets and can prove their title, they are of course, as I said at an earlier stage of the Bill, entitled to have them back. It was for this purpose that paragraphs (b) and (c) of subsection (3) of this clause, and the saving for property belonging to an individual in subsection (5), were inserted in the Bill. They would ensure that any individual still in a position to put forward a valid claim could, and would, get back the property or its proceeds.

It seems to me that there have been fears about this of a very real kind. Some noble Lords have gone so far as to suggest that it is the business of Her Majesty's Government to go chasing around trying to find these people. I certainly could not accept that. I do, however, accept, as the noble Lord, Lord St. Oswald, said in rather colourful terms this afternoon, that it may be difficult for some people to put forward these claims.

LORD ST. OSWALD

I was very factual.

LORD CHALFONT

My Lords, I do not know whether the noble Lord wants me to give way.

LORD ST. OSWALD

My words were not colourful; they were extremely factual.

LORD CHALFONT

My Lords, there are such things as colourful facts, and the noble Lord is an expert at them. I hope that I can set some fears about this at rest if I give an assurance about this particular category of asset. I agree with the noble and learned Viscount. Lord Dilhorne, that the purpose of these provisions to which I have referred would be frustrated if the assets, or the proceeds of the vested assets which formerly belonged to these individuals, were immediately to be transferred to the Foreign Compensation Commission. Of course that is so. If we handed these assets over to the Foreign Compensation Commission for distribution straight away then the purposes of those saving clauses would be defeated.

In order to give any such persons a reasonable chance to come forward and claim their property—and noble Lords opposite, I think, can hardly argue that this matter has not now been given a great deal of publicity—I can, if the House wishes, give an assurance that nothing will be done under Clause 1, subsections (1), (2) or (3)(a), for a period of two years after the passage of this Bill in respect of the assets of individuals not covered by the Anglo-Soviet Agreement. It is only after this time, two years from the passage of the Bill, that any of these assets which still remain unclaimed will be transferred to the Foreign Compensation Commission for distribution.

No doubt, bearing in mind the history of the areas, there are cases in which the former owners of these properties have died without heirs, in which case no one will come forward. This arrangement would give a period of time within which a property owner who established a claim could get his property back. I am not suggesting that this is an original idea by Her Majesty's Government; that was an idea put forward in Committee by the noble Lord, Lord Hankey, and the suggestion has commended itself to the Government. I can go further and say that if even after that two-year period has passed such a person should come forward and prove his case, his property or the proceeds of his property will be returned to him under the provisions of this Bill, or, if that is no longer possible, then compensation will in a proper case be paid to him from public funds. I hope that noble Lords opposite who have been worried about the possibility of people coming forward and claiming unclaimed assets will agree that there are the most ample safeguards for the individuals concerned in this particular category.

There is one further category of assets, and it is this category which has been exercising noble Lords opposite, and certainly has been exercising the powerful mind of the noble and learned Viscount, Lord Dilhorne. It is the category of unvested assets—the £30,000 or £40,000 which remain unvested. The noble and learned Viscount, Lord Dilhorne, asked what were the reasons that these assets had not been vested. There were variou3 reasons. It was not the practice of the Board of Trade to make vesting orders unless the necessity arose for the Custodian to have powers to deal with the property for the purpose of its preservation. For various reasons these assets of £30,000 to £40,000—of which £20,000 is held in foreign currency, mainly in dollars, and the remainder is in the form of securities, gold bars and coins—are in the unique status of being under the control of the Board of Trade.

VISCOUNT DILHORNE

My Lords, when were these assets reported to the Board of Trade?

LORD CHALFONT

My Lords, I cannot give the noble and learned Viscount an answer immediately. I hope that by the end of the discussion I shall be able to do so.

The noble and learned Viscount seemed to draw some kind of distinction between these assets and other assets which have been vested, but my understanding is that the origin of this property is precisely the same as that of the property which has been vested. It is largely a matter of accident that it has not been vested like all the rest. The companies and individuals to whom the property belonged are, so far as I know, similar in all ways to the former owners of the vested assets. For that reason we propose to treat this property in broadly the same way as the vested property. Owners will be given an ample period in which to come forward and establish their claims.

THE MARQUESS OF LANSDOWNE

My Lords, I take it that the offer which the Minister is making refers only to assets of individuals. Does it include the assets of institutions?

LORD CHALFONT

No, my Lords; the assurance which I have just offered to the House deals with the property of individuals.

Before I ask the noble and learned Viscount, in the light of these assurances, to withdraw his Amendment, I should like to answer two specific questions which were put to me. The first question was about the income on certain property. I think that the answer is that Clause 1(3)(b) refers to money which is the former property of a Baltic State or ceded territory … By virtue of the definition of "former property" which occurs in Clause 3(1) of the Bill, this includes "any income arising from…such property". The same goes for Clause 1(3)(a) and (c). There is a reference in Clause 1(3)(a) to a different sort of income, namely, the income arising from the investment in Treasury Bills of the proceeds of the sale of assets. This sort of investment income does not arise where there has been no sale and no investment, as is the case with regard to subsection (3)(b) and 3(c). In regard to the question by the noble and learned Viscount as to when the property under control was reported, I understand that most of this was reported when these territories became enemy territories—that is to say, in 1941 or thereabouts.

The facts are that in this Bill we are trying to follow up the Agreement made with the Soviet Union, an Agreement which I believe to be practical, honourable, and humane, and one that will now allow us to meet the claims of people whose property has been expropriated and whose claims have been outstanding for many years. It is easy to become incensed with an Agreement, especially as it was an Agreement which, for what we think were good reasons, was not subject to the ratification of Parliament. Nevertheless, the Agreement was made, and we believe that it should have been made.

