Very mysterious. His right hand is either holding or resting on a strap which looks to be holding some kit of some sort - perhaps ...

The odd thing is that when I first looked at the photo I thought it looked Naval before I read your question. I thought the fabric had a look of sails about it, though don't think that would be relevant to WW2 would it? Anyway, I still think that looks like sails, or sail cloth.
No clue what he is leaning on though. Perhaps just a shelf of some sort but it looks metal? I see what looks a bit like a carriage/pram wheels hanging up high and something technical (switchboard looking thing) to the left of the picture.
Sorry not to be of more help and probably pointing out things you already know.
Regarding a restore, have you considered just concentrating on defining and restoring James and leaving the background more or less as is, a bit blurred? This would keep him in context. It would be hard to restore objects if you don't know what they are and have no point of reference. If you put him in a different background it may not look right.
Just my thoughts. Good luck with it anyway.