What we should like to do now, if we can fight our way through the thicket of legal technicalities (I do not diminish the importance of the legal arguments which are involved; they are extremely important, and the noble and learned Viscount, Lord Dilhorne, has advanced them lucidly, reasonably and cogently), is to arrive at a Bill which is sensible and humane. And in this case I have offered to give an assurance. It is that in the case of the unclaimed assets we will give a period of grace of two years after the passage of the Bill, which will enable anybody to come forward and claim his property. If such a claimant can establish any claim, he will get his property back, or the proceeds from it, in full. If, even after two years, people still come forward and can establish a good claim, even if all the property has been distributed, this will be a case to be considered for compensation out of public funds. I do not believe that we can go much further than that, and I hope that the noble and learned Viscount will withdraw the Amendment.

4.59 p.m.

VISCOUNT DILHORNE

My Lords, I have listened with the greatest care to the noble Lord, Lord Chalfont. I am afraid that I interrupted him a good deal, but it was in order to get clear what he was saying. Discussion on this Amendment has covered a wide field and I do not think the House regrets it. It has led to the noble Lord, Lord Chalfont, making a very important statement about matters which are not the subject matter of this Amendment, although I referred to them in passing in moving the Amendment. It concerned the position with regard to claims against this property by former owners, or the heirs of former owners. The noble Lord said that these individual properties were not covered by the Agreement. I do not see anything in the Agreement which draws a distinction between the property of individuals and the property of other juridical persons. But the noble Lord said—I took down his words—that nothing would be done for two years in relation to assets not covered by the Agreement. That is a fairly indefinite phrase.

I should like to ask whether it means this—I think from what he said later it does, but he rather changed his language. Does it mean that there will be a two-year period in which anyone can come forward and claim to be entitled (I leave out the word "owner" for the moment) to property in the hands of the Custodian, and that he will get it back? I am dealing first of all with the Custodian. Does it mean that within the next two years any individual who can show that he is entitled to property in the hands of the Custodian will get it back? The noble Lord, Lord Chalfont, nods his head. So much for that one. Then one comes to the question of the claims against the property which is not vested as yet—what the noble Lord called the unvested assets. That presupposes that they are to be vested. If they are vested in the Custodian, then I for one welcome that assurance.

Let me now pass from that, because that is not really the subject matter of this Amendment. The noble Lord then went on—and, I thought, was quickly looking for a few lifebelts—to deal with the question of legal title. I endeavoured to draw the noble and learned Lord the Lord Chancellor on this earlier. I think anyone who expressed a firm opinion as to the precise operation of the statutory powers of the Custodian in relation to ownership of the property would be hazarding quite a little. So I am not disappointed at not getting a very positive reply upon that point. But the noble Lord, Lord Chalfont, went so far as to say that when the legal title went to the Custodian—that is to say, after a vesting order—the Custodian became the owner. That may be the view of the Government now, but it is quite inconsistent with the Explanatory Memorandum which was published on the Bill when it first appeared in this House, because that said: This Bill makes provision for the disposal of property"— I leave out the irrelevant words— of persons formerly resident or carrying on business in one of the Baltic States". If the noble Lord, Lord Chalfont, is right, then that Explanatory Memorandum is quite wrong. It should have made provision for the disposal of what was formerly property of those persons and is now the property of the Custodian, but it very carefully did not do so. I leave that on one side. I hope that at some stage we shall have the benefit of the views of the noble and learned Lord the Lord Chancellor upon that matter. I now come back to the—

LORD CHORLEY

My Lords, is not the noble and learned Viscount making a mistake against which we always warn our first-year students? I refer to the difference between physical objects—what is described as "property"—and the ownership of those objects? The introductory phrase to which he has just referred is obviously referring to the assets, and not to the ownership of them. I should have thought that was as plain as a pikestaff.

VISCOUNT DILHORNE

My Lords, I do not think I have made a mistake. I recognise that if I had been one of the noble Lord's pupils the chances would be much greater of my having done so. But I will leave that. May I come back to the point of the £30,000 and £40,000 which is the subject matter of this Amendment? We were told that assets of that value were reported to the proper authorities as long ago as 1941. No vesting order was made at that time under the Trading with the Enemy Act. We have that from the noble and learned Lord, the Lord Chancellor. Those assets were then frozen under a Defence Regulation, and that Defence Regulation was revoked in 1951.

The point with which the noble Lord, Lord Chalfont, has not dealt is that powers to freeze those assets disappeared completely in 1951 because the Defence Regulation went and no action had been taken tinder the Trading with the Enemy Act. What is now proposed is that the Trading with the Enemy Act should be brought into operation as if these people were now technically enemies and there were now a state of war, for the purpose of enabling the Board of Trade to do in 1969 what they could have done in 1951, what they did not do in 1951 when they made the vesting order in relation to the other assets. But we are given no explanation of the omission except that there were various reasons for it which were incidental, accidental or something of that sort. That does not satisfy me.

We were also told that these assets are now under the control of the Board of Trade. I wonder how they come to be under the control of the Board of Trade. That has not been explained to us. The fact remains, as I see it from what the noble Lord has said in dealing with the £30,000 to £40,000 worth of assets, that they are assets which, unless we give this power in subsection (2) of Clause 1, cannot be vested in the Custodian of Enemy Property. So far as I can see, they are assets which should not now be vested in the Custodian of Enemy Property, and it is no justification for the noble Lord to say, "Oh!, we are going to vest, because they are covered by the agreement made with the Soviet Union." What fears does that arouse? If the Foreign Office had made an agreement with the Soviet Union that they would deal with property of other individuals in this country, I suppose that the justification for taking power to dispossess the owners of that property would be, "Oh!, we have made an agreement with the Soviet Union to do that." I cannot regard that as right. I cannot regard it as right to take this extra power. Therefore, if my noble friends agree I shall seek to divide the House.

LORD CHALFONT

My Lords, before the noble and learned Viscount sits down, may I say this? If he still insists that it would be wrong ever to vest this property which is at present unvested—or at any rate so much of it as formerly belonged to individuals and was not claimed by the Russians—I see no insuperable objection to assuring the House that the £30,000 to £40,000 will remain outside the purview of this Bill. But all this means is that it will probably remain for ever in some hank vaults.

VISCOUNT DILHORNE

My Lords, the noble Lord has spoken again and, with the leave of the House, I should like to reply. If these assets remain in the banks, people who claim ownership of them can establish their title in the courts. But if they are vested in the Custodian it is all at the discretion of the Treasury. I cannot see any justification now for taking them away from the banks where the owners had them and putting them in the hands of the Custodian. We cannot really carry on this discussion any further under the rules of a Report stage, but if the noble Lord has now said that he will be content to take this £30,000 to £40,000 out of the Bill and not let it come within its scope, the best and most effective way of doing that is by carrying this Amendment. But I should not object to a provision being inserted in the Bill—and, fortunately, there is time to do it—dealing with the Custodian's title to the assets now in his possession, which the noble and learned Lord the Lord Chancellor said was the

main object of this provision. I am sure that that could be so worded. Cutting out this subsection does not stop that. I have spoken again with the leave of the House, and I have listened with the greatest care to the noble Lord, Lord Chalfont, but I feel that I must ask the House to support me in excising these words.

5.10 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 84; Not-Contents, 71.

CONTENTS
Aberdare, L.	Fortescue, E.	Poltimore, L.
Aberdeen and Temair, M.	Goschen, V.[Teller.]	Polwarth, L.
Airedale, L.	Gowrie, E.	Rankeillour, L.
Atholl, D.	Grenfell, L.	Rathcavan, L.
Balfour of Inchrye, L.	Gridley, L.	Rea, L.
Beauchamp, E.	Grimston of Westbury, L.	Redesdale, L.
Berkeley, Bs.	Hampden, V.	Rennell, L.
Bessborough, E.	Hawke, L.	Robertson of Oakridge, L.
Brooke of Cumnor, L.	Horsbrugh, Bs.	Ruthven of Freeland, Ly.
Brooke of Ystradfellte, Bs.	Howard of Glossop, L.	St. Aldwyn, E.
Carrington, L.	Howe, E.	St. Helens, L.
Clwyd, L.	Hylton-Foster, Bs.	St.Oswald, L.
Conesford, L.	Ilford, L.	Sandford, L.
Cork and Orrery, E.	Inglewood, L,	Sandys, L,
Craigavon, V.	Jessel, L.	Somers, L.
Craigmyle, L.	Lambert, V.	Stonehaven, V.
Cromartie, E.	Lansdowne, M.	Strang, L.
Daventry, V.	Lauderdale, E.	Strange of Knokin, Bs.
Denham, L. [Teller.]	Mancroft, L.	Strathcarron, L.
Derwent, L.	Massereene and Ferrard, V.	Strathclyde, L.
Dilhorne, V.	Merrivale, L.	Swinton, E.
Drumalbyn, L.	Mersey, V.	Teynham, L.
Dudley, L.	Meston, L.	Trefgarne, L.
Dundonald, E.	Molson, L.	Vivian, L.
Emmet of Amberley, Bs.	Mowbray and Stourton, L.	Wade, L.
Essex, E.	Moyne, L.	Ward of Witley, V.
Falmouth, V.	Newton, L.	Wedgwood, L.
Ferrier, L.	Nugent of Guildford, L.	Younger of Leckie, V.
NOT-CONTENTS
Addison, V.	Gaitskell, Bs.	Morrison, L.
Archibald, L.	Gardiner, L. (L. Chancellor.)	Moyle, L.
Arwyn, L.	Garnsworthy, L.	Noel-Buxton, L.
Balogh, L.	Granville of Eye, L.	Nunburnholme, L.
Beswick, L.	Hall,V.	Pargiter, L.
Blyton, L.	Helsby, L.	Phillips, Bs. [Teller.]
Bowles, L.	Heycock, L.	Plummer, Bs.
Boyd-Orr, L.	Hill of Wivenhoe, L.	Popplewell, L.
Brockway, L.	Hilton of Upton, L. [Teller,]	Raglan, L.
Burden, L.	Hughes, L.	Ritchie-Calder, L.
Burton of Coventry, Bs.	Jacques, L.	St. Davids, V.
Carron, L.	Kilbracken, L.	Serota, Bs.
Chalfont, L.	Latham, L.	Shackleton, L. (L. Privy Seal.)
Champion, L.	Leatherland, L.	Shepherd, L.
Chorley, L.	Lindgren, L.	Silkin, L.
Collison, L.	Llewelyn-Davies of Hastoe, Bs.	Sorensen, L.
Crook, L.	McLeavy, L.	Stocks, Bs.
Denning, L.	MacLeod of Fuinary, L.	Stonham, L.
Donaldson of Kingsbridge, L.	Maelor, L.	Strabolgi, L.
Douglass of Cleveland, L.	Mais, L.	Summerskill, Bs.
Francis-Williams, L.	Mitchison, L.	Taylor of Mansfield, L.
Trevelyan, L.	Williamson, L.	Wright of Ashton under Lyne, L.
Walston, L.	Willis, L.	Wynne-Jones, L.
Wilberforce, L.	Wise, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

5.18 p.m.

VISCOUNT DILHORNE moved Amendment No. 3: Page 2, line 41, leave out from first ("property") to end of line 44.

The noble and learned Viscount said: My Lords, I can move this Amendment quite shortly. It is to leave out all the words after the word "property" where it first appears in line 41 on page 2 to the end of the subsection. This particular clause of the Bill, if I understand it correctly, purports to make amendments to the Enemy Property Act 1953, and the noble and learned Lord the Lord Chancellor said in Committee that one of the reasons for the restriction of the scope of this particular section of the Act was to ensure that there would be no claims by corporations to be owners of any of the assets involved. That is why, while the right to claim by corporations was extinguished, the right of individuals to claim under the Enemy Property Act that their property really was not enemy property at all and ought to be returned to them was preserved. On that, there was a question about partnerships which was not answered last time, and perhaps in the course of dealing with this Amendment the noble and learned Lord the Lord Chancellor, if it is he who is going to deal with it, will say something about the position of partnerships and which side of the line they come, because the word "individual" will cover individuals, and "individuals", I should have thought, would have covered a partnership.

My Lords, this Amendment is to leave out the words: and any such property or proceeds (except as aforesaid) recovered by virtue of those subsections between that date and the passing of this Act shall be re-transferred or repaid, as the case may require". That date was January 5, and, so far as I can see and understand, those last words of the subsection enact, or will enact if included in the Bill, that any property which has been recovered by someone on the ground that it was not enemy property, if it was recovered between January 5, 1968, and the date of the passing of this Act, has then to be re-transferred or repaid, as the case may require, back to the Custodian.

That struck me, when I read it, as extremely odd. In column 617 on the Committee stage on February 13 I asked a number of questions about it; and it was again referred to in column 639. I referred to these words and I read them out. After I had read them out, the noble and learned Lord the Lord Chancellor said, in column 639: At the moment there is not any", meaning, as I understand it, that at the moment, February 13, 1969, there had been no claims made in respect of these assets under the Enemy Property Act 1953 which had resulted in the recovery by the owners of their property; and therefore, there not having been any such claims, there would be no question of repayment under the concluding words of this subsection.

If that be so, what is the case for these words at all? I do not understand why they are wanted. It seems to me impossible, there having been no such claims under the Enemy Property Act 1953, that there will be such a claim established before this Bill is enacted as to make it necessary to insert in the Bill a provision that the proceeds of a successful claim before this Bill is enacted shall be retransferred. I cannot think it is necessary; and even if it were, I should be inclined to think that it was wrong; because under the provisions of the Enemy Property Act 1953 a successful claim under Sections 3, 4 and 5 of that Act will be on the basis that the property ought never to have been dealt with as enemy property at all. And if the person concerned can establish that, it does not seem to me that there can be much ground for providing in this Bill that after it is enacted, notwithstanding the fact that he has established that it ought not to have been treated as enemy property at all,, he has to repay it or hand it back to the Custodian. It seems very odd; and if the noble Lord, Lord Chalfont, said that he wanted to look at it again I would not press this Amendment. At the moment I see no useful purpose served by these words and I hope that he will agree that it will improve the Bill to leave them out—bearing in mind, as the noble and learned Lord said, that there is no recovery of property under the Enemy Property Act 1953. I beg to move.

LORD CONESFORD

My Lords, may I add my plea that the noble Lord in replying will deal with the question whether the words "on behalf of an individual" cover partnerships, because I think I am right in saying that under the Interpretation Act "individual", singular, covers the plural. I cannot quite see why the words "on behalf of individuals" which is what they mean when you consider the Interpretation Act do not include partnerships. I understand from something that was said in an earlier debate that the Government were under the impression that they did not.

LORD CHALFONT

My Lords, before replying directly to the noble and learned Viscount and his strictures on the necessity or otherwise of these words in the Bill, perhaps I could deal now with the question which has been asked before during the passage and process of this Bill and twice to-day: that is, the question whether partnerships are individuals for the purpose of this Bill. Here again I am giving hostages to fortune by trespassing on what is clearly legal ground; but as I understand it the position is this. The majority of businesses claimed by the Soviet Union were companies but there were others which were more in the nature of what we would call partnerships. In the course of the negotiations that led to the Anglo-Soviet Agreement, the Soviet delegation told us across the table that as they understood it the local law on partnership in each of the regions concerned had the effect of making a partnership a juridical person. So, my Lords, the reply to both noble Lords, as I understand it, is therefore that in most cases it would appear that the partnership property was not the property of the individual partners. But if it was the property of the individual partners, the provisions of Clause 1(5) would not apply by reasons of the saving, of the exception, contained in that subsection.

My Lords, I am afraid that I cannot agree with the noble and learned Viscount that the words which are the subject of this Amendment are unnecessary in the Bill. There has not been very much discussion of these words in either House until now; and I think I ought to make it clear that the purpose of these words is to ensure that no part of the assets which we think ought properly to go into the Compensation Fund for distribution to claimants on our side is lost as a result of applications for the recovery of property before the Bill passes into law. I think that so far we are on common ground. It remains the case, as the noble and learned Viscount has said, that between January 5, 1968, and the present time—which now becomes to-day instead of the date which the noble and learned Viscount quoted—no property or proceeds of property have been recovered by virtue of Section 3(4) of the Enemy Property Act 1953 or, so far as we are aware, under subsection (5). Of course, an application could still be made to the Custodian; and it may be, as I have already explained to the House on an earlier Amendment, that in some cases the title of the Custodian to particular assets may not in some cases be perfect or may be defeasible by reason of the provisions of the 1953 Act to which I have referred. So, if an application were to be made in such a case between now and the passage of the Bill into law the Custodian would be placed in a very difficult position. He has to apply the law as it stands now—

VISCOUNT DILHORNE

My Lords, I am sorry to interrupt. Would the noble Lord confirm—and this is very relevant to the argument—that subsections (3), (4) and (5) will provide only for the recovery of property which has wrongfully been treated as enemy property? That has a great deal of bearing on the issue here.

LORD CHALFONT

My Lords, the real point at issue here, if I may suggest it to the noble and learned Viscount, is this. If any claim of any kind is made between now and the passage of the Bill—and no claim has been made up till now—it is possible, as I have said, that the title of the Custodian may prove to be imperfect; the title may be defeasible. Therefore, whatever the reason for the claim, he might find himself in a very difficult position. What we are here concerned to do is, I think, in effect, to exclude the possibility of a Soviet State trading enterprise, or some other Soviet interest, as well as a creditor of the dissolved Baltic company for example, recovering any part of the assets.

So far as the Soviet interests are concerned, the justification for this, as I have suggested before, lies in Articles 2 and 3 of the Agreement of January 5, 1968. That is why that date is contained in Clause 1 (5). By Article 2 of the Agreement the Soviet Government undertook, on its own behalf and on behalf of Soviet persons, physical and juridical, not to pursue further claims which it had advanced during the negotiations. Article 3 recognises the right of the Soviet Government to dispose of former British assets in the Baltic States, and of course in the ceded territories, in order to settle the claims of Soviet nationals which it had put forward. Clearly, then, the Agreement justifies, in our view, our excluding claims from Soviet interests. This seems to me entirely logical and defensible. As regards creditors of dissolved Baltic companies, British creditors of those companies will, of course, be entitled to claim in the distribution to be made by the Foreign Compensation Commission.

If we were to accept this Amendment and leave these words out of the Bill—I ask the noble and learned Viscount to accept this—there would be a risk that assets might be lost to the compensation fund which in the light of the Soviet Agreement, whatever noble Lords opposite may think about it, should be included for the benefit of claimants on our side. The fact that no applications for the recovery of property have been made to the Custodian since January 5, 1968, does not necessarily mean (I know that the noble and learned Viscount will appreciate this, especially in the light of the publicity that it is still, and increasingly, getting) that applications will not be made in the remaining weeks before, as I hope, the Bill becomes law. We think that this possibility, however remote, is one that it is prudent to guard against. My advice to the House, therefore, is that the risk will certainly be increased if the words which are the subject of the noble and learned Viscount's Amendment are deleted from the Bill. I hope, for these reasons, that the noble and learned Viscount will not press the Amendment.

5.33 p.m.

VISCOUNT DILHORNE

My Lords, no doubt the noble Lord has been fully briefed on this, but of course he was briefed before he had heard the argument advanced for the deletion of these words, and the brief which he has does not answer the point I sought to make. If I may—I do not want to prolong this discussion—I should like to deal quite shortly with what the noble Lord said. First of all, when you are construing an English Act of Parliament and the meaning to be attached to the word "individual" in Clause 1(5), you cannot do that according to the meaning given in Lithuania, Latvia or Estonia to the word "partnership". Therefore, while I am not seeking to quarrel with what the noble Lord is intending to achieve, I say to him that if he wants to make sure that partnerships are excluded, that ought to be clearly provided for in the Bill. It should not be left in doubt and to possible litigation. I seek to impress that on the noble Lord, because it does not suffice to say that the Russians—or whoever it may be—have said that a partnership in Lithuania has a corporate identity of its own.

LORD CHALFONT

My Lords, may I say that the explanation I gave was simply by way of background, and was not intended in any way to be any kind of explanation for this interpretation. Of course, in the light of what the noble and learned Viscount has said, we will have another look.

VISCOUNT DILHORNE

My Lords, I am obliged to the noble Lord. There is no need for there to be controversy about that: we simply want to get it clear.

With regard to the other point, what I think is essential (and if my memory serves me correctly it is the case) is that one must bear in mind that the Enemy Property Act 1953 validated, or purported to validate, all kinds of transactions of the Custodian between certain dates about the legality of which there was doubt. But Section 3(4) and (5) having validated the Custodian's actions, a right was given to the owner of property dealt with by the Custodian to recover it. My recollection is that that right was limited to the recovery of property held by the Custodian which never ought to have been regarded as enemy property at all, and that the right did beyond that.

Now, my Lords, if that is so, it goes to the root of the argument in relation to this particular subsection of the Bill, because here is excluded from the operation of the Enemy Property Act Section 3(4) and (5) claims by corporations and corporate bodies. They can no longer say to the Custodian, "You have got my property. You must give it back because it never was enemy property". It will no longer be possible for them to say that if this subsection is carried into effect. But an individual will be able to say, "Yes, you have got my property. It was not enemy property at all and you must give it back". That I quite see is the effect of the first part of this subsection. Then we come to the extraordinary words, bearing in mind the position. It is not the case that any claim made to the Custodian before the passing of this Bill will operate. The words which my Amendment seeks to leave out are words which provide for the repayment, or re-transfer, of anything handed out by the Custodian to some claimant, on the basis that it was not ex hypothesi enemy property at all. And power is taken, to get that property, which was not enemy property at all, back into the hands of the Custodian.

What is the justification for that? The noble Lord says, "Oh, it is property which was within the scope of the Agreement with the Soviet Union". But, my Lords, surely that property was property which could properly be described technically, at one time at any rate, as enemy property. So it really will not do to try to relate this particular subsection to the terms of this Agreement with the Soviet Union. And the matter gets even more curious because it is not a question of barring all claims: this is providing for the recovery or repayment of that which has been paid out by the Custodian; and he has paid out nothing.

LORD CHALFONT

My Lords, may I ask whether the noble and learned Viscount has possibly overlooked one fact in his argument which I think may be crucial? It is that Section 3 of the Enemy Property Act applies not only where property was not enemy property, but also where, for any other reason, a vesting order was not valid. What I am saying is that there may be other reasons I why a title is not valid, and it is not only for reasons to do with whether or not property was enemy property that Section 3 of the Enemy Property Act applies. If the noble and learned Viscount agrees with that, I think it is relevant to this case and explains the need for those words in the Bill.

VISCOUNT DILHORNE

My Lords, regarding the first part, I have not a copy of the Act with me as I had last time, and now I am speaking from recollection. I will certainly look at that Act. No doubt the noble Lord has been reading the Act, or has advice as to the terms of its provisions. But it does not seem to me, even if that is so, that it justifies the last words, the subject of this Amendment, because it is not the case that you have to bother just about claims made against the Custodian—there have not been any.

Let us see what is going to happen. Let us assume that we take these words out of the Bill and that there is going to be a claim. There has not only got to be a claim, there has to be a payment by the Custodian, or the transfer of some property; and the Custodian has to do that before this Bill reaches the Statute Book. I do not think that the noble Lord is telling me that the Custodian would act with such speed that there is no need for this provision. I am sure that the Custodian does not act as quickly as that, but I think this is going far too far. This does not seem to have much practical content. We know that there are no claims and we know that no claims are likely to come and, if they did, that quite a long time would be taken to investigate them. I would be content if the noble Lord said that he would look at this again and I would not press this Amendment now. I would be quite willing to talk to him about it. But I think that these words are unnecessary and otiose, even in the light of the arguments he has advanced. If he is prepared to say that he will consider this Amendment again, I will ask leave to withdraw it, but if he is not prepared to do so I feel that I should have to press it, because at the moment I am not satisfied with the case he has put forward.

LORD CHALFONT

My Lords, I am grateful to the noble and learned Viscount for that suggestion. Of course, I am always prepared to reconsider things so long as the Bill is in your Lordships' House. I cannot hold out very much hope to the noble and learned Viscount that we shall change our view about this. I have said that there have not been any claims but I believe, and I must advise your Lordships, that there is a risk that there might be and that as a result of these claims the Custodian, because a certain vesting order was not valid, might have to pay out some money. We think that that money should not be removed from the assets for distribution by the Compensation Commission. It is all very well for the noble and learned Viscount to say that the Custodian could impose an administrative delay until the Bill was enacted, but surely this is not what these words are about; they are designed to eliminate that risk. I do not believe that it would be right and proper to seek to eliminate that risk by the imposition of administrative delays by the Custodian. But in the circumstances, since the noble and learned Viscount has offered to discuss this matter, although I do not hold out much hope that we will change our view on it, I will undertake to look

at it again and to discuss it with him before the next stage of the Bill.

VISCOUNT DILHORNE

My Lords, I have now been handed a copy of the Enemy Property Act. Subsection (4) begins, If at the time of the dealing the property was not enemy property … I do not see anything in subsection (5) of the Act which goes beyond that. I made that offer, but I am not entirely happy about what the noble Lord has said. He is willing to consider anything and everything—he has been very nice about that—but he is not holding out the slightest hope. In the circumstances, I think it would be better to take these words out and then the noble Lord can consider again whether some alternative form would not be more appropriate than a form which gives power to re-transfer or repay money to which someone might establish a title but to which no one has done so at the present moment. I think that the best thing to do is to take these words out.

On Question, Whether the said Amendment (No. 3) shall he agreed to?

Their Lordships divided: Contents, 66; Not-Contents, 69.

CONTENTS
Aberdare, L.	Falmouth, V.	Nugent of Guildford, L.
Aberdeen and Temair, M.	Ferrier, L.	Poltimore, L.
Atholl, D.	Fortescue, E.	Polwarth, L.
Beauchamp, E.	Goschen, V. [Teller.]	Rankeillour, L.
Berkeley, Bs.	Gowrie, E.	Rathcavan, L.
Bessborough, E.	Grenfell, L.	Rennell, L.
Brooke of Cumnor, L.	Gridley, L.	Robertson of Oakridge, L.
Brooke of Ystradfellte, Bs.	Grimston of Westbury, L.	St. Aldwyn, E.
Carrington, L.	Hawke, L.	St. Helens, L.
Clwyd, L.	Horsbrugh, Bs.	St. Oswald, L.
Conesford, L.	Howard of Glossop, L.	Sandford, L.
Cork and Orrery, E.	Hylton-Foster, Bs.	Sandys, L.
Craigavon, V.	Ilford, L.	Selkirk, E.
Craigmyle, L.	Inglewood, L.	Somers, L.
Cromartie, E.	Jessel, L.	Stonehaven, V.
Daventry, V.	Lambert, V.	Strange of Knokin, Bs.
Denham, L. [Teller.]	Lansdowne, M.	Strathclyde, L.
Derwent, L.	Lauderdale, E.	Swinton, E.
Dilhorne, V.	Molson, L.	Trefgarne, L.
Dundonald, E.	Mowbray and Stourton, L.	Vivian, L.
Emmet of Amberley, Bs.	Moyne, L.	Ward of Witley, V.
Essex, E.	Newton, L.	Wedgwood, L.
NOT-CONTENTS
Addison, V.	Brockway, L.	Collison, L.
Archibald, L.	Burden, L.	Crook, L.
Arwyn, L.	Burton of Coventry, Bs.	Denning, L.
Balogh, L.	Carron, L.	Donaldson of Kingsbridge, L.
Beswick, L.	Chalfont, L.	Douglass of Cleveland, L.
Bowles, L.	Champion, L.	Francis-Williams, L.
Boyd-Orr, L.	Chorley, L.	Gaitskell, Bs.
Gardiner, L. (L. Chancellor.)	Llewelyn-Davies of Hastoe, Bs.	Scrota, Bs.
Garnsworthy, L.	McLeavy, L.	Shackleton, L. (L. Privy Seal.)
Gifford, L.	MacLeod of Fuinary, L.	Shepherd, L.
Gladwyn, L.	Maelor, L.	Sorensen, L.
Hall, V.	Mais, L.	Stocks, Bs.
Heycock, L.	Mitchison, L.	Stonham, L.
Hill of Wivenhoe, L.	Morrison, L.	Strabolgi, L.
Hilton of Upton, L. [Teller.]	Moyle, L.	Summerskill, Bs.
Hughes, L.	Norwich, V.	Taylor of Mansfield, L.
Hunt, L.	Nunburnholme, L.	Walston, L.
Huntingdon, E.	Peddie, L.	Williamson, L.
Jacques, L.	Phillips, Bs. [Teller.]	Willis, L.
Kilbracken, L.	Plummer, Bs.	Winterbottom, L.
Latham, L.	Popplewell, L.	Wise, L.
Leatherland, L.	Ritchie-Calder, L.	Wright of Ashton under Lyne, L.
Lindgren, L.	St. Davids, V.	Wynne-Jones, L.

On Question, Motion agreed to.

Clause 2 [Amendments of Foreign Compensation Act 1950]:

5.50 p.m.

THE LORD CHANCELLOR moved Amendment No. 3A: Page 3, line 24, leave out subsection (4).

The noble and learned Lord said: My Lords, I beg to move Amendment No. 3A, and in doing so must necessarily invite your Lordships to consider Amendments Nos. 5 and 6, the other Amendments standing in my name. The first Amendment, No. 3A, proposes to leave out subsection (4) of Clause 2 which was put in on Committee stage at the instance of the noble and learned Viscount, Lord Dilhorne, and which gives a right of appeal by way of case stated to the Court of Appeal on any question of law relating to the jurisdiction of the Commission. This provision will be replaced by subsection (2) of the new clause. The second Amendment is consequential and is no more than drafting.

As to Amendment No. 6, subsection (1) of the new clause replaces subsection (4) of Clause 2 of the Bill as brought from the House of Commons, which would have enabled an Order in Council to confer power on the Commission to determine any question as to the construction or interpretation of any provision with respect to claims falling to be determined by the Commission included in any order made under Section 3 of the Foreign Compensation Act 1950 after the passing of the Bill. Subsection (1) differs from the former subsection (4) only in itself conferring power on the Commission to determine any such question of construction or interpretation instead of leaving the power to be conferred by Order in Council. In the light of the new right of appeal conferred by the new clause there appears to be no useful purpose in leaving the new powers to be conferred on the Commission to be dependent on the making of an Order in Council.

Subsection (2) enables any person aggrieved (within the meaning of subsection (6)) by any determination of the Commission on a question of law relating to the jurisdiction of the Commission, or on any question as to the construction or interpretation of an Order in Council, to require the Commission to state a case for the decision of the Court of Appeal. Unlike the subsection which was added in Committee, the right of appeal conferred by subsection (2) covers not only questions relating to the jurisdiction of the Commission but also those relating to the construction or interpretation of an Order in Council following on the power conferred by subsection (1). This is necessary because the Commission may be concerned not only with questions of jurisdiction properly so called but also with questions of construction of the Orders in Council under which the Commission operate. The two categories will be mutually exclusive, in the sense that if the Commission have no power to decide a question of construction, the question will then be one of their jurisdiction—as, for example, whether the Commission had power to determine a claim which is alleged to have been made out of time.

Subsection (3) defines "determination" so as to include provisional determinations and anything purporting to be a determination. There is no reference in the Act of 1950 or the present Bill to a provisional determination, but Rule 38 of the Foreign Compensation Commission Rules 1956 (as amended in 1964) provides that all determinations of the Commission are to be provisional and subject to review, although there may not be more than one review of any determination. It is necessary to include in the definition of "determination" anything purporting to be a determination in order to avoid the possibility of any appeal to the courts in future (apart from the new right of appeal conferred by the clause itself) on the ground which succeeded in the Anisminic case; that is to say, that the Commission's decision was in no sense a determination, but, being made wholly without jurisdiction, was a nullity. It is not, however, intended to interfere with the power—which was recognised as existing before the decision in the Anisminic case—to impeach a decision of the Commission on the ground that it was given in breach of the rules of natural justice; and this position is preserved by subsection (10).

It will be open to a person aggrieved to require the Commission to state a case either on a provisional determination or on a final determination, but if he appeals against the decision on the provisional determination it ought not to be open to him to appeal again on the final determination of the same matter. This is dealt with by subsection (4) the effect of which is that where the Court of Appeal has decided a question on a provisional determination the Commission cannot be required to state a case on a final determination of the same question.

Subsection (5) enables a person aggrieved to ask the Commission for a written statement of the reasons for their determination, but the Commission are not obliged to state reasons except in a case in which the question at issue is one of jurisdiction or of the construction or interpretation of an Order in Council. Subsection (6) defines the persons who may request the Commission to give their reasons or to state a case for the Court of Appeal as being the claimant and any person appointed by the Commission to represent the interests of any fund out of which the claim would be met; that is to say, the Commission's legal officer appointed for that purpose. Although it is no doubt unlikely that the legal officer would ever wish to appeal against a determination of the Commission, it seems difficult, if a right of appeal is to be conferred at all, to deny it to the person appointed to represent the interests of other claimants besides the one who may fall to be benefited by a decision of the Commission allowing his claim.

Subsection (7) prescribes the time limits within which a request to furnish reasons and a requirement to state a case must be made. The Commission will have power to disregard a request for reasons unless it is received within four weeks from the date on which the Commission send notice of the determination, or such other time as may be provided by the Commission's rules. A requirement to state a case may be disregarded unless received within eight weeks from the date on which the Commission give notice of their determination or within four weeks from the date on which the Commission state their reasons (if reasons are asked for), whichever expires last, or within such other period as may be provided by Rules of Court. Although the Commission will have power to entertain a request or requirement which is not made within the time specified, the intention is that the time limits should be strictly adhered to in order to avoid undesirable delays. Subsection (7) deals with the same matters as those to which Lord Dilhorne's Amendment to page 3, line 28, is directed.

Subsection (8) provides that no appeal to the House of Lords will lie from a decision of the Court of Appeal on a case stated. Subsection (9) makes it cleat that, apart from the right of appeal conferred by the new clause and from the right to take proceedings in respect of any breach of natural justice, no determination of the Commission is to be called in question in any court of law. This subsection corresponds with Section 4(4) of the Foreign Compensation Act 1950. The effect of subsections (11) and (12) is to confine the new right of appeal to determinations of which notice is given after the Bill comes into force, leaving other determinations to be dealt with by the law as it stands at present. I felt bound to address your Lordships on those three Amendments together because, as your Lordships will understand, they all hang together. My Lords, I beg to move.

VISCOUNT DILHORNE

My Lords, I am sure that the House is grateful to the noble and learned Lord the Lord Chancellor for his clear exposition of the effect of this new clause, which contains no fewer than twelve subsections. I am not only grateful to him for that, but very grateful indeed to him for tabling this Amendment at all. I am sure it makes a great improvement to the Bill. In passing, may I say that the length of this new clause indicates what I feared was correct: that the Amendment drafted by me and my noble and learned friend Lord Wilberforce, which is now embodied in subsection (4) in a matter of three or four lines, would not satisfy Parliamentary Counsel at all. It has now grown to twelve subsections and the effect is, so far as I can see, to carry out what we hoped would be done and to make that effectual and work all right. I am glad that it has been possible for the noble and learned Lord the Lord Chancellor to reach this conclusion. I think it will be a considerable improve-to the Bill.

I hope the noble and learned Lord will not mind my saying that I am glad we managed to defeat the Government in Committee and to carry the Amendment which is now in subsection (4), for if we had not done that perhaps we should not have seen this Amendment on the Order Paper in the name of the noble and learned Lord the Lord Chancellor. I think that that is a useful function of this House, a proper function of this unreformed House, a function which may not be so easy to discharge in a reformed House. Here it is a question, not of getting into conflict with another place, but of giving the Government another opportunity of thinking the matter over, and on this occasion of thinking it over and reaching a conclusion which I am sure will meet with acclaim from all sides of the House. I am grateful to the noble and learned Lord the Lord Chancellor.

LORD DENNING

My Lords, I should like to say just one world of gratitude to the noble and learned Lord the Lord Chancellor because this Amendment shows that the Tribunal will not be a judge in its own cause. The case is to be stated on a point of law, but only to the Court of Appeal and no further. This is a most useful precedent, not only for this Foreign Compensation Bill but I hope in other spheres of the law, too. It is a precedent which might well be followed elsewhere. I would make only one further small point. The Tribunal need not give its reasons in all cases, but only in a limited class. It rather reminds me of the case when Lord Mansfield gave some advice to a new Judge. He said, "Give your decision but never give your reasons, for your decision may well be right but your reasons are almost certain to be wrong". I wish the Tribunal was compelled to give its reasons in all cases, as is generally done under the Tribunals and Inquiries Act 1958. But that is only a comparatively minor matter. I must say, on behalf, I think, of all the profession, how grateful we are that this Amendment has been put down by the Lord Chancellor.

THE LORD CHANCELLOR

My Lords, if I may have leave to speak again, the noble and learned Lord has stimulated me to say that this is a point on which some lawyers feel strongly. As I have explained throughout, it does not matter in the slightest to the Government which way the matter is decided. They do not stand to lose anything; they do not stand to gain anything. If anybody has lost it will be the claimants, who will have lost by the extent in time it will take to distribute the money among them if there are appeals. If anyone has lost financially it will be the claimants, because the Fund will be diminished by the amount of the costs to which the Commission themselves may be put. But, as I have said, this is a point on which there are different views and on which the Government have pointed out throughout that the outcome does not matter in the slightest to them.

THE LORD CHANCELLOR

My Lords, I have already addressed your Lordships on Amendment No. 5, which I now beg to move.

Amendment moved— Page 3, line 29, leave out ("said Act of") and insert ("Foreign Compensation Act").—(The Lord Chancellor.)

THE LORD CHANCELLOR

My Lords, I have also addressed your Lordships on Amendment No. 6, which I now beg to move.

Amendment moved— After Clause 2 insert the following new clause:

Determinations of the Foreign Compensation Commission and appeals against such determinations

".—(1) The Foreign Compensation Commission shall have power to determine any question as to the construction or interpretation of any provision of an Order in Council under section 3 of the Foreign Compensation Act 1950 with respect to claims falling to be determined by them.

(2) Subject to subsection (4) below, the Commission shall, if so required by a person mentioned in subsection (6) below who is aggrieved by any determination of the Commission on any question of law relating to the jurisdiction of the Commission or on any question mentioned in subsection (1) above, state and sign a case for the decision of the Court of Appeal.

(3) In this section "determination" includes a determination which under rules under section 4(2) of the Foreign Compensation Act 1950 (rules of procedure) is a provisional determination, and anything which purports to be a determination.

(4) Where the Court of Appeal decide a question on a case stated and signed by the Commission on a provisional determination in any proceedings, subsection (2) above shall not require the Commission to state and sign a case on a final determination by them of that question in those proceedings.

(5) Any person mentioned in subsection (6) below may, with a view to requiring the Commission to state and sign a case under this section, request the Commission to furnish a written statement of the reasons for any determination of theirs, but the Commission shall not be obliged to state the reasons for any determination unless it is given on a claim in which a question mentioned in subsection (2) above arises.

(6) The persons who may make a request under subsection (5) above or a requirement under subsection (2) above in relation to any claim are the claimant and any person appointed by the Commission to represent the interest of any fund out of which the claim would, if allowed, be met.

(7) Any such request or requirement must be in writing, and—

1. (a) any such request may be disregarded unless it is received by the Commission within the period of four weeks beginning with the date on which the Commission send notice of the determination in question or such other period as may be provided for by or under rules under section 4(2) of the Foreign Compensation Act 1950; and
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2. (b) any such requirement may be disregarded unless it is received by the Commission within the period of eight weeks beginning with that date or the period of four weeks beginning with the date on which the Commission send a statement of reasons for the determination in question, whichever expires last, or within such other period as may be provided for by or under rules of court.

(8) Notwithstanding anything in section 3 of the Appellate Jurisdiction Act 1876 (right of appeal to the House of Lords from decisions of the Court of Appeal), no appeal shall lie to the House of Lords from a decision of the Court of Appeal on an appeal under this section.

(9) Except as provided by subsection (2) above and subsection (10) below, no determination by the Commission on any claim made to them under the Foreign Compensation Act 1950 shall be called in question in any court of law.

(10) Subsection (9) above shall not affect any right of any person to bring proceedings questioning any determination of the Commission on the ground that it is contrary to natural justice.

(11) Subsections (2) to (10) above shall not apply to a determination of the Commission of which notice was sent by them before the passing of this Act.

(12) Section 4(4) of the Foreign Compensation Act 1950 (which makes provision corresponding to subsection (9) above) shall not apply to a determination of the Commission of which notice is sent by them after the passing of this Act."—(The Lord Chancellor.)